REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
LESS COMMON METALS LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
LESS COMMON METALS LIMITED |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Profit and Loss Account | 10 |
Balance Sheet | 11 |
Statement of Changes in Equity | 12 |
Notes to the Financial Statements | 13 |
LESS COMMON METALS LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 December 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
100 Barbirolli Square |
Manchester |
M2 3BD |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
The directors present their strategic report for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
Principal activities of the Company during the year were manufacture and sale of rare earth-based alloys, either by Vacuum Induction Melting or Co-reduction and the production of light rare earth metals by molten salt electrolysis. The company's main products are samarium cobalt and neodymium iron boron alloys, both for permanent magnet applications. Such magnets are used, for example in automotive, power generation and electronic industries. |
BUSINESS MODEL |
The Company adds value through processing of rare earth oxides, rare earth metals and transition metals into specialised and often complex alloys of close compositional control, low and consistent levels of impurities and controlled microstructures. |
Rare earth-based raw materials used by the Company are sourced both from China, the main global supplier of such materials, and from non-Chinese suppliers in order to lessen overdependence on a single geographic region. Other key raw materials, such as cobalt-based materials are sourced from the main ethical global suppliers. The company maintains close links with key raw material suppliers and a strong understanding of market conditions, enables secure and competitive feed to support manufacturing activities. |
The company's customers are located primarily in Europe and the far-East. Emphasis is placed on maintaining close links with all customers on commercial, technical and logistical matters to retain and grow share in key markets. |
REVIEW OF BUSINESS |
The company had a difficult trading year in 2023 following raw material prices falling back to the levels seen in 2021. |
Chinese dominance in the market still prevails across all areas of the market that LCM supplies. |
With the dependence on China for RE being on the political agenda for the UK, USA and Europe LCM has focused its technical efforts on |
- Developing a process for producing HRE (Dy/Tb) |
- Developing a process for Samarium production |
LCM has been successful in applying for grant funding through both the EU Horizon program and the UKRI Climates programme. All projects will focus on NdFeB alloy production. |
LCM remains committed to ethical sourcing. This includes working to fully understand supply chains, use only of legitimate sources for rare earth purchases, procurement of cobalt-based materials only from sources free of illegally-mined artisanal material and adherence to conflict minerals legislation. |
LCM's neodymium iron boron alloy sold in 2023 continues to use non-Chinese neodymium/neodymium praseodymium metal. |
Sales by volume in 2023 decreased slightly on the 2022 figures and Revenue also decreased back to the levels seen in 2021. Gross Profit also decreased. |
Year-end stock value decreased by 11% compared with the end of 2022. Stock values were affected by the movements in raw materials purchases. |
LCM continues its commitment to operate all activities under the highest possible standards of Environmental, Health and Safety stewardship. Focus is placed on; maintaining an appropriate company-wide culture, senior management participation on all Health and Safety matters, employee awareness and training of staff. The company has comprehensive ISO9001 Quality and ISO14001 Environmental Management Systems, with specific objectives relating to; customer satisfaction, continuous improvement, segregation of waste streams and reduction of landfill waste. Senior management commitment, effective communication and highly visible reporting of performance are maintained to support all these commitments. |
KEY PERFORMANCE INDICATORS |
LCM measures a number of Key Performance Indicators linked to Environmental, Health and Safety, Financial, Quality and Operational aspects of the business. |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
Environmental, Health and Safety KPIs focus on minimising incidents and by monitoring the effectiveness of EHS systems and measures taken to prevent any incident. |
The main Financial KPIs are linked to achievement of the Annual Operating Plan and specifically on increasing volume of sales whilst at the same time maintaining suitable margins for all business. |
Quality and Operational KPIs focus on ensuring customer satisfaction, maintaining close contact with customers, minimising non-conformances, optimising furnace utilisation, maximising yields and ensuring that all production activities are carried out efficiently. |
PRINCIPAL RISKS AND UNCERTAINTIES |
LCM sources critical raw materials in the open market and, as such, must consider the risk of supply disruption due to geopolitical or other factors. At the time of writing this Strategic Report, there is increased concern that China may restrict the export of certain rare earths, in particular to the USA as part of ongoing trade disputes. |
For several years, the low price of added value rare earth products from China has served as a barrier to entry into the market from other potential suppliers. Low export prices from China continue, and these are supported by Chinese Government policies to maintain the strong position of the domestic industry. However, current concerns about possible supply disruption should stimulate efforts to establish viable alternatives to China. LCM is actively involved in much of this work. |
FUTURE DEVELOPMENTS |
The company continues to explore options for improving the supply of rare earth raw materials at stable and realistic prices to support its manufacturing activities. Such options include both strategic partnerships with other companies and possible moves towards developing supply based on other business interests of the parent company shareholders. |
The company continues to explore options for diversification into non-rare earth products. New markets and products continued to be developed throughout the year. |
ON BEHALF OF THE BOARD: |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 December 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2023. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
Other changes in directors holding office are as follows: |
DIRECTOR'S INDEMNITIES |
The Company has indemnified its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in S232 of the Companies Act 2006. Such qualifying third-party indemnity provision was in place during the period and is in force at the date of approving the financial statements. |
DISCLOSURE IN THE STRATEGIC REPORT |
