The directors present the strategic report for the year ended 31 December 2023.
The trading subsidiary is Libra Speciality Chemicals Limited. The strategic report below sets out the results for the trading company.
The results for the year are set out on page 11.
During 2023, the country has continued to see global supply chain issues, continuing high energy costs and a cost of living crisis that has led to tough market conditions placing high demands and pressures on the entire industry. Furthermore, recession in Europe and de stocking within the industry has led to raw material and hence selling prices significantly reducing.
Despite this, turnover was £41.8m and PBT was a healthy £2.4m. Cash at bank ended at £4.1m. The capital expenditure was £565k, bringing the total investment over the last 7 years to over £10m. The company is in robust health and ready to capitalise on market recovery.
During 2023, we were delighted to have won the Manufacturing and Resource Efficiency Award and the GSK innovation Award at the CIA Chemical Industry Awards 2023. In addition, we won the Manufacturing Company of the Year Award and the International Trade Award at the CIA CNW Awards 2023. There are some 5,900 chemicals businesses in the UK, so we were overjoyed that the industry professionals once again recognised our commitment to continuous improvement.
The ongoing strategy is to access new international markets, products and technologies, and to ensure that future growth is achieved efficiently with further added benefits for the Company’s customers, suppliers, employees and shareholders. Libra’s capital expenditure programme will continue in 2024 to facilitate the introduction of yet more environmentally friendly products to the market. These continuing investments in new products and technologies will continue to assist growth going forwards as the global chemical recovers.
The Company is fully committed to ongoing improvements in all aspects of the impact of our business on the environment and people. To this end, Libra Speciality Chemicals has implemented an 'anti-pollution' and ‘net zero' drive and has full accreditation to EFfCI, RSPO, ISO9001, ISO14001, OHSAS18001 and top-tier COMAH.
On behalf of the Company, we thank our customers, suppliers and staff for their continued commitment, and we look forward to a mutually rewarding year in 2024.
There were no subsequent events that could have a significant impact on the results of the Company for 2023.
The Company started 2024 with a good performance and anticipates another successful year.
The Company has carried out an extensive financial risk management analysis, covering aspects such as currency, interest rates & liquidity, credit and market (supply chain and customer base) risks.
Currency | A significant proportion of the Company’s turnover is in Euros & US Dollars. Fluctuations in these currencies could affect the financial performance of the business. Forward contracts are taken out and currency swaps are currently undertaken where necessary to mitigate any such risk. |
Interest rates & liquidity | The Company is well funded and working capital flows are managed via the use of KPI’s within the business. |
Credit risk | Customers and potential customers are credit checked regularly and given appropriate credit limits based on the financial information available. Credit insurance is also taken out where thought necessary, either due to Company or country risk. |
Market risk | Market changes, particularly with regard to commodity prices, can affect the financial performance of the Company. Libra Speciality Chemicals makes use of the market intelligence and trends noticed that it has at it’s disposal, and also by the use of more widely available trade data and journals published by the industry. |
The Company is in very good health and is well placed to implement the strategic plans agreed by the Board.
The Company is focused on developing a long-term horizon for its products and services. As such, the strategic plan includes ongoing capital investment, a widening of the customer base and expansion of the range of products and services on offer. A number of exciting innovations are under development to ensure that the plan is met. Environmental control and health and safety remain at the forefront of all strategic planning initiatives and the Company continues to invest in these crucial areas.
Libra Speciality Chemicals uses KPI’s to monitor it’s financial performance. These include, but are not limited to;
Gross Margin % | The ratio of gross margin to sales, expressed as a % of sales.
|
Gross Margin per Tonne
| The amount of gross margin generated per each tonne sold. |
Debtor days | The level of trade debtors & their ratio to sales, expressed as a number of days.
|
Creditor days | The level of trade creditors & their ratio to purchases, expressed as a number of days.
|
Stock days | The level of stock & their ratio to purchases, expressed as a number of days.
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EBITDA | Earnings before interest, taxation, depreciation and amortisation.
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Section 172 statement
In accordance with section 172 of the Companies Act 2006, each of our directors acts in the way that each, in good faith would promote the success of the company for the benefit of its members as a whole. The directors have taken into consideration, amongst other matters:
• the likely consequences of any decisions in the long-term;
• the interests of the company’s employees;
• the need to foster the company’s business relationships with suppliers, customers and others;
• the impact of the company’s operations of the community and environment;
• the desirability of the company maintaining a reputation for high standards of business conduct; and
• the need to act fairly between members of the company.
