REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
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 |
Statement of Comprehensive Income | 10 |
Statement of Financial Position | 11 |
Statement of Changes in Equity | 12 |
Statement of Cash Flows | 13 |
Notes to the Statement of Cash Flows | 14 |
Notes to the Financial Statements | 15 |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 December 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
Statutory Auditor |
Booth Street Chambers |
Ashton-under-Lyne |
Lancashire |
OL6 7LQ |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
The directors present their strategic report for the year ended 31 December 2023. |
FAIR REVIEW OF THE BUSINESS |
The principal activity of the business continued to be the processing and sales of electro fused synthetic minerals and the sale of imported synthetic minerals to abrasive, refractory and general industrial markets worldwide. |
During the year there was a 14% increase in sales, with turnover reaching £20,413k (2022: £17,879k) and the gross margin reduced from £3,354k to £3,294k, this was in line with expectations. The net profit for the year of £1,433k was slightly lower than the £1,596k recorded in 2022. |
The Company maintained a healthy balance sheet at the end of 2023 with retained earnings of £8,220k compared to £7,200k at the end of 2022. This was due to the Company's strong performance outlined above but also due to the defined benefit pension scheme remaining in a surplus position at the year end. |
The Company's parent entity continued to provide raw materials and services during the year, helping to ensure the competitiveness of the Trafford Park facility. The directors have confirmed that the parent entity is willing and able to continue to supply the Company moving forward. |
The directors are satisfied with the Company's performance for the year and with its position at the year end. |
KEY PERFORMANCE INDICATORS |
The directors believe that the KPIs outlined below provide an overview as to how the Company is performing against principal key objectives to enable it to achieve the directors' long-term strategic vision. The KPIs encompass business performance as well as financial indicators taking consideration of the interests of all stakeholders: |
- Turnover £20,413k (2022: £17,879k) |
- Gross margin £3,294k (2022: £3,354k) |
- Operating profit £1,730k (2022: £1,953k) |
- Cash balances £2,350k (2022: £1,965k) |
- Shareholder funds £12,537k (2022: £11,518k) |
- Headcount 24 (2022: 22) |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The company is forecast to generate a similar level of performance as it achieved in 2023. The directors are aware of the risks that the continued impacts of the war in Ukraine as well as the current worldwide economic and trading environment bring to the Company. The directors meet on a regular basis with other members of senior management where the risks and uncertainties facing the business are discussed and appropriate actions taken to mitigate any impact on the Company's performance. |
Foreign currency risk |
The Company operates from the UK but its customers and suppliers are located not only in the UK but also in other jurisdictions such as Europe and Asia. This fact requires the company to operate in Sterling, Dollars and Euros. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction and the balances are regularly revalued at the prevailing rates of exchange. In light of the above, the company does not undertake any formal hedging in relation to foreign currency. |
Legislative and Regulatory Risk |
The Company operates in an industry which is subject to health and safety, environmental, customs and REACH regulations. Failure to comply with relevant laws and regulations could lead to a loss of reputation, revenues or ability to operate in some jurisdictions. To mitigate this risk, the directors continue to invest in the training of staff, monitor for changes in laws and regulations and identify and action improvements in processes and controls. |
ON BEHALF OF THE BOARD: |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
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. |
FUTURE DEVELOPMENTS |
The directors will continue to pursue a strategy of developing existing customer relationships as well as new opportunities to increase revenues and margins. Detailed future developments, strategy and Key Performance Indicators are discussed in the Strategic Report. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
FINANCIAL INSTRUMENTS |
The Company's financial instruments comprise cash, trade debtors and creditors and certain other debtors and accruals all of which arise from its operations. |
The main risks associated with these financial assets and liabilities are credit risk and liquidity and cash flow risk. The directors review and agree policies for managing each of these risks and they are outlined below. The policies are consistent with those from the prior year. |
The company does not use derivative financial instruments. |
Credit risk |
