Company Registration No. 05300889 (England and Wales)
LTI METALTECH LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LTI METALTECH LIMITED
COMPANY INFORMATION
Directors
M Kaiser
E Rayner
A Clark
Company number
05300889
Registered office
163 Brook Drive
Milton Park
Abingdon
Oxfordshire
OX14 4SD
Auditor
Shaw Gibbs (Audit) Limited
264 Banbury Road
Oxford
OX2 7DY
LTI METALTECH LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
LTI METALTECH LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the annual strategic report and audited financial statements for the year ended 31st December 2023.
Review of the business
The principal activity of the company continued to be the fabrication and high-integrity, coded welding of safety critical pressure vessels, structures and storage containers. LTi Metaltech Ltd is a leading independent manufacturer of cryogenic and pressure vessels as used in highly regulated environments. The principal customer remains Siemens Healthineers, but the company has continued to secure one-off orders in targeted sectors such as renewable energies and aerospace with the aim of unlocking longer-term volume opportunities
Our vision and strategies for the future remain focussed on the expansion of our technical capabilities to enable development and manufacture of an increasingly diverse and complex range of products for new markets and an expanding customer base.
Our vision and strategies for the future remain focused on the expansion of our technical capabilities to enable development and manufacture of an increasingly diverse and complex range of products for new markets and an expanding customer base. Efforts have also been focused on further harnessing the commercial and operational synergies presented by the acquisition of Vessco Engineering Ltd in the summer of 2021.
In order to support the continued growth of Vessco Engineering Ltd (turnover increased by 23% from 2022 to 2023), the Board have decided to waive a portion of the inter-company loan balance between the two companies.
Financial performance in 2023 was solid; turnover increased by 3% on the back of continued strong sales demand from Siemens, but profit margins were partially squeezed by the impact of high price and wage inflation. The company continues to carefully monitor commodity prices and currency exchange rates, and adopts appropriate hedging strategies to mitigate against significant fluctuations in both.
LTi Metaltech is very aware of its environmental responsibilities, and continues to take tangible measures to reduce its carbon footprint. A project to install solar panels on the roof of the principal factory on Milton Park is planned for summer 2024.
Principal risks and uncertainties
The outlook for manufacturing SMEs remains full of uncertainty; rising inflation, logistics complexities, lengthening material lead times, and a stark shortage of skilled labour in particular. The company will continue to actively manage these risks through the adoption of appropriate strategies and ambitious investment in technology to improve productivity.
Development and performance
Innovative deployment of our manufacturing technologies has enabled continued involvement in collaborative development of new products with key customers.
We have maintained accreditations for quality, environment and health and safety, and we are proud to deliver high quality products on time, whilst maintaining a safe place to work and safeguarding our environment.
LTI METALTECH LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Financial key performance indicators
The Company considers that its key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, primarily turnover and gross margin.
In the year to 31st December 2023, turnover increased to £31 million, compared to £30.1 million in the year ended 2022. Gross profit decreased to £5.3 million from £5.9 million in 2022, primarily as a result of price and wage inflation in the UK.
E Rayner
Director
12 July 2024
LTI METALTECH LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M Kaiser
E Rayner
A Clark
Results and dividends
The results for the year are set out on page 8.
An interim dividend was not paid during the year. The directors do not recommend payment of a final dividend (2022: £nil).
Auditor
The auditor, Shaw Gibbs (Audit) Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws 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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
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.
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 principals risks and uncertainties.
LTI METALTECH LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
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.
On behalf of the board
E Rayner
Director
12 July 2024
LTI METALTECH LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LTI METALTECH LIMITED
- 5 -
Opinion
We have audited the financial statements of LTI Metaltech 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, the statement of cash flows 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
LTI METALTECH LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LTI METALTECH LIMITED
- 6 -
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
LTI METALTECH LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LTI METALTECH LIMITED
- 7 -
At the planning stage of the audit we gain an understanding of the laws and regulations which apply to the company and how the management seek to comply with those laws and regulations. This helps us to plan appropriate risk assessments.
