CASTALUM LIMITED
Company registration number 06771963 (England and Wales)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CASTALUM LIMITED
COMPANY INFORMATION
Directors
Mr P Ligertwood
Mr M S Simpson
Mr P J Dodd
Mr K F Meredith
Mr M Jones
Mr S Westhorpe
Mr R J Blythe
(Appointed 1 March 2024)
Company number
06771963
Registered office
5 Buttington Cross Enterprise Park
Buttington
Welshpool
Powys
SY21 8SL
Auditor
Dyke Yaxley Limited
1 Brassey Road
Old Potts Way
Shrewsbury
Shropshire
SY3 7FA
CASTALUM LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 23
CASTALUM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The results for the year convey a positive outlook for the companies production capabilities and operational effectiveness in the near future, having successfully navigated the ramp up phase for significant new programs. These have been added to the production requirements of other established core programs and all managed within existing machine capacity.

The company continued effectively scaling up its operations, both in terms of utilised production capacity and employee levels. In addition to internal promotions a full time training manager has been employed to ensure integration of new employees and growth of the workforce.

There remains a lack of certainty within the automotive industry with reference to propulsion choice. Castalum continues to supply a range of components that can serve all forms of power sources.

ISO14000 & IATF16949 quality accreditation remains in place and once again all customer audits were favourable. In addition Castalum have been requested by Ford to apply for their own Q1 certification.

Working with both the Cast Metals federation and Warwick University Castalum continues to make great strides on its journey to Carbon Net Zero.

Principal risks and uncertainties

Price risk

Unlike the sharp rise in commodity prices, the return to somewhat more normal levels has been significantly slower and we have had to continuously monitor this in judging the viability of new and existing work.

Customers

Our customer base has continued to expand within the year, with the spread of business changing significantly to be shared around a wider range of businesses which helps to reduce risk to Castalum.

Key performance indicators

 

The following key performance indicators are used by the directors in measuring the performance of the business:

 

KPIs                  2023     2022     Definition, Method of Calculation and Analysis

 

Sales - Volumes ('000s) 1,802 1,474 Total number of parts sold

Sales (£'000s)             34,936     29,763    Sales value in GBP (all markets)

Gross margin (%) 14 12 Ratio of gross profit to sales expressed as a %

Operating (loss)/profit (£'000s)     1,638 712     Profit before interest and tax

Future prospects

Castalum continues to be recognised within the industry as a very capable and reliable supplier, which is leading to many enquiries regarding future business.

On behalf of the board

Mr K F Meredith
Director
9 April 2024
CASTALUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of aluminium diecasting and machining.

Results and dividends

The results for the year are set out on page 7.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr P Ligertwood
Mr P Radcliffe
(Resigned 22 August 2023)
Mr M S Simpson
Mr P J Dodd
Mr K F Meredith
Mr M Jones
Mr S Westhorpe
Mr R J Blythe
(Appointed 1 March 2024)
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Auditor

The auditor, Dyke Yaxley Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Disclosure in the Strategic Report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of review of business, principal risks and uncertainties and future developments.

On behalf of the board
Mr K F Meredith
Director
9 April 2024
CASTALUM LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CASTALUM LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CASTALUM LIMITED
- 4 -
Opinion

We have audited the financial statements of Castalum Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

CASTALUM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CASTALUM LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

CASTALUM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CASTALUM LIMITED
- 6 -

Irregularities, including fraud, and instances of non-compliance with laws & regulations

We design procedures in line with our responsibilities, outlined above, to detect material misstatement misstatements in respect of irregularities, including fraud.

 

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud.

 

We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

 

We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, Health & Safety, ISO 14001:2015 - Environmental Management Systems and IATF 16949:2016 - Automotive Quality Management Systems. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management, reviewing the outcomes of BSI audits and confirming that certifications have been awarded.

 

There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

 

We did not identify any key audit matters relating to irregularities, including fraud.

 

Audit procedures performed by the engagement team included:

 

Use of our report

This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.