The Company has chosen, in accordance with Section 414 C(ii) of the Companies Act 2006, and as noted in this Directors' Report, to include certain matters in its Strategic Report that would otherwise be required to disclose in this Directors' Report, specifically in respect of the review of the business, key performance indicators, principal business risks and uncertainties and future developments for the company. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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; |
- | 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. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 December 2023 |
AUDITORS |
The auditor, Xeinadin Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LESS COMMON METALS LIMITED |
Opinion |
We have audited the financial statements of Less Common Metals Limited (the 'company') for the year ended 31 December 2023 which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of 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. |
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 Auditors' 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 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 the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LESS COMMON METALS LIMITED |
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 Report of the Directors. |
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: |
- | 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 directors' 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 Statement of Directors' Responsibilities set out on page four, 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 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LESS COMMON METALS LIMITED |
Auditors' 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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Identifying and assessing potential risks related to irregularities |
In identifying and assessing risks of material misstatement in respect of irregularities including fraud and non-compliance with laws and regulations we have considered the following: |
- | The nature of the industry and sector, control environment and business performance including the company's remuneration policies, key drivers for directors remuneration and performance targets; |
- | Results of the enquiries of management about their own identification and assessment of the risks of irregularities; |
- | Any matters we have identified having obtained and reviewed the company's documentation of their policies and procedures relating to: |
- | identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance; |
- | detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; |
- | the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; |
- | the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. |
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of income, recoverability of trade and other debtors, valuation of stock and timing of recognition of grant funded projects. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. |
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. |
Audit response to risks identified |
Our procedures to respond to risks identified included the following: |
- | reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; |
- | enquiring of management concerning actual and potential litigation and claims; |
- | performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; |
- | reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and |
- | in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK). |
We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LESS COMMON METALS LIMITED |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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 a Report of the Auditors 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. |
for and on behalf of |
Statutory Auditors |
100 Barbirolli Square |
Manchester |
M2 3BD |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
PROFIT AND LOSS ACCOUNT |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
TURNOVER | 4 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
3,664,322 | 4,393,822 |
OPERATING LOSS | 7 | ( |
) | ( |
) |
Interest payable and similar expenses | 8 |
LOSS BEFORE TAXATION | ( |
) | ( |
) |
Tax on loss | 9 | ( |
) |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
BALANCE SHEET |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 10 |
CURRENT ASSETS |
Stocks | 11 |
Debtors | 12 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 13 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 14 | ( |
) | ( |
) |
PROVISIONS FOR LIABILITIES | 18 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Retained earnings |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 |
Deficit for the year | - | (229,257 | ) | (229,257 | ) |
Total comprehensive loss | - | ( |
) | ( |
) |
Balance at 31 December 2022 |
Deficit for the year | - | (536,550 | ) | (536,550 | ) |
Total comprehensive loss | - | ( |
) | ( |
) |
Balance at 31 December 2023 |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Less Common Metals Limited is a private company limited by share capital, incorporated in England and Wales, registration number 02690088. The address of the registered office and principal place of business is Unit 2 Hooton Park, North Road, Ellesmere Port, Cheshire, CH65 1BL. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The functional currency of the company is considered to be Pound Sterling due to the company's principal place of business and permanent establishment being carried out in the UK. |
The profit and loss account has been converted throughout the year using the rates applicable to each transaction as and when they occur on a month by month basis with exchange differences being recognised through the profit and loss account when they arise. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirements of Section 33 Related Party Disclosures paragraph 33.7. |
Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Turnover |
Turnover represents the value of goods provided during the year,excluding value added tax. Turnover is measured at the fair value of the consideration received or receivable. Turnover is reduced for estimated customer returns, rebates and other similar allowances. |
Turnover from the sale of goods is recognised when all the following conditions are satisfied: |
- | the Company has transferred to the buyer the significant risks and rewards of ownership of the goods; |
- | the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; |
- | the amount of turnover can be measured reliably; |
- | it is probable that the economic benefits associated with the transaction will flow to the company; and |
- | the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Tangible fixed assets |
Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost or valuation, less estimated residual value, of each asset over its estimated useful life, as follows: |
Long leasehold | - | over the term of the lease |
Freehold property | - | 25 years straight line |
Plant and machinery | - | 5, 10 and 15 years straight line |
Fixtures and fittings | - | 3 and 10 years straight line |
Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. |