The Company's credit risk is primarily associated with its trade debtors. The amounts presented in the balance sheet are net of allowances for doubtful debts where applicable. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The directors monitor credit risk but consider that the company has minimal exposure. |
Liquidity and cash flow risk |
Liquidity and cash flow risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The directors aim to mitigate liquidity risk and cash flow risk by managing working capital and, as a result, they continue to closely monitor the Company's working capital requirements. Should the directors identify that the Company requires additional working capital they would look to secure and utilise short-term or long-term finance facilities from external sources or from the group. |
REVIEW OF BUSINESS |
A description of the Company's principal activity, a review of the business and its principal risks and uncertainties is set out in the Strategic Report on pages 2 - 3 of these financial statements. |
The profit for the year, after taxation, amounted to £1,433,396 (2022: £1,595,598). |
Total comprehensive income for the year amounted to £1,019,396 (2022: £3,401,338). |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 December 2023 |
GOING CONCERN |
The directors have made enquiries and assessed the impact and risks of the geo-political situation in Ukraine and inflation. The directors believe that the Company will be able to manage the risks that the global economic climate presents and consider that the accounts should be prepared on a going concern basis. This conclusion has been reached based upon the Company having access to sufficient funds to be able to meet its liabilities and obligations as they fall due for a period of at least twelve months from approving these financial statements. |
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). 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 or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Moss & Williamson Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED |
Opinion |
We have audited the financial statements of Washington Mills Electro Minerals Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 profit 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 |
WASHINGTON MILLS ELECTRO |
MINERALS 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 five, 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 |
WASHINGTON MILLS ELECTRO |
MINERALS 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: |
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which the audit was considered capable of detecting irregularities including fraud is detailed below: |
As a part of our audit in accordance with United Kingdom Generally Accepted Accounting Practice; and requirements of the Companies Act 2006 we exercise professional judgement and maintain professional scepticism throughout the audit. Based on our understanding and accumulated knowledge of the Company and the sector in which it operates we considered the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud and whether such actions or non-compliance might have a material impact on the financial statements. These included but were not limited to those that relate to the form and content of the financial statements, such as the accounting policies, United Kingdom Generally Accepted Accounting Practice, the UK Companies Act 2006, compliance with customs, REACH, health and safety and environmental regulations and those that relate to the payment of employees. All team members were briefed to ensure they were aware of any relevant regulations in relation to their work. |
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries, management bias in accounting estimates and improper revenue recognition. Our audit procedures included, but were not limited to: |
- Agreement of the financial statement disclosures to underlying supporting documentation; |
- Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to revenue recognition, useful life of fixed assets, fair value of property assets and completeness of accruals and provisions; |
- Revenue year end cut-off procedures; |
- Identifying and testing journal entries, in particular any journal entries posted with specific unusual narrative, manual journals to revenue and cash, and review of journals posted to least used accounts; |
- Discussions with management; including consideration of known or suspected instances of non-compliance with laws and regulation and fraud; |
- Obtaining an understanding of how the Company is complying with its legal and regulatory frameworks by making enquiries with management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of board minutes, legal correspondence received, legal expenses incurred and interactions with regulators such as the HMRC. |
- Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. |
- Evaluating the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
WASHINGTON MILLS ELECTRO |
MINERALS 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 |
Chartered Accountants |
Statutory Auditor |
Booth Street Chambers |
Ashton-under-Lyne |
Lancashire |
OL6 7LQ |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
STATEMENT OF COMPREHENSIVE |
INCOME |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
