REGISTERED NUMBER: 06619924 (England and Wales) |
GROUP STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
LCMG LIMITED |
REGISTERED NUMBER: 06619924 (England and Wales) |
GROUP STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
LCMG LIMITED |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Director | 4 |
Report of the Independent Auditors | 6 |
Consolidated Profit and Loss Account | 10 |
Consolidated Balance Sheet | 11 |
Company Balance Sheet | 12 |
Consolidated Statement of Changes in Equity | 13 |
Company Statement of Changes in Equity | 14 |
Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Cash Flow Statement | 16 |
Notes to the Consolidated Financial Statements | 17 |
LCMG LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 December 2023 |
DIRECTOR: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
100 Barbirolli Square |
Manchester |
M2 3BD |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
GROUP STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
The director presents his strategic report of the company and the group for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activities of LCMG Limited (referred to as 'the group' throughout the report) and Less Common Metals Limited ("the subsidiary") during the year was 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 group'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 group 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 group 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 group 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 group'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 group 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 the group supplies. |
With the dependence on China for RE being on the political agenda for the UK, USA and Europe, the group has focused its technical efforts on |
- Developing a process for producing HRE (Dy/Tb) |
- Developing a process for Samarium production |
The group have 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. |
The group still 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. |
The group'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. |
The group 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 group 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 |
The group measure a number of Key Performance Indicators linked to Environmental, Health and Safety, Financial, Quality and Operational aspects of the business. |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
GROUP 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 |
The group 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. The group is actively involved in much of this work. |
FUTURE DEVELOPMENTS |
The group 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 group 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: |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
REPORT OF THE DIRECTOR |
for the Year Ended 31 December 2023 |
The director presents his report with the financial statements of the company and the group for the year ended 31 December 2023. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2023. |
DIRECTOR |
DIRECTOR'S INDEMNITIES |
The Group 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 Group 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 group. |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group 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 director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he 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 group's auditors are aware of that information. |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
REPORT OF THE DIRECTOR |
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 |
LCMG LIMITED |
Opinion |
We have audited the financial statements of LCMG Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 group's and of the parent company affairs as at 31 December 2023 and of the group's 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 group 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 director's 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 group's and the parent 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 director with respect to going concern are described in the relevant sections of this report. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, 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 Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LCMG LIMITED |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Director. |
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is 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 director determines 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 director is responsible for assessing the group's and the parent 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 director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LCMG 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 group'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 group'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 group'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 group 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 |