During the audit we focus on relevant risk areas and review the compliance with the laws and regulations by making relevant enquiries and undertaking corroboration, for example by reviewing Board Minutes and other documentation.
We assess the risk of material misstatement in the financial statements including as a result of fraud and undertook procedures including:
Reviewing the controls set in place by management;
Making enquiries of management as to whether they consider fraud or other irregularity may have taken place, or where such opportunity might exist;
Challenging management assumptions with regard to accounting estimates;
Identifying and testing journal entries, particularly those which appear to be unusual by size or nature; and
Reviewing the health and safety measures in place and obtaining the reports of the health and safety inspections to ensure adherence.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
Use of our report
This report is made solely to the company's members, as a body, 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 members those matters we are required to state to them 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 members as a body, for our audit work, for this report, or for the opinions we have formed.
Stephen Howard Neal (Senior Statutory Auditor)
For and on behalf of Shaw Gibbs (Audit) Limited
12 July 2024
Chartered Certified Accountants
Statutory Auditor
264 Banbury Road
Oxford
OX2 7DY
LTI METALTECH LIMITED
STATEMENT OF TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
30,972,723
30,078,532
Cost of sales
(25,675,923)
(24,153,362)
Gross profit
5,296,800
5,925,170
Administrative expenses
(4,371,797)
(4,496,438)
Operating profit
4
925,003
1,428,732
Interest receivable and similar income
7
140,407
4,388
Interest payable and similar expenses
(4,101)
(138)
Intercompany loan write off
(2,000,000)
(Loss)/profit before taxation
(938,691)
1,432,982
Taxation
8
(222,280)
(219,253)
(Loss)/profit for the financial year
(1,160,971)
1,213,729
Total comprehensive (expense) / income for the year
(1,160,971)
1,213,729
The statement of total comprehensive income has been prepared on the basis that all operations are continuing operations.
There are no recognised gains or losses other than those passing through the statement of total comprehensive income.
LTI METALTECH LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
1,045,039
1,373,008
Investments
10
1,880,998
1,880,998
2,926,037
3,254,006
Current assets
Stocks
12
2,467,865
2,129,829
Debtors falling due after more than one year
13
2,294,397
3,020,000
Debtors falling due within one year
13
11,146,214
11,830,025
Cash at bank and in hand
540,741
727,567
16,449,217
17,707,421
Creditors: amounts falling due within one year
14
(6,233,081)
(6,402,795)
Net current assets
10,216,136
11,304,626
Total assets less current liabilities
13,142,173
14,558,632
Creditors: amounts falling due after more than one year
15
(150,000)
Provisions for liabilities
Provisions
16
807,104
856,967
Deferred tax liability
17
158,375
214,000
(965,479)
(1,070,967)
Net assets
12,176,694
13,337,665
Capital and reserves
Called up share capital
19
25,000
25,000
Profit and loss reserves
12,151,694
13,312,665
Total equity
12,176,694
13,337,665
The financial statements were approved by the board of directors and authorised for issue on 12 July 2024 and are signed on its behalf by:
E Rayner
Director
Company registration number 05300889 (England and Wales)
LTI METALTECH LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
25,000
12,098,936
12,123,936
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,213,729
1,213,729
Balance at 31 December 2022
25,000
13,312,665
13,337,665
Year ended 31 December 2023:
Loss and total comprehensive income
-
(1,160,971)
(1,160,971)
Balance at 31 December 2023
25,000
12,151,694
12,176,694
LTI METALTECH LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
60,490
(1,096,307)
Interest paid
(4,101)
(138)
Income taxes paid
(120,495)
(88,867)
Net cash outflow from operating activities
(64,106)
(1,185,312)
Investing activities
Purchase of tangible fixed assets
(153,870)
(1,094,158)
Proceeds on disposal of tangible fixed assets
11,500
Interest received
31,150
4,388
Net cash used in investing activities
(122,720)
(1,078,270)
Net decrease in cash and cash equivalents
(186,826)
(2,263,582)
Cash and cash equivalents at beginning of year
727,567
2,991,148
Cash and cash equivalents at end of year
540,741
727,567
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
LTI Metaltech Limited is a private company limited by shares incorporated in England and Wales. The registered office is 163 Brook Drive, Milton Park, Abingdon, Oxfordshire, OX14 4SD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS102") 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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
In accordance with FRS102 paragraph 33.1A, the exemption has been taken from disclosing transactions and balances with group companies on the basis that every subsidiary that is party to such transactions is wholly owned by Isaak Holding GmbH or LTi Metaltech Limited.
