Company registration number 01809384 (England and Wales)
ASHFIELD EXTRUSION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ASHFIELD EXTRUSION LIMITED
COMPANY INFORMATION
Directors
Mr A M Bennett
Mr C E Davies
Mr C Gardiner
Mr K W Salisbury
Mr G A Tyers
Mr W A McClue
Mr R Hill
Ms R Tyres
(Appointed 1 December 2023)
Secretary
Mr A M Bennett
Company number
01809384
Registered office
Field Industrial Estate
Clover Street
Kirkby in Ashfield
NG17 7LH
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
ASHFIELD EXTRUSION LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
ASHFIELD EXTRUSION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
Ashfield Extrusion Limited operates in the aluminium extrusion market, specialising in countermeasures, medical, pyrotechnics and packaging. In the latter market, the emphasis on recycling continues to make aluminium an attractive alternative to plastic.
Results and performance
The results of the company for the year, as set out in the accompanying accounts, show an operating profit of £2.85m and a profit after tax of £2.00m for the year ending 31 December 2023.
The performance of Ashfield Extrusion Limited during 2023 has produced very encouraging results, against a backdrop of higher raw material costs of all types as well as increasing utility costs.
Business environment
Ashfield Extrusion Limited focuses on specialist markets across a wide range of industries and territories. It strives to provide the highest level of service and quality to those markets, using all of the expertise and experience obtained since its formation in 1984.
It also exports globally, the largest proportion being to North America.
Strategy
The use of aluminium is expected to increase, taking market share from both steel and plastics as new markets are established. The majority of finished aluminium products manufactured in Europe is sold domestically. In contrast, Ashfield Extrusion Limited has achieved considerable success through exporting and addressing specific market niches in the key sectors in which it operates. This is in line with management’s strategy to pursue niche product markets.
Ashfield Extrusion Limited will continue to consolidate its position and also explore new market opportunities. Customer service will remain a top priority.
As costs increase, we are investing in automation to improve productivity to remain competitive.
Principal risks and uncertainties
Foreign currency risk
By the nature of its raw materials requirements and the markets it sells to, Ashfield Extrusion Limited undertakes significant purchases and sales in foreign currency, predominantly the US Dollar and Euro. This exposes it to foreign exchange risk. The company mitigates this risk by the use of forward foreign exchange contracts, where the company enters into contracts to buy or sell foreign currencies at future dates at exchange rates which are agreed at the date of entering into the contract.
Credit risk
Ashfield Extrusion Limited is exposed to the normal credit risk and cash flow risk associated with selling on credit. This is managed by credit control procedures, which include insuring sales ledger balances where possible.
General commercial risks
The situation in Ukraine continues to impact energy costs and high inflation throughout the year has seen increases in our costs from suppliers. We continue to manage this by buying material and currency contracts forward at opportune times and managing other costs as effectively as possible.
ASHFIELD EXTRUSION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators
Ashfield Extrusion Limited has made significant progress during 2023 in relation to key elements of its strategy. Please note, the following KPI’s listed relate solely to Ashfield Extrusion Limited:
2023 2022
Turnover £12.04m £12.89m
Gross Margin 46% 46%
Operating profit £2.85m £3.41m
Profit after tax £2.00m £2.55m
Future developments
A major packaging contract completed during 2023 which will mean a reduction in turnover in 2024. The business has been restructured accordingly. The sales development programme is continuous and there are a number of projects already in progress to replace lost sales. The new financial year has started well. The business is helped by its wide spread of markets both by category and geography and by its expanding customer base.
Staff
On behalf of the Board I would like to thank our employees for their commitment during the year, in what continue to be difficult circumstances.
Mr A M Bennett
Director
9 September 2024
ASHFIELD EXTRUSION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity continues to be the manufacture of aluminium impact extrusion products.
Results and dividends
The results for the year are set out on page 8.
Ordinary Interim dividends were paid amounting to £250,000 (2022 - £2,000,000). On 16 May 2024 the directors declared a final dividend of £4,500,000 (2022 - £nil).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A M Bennett
Mr C E Davies
Mr C Gardiner
Mr K W Salisbury
Mr G A Tyers
Mr W A McClue
Mr R Hill
Ms R Tyres
(Appointed 1 December 2023)
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr A M Bennett
Director
9 September 2024
ASHFIELD EXTRUSION LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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.
