Company Registration No. SC055281 (Scotland)
Silberline Limited
Annual report and financial statements
for the year ended 31 December 2023
Silberline Limited
Company information
Directors
LJ Scheller
GJ Karnish
Secretary
Brodies Secretarial Services Limited
Company number
SC055281
Registered office
58 Morrison Street
Edinburgh
EH3 8BP
Auditor
Henderson Loggie LLP
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Silberline Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 30
Silberline Limited
Strategic Report
for the year ended 31 December 2023
- 1 -

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

Fair review of the business

The results for the Company show a pre-tax loss of £2,630,544 (2022 - profit £153,362) for the year and sales of £16,412,022 (2022 - £19,753,132). The directors paid a final dividend of £Nil (2022 - £Nil).

 

The Company experienced a decline in sales from 2022 to 2023 due to a reduction in customer demand and the localization of production within the various Silberline entities which resulted in a reduction in intercompany sales for Silberline Limited. Together with an increase in input costs, including electricity & gas, this resulted in a reduction in gross profit margin for the Company.

 

On January 19th 2024, Silberline Limited as part of the Silberline Group was acquired by Eckart, a division of the specialty chemicals group Altana AG. The acquisition of Silberline Limited creates new potential driving the development of sustainable product innovations, benefiting both customers and employees.

 

Since the acquisition post year end by Altana AG, consideration is being given as to how to best integrate the company into the new group. Options under consideration include the Leven site continuing as it is, a potential downsizing of the site or the possibility of closure. At the time of approving these financial statements, no binding decisions have been made.

Principal risks and uncertainties

Market conditions

The sector in which the company operates is a globally priced competitive market. We are currently operating in an inflationary environment and we have seen an increase in raw material prices. The company mitigates the risk by adjusting sales prices and ensuring that it provides high quality products and builds global relationships with its customers through customer service and technical support.

 

Credit and counterparty risk

The company has trade debtors and cash and bank balances. These assets represent the company’s main exposure to credit risk, which is a risk that a counterparty will fail to discharge its obligations, resulting in financial loss to the company. The company may also be exposed to financial risk through the failure of a supplier. The financial strength of counterparties are considered prior to placing and receiving trade orders and are reviewed as trading progresses where there are indications that a counterparty may be experiencing financial difficulty.

 

Liquidity risk

The company manages liquidity risk by maintaining adequate cash and banking facilities, monitoring cash flows and by matching profiles of financial assets and liabilities within the bounds of its contractual obligations.

 

Cash flow exchange risk

The company is exposed to changes in exchange rates on its trade balances and bank deposits. The company’s financial instruments comprise cash, bank deposits, trade receivables and payables. The company manages the risk through matching maturity profiles of foreign currency payables and receivables.

Development and performance

The commercial environment is expected to remain uncertain in 2024, however, the company remains confident that it will achieve a profitable performance in the future.

 

The company will continue to improve its operations through the investment in people, processes and working capital management to ensure we continue to meet the requirements of our customers.

Silberline Limited
Strategic Report (continued)
for the year ended 31 December 2023
- 2 -
Key performance indicators

The financial KPIs used to measure the company’s progress and performance are turnover, gross profit and cash.

 

Turnover decreased by £3,341,110 to £16,412,022 (2022 - £19,753,132), a decrease of 17% and the company made a gross profit of £81,410 (2022 - £2,884,720), representing a gross margin of 0.5% (2022 – 15%). The cash balance decreased by £10,947 to £289,792 (2022 - £278,845).

On behalf of the board

GJ Karnish
Director
17 April 2024
Silberline 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.

Principal activities

The principal activity of the company continued to be that of the manufacture and supply of high quality special effect and performance pigments for coatings, paints, inks, plastics and textiles.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid.

Directors

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

LJ Scheller
GJ Karnish
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.

Strategic report

Included within the strategic report is an indication of the principal risks and uncertainties including the risks associated with the market conditions, credit and counterparty risk, liquidity risk, and cash flow exchange risk. Also included are the methods adopted to manage these risks where applicable.

On behalf of the board
GJ Karnish
Director
17 April 2024
Silberline Limited
Directors' responsibilities statement
for the year ended 31 December 2023
- 4 -

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.