The Board acknowledge that every decision it makes will not necessarily result in a positive outcome for all of the Company’s stakeholders. By considering the Company’s purpose, vision and values, together with its strategic priorities and having a process in place for decision making, the Board does however aim to make sure that its decisions are consistent.
Stakeholder engagement
The Board believe that considering our stakeholders in key business decisions is not only the right thing to do, but is fundamental to our ability to drive value creation. The Board seeks to understand the respective interest of such stakeholder groups through various methods, including direct engagement by Board members; receiving of reports and updates from members of management who engage with such groups; and coverage in our Board papers of relevant stakeholder interests with regards to proposed courses of action. The directors consider the following to be the Company’s key stakeholders:
Employees
The strength of our business is built on the hard work and dedication of our employees. The Board recognises that the implementation of an effective people strategy and strong culture underpin the effective delivery of the company strategy.
Employees are kept informed of performance and strategy through regular presentations and updates from members of the Board. These updates are further supported by newsletters and management briefings. The directors attend key business meetings throughout the year, including weekly trading meetings. An anonymous employee whistleblowing line is also in place, allowing employees to raise any concerns in confidence. We have a cultural value of Bravery. Everybody should feel brave enough to challenge what is not right and what can be improved, whether this be peer to peer or your line manager.
Key focus of the Board includes employee health and well-being, personal development, pay and benefits.
Customers
The profitability of the business is underpinned by providing effective partnerships with customers to understand their needs and requirements. In recognition of this a core principle of the business is to be customer centric, building relationships and engaging at a local and national level, providing a high level of service through the expert knowledge of our employees and ensuring a quality product.
Suppliers
The Board recognizes that relationships with suppliers are important to the Company’s long-term success and is briefed on supplier feedback and issues on a regular basis. The Board seeks to balance the benefit of maintaining these strong relationships along with the need to obtain value for money for our investors and desired quality and service for our customers. Engagement with suppliers is primarily through our Supply Chain Director. Key areas of focus include innovation, product development, health and safety and sustainability.
Communities
The Board supports the initiatives with regards to reducing the adverse impacts on the environment and engages with the communities in which we operate. Key areas of focus include how we can support local causes and issues, create opportunities to recruit and develop local people and help to look after the environment. We partner with local charities at a site level to raise awareness and funds. The key issues and themes across local communities are reported back to the Board.
Government and regulations
We engage with the government and regulators through a range of industry consultations, forums, and meetings to communicate our views to policy makers relevant to our business. Key areas of focus are compliance with laws and regulations, health and safety and product safety. The Board is updated on legal and regulatory developments and takes these into account when considering future actions.
Investors
The Group relies on our shareholders and providers of debt funding as essential sources of capital to further our business objectives. Investor involvement in the decision-making process includes representation on the company Board. The company has open dialogue with all investors through regular meetings which cover a wide range of topics including financial performance, strategy, outlook and governance.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 11.
Ordinary dividends were paid amounting to £2,211,002. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The activity data is collected from energy suppliers in consumption reports, with transport collected from business mileage claims.
The carbon conversion is calculated using the Government conversion factors for company reporting of greenhouse gas emissions.
The chosen intensity measurement ratio is tCO2e per employee.
Libra Speciality Chemicals invested over £4 million in new plant over the last few years to efficiently manufacture low-salt betaines, in a move that also increased total betaine capacity. The investment was supported by the Lloyds Bank Clean Growth Finance Initiative, which lends to businesses on the basis of investing to reduce their environmental impact.
This transformational investment will help create a new generation of environmentally friendly, renewable plant-based cleaning products that are sulphate-free, energy efficient and reduce waste. Libra is committed to 'Green Chemistry', seeking ever-better environmental and sustainable solutions for everyday products.
Libra has commenced its medium-term Carbon Neutral (and ultimately Nett Zero) project and its current intent is to begin the Scope 3 evaluation process by working with our top 20 suppliers to evaluate the carbon footprint associated with their supplied products and understand how that can be reduced or minimised.