REVENUE | 3 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
1,563,220 | 1,400,633 |
OPERATING PROFIT | 5 |
Interest payable and similar expenses | 6 | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE (LOSS)/INCOME |
Gain/(loss) on defined benefit pension | ( |
) |
Income tax relating to other comprehensive (loss)/income |
( |
) |
OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR, NET OF INCOME TAX |
( |
) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
STATEMENT OF FINANCIAL POSITION |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Property, plant and equipment | 8 |
CURRENT ASSETS |
Inventories | 9 |
Debtors | 10 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 11 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 13 | ( |
) | ( |
) |
PENSION ASSET | 16 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 14 | 3,403,812 | 3,403,812 |
Capital redemption reserve | 15 | 913,983 | 913,983 |
Retained earnings | 15 | 8,219,661 | 7,200,265 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 December 2023 |
Called up | Capital |
share | Retained | redemption | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 January 2022 | 3,403,812 | 3,798,927 | 913,983 | 8,116,722 |
Changes in equity |
Profit for the year | - | 1,595,598 | - | 1,595,598 |
Other comprehensive income | - | 1,805,740 | - | 1,805,740 |
Total comprehensive income | - | 3,401,338 | - | 3,401,338 |
Balance at 31 December 2022 | 3,403,812 | 7,200,265 | 913,983 | 11,518,060 |
Changes in equity |
Profit for the year | - | 1,329,896 | - | 1,329,896 |
Other comprehensive income | - | (310,500 | ) | - | (310,500 | ) |
Total comprehensive income | - | 1,019,396 | - | 1,019,396 |
Balance at 31 December 2023 | 3,403,812 | 8,219,661 | 913,983 | 12,537,456 |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
STATEMENT OF CASH FLOWS |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | ( |
) |
Net cash from operating activities | ( |
) |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Net cash from investing activities | ( |
) | ( |
) |
Increase/(decrease) in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
2,262,459 |
Cash and cash equivalents at end of year |
2 |
2,350,188 |
1,965,221 |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE STATEMENT OF CASH FLOWS |
for the Year Ended 31 December 2023 |
1. | RECONCILIATION OF PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Profit for the financial year |
Depreciation charges |
Pension scheme non-cash movement | (102,000 | ) | (138,000 | ) |
Finance costs | (48,000 | ) | 28,000 |
Taxation |
1,726,967 | 1,916,772 |
Increase in inventories | ( |
) | ( |
) |
(Increase)/decrease in trade and other debtors | ( |
) |
(Decrease)/increase in trade and other creditors | ( |
) |
Cash generated from operations | ( |
) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£ | £ |
Cash and cash equivalents | 2,350,188 | 1,965,221 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 1,965,221 | 2,262,459 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.1.23 | Cash flow | At 31.12.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 1,965,221 | 384,967 | 2,350,188 |
1,965,221 | 2,350,188 |
Total | 1,965,221 | 384,967 | 2,350,188 |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Washington Mills Electro Minerals Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Significant judgements and estimates |
The Company's directors make estimates and assumptions about the future. These estimates and assumptions impact recognised assets and liabilities, as well as revenue and expenses and other disclosures. These estimates are based on historical experience and on various assumptions considered reasonable under the prevailing conditions. The actual outcome may diverge from these estimates if other assumptions are made, or other conditions arise. The estimates and assumptions that may have a significant effect on the carrying amounts of assets and liabilities within the financial year include: |
Tangible assets and intangible assets are recognised at cost, less accumulated depreciation, amortisation and any impairments. Amortisation and depreciation take place over the estimated useful life of each asset, until the assessed residual value of the asset is reached. |
The directors make an estimate of the recoverable value of trade and other debtors. When assessing for impairment of trade and other debtors, management considers factors including the ageing profile of debtors and historical experience. |
The present value of the defined benefit pension surplus or liability depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost or income for pensions include the discount rate. Any changes in these assumptions, which are disclosed in note 16, can considerably impact the carrying value of the pension surplus or liability. Furthermore a roll forward approach which projects results from the latest full actuarial valuation performed at 1 April 2020 has been used by the actuary in valuing the pensions liability at 31 December 2023. Any differences between the figures derived from the roll forward approach and a full actuarial valuation would impact on the carrying amount of the pension liability. |