Silberline Limited
Independent auditor's report
to the members of Silberline Limited
- 5 -
Opinion

We have audited the financial statements of Silberline 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 FRS 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.

Silberline Limited
Independent auditor's report (continued)
to the members of Silberline Limited
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

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

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 and the directors' report.

 

We have nothing to report in respect of the following matters where 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.

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below.

Silberline Limited
Independent auditor's report (continued)
to the members of Silberline Limited
- 7 -

As part of our planning process:

 

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the 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. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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.

Silberline Limited
Independent auditor's report (continued)
to the members of Silberline Limited
- 8 -

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.

Gavin Black (Senior Statutory Auditor)
For and on behalf of Henderson Loggie LLP
17 April 2024
Chartered Accountants
Statutory Auditor
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Silberline Limited
Statement of comprehensive income
for the year ended 31 December 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
16,412,022
19,753,132
Cost of sales
(16,330,612)
(16,868,412)
Gross profit
81,410
2,884,720
Distribution costs
(991,512)
(1,036,918)
Administrative expenses
(1,778,924)
(1,747,209)
Other operating income
70,394
63,084
Operating (loss)/profit
4
(2,618,632)
163,677
Interest receivable and similar income
7
4,099
489
Interest payable and similar expenses
8
(16,011)
(10,804)
(Loss)/profit before taxation
(2,630,544)
153,362
Tax on (loss)/profit
9
615,838
(19,449)
(Loss)/profit for the financial year
(2,014,706)
133,913

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.

Silberline Limited
Balance sheet
as at 31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
603,333
1,079,055
Tangible assets
11
5,218,826
5,691,762
Investment properties
12
288,410
288,410
6,110,569
7,059,227
Current assets
Stocks
13
5,724,274
7,248,883
Debtors
14
2,561,539
3,309,877
Cash at bank and in hand
289,792
278,845
8,575,605
10,837,605
Creditors: amounts falling due within one year
15
(1,397,612)
(1,771,959)
Net current assets
7,177,993
9,065,646
Total assets less current liabilities
13,288,562
16,124,873
Creditors: amounts falling due after more than one year
16
(21,309)
(361,161)
Provisions for liabilities
Deferred tax liability
17
-
0
(481,753)
-
(481,753)
Net assets
13,267,253
15,281,959
Capital and reserves
Called up share capital
19
100,500
100,500
Share premium account
20
4,500
4,500
Profit and loss reserves
21
13,162,253
15,176,959
Total equity
13,267,253
15,281,959
The financial statements were approved by the board of directors and authorised for issue on 17 April 2024 and are signed on its behalf by:
GJ Karnish
Director
Company Registration No. SC055281
Silberline Limited
Statement of changes in equity
for the year ended 31 December 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
100,500
4,500
15,043,046
15,148,046
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
133,913
133,913
Balance at 31 December 2022
100,500
4,500
15,176,959
15,281,959
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(2,014,706)
(2,014,706)
Balance at 31 December 2023
100,500
4,500
13,162,253
13,267,253
Silberline Limited
Statement of cash flows
for the year ended 31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
25
243,295
(65,262)
Interest paid
(16,011)
(10,804)
Income taxes refunded
256,909
319,910
Net cash inflow from operating activities
484,193
243,844
Investing activities
Purchase of tangible fixed assets
(477,345)
(865,267)
Interest received
4,099
489
Net cash used in investing activities
(473,246)
(864,778)
Net increase/(decrease) in cash and cash equivalents
10,947
(620,934)
Cash and cash equivalents at beginning of year
278,845
899,779
Cash and cash equivalents at end of year
289,792
278,845
Silberline Limited
Notes to the financial statements
for the year ended 31 December 2023
- 13 -
1
Accounting policies
Company information

Silberline Limited is a private company limited by shares incorporated in Scotland. The registered office is 58 Morrison Street, Edinburgh, EH3 8BP.

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. The principal accounting policies adopted are set out below.