We have engaged consultants to advise, establish, and to steer us on a pathway to Carbon Neutral. This pathway includes the analysis of all current operations which has already identified and quantified the Libra carbon footprint. Libra have developed a Carbon Neutral timeline and within this timeline have begun to identify and deliver steps which are critical to enable carbon reduction to achieve the target.
As part of this, we have partnered with a specific electricity company so that 100% of our electricity is from renewable sources, such as wind and solar. They refer to this as 'dark green' electricity and their fuel mix is zero carbon and 100% renewable, compared to the UK average of 38.7% renewable. In addition, a number of energy saving/efficiency initiatives have been identified and these are currently being worked through and evaluated.
We have audited the financial statements of GRI Libra Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and 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 directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
In the light of the knowledge and understanding of the group and the parent company and their 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 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 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 directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the Group through discussions with directors and other management, and from our commercial knowledge and experience of the sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Group;
we assessed the extent of compliance with the laws and regulations considered above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risks of fraud through management bias and override controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
discussions with senior management regarding relevant regulations and reviewing the company’s legal and professional fees.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director’s and other management and the inspection of regulatory and legal correspondence.
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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,001,002 (2022 - £1,923,114 profit).
GRI Libra Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 5 Acorn Business Park, Woodseats Close, Sheffield, United Kingdom, S8 0TB.
The group consists of GRI Libra Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures.
The consolidated group financial statements consist of the financial statements of the parent company GRI Libra Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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 recognised in the profit and loss account.
Fixed asset additions relating to a project are not depreciated until the project is completed in its entirety.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
The group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’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.
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.
The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values of all asset categories are reviewed on an annual basis to ensure appropriate changes are made for depreciations.
Stocks are stated at the lower of cost and net realisable value. The Directors will assess the requirement for any provision for obsolete stock or value deterioration as based on historical transactions, stock utilisation patterns, regular inspection and counting of physical items.
Within certain subsidiaries of the group are classes of shares issued to select employees which do not carry the right to vote or share in the return of capital until defined hurdle targets are met in the event the business is sold. These are termed “growth shares”.
In assessing whether the group consolidated accounts should take account of these growth shares as a non-controlling interest or financial liability, the directors have reviewed the terms of the Articles and accounting standards. The directors have noted that if certain conditions are met and interpretations of accounting standards made, the consolidated group accounts could need to show the fair value of the shares in issue, recognised in profit and loss and as a financial liability. It is the view of the directors that the terms of the Articles are such that no financial liability or equity interest should be recognised on the growth shares because of powers afforded in the Articles to the majority shareholders to determine the outcome when shareholders ceasing employment with the group. Accordingly, no such financial liability or equity component has been made in the group financial statements. As this represents a key source of judgement in the financial statements, the basis of the directors’ decision has been disclosed.
An analysis of the group's turnover is as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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:
Freehold buildings
The fair value of the freehold buildings has been arrived at on the basis of a valuation carried out at the year end by the directors. The basis of the directors valuation is a post year end valuation done by CBRE Limited which valued the property at £6,440,000.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
Details of the company's subsidiaries at 31 December 2023 are as follows:
The bank loans are secured by a legal charge over the freehold land and buildings and a debenture over the remaining assets together with a Cross Corporate Guarantee.
Deferred tax assets and liabilities are offset where the group or 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:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
All classes of shares shall have full voting and capital (including on a winding up) rights. The shares have full rights to any dividends, save that different rates or amounts of dividends may be declared in respect of each issued class of shares. There are no rights of redemption.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Nature of related party relationship
GRI Group Limited is a subsidiary of GRI Whirlow Limited, a company which is under common control.
Expac (Preston) Limited is a subsidiary of GRI Expac Limited, a company which is under common control.
A total of £532,260 was paid to key management personnel (directors of Libra Speciality Chemicals Limited) in the year. Remuneration paid to the highest paid director was £154,350.
Transactions
Management charges of £1,800,000 were paid to GRI Group Limited during the year (2022: £1,560,000).
Other costs and services of £73,641 were recharged from GRI Group Limited during the year (2022: £104,188).
Sales have been made to Expac (Preston) Limited during the year totaling £557,029.
Outstanding balances
At year end £102,072 (2022: £56,711) was owed from Expac (Preston) Limited. This amount is included within trade debtors.