ASHFIELD EXTRUSION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ASHFIELD EXTRUSION LIMITED
- 5 -
Opinion
We have audited the financial statements of Ashfield Extrusion Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
ASHFIELD EXTRUSION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ASHFIELD EXTRUSION LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
ASHFIELD EXTRUSION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ASHFIELD EXTRUSION LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Use of our report
This report is made solely to the company's member 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 member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
Martin Davey
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
11 September 2024
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
ASHFIELD EXTRUSION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
12,037,072
12,885,214
Cost of sales
(6,557,895)
(6,986,824)
Gross profit
5,479,177
5,898,390
Distribution costs
(288,647)
(313,048)
Administrative expenses
(2,339,319)
(2,179,130)
Operating profit
4
2,851,211
3,406,212
Interest payable and similar expenses
6
(192,646)
(21,912)
Amounts written off investments
(23,961)
(243,303)
Profit before taxation
2,634,604
3,140,997
Tax on profit
7
(628,818)
(592,524)
Profit for the financial year
2,005,786
2,548,473
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
ASHFIELD EXTRUSION LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
1,611,170
845,682
Current assets
Stocks
11
484,158
817,806
Debtors
12
9,562,501
7,711,354
Cash at bank and in hand
185,249
92,816
10,231,908
8,621,976
Creditors: amounts falling due within one year
15
(2,377,858)
(2,476,958)
Net current assets
7,854,050
6,145,018
Total assets less current liabilities
9,465,220
6,990,700
Creditors: amounts falling due after more than one year
16
(1,173,953)
(557,219)
Provisions for liabilities
Deferred tax liability
17
230,000
128,000
(230,000)
(128,000)
Net assets
8,061,267
6,305,481
Capital and reserves
Called up share capital
19
29,130
29,130
Capital redemption reserve
49,766
49,766
Profit and loss reserves
7,982,371
6,226,585
Total equity
8,061,267
6,305,481
The financial statements were approved by the board of directors and authorised for issue on 9 September 2024 and are signed on its behalf by:
Mr A M Bennett
Director
Company Registration No. 01809384
ASHFIELD EXTRUSION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
29,130
49,766
5,678,112
5,757,008
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
2,548,473
2,548,473
Dividends
8
-
-
(2,000,000)
(2,000,000)
Balance at 31 December 2022
29,130
49,766
6,226,585
6,305,481
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
2,005,786
2,005,786
Dividends
8
-
-
(250,000)
(250,000)
Balance at 31 December 2023
29,130
49,766
7,982,371
8,061,267
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Ashfield Extrusion Limited is a private company limited by shares incorporated in England and Wales. The registered office is Clover Street, Kirkby in Ashfield, Nottinghamshire, NG17 7LH.
1.1
Accounting convention
These financial statements have been prepared in accordance with “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel
The financial statements of the company are consolidated in the financial statements of Ashfield 2018 Limited. These consolidated financial statements are available from its registered office, Foss Islands House, Foss Islands Road, York, YO31 7UJ
1.2
Going concern
The directors have considered all factors, including in the wider economy as part of their assessment of going concern. Although the current economic climate creates both cash flow and profitability risks for the company, it has traded profitability during the year and continues to do so post year end. Budgets and cashflows have been prepared using assumptions for customer demand and supply chain costs which indicate continuing profitability and cash generation. Consequently, the directors believe on balance that they have sufficient resources to enable trading to continue for a period of at least one year from the date of approval of the financial statements. Accordingly, these financial statements have been prepared on a going concern basis. true
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their estimated residual values over their useful lives as follows:
Freehold buildings
2% straight line
Plant and machinery
15% straight line
Fixtures, fittings and equipment
15% and 33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from 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. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
The company contributes to personal pension plans for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date unless a matching hedge contract is in place in which case the contract exchange rate is used. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction or at the average contract rate when forward hedge contracts are utilised. All differences are taken to the profit and loss account.
1.16
Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Depreciation
The depreciation policy has been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £139,089 (2022 - £149,269) which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
Forward foreign currency contracts
The company enters contracts to purchase and sell foreign currencies, which represent derivatives. Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately as none are designated as an effective hedging instrument.
As at the year end the directors have made an assessment of the fair value of the derivatives based on the information available. However the assumptions used are subject to change over the coming months and accordingly this has been identified as a key estimate.
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of extrusion products
12,037,072
12,885,214
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
3,624,186
5,649,521
Rest of Europe
1,436,535
1,063,749
Rest of the World
6,976,351
6,171,944
12,037,072
12,885,214
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(122,937)
(137,691)
Fees payable to the company's auditor for the audit of the company's financial statements
10,150
9,550
Depreciation of owned tangible fixed assets
139,089
149,269
Profit on disposal of tangible fixed assets
-
(750)
Operating lease charges
31,109
37,700
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Managerial
7
7
Clerical
3
3
Production
94
105
Technical
14
13
Total
118
128
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,523,928
3,530,916
Social security costs
320,057
335,827
Pension costs
112,756
95,945
3,956,741
3,962,688
6
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
74,479
21,912
Other interest
118,167
192,646
21,912
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
510,000
553,000
Adjustments in respect of prior periods
4,619
(4,879)
Group tax relief
12,199
34,403
Total current tax
526,818
582,524
Deferred tax
Origination and reversal of timing differences
102,000
10,000
Total tax charge
628,818
592,524
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
(Continued)
- 18 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
2,634,604
3,140,997
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
619,659
596,789
Tax effect of expenses that are not deductible in determining taxable profit
353
Depreciation on assets not qualifying for tax allowances
2,829
Under/(over) provided in prior years
4,619
(4,879)
Other tax adjustments
4,187
(2,215)
Taxation charge for the year
628,818
592,524
8
Dividends
2023
2022
£
£
Interim paid
250,000
2,000,000
On 16 May 2024 the directors declared a final dividend of £4,500,000 (2022 - £nil).