1.2
Going concern

The financial statements have been prepared on a going concern basis. The directors have considered relevant information, including the financial projections, forecast future cash flows and the impact of subsequent events in making their assessment. The directors have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from rising input costs and the likelihood of the company's main trading markets falling into economic recession. This analysis also considers the effectiveness of available measures to assist in mitigating the impact. true

 

Since the acquisition post year end by Altana AG, consideration is being given as to how to best integrate the company into the new group. Options under consideration include the Leven site continuing as it is, a potential downsizing of the site or the possibility of closure. At the time of approving these financial statements, no binding decisions have been made. Any decision taken will be made with the support of the Altana AG group to ensure that the company can continue to meet all liabilities as they fall due for a period of at least 12 months following approval of these financial statements.

 

Based on the above and having regard to the resources available to the company, including the ongoing financial support of its parent Altana AG, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and 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. 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
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
1
Accounting policies (continued)
- 14 -
1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Intellectual property
10 years straight line
1.6
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:

Freehold land and buildings
Land - nil: buildings - 4% straight line
Plant and equipment
10% straight line

Tangible assets are derecognised on disposal or when no future economic benefits are expected. 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.

The assets' residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

 

Repairs, maintenance and minor inspection costs are expensed as incurred.

1.7
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of income and retained earnings in the period in which the property is derecognised.

 

The Companies Act 2006 requires all properties to be depreciated. However, this requirement conflicts with the generally accepted accounting principle set out in Section 16 of FRS 102. The directors consider that, as these properties are not held for consumption but for their investment potential, to depreciate them would not give a true and fair view and that it is necessary to adopt Section 16 of FRS 102 in order to give a true and fair view. The financial effect of the departure from the statutory accounting rules is not deemed to be material.

Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
1
Accounting policies (continued)
- 15 -
1.8
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
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.

Cost is initially determined based on the standard cost with subsequent adjustment to reflect the actual cost.

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.

1.10
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.

1.11
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.

Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
1
Accounting policies (continued)
- 16 -
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.

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.

Derecognition of financial liabilities

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

Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
1
Accounting policies (continued)
- 17 -
1.12
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.

1.13
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.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.14
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.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

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.

1.15
Retirement benefits

The company operates a defined contribution retirement plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. Contributions to the company's defined contribution pension scheme are charged to the statement of income and retained earnings as incurred. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

1.16
Leases
Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
1
Accounting policies (continued)
- 18 -

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.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.17
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.

 

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

1.18
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.

Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
2
Judgements and key sources of estimation uncertainty (continued)
- 19 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful economic lives of tangible fixed assets

The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of assets. The useful economic lives and residual values are assessed annually. They are amended when necessary to reflect current estimates, based on technological advancements, future investments, economic utilisation and the physical condition of the assets.

Intangible assets

An intangible asset has been capitalised in accordance with the accounting policy. Capitalisation has been based on management's judgement that completion of the development of the asset is technologically and economically feasible. The capitalised amount includes an element of deferred consideration based on future revenue and profit generation from the intangible asset over a 6 year period. In determining future revenue and profit generation, certain assumptions have been made which could change as the development of the asset progresses. Significant changes in assumptions could have a material effect on the carrying value of the intangible asset.

Stock provisions

At the end of each financial period, the company makes a provision against obsolete, slow moving stock and negative margin stock. These provisions are calculated using actual current information.

3
Turnover and other revenue

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

2023
2022
£
£
Turnover analysed by class of business
Principal activity
16,412,022
19,753,132
2023
2022
£
£
Turnover analysed by geographical market
UK
752,175
856,875
Europe
11,245,413
11,802,473
Rest of World
4,414,434
7,093,784
16,412,022
19,753,132
2023
2022
£
£
Other significant revenue
Interest income
4,099
489
Rental income arising from investment properties
30,491
29,574
Royalty income
39,903
33,510
Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 20 -
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(39,974)
(151,745)
Research and development costs
10,513
11,317
Fees payable to the company's auditor for the audit of the company's financial statements
29,220
27,830
Depreciation of owned tangible fixed assets
950,281
1,051,221
(Profit)/loss on disposal of tangible fixed assets
-
10,349
Amortisation of intangible assets
136,490
132,625
Impairment of intangible assets
339,232
446,594
Operating lease charges
155,091
163,707
5
Employees

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

2023
2022
Number
Number
Directors
2
2
Production
99
108
Distribution
8
8
Administrative
12
14
Total
121
132

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,118,965
4,503,843
Social security costs
406,709
460,019
Pension costs
380,347
397,343
4,906,021
5,361,205
Redundancy payments made or committed
91,352
-
Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 21 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
30,000
30,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
4,099
489