Andrew Young FCA
Senior Statutory Auditor
For and on behalf of Dyke Yaxley Limited
11 April 2024
2024-04-11
Chartered Accountants
Statutory Auditor
1 Brassey Road
Old Potts Way
Shrewsbury
Shropshire
SY3 7FA
CASTALUM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
34,936,222
29,762,846
Cost of sales
(30,109,281)
(26,199,834)
Gross profit
4,826,941
3,563,012
Distribution costs
(970,366)
(1,164,874)
Administrative expenses
(2,246,396)
(1,713,219)
Other operating income
27,332
27,332
Operating profit
4
1,637,511
712,251
Interest receivable and similar income
8
1,722
-
0
Interest payable and similar expenses
9
(189,808)
(205,092)
Fair value gains and losses on foreign exchange contracts
39,770
-
0
Profit before taxation
1,489,195
507,159
Tax on profit
10
(498,409)
(240,061)
Profit for the financial year
990,786
267,098
Other comprehensive income
Cash flow hedges gain/(loss) arising in the year
741,135
(862,932)
Cash flow hedges loss reclassified to profit or loss
(146,487)
(33,504)
Tax relating to other comprehensive income
(148,662)
203,905
Total comprehensive income for the year
1,436,772
(425,433)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CASTALUM LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
6,940,059
7,988,731
Current assets
Stocks
13
2,538,266
2,352,897
Debtors
14
6,361,185
7,897,316
Cash at bank and in hand
2,378,020
1,004,073
11,277,471
11,254,286
Creditors: amounts falling due within one year
15
(11,850,379)
(12,914,397)
Net current liabilities
(572,908)
(1,660,111)
Total assets less current liabilities
6,367,151
6,328,620
Creditors: amounts falling due after more than one year
16
(1,169,511)
(3,214,823)
Provisions for liabilities
Deferred tax liability
18
1,201,185
554,114
(1,201,185)
(554,114)
Net assets
3,996,455
2,559,683
Capital and reserves
Called up share capital
21
100,000
100,000
Hedging reserve
22
24,916
(421,070)
Profit and loss reserves
22
3,871,539
2,880,753
Total equity
3,996,455
2,559,683

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 9 April 2024 and are signed on its behalf by:
Mr K F Meredith
Director
Company registration number 06771963 (England and Wales)
CASTALUM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Hedging reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
100,000
271,461
2,613,655
2,985,116
Year ended 31 December 2022:
Profit
-
-
267,098
267,098
Other comprehensive income:
Cash flow hedges gains
-
(862,932)
-
(862,932)
Gains reclassified to profit or loss
-
(33,504)
-
(33,504)
Tax relating to other comprehensive income
-
203,905
-
0
203,905
Total comprehensive income
-
(692,531)
267,098
(425,433)
Balance at 31 December 2022
100,000
(421,070)
2,880,753
2,559,683
Year ended 31 December 2023:
Profit
-
-
990,786
990,786
Other comprehensive income:
Cash flow hedges gains
-
741,135
-
741,135
Gains reclassified to profit or loss
-
(146,487)
-
(146,487)
Tax relating to other comprehensive income
-
(148,662)
-
0
(148,662)
Total comprehensive income
-
445,986
990,786
1,436,772
Balance at 31 December 2023
100,000
24,916
3,871,539
3,996,455
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information

Castalum Limited is a private company limited by shares incorporated in England and Wales. The registered office is 5 Buttington Cross Enterprise Park, Buttington, Welshpool, Powys, SY21 8SL.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Short-term Leasehold property
5 to 20 years straight line
Plant and machinery
3 to 12 years straight line
Office equipment
3 to 10 years straight line
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.11
Hedge accounting

The Company designates certain hedging instruments, including derivatives, embedded derivatives and non-derivatives, as either fair value hedges or cash flow hedges.

 

At the inception of the hedge relationship, the company documents the relationship between the hedging instrument and the hedged item along with risk management objectives and strategy for undertaking various hedge transactions. At the inception of the hedge and on an ongoing basis, the company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

 

Fair value hedges

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income.