LCMG 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 |
100 Barbirolli Square |
Manchester |
M2 3BD |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
CONSOLIDATED PROFIT AND LOSS ACCOUNT |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
TURNOVER | 4 | 12,972,279 | 20,752,256 |
Cost of sales | 9,768,928 | 16,541,437 |
GROSS PROFIT | 3,203,351 | 4,210,819 |
Distribution costs | 763,553 | 914,743 |
Administrative expenses | 2,900,769 | 3,479,079 |
3,664,322 | 4,393,822 |
OPERATING LOSS | 7 | (460,971 | ) | (183,003 | ) |
Interest payable and similar expenses | 8 | 115,371 | 46,254 |
LOSS BEFORE TAXATION | (576,342 | ) | (229,257 | ) |
Tax on loss | 9 | (39,792 | ) | - |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
CONSOLIDATED BALANCE SHEET |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 11 | - | - |
Tangible assets | 12 | 3,300,546 | 3,357,643 |
Investments | 13 | - | - |
3,300,546 | 3,357,643 |
CURRENT ASSETS |
Stocks | 14 | 2,673,764 | 2,981,524 |
Debtors | 15 | 1,783,230 | 2,838,781 |
Cash at bank and in hand | 477,555 | 899,873 |
4,934,549 | 6,720,178 |
CREDITORS |
Amounts falling due within one year | 16 | 2,711,917 | 3,938,242 |
NET CURRENT ASSETS | 2,222,632 | 2,781,936 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
5,523,178 |
6,139,579 |
CREDITORS |
Amounts falling due after more than one year | 17 | (827,513 | ) | (907,364 | ) |
PROVISIONS FOR LIABILITIES | 21 | (460,273 | ) | (460,273 | ) |
NET ASSETS | 4,235,392 | 4,771,942 |
CAPITAL AND RESERVES |
Called up share capital | 22 | 500,001 | 500,001 |
Retained earnings | 3,735,391 | 4,271,941 |
SHAREHOLDERS' FUNDS | 4,235,392 | 4,771,942 |
The financial statements were approved by the director and authorised for issue on 5 September 2024 and were signed by: |
Mr G Smith - Director |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
COMPANY BALANCE SHEET |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 11 |
Tangible assets | 12 |
Investments | 13 |
CURRENT ASSETS |
Debtors | 15 |
CREDITORS |
Amounts falling due within one year | 16 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 22 |
Retained earnings |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | - | - |
The financial statements were approved by the director and authorised for issue on |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
CONSOLIDATED 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 | 500,001 | 4,501,198 | 5,001,199 |
Deficit for the year | - | (229,257 | ) | (229,257 | ) |
Total comprehensive loss | - | (229,257 | ) | (229,257 | ) |
Balance at 31 December 2022 | 500,001 | 4,271,941 | 4,771,942 |
Deficit for the year | - | (536,550 | ) | (536,550 | ) |
Total comprehensive loss | - | (536,550 | ) | (536,550 | ) |
Balance at 31 December 2023 | 500,001 | 3,735,391 | 4,235,392 |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
COMPANY 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 |
Profit for the year | - | - | - |
Balance at 31 December 2022 |
Profit for the year | - | - | - |
Balance at 31 December 2023 |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
CONSOLIDATED CASH FLOW STATEMENT |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 151,576 | (238,608 | ) |
Interest paid | (115,371 | ) | (46,254 | ) |
Net cash from operating activities | 36,205 | (284,862 | ) |
Cash flows from investing activities |
Purchase of tangible fixed assets | (690,969 | ) | (824,668 | ) |
Sale of tangible fixed assets | 180,436 | 20,899 |
Net cash from investing activities | (510,533 | ) | (803,769 | ) |
Cash flows from financing activities |
New loans in year | 3,378,419 | 5,441,838 |
Loan repayments in year | (3,326,409 | ) | (4,357,636 | ) |
Capital repayments in year | - | 67,055 |
Net cash from financing activities | 52,010 | 1,151,257 |
(Decrease)/increase in cash and cash equivalents | (422,318 | ) | 62,626 |
Cash and cash equivalents at beginning of year |
2 |
899,873 |
837,247 |
Cash and cash equivalents at end of year |
2 |
477,555 |
899,873 |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT |
for the Year Ended 31 December 2023 |
1. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Loss before taxation | (576,342 | ) | (229,257 | ) |
Depreciation charges | 537,685 | 487,987 |
Loss on disposal of fixed assets | 29,945 | 142,046 |
Finance costs | 115,371 | 46,254 |
106,659 | 447,030 |
Decrease/(increase) in stocks | 307,760 | (797,839 | ) |
Decrease in trade and other debtors | 1,095,343 | 61,825 |
(Decrease)/increase in trade and other creditors | (1,358,186 | ) | 50,376 |
Cash generated from operations | 151,576 | (238,608 | ) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£ | £ |
Cash and cash equivalents | 477,555 | 899,873 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 899,873 | 837,247 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1.1.23 | Cash flow | At 31.12.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 899,873 | (422,318 | ) | 477,555 |