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
4,099
489
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
16,011
-
Interest payable to group undertakings
-
0
10,804
16,011
10,804
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
3,341
4,827
Adjustments in respect of prior periods
(137,426)
(87,318)
Total current tax
(134,085)
(82,491)
Deferred tax
Origination and reversal of timing differences
(579,155)
31,310
Adjustment in respect of prior periods
97,402
70,630
Total deferred tax
(481,753)
101,940
Total tax (credit)/charge
(615,838)
19,449

 

Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
9
Taxation (continued)
- 22 -

The actual (credit)/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
(2,630,544)
153,362
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 24% (2022: 19%)
(618,178)
29,139
Tax effect of expenses that are not deductible in determining taxable profit
1,762
(5,343)
Unutilised tax losses carried forward
76,606
-
0
Adjustments in respect of prior years
(152)
35,508
Effect of change in corporation tax rate
(39,345)
7,514
Research and development tax credit
(137,274)
(122,826)
Deferred tax adjustments in respect of prior years
97,402
70,630
Foreign tax
3,341
4,827
Taxation (credit)/charge for the year
(615,838)
19,449

The Finance (No.2) Act 2015 reduced the main rate of UK corporation tax to 19% and this was effective from 1 April 2017. A further reduction in the UK corporation tax rate to 17% was expected to come into effect from 1 April 2020 (as enacted by the Finance Act 2016 on 15 September 2016). However, legislation introduced in the Finance Act 2020 (enacted on 22 July 2020) repealed the reduction of corporation tax, maintaining the current rate of 19%.

 

On 3 March 2021, the UK Budget 2021 announcements included measures to support economic recovery as a result of the COVID-19 pandemic. These included an increase to the UK’s main corporation tax rate to 25%, which became effective from 1 April 2023. As a result, the effective tax rate for the year ended 31 December 2023 is 23.50%.

 

The 25% rate was granted Royal Assent on 10 June 2021 and so was enacted at the balance sheet date. As a result the closing deferred tax balances as at 31 December 2023 are recognised at 25% (2022 - 25%).

Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 23 -
10
Intangible fixed assets
Intellectual property
£
Cost
At 1 January 2023 and 31 December 2023
3,261,511
Amortisation and impairment
At 1 January 2023
2,182,456
Amortisation charged for the year
136,490
Impairment losses
339,232
At 31 December 2023
2,658,178
Carrying amount
At 31 December 2023
603,333
At 31 December 2022
1,079,055

The intangible asset relates to technology which will improve the company's product offering and is being amortised over the period it is expected to generate revenue.

11
Tangible fixed assets
Freehold land and buildings
Assets under construction
Plant and equipment
Total
£
£
£
£
Cost
At 1 January 2023
5,886,855
766,443
40,157,939
46,811,237
Additions
-
0
205,705
271,640
477,345
Transfers
-
0
(488,129)
488,129
-
0
At 31 December 2023
5,886,855
484,019
40,917,708
47,288,582
Depreciation and impairment
At 1 January 2023
5,731,061
-
0
35,388,414
41,119,475
Depreciation charged in the year
6,398
-
0
943,883
950,281
At 31 December 2023
5,737,459
-
0
36,332,297
42,069,756
Carrying amount
At 31 December 2023
149,396
484,019
4,585,411
5,218,826
At 31 December 2022
155,794
766,443
4,769,525
5,691,762
Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 24 -
12
Investment property
2023
£
Fair value
At 1 January 2023 and 31 December 2023
288,410

The investment property comprises Units 1 and 2, Banbeath Industrial Estate, Leven, KY8 5GY. In January 2016, both units were valued by Hardies Property & Construction Consultants, who are not connected with the company, in accordance with the Royal Institution of Chartered Surveyors and Valuation Standards. The valuations were on an open market value basis and the increase in the valuations was not materially different to the carrying value in the financial statements. No adjustment has been made to reflect the increased valuations through the current or prior year results.

13
Stocks
2023
2022
£
£
Raw materials and consumables
1,792,631
2,139,377
Work in progress
1,318,510
2,104,461
Finished goods and goods for resale
2,613,133
3,005,045
5,724,274
7,248,883

There is no material difference between the carrying amount of stocks and the replacement cost.