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:
- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
LTI Metaltech Limited is a wholly owned subsidiary of Isaak Holding GmbH and the results of LTI Metaltech Limited are included in the consolidated financial statements of Isaak Holding GmbH which are available from Rudolf-Diesel- Str.7, 97944, Boxberg/Baden, Germany.
1.2
Going concern
The company derives the vast majority of its turnover from one customer. Both companies remain dependent upon one another in the short to medium term and the directors are therefore confident that the companies will continue to trade with each other, at similar levels of activity, for the foreseeable future. This is demonstrated by a contractual supply agreement entered into by the parties involved.true
At 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
The turnover shown in the profit and loss account represents amounts invoiced during the year, exclusive of Value Added Tax. Invoices to the primary customer are raised weekly to recognise the goods appropriated by the customer.
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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:
Leasehold improvements
3 to 7 years straight line
Plant and machinery
3 to 7 years straight line
Fixtures, fittings & equipment
3 to 5 years straight line
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 recognised in the statement of total comprehensive income.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Stocks
Stocks are valued at the lower of cost and estimated selling price less costs to complete and sell after making due allowance for obsolete and slow moving items. Work in progress is valued on the basis of direct costs plus attributable overheads based on the level of activity. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation.
1.7
Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
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 arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the company's accounts. Deferred tax is provided in full on material timing differences which result in an obligation to pay more (or less) tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws.
1.9
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.10
Retirement benefits
The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.
1.11
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.
1.12
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.
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock valuation and obsolescence
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete stock and slow moving items. Work in progress is valued on the basis of direct costs plus attributable overheads, based on the level of activity. Provision is made for any foreseeable losses, where appropriate. No element of profit is included in the valuation.
The calculation of the above provisions requires judgements to be made, which include a number of variables, such as, the forecast customer demand, the economic environment, the ageing of stock and the discontinuation of certain product lines by the company's key customer. These variables are monitored by the directors and a provision is in place to mitigate the relevant risks.
Standard cost is also considered a significant estimate.
Useful economic lives of non-current assets
The useful economic lives of non-current assets have been derived from the judgement of the directors, using their best estimate of the write-down period.
Dilapidations provision
The dilapidations provision with respect to the premises rented by the company is based on a professional dilapidations assessment that was carried out in 2022 by a firm of Chartered Surveyors. The adequacy of the dilapidations provision and the necessity for an additional professional assessment is monitored by the directors on an annual basis. Adjustments are made as and when necessary to ensure the adequacy of the relevant provision.
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Materials provision
The company enters into supplier contracts to purchase materials over certain periods of time in order to fulfil the demand from its principal customer. From time to time the principal customer may discontinue certain product lines and as a result, the company may be in a position where it is contracted to purchase additional materials with respect to discontinued product lines. The directors monitor continuously the demand from its principal customer and they also enter into proactive negotiations to ensure that the discontinuance of certain product lines is managed proactively and does not result in the company being committed to purchase excess stock that cannot be used in other product lines. Despite that and the fact that there is an understanding that the principal supplier will meet such commitments in case of sudden product discontinuations, from time to time a materials provision may be necessary. The provision is estimated by the directors to be the cost of the stock that the company is committed to purchase with respect to discontinued product lines and cannot be used in the manufacturing of others and will not be met by its principal supplier.