899,873 | (422,318 | ) | 477,555 |
Debt |
Finance leases | (186,252 | ) | 87,408 | (98,844 | ) |
Debts falling due within 1 year | (1,751,549 | ) | (6,203 | ) | (1,757,752 | ) |
(1,937,801 | ) | 81,205 | (1,856,596 | ) |
Total | (1,037,928 | ) | (341,113 | ) | (1,379,041 | ) |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
LCMG Limited is a private company limited by share capital, incorporated in England and Wales, registration number 06619924. The address of the registered office 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 group is considered to be Pound Sterling due to the group'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. |
Basis of consolidation |
The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to 31st December 2023. A subsidiary is an entity that is controlled by the parent. The results of subsidiary undertakings are included in the profit or loss and other comprehensive income from the date that control commences until the date that control ceases. Control is established when the group has the power to govern the operating and financial policies of an entity as to obtain benefits from its activities. In assessing control, the group takes into consideration potential voting rights that are currently exercisable. |
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 group has transferred to the buyer the significant risks and rewards of ownership of the goods; |
- | the group 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 group; and |
- | the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Goodwill |
Goodwill, being the amount paid in connection with the acquisition of a business in 2008, it has been fully amortised after being amortised evenly over its estimated useful life of ten years. |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
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 group property leases were capitalised at the outset and are being written off over the term of the lease. |
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 of current 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 group under leases which transfer to the group 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 group are classified as operating leases. |
Assets held under finance leases are initially recognised as assets of the group 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 group'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. |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group'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. |
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. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
In the application of the group'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 group. 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 group. |
An analysis of turnover by class of business is given below: |
2023 | 2022 |
£ | £ |
Goods | 11,868,065 | 20,340,476 |
Commission received | 204,532 | 245,665 |
Grants for projects | 899,682 | 166,115 |
12,972,279 | 20,752,256 |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
4. | TURNOVER - continued |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom | 344,411 | 895,933 |
Europe | 10,065,895 | 12,536,383 |
United States of America | 582,062 | 1,510,096 |
Rest of World | 1,979,911 | 5,809,844 |
12,972,279 | 20,752,256 |
5. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries | 1,745,533 | 1,966,312 |
Social security costs | 182,678 | 223,834 |
Other pension costs | 80,875 | 108,485 |
2,009,086 | 2,298,631 |
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 | 284,199 | 203,518 |
Directors' pension contributions to money purchase schemes | 12,084 | 53,318 |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 2 | 2 |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc | 145,757 | 130,617 |
Pension contributions to money purchase schemes | - | 53,318 |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
7. | OPERATING LOSS |
The operating loss is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Other operating leases | 325,482 | 364,619 |
Depreciation - owned assets | 537,685 | 487,987 |
Loss on disposal of fixed assets | 29,945 | 142,046 |
Auditors' remuneration | 29,922 | 28,509 |
Foreign exchange differences | (49,395 | ) | 238,187 |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank loan interest | 115,371 | 46,254 |
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 | (39,792 | ) | - |
Tax on loss | (39,792 | ) | - |
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 | (576,342 | ) | (229,257 | ) |
Loss multiplied by the standard rate of corporation tax in the UK of 19 % (2022 - 19 %) |
(109,505 |
) |
(43,559 |
) |
Effects of: |
Expenses not deductible for tax purposes | 9,281 | 29,366 |
Capital allowances in excess of depreciation | (30,897 | ) | (34,570 | ) |
Unused tax losses | 131,121 | 48,763 |
R & D tax credit | (39,792 | ) | - |
Total tax credit | (39,792 | ) | - |
