Company registration number 01009166 (England and Wales)
LIBRA SPECIALITY CHEMICALS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LIBRA SPECIALITY CHEMICALS LIMITED
COMPANY INFORMATION
Directors
G Royle
P M Carson
G Cox
J Dutton
DT Kearns
R Wiles
C H Williams
Secretary
D T Kearns
Company number
01009166
Registered office
5 Acorn Business Park
Woodseats Close
Sheffield
United Kingdom
S8 0TB
Auditor
BHP LLP
2 Rutland Park
Sheffield
S10 2PD
Business address
Brinell Drive
Northbank Industrial Park
Irlam
Manchester
M44 5LF
LIBRA SPECIALITY CHEMICALS LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Independent auditor's report
8 - 10
Profit and loss account
11
Statement of comprehensive income
12
Balance sheet
13
Statement of changes in equity
14
Notes to the financial statements
15 - 26
LIBRA SPECIALITY CHEMICALS 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

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.

LIBRA SPECIALITY CHEMICALS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

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.

Key performance indicators

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.

 

EBITDA

Earnings before interest, taxation, depreciation and amortisation.

 

LIBRA SPECIALITY CHEMICALS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Promoting the success of the company

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.

LIBRA SPECIALITY CHEMICALS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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

G Royle
Director
20 September 2024
LIBRA SPECIALITY CHEMICALS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the manufacture and distribution of chemical products.

Results and dividends

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 final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

G Royle
P M Carson
G Cox
J Dutton
DT Kearns
R Wiles
C H Williams
Auditor

The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report
2023
2022
Energy consumption
kWh
kWh
Total energy consumption in the year
8,466,894
8,282,549
2023
2022
Emissions of CO2 equivalent
tCO2e
tCO2e
- Total emissions in the year
1,594.00
1,531.00
Intensity ratio
kWh Energy consumption per employee
117,596
120,037
tCO2e per employee
22.1
22.2
Quantification and reporting methodology

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.

Intensity measurement

The chosen intensity measurement ratio is tCO2e per employee.

LIBRA SPECIALITY CHEMICALS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Measures taken to improve energy efficiency

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.

Statement of directors' responsibilities

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:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement 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.

LIBRA SPECIALITY CHEMICALS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
On behalf of the board
G Royle
Director
20 September 2024
LIBRA SPECIALITY CHEMICALS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LIBRA SPECIALITY CHEMICALS LIMITED
- 8 -
Opinion

We have audited the financial statements of Libra Speciality Chemicals Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, 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:

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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The 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:

LIBRA SPECIALITY CHEMICALS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LIBRA SPECIALITY CHEMICALS LIMITED (CONTINUED)
- 9 -
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:

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.

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:

 

LIBRA SPECIALITY CHEMICALS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LIBRA SPECIALITY CHEMICALS LIMITED (CONTINUED)
- 10 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by;

 

 

To address the risks of fraud through management bias and override controls, we:

 

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

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.

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.

Paul Winwood
Senior Statutory Auditor
For and on behalf of BHP LLP
20 September 2024
Chartered Accountants
Statutory Auditor
2 Rutland Park
Sheffield
S10 2PD
LIBRA SPECIALITY CHEMICALS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
Turnover
3
41,841,554
52,009,461
Cost of sales
(31,367,636)
(39,137,291)
Gross profit
10,473,918
12,872,170
Administrative expenses
(7,891,472)
(6,624,130)
Operating profit
4
2,582,446
6,248,040
Interest receivable and similar income
8
-
0
2,063
Interest payable and similar expenses
9
(187,855)
(145,229)
Profit before taxation
2,394,591
6,104,874
Tax on profit
10
(413,086)
(1,010,754)
Profit for the financial year
1,981,505
5,094,120

The profit and loss account has been prepared on the basis that all operations are continuing operations.