Contingent consideration
The cost of investment regarding the acquisition of Vessco Engineering Limited includes £150,000 with respect to the contingent consideration that will become due if Vessco Engineering Limited achieve profits agreed in the share purchase agreement in the 36 months following the acquisition date.
A corresponding amount has been recognised in creditors.
At the acquisition date and at the year-end date, the directors of LTI are of the opinion that the relevant performance objectives will be met and therefore the contingent consideration will become due.
In their assessment, the directors have taken into consideration the post acquisition performance of Vessco Engineering Limited as well as the forecasted figures for the contingent consideration period which incorporate all available information to the date of their assessment.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Income from manufacturing fabricated metal products
30,972,723
30,078,532
2023
2022
£
£
Other significant revenue
Interest income
140,407
4,388
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
30,606,249
28,292,351
Rest of the world
366,474
1,786,181
30,972,723
30,078,532
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
12,931
13,976
Fees payable to the company's auditors for the audit of the company's financial statements
24,000
22,000
Depreciation of owned tangible fixed assets
481,839
535,827
Profit on disposal of tangible fixed assets
-
(9,800)
Operating lease charges
570,194
563,366
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Number of direct production staff
70
70
Number of administrative staff
21
22
Number of indirect productive staff
25
20
Total
116
112
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,355,773
5,409,243
Social security costs
533,348
524,333
Pension costs
255,199
442,571
6,144,320
6,376,147
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
718,979
482,161
Company pension contributions to defined contribution schemes
42,258
54,953
761,237
537,114
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
374,740
303,705
Company pension contributions to defined contribution schemes
13,648
54,298
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
30,883
4,388
Interest receivable from group companies
109,257
Other interest income
267
Total income
140,407
4,388
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
302,800
96,036
Adjustments in respect of prior periods
(24,895)
(42,783)
Total current tax
277,905
53,253
Deferred tax
Origination and reversal of timing differences
(55,625)
166,000
Total tax charge
222,280
219,253
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 20 -
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
(Loss)/profit before taxation
(938,691)
1,432,982
Expected tax charge based on a corporation tax rate of 23.5% (2022: 19%)
(220,592)
272,267
Tax effect of expenses that are not deductible in determining taxable profit
483,447
19,713
Adjustments in respect of prior years
(24,895)
(42,783)
Effect of change in corporation tax rate
(19,811)
Deferred tax movement
(55,625)
166,000
Depreciation in excess of capital allowances
55,291
(195,197)
Capital items expensed
1,123
Pensions
4,465
(747)
Total tax charge for the year
222,280
220,376
In the budget on 3 March 2021, the UK Government announced an increase in the main UK corporation tax rate from 19% to 25% with effect from 1 April 2023. The change in rate was substantively enacted on 24 May 2021 and deferred tax has been calculated at 25%.