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Tangible fixed assets
Freehold buildings
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
£
Cost
At 1 January 2023
748,194
1,137,196
269,005
2,154,395
Additions
557,305
308,022
39,250
904,577
At 31 December 2023
1,305,499
1,445,218
308,255
3,058,972
Depreciation and impairment
At 1 January 2023
427,391
697,691
183,631
1,308,713
Depreciation charged in the year
17,182
93,722
28,185
139,089
At 31 December 2023
444,573
791,413
211,816
1,447,802
Carrying amount
At 31 December 2023
860,926
653,805
96,439
1,611,170
At 31 December 2022
320,803
439,505
85,374
845,682
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
274,606
Freehold buildings have been pledged as security against the long term bank loan by way of debentures containing fixed and floating charges.
10
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
69,164
15,575
11
Stocks
2023
2022
£
£
Raw materials and consumables
235,754
560,565
Work in progress
175,938
214,355
Finished goods and goods for resale
72,466
42,886
484,158
817,806
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,479,697
2,763,906
Corporation tax recoverable
659,000
Amounts owed by group undertakings
7,215,247
4,828,618
Derivative financial instruments
69,164
15,575
Prepayments and accrued income
139,393
103,255
9,562,501
7,711,354
13
Loans and overdrafts
2023
2022
£
£
Bank loans
1,059,095
604,049
Bank overdrafts
2,445
1,061,540
604,049
Payable within one year
90,022
46,830
Payable after one year
971,518
557,219
The company has 3 long-term loans.
The first loan is secured by way of a fixed charge over freehold buildings and by way of debentures containing fixed and floating charges. It is repayable by September 2033 in quarterly instalments of £21,073 and interest is charged at 2.25% over base rate.
The second loan is secured by by way of a fixed charge over freehold buildings and by way of debentures containing fixed and floating charges. It is repayable by June 2043 in monthly instalments of £2,473 and interest is charged at 2.25% over base rate.
The third loan is secured by by way of a fixed charge over freehold buildings. It is repayable by April 2028 in monthly instalments of £3,741 and interest is charged at 2.25% over base rate.
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
59,490
In two to five years
231,535
291,025
Less: future finance charges
(45,032)
245,993
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Finance lease liabilities are secured against the assets to which they relate.
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
13
90,022
46,830
Obligations under finance leases
14
43,558
Trade creditors
676,927
1,250,159
Amounts owed to group undertakings
18,821
18,821
Corporation tax
998,373
553,000
Other taxation and social security
95,351
201,797
Accruals and deferred income
454,806
406,351
2,377,858
2,476,958
Boan loans and overdrafts are secured in note 13.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
13
971,518
557,219
Obligations under finance leases
14
202,435
1,173,953
557,219
Boan loans and overdrafts are secured in note 13.
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
230,000
128,000
2023
Movements in the year:
£
Liability at 1 January 2023
128,000
Charge to profit or loss
102,000
Liability at 31 December 2023
230,000
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
112,756
95,945
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
29,130
29,130
29,130
29,130
20
Financial commitments, guarantees and contingent liabilities
At the balance sheet date the company was committed to sell US $2,600,000 (2022 - US $4,700,000) and buy €950,000 (2022 - €1,200,000) under forward foreign exchange contracts.
ASHFIELD EXTRUSION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
21
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
121,554
47,671
Between two and five years
272,450
68,041
394,004
115,712
22
Related party transactions
The company has taken advantage of the exemption granted by paragraph 33.1A of FRS 102 not to disclose related party transactions with Ashfield 2018 Limited group companies.
23
Ultimate controlling party
The company is a wholly owned subsidiary of Arklow Engineering Limited, a company registered in England and Wales, which is the immediate parent company. The ultimate parent company and controlling party is Ashfield 2018 Limited, a company registered in England and Wales.
The financial statements of the company are consolidated into the financial statements of Ashfield 2018 Limited. Copies of the consolidated financial statements are available from Ashfield 2018 Limited with registered office Foss Islands House, Foss Islands Road, York, YO31 7UJ.
24
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
440,325
359,614
Company pension contributions to defined contribution schemes
16,521
42,995
456,846
402,609
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
134,693
101,741
Company pension contributions to defined contribution schemes
7,005
10,867
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