Provisions required to meet dilapidation clauses under the company property leases were capitalised at the outset and are being written off over the term of the lease. |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks are stated at the lower of cost and selling price less cost of selling. Cost is based on the weighted average principle and includes expenditure incurred in acquiring the stocks, production or conversion costs and other costs in bringing them to their existing location and condition. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Assets that are held by the Company under leases which transfer to the Company substantially all the risks and rewards of ownership are classified as being held under finance leases. Leases which do not transfer substantially all the risks and rewards of ownership to the company are classified as operating leases. |
Assets held under finance leases are initially recognised as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statements of financial position as a finance lease obligation. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability, finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Company's policy on borrowing costs . Contingent rentals are recognised as expenses in the periods in which they are incurred. |
Operating lease payments are recognised as an expense on straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Differences between contributions payable in the period and contributions actually paid are shown as either accruals or prepayments in the balance sheet. |
Trade and other debtors |
Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts. |
Trade and other creditors |
Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost. |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Cash and cash equivalents |
Cash and cash equivalents are represented by cash at bank and in hand. Bank borrowings are included in other creditors. |
3. | SIGNIFICANT JUDGEMENTS AND ESTIMATES |
In the application of the Company's accounting policies above, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period. |
The following provisions have been made in the financial statements: |
Dilapidation Provision - A provision has been made in respect of the estimated costs of vacating the properties which are currently leased by the company. The provision at the reporting date was £460,273 (2022 - £460,273). |
4. | TURNOVER |
The turnover and loss before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by class of business is given below: |
2023 | 2022 |
£ | £ |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom |
Europe |
United States of America |
Rest of World | 1,979,911 | 5,809,844 |
5. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
5. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees during the year was as follows: |
2023 | 2022 |
Production | 29 | 31 |
Administration | 16 | 18 |
6. | DIRECTORS' EMOLUMENTS |
2023 | 2022 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
7. | OPERATING LOSS |
The operating loss is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Loss on disposal of fixed assets |
Auditors' remuneration |
Foreign exchange differences | ( |
) |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank loan interest |
9. | TAXATION |
Analysis of the tax credit |
The tax credit on the loss for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | ( |
) |
Tax on loss | ( |
) |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
9. | TAXATION - continued |
Reconciliation of total tax credit included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Loss before tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of (2022 - |
( |
) |
( |
) |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Unused tax losses | 131,121 | 48,763 |
R & D tax credit | (39,792 | ) | - |
Total tax credit | (39,792 | ) | - |
10. | TANGIBLE FIXED ASSETS |
Fixtures |
Freehold | Long | Plant and | and |
property | leasehold | machinery | fittings | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
Reclassification/transfer | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
Reclassification/transfer | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
2023 | 2022 |
£ | £ |
Plant and machinery | 229,490 | 246,979 |
229,490 | 246,979 |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
11. | STOCKS |
2023 | 2022 |
£ | £ |
Raw materials |
Work-in-progress |
Finished goods |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
VAT | 15,580 | 18,740 |
Tax |
Prepayments and accrued income |
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans and overdrafts (see note 15) |
Other loans (see note 15) |
Hire purchase contracts (see note 16) |
Trade creditors |
Social security and other taxes |
Accruals and deferred income |
14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£ | £ |
Hire purchase contracts (see note 16) |
Other creditors |
15. | LOANS |
An analysis of the maturity of loans is given below: |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Other loans |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
16. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
17. | SECURED DEBTS |
On the 11 October 2018, Barclays created a fixed and floating charge over all of the property and undertakings of the company; this charge also contains a negative pledge. |
On the 9th November 2022, a Director created a fixed charge over the company's freehold property. |
18. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Other provisions |
Dilapidations | 460,273 | 460,273 |
The dilapidation provision amounts above relate to the properties leased by the company. The directors have made their best estimate of future obligations for the dilapidation costs to restore the leasehold property to its original state, however there are uncertainties over the exact costs to the company. |
Deferred Tax |
No deferred tax asset has been recognised due to the current uncertainty of future taxable profits. The asset will be recognised when sufficient taxable profits are generated to relieve the losses, depreciation and capital allowances equalise and other temporary differences reverse. The amounts not provided were as follows: |
2023 | 2022 |
£ | £ |
Short term temporary differences | (2,183,752 | ) | (1,899,199 | ) |
Unused tax losses | 6,624,645 | 5,944,880 |
4,440,893 | 4,045,681 |
LESS COMMON METALS LIMITED (REGISTERED NUMBER: 02690088) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1.00 | 75,790 | 75,790 |
Ordinary B | £1.00 | 5,000 | 5,000 |
80,790 | 80,790 |
20. | CAPITAL COMMITMENTS |
2023 | 2022 |
£ | £ |
Contracted but not provided for in the |
financial statements |
21. | RELATED PARTY DISCLOSURES |
At the balance sheet date the company owed a director £281,125 (2022: £326,932) for a loan on which interest is charged. |
22. | ULTIMATE CONTROLLING PARTY |
The immediate parent undertaking at the balance sheet date was LCMG Limited and the ultimate parent undertaking was Indian Ocean Rare Metals Pte Ltd, a company registered in Singapore. |
The parent company of the smallest group that includes the company and for which consolidated financial statements are prepared is LCMG Limited. Copies of these financial statements can be obtained from the registered office at Unit 2 Hooton Park, North Road, Ellesmere Port, Cheshire, CH65 1BL. |