LIBRA SPECIALITY CHEMICALS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
£
£
Profit for the year
1,981,505
5,094,120
Other comprehensive income
Revaluation of tangible fixed assets
3,566,303
-
0
Total comprehensive income for the year
5,547,808
5,094,120
LIBRA SPECIALITY CHEMICALS LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
15,095,826
11,450,092
Current assets
Stocks
13
4,265,119
5,628,317
Debtors
14
8,583,292
9,754,811
Cash at bank and in hand
4,128,849
3,625,169
16,977,260
19,008,297
Creditors: amounts falling due within one year
15
(6,643,136)
(8,672,245)
Net current assets
10,334,124
10,336,052
Total assets less current liabilities
25,429,950
21,786,144
Creditors: amounts falling due after more than one year
16
(3,000,000)
(3,000,000)
Provisions for liabilities
Deferred tax liability
18
2,455,000
2,148,000
(2,455,000)
(2,148,000)
Net assets
19,974,950
16,638,144
Capital and reserves
Called up share capital
20
100
100
Revaluation reserve
4,517,734
951,431
Profit and loss reserves
15,457,116
15,686,613
Total equity
19,974,950
16,638,144
The financial statements were approved by the board of directors and authorised for issue on 20 September 2024 and are signed on its behalf by:
G Royle
Director
Company registration number 01009166 (England and Wales)
LIBRA SPECIALITY CHEMICALS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
100
951,431
12,732,493
13,684,024
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
5,094,120
5,094,120
Dividends
11
-
-
(2,140,000)
(2,140,000)
Balance at 31 December 2022
100
951,431
15,686,613
16,638,144
Year ended 31 December 2023:
Profit
-
-
1,981,505
1,981,505
Other comprehensive income:
Revaluation of tangible fixed assets
-
3,566,303
-
3,566,303
Total comprehensive income
-
3,566,303
1,981,505
5,547,808
Dividends
11
-
-
(2,211,002)
(2,211,002)
Balance at 31 December 2023
100
4,517,734
15,457,116
19,974,950
LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

Libra Speciality Chemicals Limited is a private company limited by shares incorporated in England and Wales. The registered office is 5 Acorn Business Park, Woodseats Close, Sheffield, United Kingdom, S8 0TB.

1.1
Accounting convention

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 on the historical cost convention, modified to include the revaluation of freehold properties. 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:

 

 

The financial statements of the company are consolidated in the financial statements of GRI Libra Limited. These consolidated financial statements are available from its registered office, 5 Acorn Business Park, Woodseats Close, Sheffield, South Yorkshire, S8 0TB.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

1.3
Turnover

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.

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.

LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold buildings
2% straight line
Plant and machinery
5 -10% straight line
Fixtures, fittings & equipment
10 - 25% 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.

Fixed asset additions relating to a project are not depreciated until the project is completed in its entirety.

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). 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.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprise direct materials and labour.

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 statement of financial position when the company becomes party to the contractual provisions of the instrument.

LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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, 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.

LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
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.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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
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.

1.11
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.

 

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.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.13
Foreign exchange

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 are included in the profit and loss account for the period.

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.

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.

Useful economic lives of tangible fixed assets

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.

Stock provisions

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.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Manufacture and distribution of chemical products
41,841,554
52,009,461
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
29,142,074
35,510,716
Europe
9,268,648
13,828,992
Rest of world
3,430,832
2,669,753
41,841,554
52,009,461
LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 20 -
2023
2022
£
£
Other revenue
Interest income
-
2,063
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
3,037
31,312
Fees payable to the company's auditor for the audit of the company's financial statements
23,102
21,591
Depreciation of owned tangible fixed assets
826,640
625,830
Fees payable to the company's auditor for other services
320
9,595
Profit on disposal of tangible fixed assets
-
(1,000)

 

5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
41,640
39,160
Audit of the financial statements of the company's subsidiaries
-
9,595
41,640
48,755
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Directors
5
5
Administrative staff
32
29
Production staff
35
35
Total
72
69
LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 21 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,833,167
2,744,285
Social security costs
311,063
293,162
Pension costs
88,930
94,306
3,233,160
3,131,753
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
517,560
447,970
Company pension contributions to defined contribution schemes
14,700
13,639
532,260
461,609