9
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost
At 1 January 2023
213,854
5,383,776
1,030,878
6,628,508
Additions
24,753
111,342
17,775
153,870
At 31 December 2023
238,607
5,495,118
1,048,653
6,782,378
Depreciation and impairment
At 1 January 2023
175,572
4,303,660
776,268
5,255,500
Depreciation charged in the year
27,790
321,665
132,384
481,839
At 31 December 2023
203,362
4,625,325
908,652
5,737,339
Carrying amount
At 31 December 2023
35,245
869,793
140,001
1,045,039
At 31 December 2022
38,282
1,080,116
254,610
1,373,008
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
11
1,880,998
1,880,998
11
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Vessco Engineering Limited
163 Brook Drive, Milton Park, Abingdon, Oxfordshire, OX14 4SD
Ordinary
100.00
12
Stocks
2023
2022
£
£
Raw materials and consumables
1,568,510
1,327,863
Work in progress
407,440
354,452
Finished goods and goods for resale
491,915
447,514
2,467,865
2,129,829
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
8,863,619
10,740,815
Amounts due from subsidiary undertakings
1,459,902
319,050
Other debtors
353,823
386,756
Prepayments and accrued income
468,870
383,404
11,146,214
11,830,025
Amounts falling due after one year:
Amounts due from fellow group undertakings
2,294,397
3,020,000
Total debtors
13,440,611
14,850,025
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
4,391,323
4,614,976
Amounts owed to group undertakings
335,022
326,561
Corporation tax
252,756
95,346
Other taxation and social security
781,252
898,639
Other creditors
227,082
219,259
Accruals and deferred income
245,646
248,014
6,233,081
6,402,795
15
Creditors: amounts falling due after more than one year
2023
2022
£
£
Other creditors
150,000
16
Provisions for liabilities
2023
2022
Notes
£
£
Provisions
807,104
856,967
Deferred tax liabilities
17
158,375
214,000
965,479
1,070,967
The balance of provisions relates to property dilapidations of £807,104 (2022: £856,967) based on the cost estimated by an independent surveyor.
17
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
158,375
214,000
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 January 2023
214,000
Deaccelerated capital allowances
(55,625)
Liability at 31 December 2023
158,375
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
255,199
442,571
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.
At the year end date amounts payable to the pension scheme totalled £42,958 (2022: £40,539).
19
Share capital
2023
2022
£
£
Ordinary share capital
Allotted, called up and fully paid
25,000 Ordinary A shares of £1 each
25,000
25,000
The company's ordinary shares, which are non redeemable and carry no right to fixed income, each carry the right to one vote at general meetings of the company and rank equally for any dividends declared.
20
Capital and purchasing commitments
During the year ended 31 December 2021, the company entered into a supplier agreement to purchase stainless steel starting in March 2022 and ending in FY24/25 for a total price of c£1.1m. The relevant stock will be delivered directly to the company’s premises.
During the year ended 31 December 2023, the company entered into a further supplier agreement to purchase stainless steel, approx 1,843 tonnes starting in October 2023 and expected to finish in September 2024 at a total cost of c£8.75m. The relevant stock will be delivered directly to the company’s premises.
During the year ended 31 December 2023, the company also entered into a supplier agreement to purchase aluminium, approx 322 tonnes starting in October 2023 and expected to finish in September 2024 at a total cost of c£1.59m. The relevant stock was and will be delivered directly to the company’s premises.
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
21
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
571,122
579,122
Between two and five years
420,553
985,465
991,675
1,564,587
22
Related party transactions and controlling party
LTi Metaltech Limited is a wholly owned subsidiary of Isaak Holding GmbH, a company based in Rudolf - Diesel- Str.7, 97944, Boxberg/ Baden, Germany. The ultimate controlling parties are K Isaak and his family.
In accordance with FRS102 paragraph 33.1A, the exemption has been taken from disclosing transactions and balances with group companies on the basis that every subsidiary that is party to such transactions is wholly owned by Isaak Holding GmbH.
There were no other related party transactions and balances that require disclosure.
No guarantees have been given or received.
23
Cash generated from operations
2023
2022
£
£
(Loss)/profit for the year after tax
(1,160,971)
1,213,729
Adjustments for:
Taxation charged
222,280
219,253
Finance costs
4,101
138
Investment income
(140,407)
(4,388)
Gain on disposal of tangible fixed assets
-
(9,800)
Depreciation and impairment of tangible fixed assets
481,839
535,827
(Decrease)/increase in provisions
(49,863)
71,667
Movements in working capital:
(Increase)/decrease in stocks
(338,036)
260,795
Decrease/(increase) in debtors
1,518,671
(5,377,266)
(Decrease)/increase in creditors
(477,124)
1,993,738
Cash generated from/(absorbed by) operations
60,490
(1,096,307)
LTI METALTECH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
24
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
727,567
(186,826)
540,741
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