 

The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is included in the 'other gains and losses' line in this item.

 

Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item is recognised in the profit or loss in the same line as of the income statement as the recognised hedged item. However when the forecast transaction that is hedged results in the recognition of a non-financial asset or liability, the gains and losses previously accumulated in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability concerned.

CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

For derivatives that are designated and qualify as cash flow hedges, the effective portion of changes in the fair value of the hedge is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

 

Any gain or loss previously recognised in other comprehensive income is reclassified to profit or loss when the hedge relationship ends. This occurs when the hedging instrument expires or no longer meets the hedging criteria, the forecast transaction is no longer highly probable, the hedged debt instrument is derecognised, or the hedging instrument is terminated.

1.12
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.16
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

Overheads have been absorbed into stock using a standard hourly rate which is calculated based on the factory's production hours for the year and the cost of casting production overheads. The standard hourly rate is then applied to the number of parts in stock at the year-end, taking account for the number of parts which be cast in an hour.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
All turnover is derived from the principal activity undertaken
34,936,222
29,762,846
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
12,914,825
5,485,989
Rest of Europe
21,084,789
23,237,886
Rest of world
936,608
1,038,971
34,936,222
29,762,846
2023
2022
£
£
Other revenue
Interest income
1,722
-
Grants received
27,332
27,332
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(177,441)
(468,317)
Hedging item gains
-
0
(31,202)
Government grants
(27,332)
(27,332)
Depreciation of owned tangible fixed assets
1,534,726
1,478,053
Operating lease charges
346,500
346,500
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
15,865
15,865
For other services
Preparation of corporation tax return
2,000
2,000
Preparation of financial statements
3,000
3,000
5,000
5,000
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Directors
6
6
Staff
138
126
Total
144
132

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
5,451,975
4,680,719
Social security costs
553,366
493,324
Pension costs
201,716
179,586
6,207,057
5,353,629
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
610,739
569,000
Company pension contributions to defined contribution schemes
45,513
41,298
656,252
610,298

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
149,511
134,192
Company pension contributions to defined contribution schemes
14,626
13,419
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
1,722
-
0
9
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
189,808
205,092
10
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
498,409
240,061
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 17 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
1,489,195
507,159
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
350,259
96,360
Tax effect of expenses that are not deductible in determining taxable profit
1,671
3,511
Tax effect of utilisation of tax losses not previously recognised
(485,157)
-
0
Unutilised tax losses carried forward
-
0
10,899
Permanent capital allowances in excess of depreciation
133,227
(47,708)
Deferred tax - origination and reversal of temporary differences
498,409
240,061
R&D additional deduction
-
0
(63,062)
Taxation charge for the year
498,409
240,061

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Reclassifications from equity to profit or loss:
Relating to cash flow hedges
148,662
(203,905)
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
11
Tangible fixed assets
Short-term Leasehold property
Plant and machinery
Office equipment
Total
£
£
£
£
Cost
At 1 January 2023
1,097,427
26,036,581
237,190
27,371,198
Additions
-
0
468,255
17,799
486,054
At 31 December 2023
1,097,427
26,504,836
254,989
27,857,252
Depreciation and impairment
At 1 January 2023
520,000
18,652,610
209,857
19,382,467
Depreciation charged in the year
57,920
1,458,458
18,348
1,534,726
At 31 December 2023
577,920
20,111,068
228,205
20,917,193
Carrying amount
At 31 December 2023
519,507
6,393,768
26,784
6,940,059
At 31 December 2022
577,427
7,383,971
27,333
7,988,731
12
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
72,991
-
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
-
561,427

Financial instruments measured at fair value through other comprehensive income comprise forward foreign currency contracts which are derivative financial instruments designed as hedges of variable exchange rate risk.

 

At the year end, the company had entered into agreements for the forward selling of Euros with a maximum contracted value of €24.6m (2022: €28.8m).