The amount of stocks recognised as an expense during the year was £16,330,612 (2022 - £16,868,412).

14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,884,913
1,731,152
Corporation tax recoverable
-
0
122,824
Amounts owed by group undertakings
334,005
1,072,958
Other debtors
192,820
243,960
Prepayments and accrued income
149,801
138,983
2,561,539
3,309,877
Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 25 -
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
696,932
1,099,960
Amounts owed to group undertakings
35,682
-
0
Taxation and social security
101,824
112,781
Other creditors
25,826
72,045
Accruals and deferred income
537,348
487,173
1,397,612
1,771,959
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Government grants
21,309
27,909
Other creditors
-
0
333,252
21,309
361,161
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
767,281
789,838
Tax losses
(762,778)
(302,939)
Retirement benefit obligations
(4,503)
(5,146)
-
481,753
2023
Movements in the year:
£
Liability at 1 January 2023
481,753
Credit to profit or loss
(481,753)
Liability at 31 December 2023
-
Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 26 -
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
380,347
397,343

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.

19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
500
500
500
500
Non-voting ordinary shares of £1 each
100,000
100,000
100,000
100,000
100,500
100,500
100,500
100,500

Ordinary £1 shares carry full ownership, voting and equity rights.

 

The £1 non-voting ordinary shares have the same rights as the £1 ordinary shares, with the exception of not having any voting rights.

20
Share premium account

This reserve includes any premiums received on the issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.

21
Profit and loss reserves

Profit and loss reserves include all current and prior period retained profits and losses.

22
Financial commitments, guarantees and contingent liabilities

Bank borrowings are secured by a fixed and floating charge over the company's property and assets.

Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 27 -
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
103,273
185,480
Between two and five years
287,609
738,213
In over five years
94,591
442,876
485,473
1,366,569
Lessor

The operating leases represent properties leased to third parties. The leases are negotiated over terms of 5 years and rentals are fixed over the duration of the leases. All leases include a provision for five-yearly upward rent reviews according to prevailing market conditions.

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2023
2022
£
£
Within one year
27,449
27,366
Between two and five years
73,339
85,839
In over five years
7,475
22,424
108,263
135,629
24
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
59,280
139,509
Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 28 -
25
Cash generated from/(absorbed by) operations
2023
2022
£
£
(Loss)/profit for the year after tax
(2,014,706)
133,913
Adjustments for:
Taxation (credited)/charged
(615,838)
19,449
Finance costs
16,011
10,804
Investment income
(4,099)
(489)
(Gain)/loss on disposal of tangible fixed assets
-
10,349
Amortisation and impairment of intangible assets
136,490
132,625
Depreciation and impairment of tangible fixed assets
950,281
1,051,221
Movements in working capital:
Decrease/(increase) in stocks
1,524,609
(1,398,449)
Decrease in debtors
625,514
397,407
Decrease in creditors
(368,367)
(415,161)
Decrease in deferred income
(6,600)
(6,931)
Cash generated from/(absorbed by) operations
243,295
(65,262)
26
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
278,845
10,947
289,792
27
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
657,900
629,380
Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
27
Related party transactions (continued)
- 29 -
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
2,130,109
3,141,627
867,269
2,756,552
Other related parties
2,157,727
3,635,891
42,999
53,413
Royalty costs
Royalty income
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
619,947
610,136
-
-
Other related parties
-
-
39,903
33,510

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
268,324
342,902
Other related parties
9,443
27,921

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
261,663
710,939
Other related parties
350,109
732,843
28
Ultimate controlling party

The company is a subsidiary of Silberline Manufacturing Company Inc., which is incorporated in Indiana in the United States of America. The ultimate owner of the Company is considered to be LJ Scheller. Silberline Manufacturing Company Inc. is the only Company which consolidated the Company's financial statements. The consolidated financial statements of Silberline Manufacturing Company Inc. are available from 130 Lincoln Drive, PO Box B, Tamaqua, Pennsylvania, 18252-0420, USA.

Silberline Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 30 -
29
Events after the reporting date

On January 19th 2024, Silberline Limited as part of the Silberline Group was acquired by Eckart, a division of the specialty chemicals group Altana AG.

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