Turnover |
Turnover represents the amounts (excluding value added tax) derived from the provision of goods to customers during the period. Turnover and profit on ordinary activities before taxation is wholly |
attributable to the company's principal activity as stated in the Strategic Report. Revenue is recognised when the goods are delivered to the customer as this is when the significant risks and rewards of ownership have passed to the buyer. |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Tangible assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised in profit and loss. |
A review for Indicators of impairment Is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. |
For the purposes of impairment testing, when it Is not possible to estimate the recoverable amount of an Individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. |
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases: |
Freehold land and buildings - 2.5% straight line |
Plant and machinery - 5% - 33% reducing balance |
Fixtures, fittings and equipment - 20% reducing balance & 20% straight line |
Land is not depreciated. |
Stocks |
Stocks and work in progress are stated at the lower of cost and net realisable value. Cost includes shipping and other associated charges payable in getting the stocks to their present location. Finished goods and work in progress also includes overheads appropriate to the stage of manufacture. |
Net realisable value is based upon estimated selling price less further costs expected to be incurred to completion and disposal. Provision is made for obsolete and slow-moving items. |
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. |
Cash and cash equivalents |
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments. |
Financial instruments are recognised 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. |
Basic financial assets |
Basic financial assets, which include trade, other debtors, amounts due from group undertakings 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. |
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. |
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 trade and other creditors and amounts due to fellow group companies 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. |
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
Other financial liabilities |
Other financial liabilities, are initially measured at fair value, net of transaction costs. They are |
subsequently measured at amortised cost using the effective interest method, with interest expense |
recognised on an effective yield basis. |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
Derecognition of financial liabilities |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial liabilities are derecognised when, and only when, the Company’s contractual obligations are discharged, cancelled, or they expire. |
Equity instruments |
Equity instruments issued by the company are recorded at the fair value of 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. |
Taxation and deferred tax |
The tax expense represents the sum of the current tax and deferred tax expense. Current tax assets are recognised when tax paid exceeds the tax payable. |
Current and deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income, or equity. |
Current tax assets and liabilities and deferred tax assets liabilities are offset if, and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on the net basis or to realise the asset and settle the liability simultaneously. |
Current tax is based on taxable profit for the year. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting date. |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more tax, or a right to pay less tax, or a right to receive repayments of tax. |
Deferred tax assets are recognised only to the extent that the directors consider it more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax assets and liabilities recognised have not been discounted. |
Deferred tax is measured on an undiscounted basis at the average tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date. |
Foreign exchange |
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the |
transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Pension costs and other 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. |
Retirement benefits |
The company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the company to the fund in respect of the year. The assets of the scheme are held separately from those of the company in an independently administered fund. |
The company also operates a pension scheme providing benefits based on final pensionable pay. The assets for the scheme are held separately from those of the company. |
Pension scheme assets are measured using market values. Pension scheme liabilities are measured using a projected unit method and discounted at the rate of return on a high quality corporate bond of equivalent term and currency to the liability. |