13
Stocks
2023
2022
£
£
Raw materials and consumables
499,995
670,497
Finished goods and goods for resale
2,038,271
1,682,400
2,538,266
2,352,897
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,945,103
7,396,321
Corporation tax recoverable
816
133,672
Derivative financial instruments
72,991
-
Other debtors
140,674
194,869
Prepayments and accrued income
201,601
172,454
6,361,185
7,897,316
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other borrowings
17
1,017,980
1,168,794
Trade creditors
3,682,158
4,366,735
Amounts owed to group undertakings
3,462,048
3,208,602
Taxation and social security
151,295
149,068
Derivative financial instruments
-
0
561,427
Government grants
19
27,332
27,332
Other creditors
2,683,763
2,788,706
Accruals and deferred income
825,803
643,733
11,850,379
12,914,397

HSBC Bank holds a group set-off between Castalum Limited, Manx Welshpool Limited, Manx Welshpool Holdings Limited and AHW Industries Limited.

16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Other borrowings
17
1,090,311
3,108,291
Government grants
19
79,200
106,532
1,169,511
3,214,823

 

CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
17
Loans and overdrafts
2023
2022
£
£
Loans from related parties
2,108,291
4,277,085
Payable within one year
1,017,980
1,168,794
Payable after one year
1,090,311
3,108,291

 

18
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,192,879
1,336,041
Tax losses
-
(641,571)
Deferred tax on forward contracts
8,306
(140,356)
1,201,185
554,114
2023
Movements in the year:
£
Liability at 1 January 2023
554,114
Charge to profit or loss
498,408
Charge to other comprehensive income
148,663
Liability at 31 December 2023
1,201,185

The deferred tax liability set out above relates to accelerated capital allowances that are expected to mature within the same period.

CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
19
Government grants
2023
2022
£
£
Arising from government grants
106,532
133,864
Included in the financial statements as follows:
Current liabilities
27,332
27,332
Non-current liabilities
79,200
106,532
106,532
133,864

Government grants received relate to plant & machinery purchased by the company. This is being amortised in accordance with the depreciation policy for plant & machinery.

20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
201,716
179,586

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Contributions totalling £42,242 (2022: £40,000) were payable to the scheme at the year end and are included in creditors.

21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000

The Ordinary Shares carry full rights in the Company with respect to voting, dividends and capital distributions.

22
Reserves
Cash flow hedge reserve

Includes movements in fair value on derivative instruments identified as designated and effective hedges. This is a non-distributive reserve impacting other comprehensive income.

Profit and loss reserves

Includes all current and prior period retained profits and losses.

CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
23
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
348,517
6,689
Between two and five years
1,386,000
2,281
In over five years
173,250
-
0
1,907,767
8,970
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
24
Related party transactions
Transactions with related parties

The company has taken advantage of the exemption in section 33.1A of Financial Reporting Standard 102 from the requirement to disclose transactions with wholly owned members of the group.

 

The company has taken advantage of the exemption under Financial Reporting Standard 102 section 1.12 Reduced Disclosure For Subsidiaries from disclosing key management compensation in total.

 

At the year end the following amounts were outstanding to a director of the company:

 

Mr P Ligertwood £2,331,888 (2022: £2,375,963). There are no fixed repayment terms for this loan.

 

The company continued to hold loan agreements in the year with Manxfina, a company which the directors P Ligertwood and S Westhorpe are trustees of the controlling Trust. The loans are repayable over 5 years and interest is charged at 2.25% above base rate. The balance outstanding at the year end was £2,108,291 (2022: £4,277,085).

25
Ultimate controlling party

The ultimate parent company is Manx Welshpool Holdings Limited, a company incorporated in England & Wales.

The ultimate controlling party is P Ligertwood by virtue of his 100% holding of the issued share capital of Manx Welshpool Holdings Limited.

The parent undertaking of the largest and smallest group for which group accounts are prepared for the year ended 31 December 2023 is Manx Welshpool Holdings Limited. Copies of the group financial statements can be obtained from Companies House, Crown Way, Cardiff, Wales, CF14 3UZ.

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