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2022 - 5).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
150,000
134,850
Company pension contributions to defined contribution schemes
4,350
4,046
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
-
0
2,063
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
187,855
145,229
LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
447,086
742,118
Adjustments in respect of prior periods
-
0
(16,364)
Total current tax
447,086
725,754
Deferred tax
Origination and reversal of timing differences
(34,000)
285,000
Total tax charge
413,086
1,010,754

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
2,394,591
6,104,874
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
563,208
1,159,926
Tax effect of expenses that are not deductible in determining taxable profit
111
2,015
Change in unrecognised deferred tax assets
(207)
16,295
Effect of change in corporation tax rate
(2,000)
68,400
Permanent capital allowances in excess of depreciation
9,308
(69,765)
Research and development tax credit
(157,334)
(149,753)
Under/(over) provided in prior years
-
0
(16,364)
Taxation charge for the year
413,086
1,010,754
11
Dividends
2023
2022
£
£
Interim paid
2,211,002
2,140,000
LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
12
Tangible fixed assets
Freehold buildings
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost or valuation
At 1 January 2023
2,721,127
12,563,865
866,747
16,151,739
Additions
-
0
364,583
200,488
565,071
Revaluation
3,718,873
-
0
-
0
3,718,873
At 31 December 2023
6,440,000
12,928,448
1,067,235
20,435,683
Depreciation and impairment
At 1 January 2023
141,007
4,047,921
512,719
4,701,647
Depreciation charged in the year
47,423
671,202
108,015
826,640
Revaluation
(188,430)
-
0
-
0
(188,430)
At 31 December 2023
-
0
4,719,123
620,734
5,339,857
Carrying amount
At 31 December 2023
6,440,000
8,209,325
446,501
15,095,826
At 31 December 2022
2,580,120
8,515,944
354,028
11,450,092

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:

2023
2022
£
£
Cost
2,696,733
2,696,733
Accumulated depreciation
(1,275,516)
(1,221,581)
Carrying value
1,421,217
1,475,152
13
Stocks
2023
2022
£
£
Raw materials and consumables
3,001,041
3,991,254
Finished goods and goods for resale
1,264,078
1,637,063
4,265,119
5,628,317
LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
6,530,981
7,969,065
Amounts owed by group undertakings
1,500,000
1,500,000
Prepayments and accrued income
552,311
285,746
8,583,292
9,754,811
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
5,497,364
6,604,272
Corporation tax
209,065
742,118
Other taxation and social security
419,285
469,625
Accruals and deferred income
517,422
856,230
6,643,136
8,672,245
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
3,000,000
3,000,000
17
Loans and overdrafts
2023
2022
£
£
Bank loans
3,000,000
3,000,000
Payable after one year
3,000,000
3,000,000

The bank loan and banking facilities are secured by a legal charge over the freehold land and buildings and a debenture over the remaining assets of the company together with a Cross Corporate Guarantee.

 

LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
18
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:
£
£
ACAs
2,455,000
2,148,000
2023
Movements in the year:
£
Liability at 1 January 2023
2,148,000
Charge to profit or loss
307,000
Liability at 31 December 2023
2,455,000
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
88,930
94,306

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.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
21
Operating lease commitments

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
112,764
80,560
Between two and five years
328,937
322,240
In over five years
-
0
6,713
441,701
409,513
LIBRA SPECIALITY CHEMICALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
22
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
-
39,011
23
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Nature of related party relationship

 

GRI Group Limited is a subsidiary of GRI Whirlow Limited, a company which is under common control. Management charges were paid to GRI Group Limited during the year.

 

Expac (Preston) Limited is a subsidiary of GRI Expac Limited, a company which is under common control. Sales have been made to Expac (Preston) Limited during the year totaling £557,029.

 

 

Management charges

 

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).

 

 

Outstanding balances

 

At year end £102,072 (2022: £56,711) was owed from Expac (Preston) Limited. This amount is included within trade debtors.

24
Ultimate controlling party

The company's immediate parent company is Libra Chemicals Limited. The ultimate parent company is GRI Libra Limited, a company registered in England and Wales. GRI Libra Limited prepares group financial statements and copies can be obtained from GRI Libra Limited's registered office.

 

The ultimate controlling party is G Royle who owns a majority shareholding in GRI Libra Limited.

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