A defined benefit pension scheme deficit is recognised in full but any surplus is only recognised where the Company will pay lower contributions to the fund in future or, where it will be able to obtain a refund from the scheme in the future. The movement in the scheme surplus or deficit is split between operating charges, finance items and, in the statement of total recognised gains and losses, actuarial gains and losses. The defined benefit scheme is closed to new contributions. |
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost. |
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods. |
The net defined benefit pension asset or liability in the balance sheet comprises the total for the plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme. |
3. | REVENUE |
The revenue and profit before taxation are attributable to the one principal activity of the company. |
An analysis of revenue by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom |
Rest of the world | 15,778,412 | 12,824,127 |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Production | 12 | 12 |
Sales | 6 | 5 |
Administration | 6 | 5 |
2023 | 2022 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
5. | OPERATING PROFIT |
The operating profit is stated after charging: |
2023 | 2022 |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Auditors' remuneration |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Net interest on defined benefit liability | ( |
) |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax |
Tax on profit |
UK corporation tax has been charged at 23.52% . |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
7. | TAXATION - continued |
Reconciliation of total tax charge 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 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Depreciation in excess of capital allowances |
Utilisation of tax losses | ( |
) | ( |
) |
Change in tax rate during the year | (26,312 | ) | - |
Tax adjustments relating to defined benefit pension scheme | 68,219 | (20,900 | ) |
Timing differences | (34,870 | ) | (11,037 | ) |
Total tax charge | 448,594 | 329,309 |
Tax effects relating to effects of other comprehensive income |
2023 |
Gross | Tax | Net |
£ | £ | £ |
Gain/(loss) on defined benefit pension | ( |
) | 103,500 | (310,500 | ) |
2022 |
Gross | Tax | Net |
£ | £ | £ |
Gain/(loss) on defined benefit pension | (520,260 | ) | 1,805,740 |
Factors that will affect future tax charges |
Changes announced to the rate of corporation tax in May 2021 have been applied to profits earned in the year ended 31 December 2023 and have had a significant impact on the amount of corporation tax payable. |
The £31,374 deferred tax asset brought forward in respect of tax losses has now been fully released |
The duration of the defined benefit pension scheme's liabilities is estimated to be approximately 13 years. The deferred tax liability associated with the year end scheme surplus is not therefore expected to crystallise in the near future. |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
8. | PROPERTY, PLANT AND EQUIPMENT |
Freehold | Fixtures |
land and | Plant and | and |
buildings | machinery | fittings | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
9. | INVENTORIES |
2023 | 2022 |
£ | £ |
Raw materials |
Finished goods |
The amount of impairment loss recognised in profit and loss during the year was £Nil (2022: £36,215). |
10. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Other debtors |
Deferred tax asset | - | 31,374 |
Prepayments and accrued income |
At the year end, a deferred tax asset of £Nil (2022: £31,374) has been recognised in respect of tax losses where future profits are forecast. |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
VAT | 99,935 | 129,306 |
Other creditors |
Accrued expenses |
12. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
13. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax | 266,520 | 332,764 |
Deferred |
tax |
£ |
Balance at 1 January 2023 |
Utilised during year | ( |
) |
Balance at 31 December 2023 |
The provision for deferred taxation relates to the following: |
- Accelerated capital allowances £37,352 (2022: £37,596) |
- Capital gains £55,918 (2022: £55,918) |
- Defined benefit pension scheme surplus £173,250 (2022: £239,250) |
14. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | 1 | 3,403,812 | 3,403,812 |
Rights, preferences and restrictions |
Ordinary Shares of £1 each have the following rights. preferences and restrictions: |
Each Ordinary Share has the rights of one vote per share. |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
15. | RESERVES |
Capital |
Retained | redemption |
earnings | reserve | Totals |
£ | £ | £ |
At 1 January 2023 | 7,200,265 | 913,983 | 8,114,248 |
Profit for the year | 1,329,896 | 1,329,896 |
Other comprehensive income | (310,500 | ) | - | (310,500 | ) |
At 31 December 2023 | 8,219,661 | 913,983 | 9,133,644 |
Retained earnings is a reserve that includes all current and prior period profits and losses. The figure in the balance sheet is not wholly distributable as it includes unrealised gains and losses recognised in other comprehensive income in relation to the Company's defined benefit pension scheme. |
The capital redemption reserve is a non-distributable reserve into which amounts have been transferred following the redemption or purchase of the Company's own shares out of distributable profits or, in certain circumstances, from the proceeds of a fresh issue of shares. |