10. | INDIVIDUAL PROFIT AND LOSS ACCOUNT |
As permitted by Section 408 of the Companies Act 2006, the Profit and Loss Account of the parent company is not presented as part of these financial statements. |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
11. | INTANGIBLE FIXED ASSETS |
Group |
Goodwill |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 | 3,919,210 |
AMORTISATION |
At 1 January 2023 |
and 31 December 2023 | 3,919,210 |
NET BOOK VALUE |
At 31 December 2023 | - |
At 31 December 2022 | - |
12. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
Freehold | Long | Plant and | and |
property | leasehold | machinery | fittings | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2023 | 340,040 | 2,448,981 | 7,717,353 | 1,092,830 | 11,599,204 |
Additions | 49,128 | 6,390 | 618,712 | 16,739 | 690,969 |
Disposals | - | - | (2,520,973 | ) | - | (2,520,973 | ) |
Reclassification/transfer | - | - | (34,568 | ) | 34,568 | - |
At 31 December 2023 | 389,168 | 2,455,371 | 5,780,524 | 1,144,137 | 9,769,200 |
DEPRECIATION |
At 1 January 2023 | 2,267 | 1,640,213 | 5,550,827 | 1,048,254 | 8,241,561 |
Charge for year | 19,123 | 147,423 | 327,172 | 43,967 | 537,685 |
Eliminated on disposal | - | - | (2,310,592 | ) | - | (2,310,592 | ) |
Reclassification/transfer | - | - | (308 | ) | 308 | - |
At 31 December 2023 | 21,390 | 1,787,636 | 3,567,099 | 1,092,529 | 6,468,654 |
NET BOOK VALUE |
At 31 December 2023 | 367,778 | 667,735 | 2,213,425 | 51,608 | 3,300,546 |
At 31 December 2022 | 337,773 | 808,768 | 2,166,526 | 44,576 | 3,357,643 |
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 |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
13. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
The following was a subsidiary undertaking of the LCMG Limited: |
Name |
Country of incorporation |
Class of shares |
Holding |
Principal Activity |
Less Common Metals Limited | England and Wales | Ordinary | 100% | Rare Earth Materials |
The registered office for the above company is Unit 2 Hooton Park, North Road, Ellesmere Port, Cheshire, CH65 1BL. |
The above company has been included in these consolidated financial statements. |
The financial year end of the above is 31st December 2023. |
14. | STOCKS |
Group |
2023 | 2022 |
£ | £ |
Raw materials | 1,648,556 | 1,157,394 |
Work-in-progress | 240,150 | 78,275 |
Finished goods | 785,058 | 1,745,855 |
2,673,764 | 2,981,524 |
15. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade debtors | 1,283,036 | 1,890,782 |
Other debtors | 100,015 | 133,610 |
VAT | 15,580 | 18,740 | - | - |
Tax | 39,792 | - |
Prepayments and accrued income | 344,807 | 795,649 |
1,783,230 | 2,838,781 |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 18) | 1,476,627 | 1,424,617 |
Other loans (see note 18) | 281,125 | 326,932 |
Hire purchase contracts (see note 19) | 84,995 | 69,778 |
Trade creditors | 567,593 | 1,225,680 |
Amounts owed to group undertakings | - | - |
Social security and other taxes | 40,593 | 113,253 |
Accruals and deferred income | 260,984 | 777,982 |
2,711,917 | 3,938,242 |
17. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
2023 | 2022 |
£ | £ |
Hire purchase contracts (see note 19) | 13,849 | 116,474 |
Other creditors | 813,664 | 790,890 |
827,513 | 907,364 |
18. | LOANS |
An analysis of the maturity of loans is given below: |
Group |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on | demand: |
Bank loans | 1,476,627 | 1,424,617 |
Other loans | 281,125 | 326,932 |
1,757,752 | 1,751,549 |
19. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year | 84,995 | 69,778 |
Between one and five years | 13,849 | 116,474 |
98,844 | 186,252 |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
19. | LEASING AGREEMENTS - continued |
Group |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year | 363,792 | 250,000 |
Between one and five years | 682,110 | 718,750 |
1,045,902 | 968,750 |
20. | SECURED DEBTS |
On the 11 October 2018, Barclays created a fixed and floating charge over all of the property and undertakings of the group; this charge also contains a negative pledge. |
On the 9th November 2022, a Director created a fixed charge over the company's freehold property. |
21. | PROVISIONS FOR LIABILITIES |
Group |
2023 | 2022 |
£ | £ |
Other provisions |
Dilapidations | 460,273 | 460,273 |
Aggregate amounts | 460,273 | 460,273 |
The dilapidation provision amounts above relate to the properties leased by the group. 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 group. |
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 |
22. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1.00 | 500,001 | 500,001 |
23. | RELATED PARTY DISCLOSURES |
At the balance sheet date the group owed a director £281,125 (2022: £326,932) for a loan on which interest is charged. |
LCMG LIMITED (REGISTERED NUMBER: 06619924) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
24. | ULTIMATE CONTROLLING PARTY |
The ultimate parent undertaking was Indian Ocean Rare Metals Pte Ltd, a company registered in Singapore. |