16. | EMPLOYEE BENEFIT OBLIGATIONS |
Defined benefit schemes |
The company operates a pension scheme providing benefits based on final pensionable salary. The defined benefit scheme was closed to future accrual, effective 31 March 2012. The latest full actuarial valuation was carried out on 1 April 2020 and was updated for the purposes of these financial statements to 31 December 2023 by a qualified, independent actuary. |
At the year end, the scheme is showing a surplus. The directors have reviewed the defined benefit pension scheme's trust deed and rules and have ascertained that the Company has an unconditional right to obtain a cash refund of any surplus leftover at the end of the Scheme's life. On this basis, the directors consider that recognition of the surplus is appropriate. |
The amounts recognised in the balance sheet are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Present value of funded obligations | ( |
) | ( |
) |
Fair value of plan assets |
693,000 | 957,000 |
Present value of unfunded obligations |
Surplus |
Net asset |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
16. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
The amounts recognised in profit or loss are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Current service cost |
Net interest from net defined benefit asset/liability |
(48,000 |
) |
28,000 |
Past service cost |
(48,000 | ) | 28,000 |
Actual return on plan assets |
Changes in the present value of the defined benefit obligation are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Opening defined benefit obligation |
Interest cost |
Benefits paid | ( |
) | ( |
) |
Actuarial gains/(losses) from changes in financial assumptions |
643,000 |
(4,446,000 |
) |
Changes in the fair value of scheme assets are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Opening fair value of scheme assets |
Contributions by employer |
Interest income | 418,000 | 220,000 |
Benefits paid | (413,000 | ) | (402,000 | ) |
Return on plan assets (excluding interest income) |
229,000 |
(2,120,000 |
) |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
16. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
The amounts recognised in other comprehensive income are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Actuarial gains/(losses) from changes in financial assumptions |
(643,000 |
) |
4,446,000 |
Return on plan assets (excluding interest income) |
229,000 |
(2,120,000 |
) |
(414,000 | ) | 2,326,000 |
The major categories of scheme assets as a percentage of total scheme assets are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
Equity | - | 25% |
Bonds | 96% | 72% |
Cash | 4% | 3% |
100% | 100% |
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages): |
2023 | 2022 |
Discount rate |
Rate of future inflation (CPI) |
Expected rate of increase of pension |
Mortality assumptions |
Mortality assumptions were arrived at by using 100% of S3PA year of birth tables for males and females. CMI 2022 predictions with a long-term rate of improvement of 1.25% p.a. |
Current pensioners |
Males - 21.4 years (2022: 21.6 years) |
Females - 23.9 years (2022: 23.7 years) |
Members retiring in 20 years |
Males - 22.6 years (2022: 23.0 years) |
Females - 25.3 years (2022: 25.2 years) |
Defined contribution scheme |
The company operates a defined contribution pension scheme for the benefit of its employees. The contributions payable for the year amounted to £73,407 (2022: £60,497). There were no outstanding contributions at the year end (2022: £Nil). |
WASHINGTON MILLS ELECTRO |
MINERALS LIMITED (REGISTERED NUMBER: 01436144) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
17. | ULTIMATE CONTROLLING COMPANY |
The ultimate parent company is Washington Mills Group Inc, incorporated in the USA. |
The ultimate controlling party is also Washington Mills Group Inc, incorporated in the USA. |
18. | FINANCIAL COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES |
The following guarantees were in place at the year end: |
- A £70,000 guarantee dated 3rd July 2013 in favour of HM Revenue & Customs. |
- A €5,000 guarantee in favour of the Netherlands tax office in relation to NL Article 23 Licence. |
- A £5,000 guarantee in favour of Fiscal IOR, the Company's German import and export representative. |
19. | RELATED PARTY DISCLOSURES |
Entities with control, joint control or significant influence over the entity |
2023 | 2022 |
£ | £ |
Sales | 59,881 | 75,276 |
Purchases | 10,991,551 | 4,707,757 |
Charges made for administration services | 115,842 | 115,592 |
Amount due to related party | 2,249,983 | 2,459,851 |
Group undertakings |
Washington Mills Group Inc (USA) |
Washington Mills Management Inc |
WMEM Holdings Inc |
Washington Mills Electro Minerals Corporation (NFNY) |
Washington Mills Ceramics Corporation (Del) |
Washington Mills Tonawanda, Inc. |
Quinsigamond Corp |
Washington Mills Transport Corp |
Washington Mills North Grafton Inc |
Washington Mills AS |
Washington Mills Hennepin, Inc |
Washington Mills Electro Minerals Corporation (NFO) |
Washington Mills Holding LLC (NFNY) |
Exolon Resources LLC |