Company registration number 01113447 (England and Wales)
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
COMPANY INFORMATION
Directors
Mrs B Albon
S Dawson
Secretary
Mrs B Albon
Company number
01113447
Registered office
Rochehall Way
Purdeys Industrial Estate
Rochford
Essex
SS4 1JU
Auditor
Gravita II LLP
Aldgate Tower
2 Leman Street
London
E1 8FA
Bankers
Lloyds Bank PLC
1 Legg Street
Chelmsford
Essex
CM1 1JS
Middlesex
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 9
Income statement
10
Group statement of comprehensive income
11
Group statement of financial position
12
Company statement of financial position
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 41
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

The directors present the strategic report for the year ended 31 December 2022.

Review of the business

Results for our UK parent company indicate a strong profit for 2022, with profit after tax of £1.7m (2021: £445k profit). This does, however, include £4.3m of dividends from the Serbian entities, without which the UK parent company would have reported a significant loss. Our UK subsidiary, Albon Forge Ltd, has reported a loss of £460k (2021: £156k loss). Our Serbian (£4.3m profit) and US (£89k profit) entities continue to be profitable and ensure healthy group profits.

 

We are currently taking steps to minimise losses in the UK and ensure the financial health of the Albon Group moving forward.

 

On a group basis, Albon has reported an operating profit of circa £2.4 million (2021: £4.6m profit). Group Turnover improved significantly in 2022 to £42.5m (2021: £34.9m).

 

Albon continues to operate a warehousing and repacking facility from rented premises in Oklahoma. Rods shipped into the USA from Serbia will continue to be stored and distributed from this facility.

 

Albon continues to work on new opportunities for blue chip companies for both UK and Serbia. Construction of a third factory in Serbia is now complete and lines are operational.

 

We continue to invest time and resources in R&D activities to ensure we can remain competitive and offer our customers the latest technologies. We continue to explore opportunities to diversify our product portfolio and potentially offer our customers in-house forgings options as well as machining for existing and new product lines.

 

The customer base across the group in 2022 remained consistent, with some new Blue Chip customers added to the portfolio in 2022.

 

Net Borrowings across the group has increased to £22 million (2021: £16.7 million). The borrowings were utilised primarily to fund the new factory in Serbia, along with the production lines required to manufacture parts for new contracts awarded in 2020.

 

Group capital spend in 2022 was circa £6.8m (2021: £5.5m). The Albon group continues to invest in plant to both fulfil obligations under new contracts as well as improve production efficiencies.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Principal risks and uncertainties

Historically, one of the key risks facing the Company was debt accrued with HMRC in respect of PAYE and VAT liabilities. Working Capital pressures, caused by increasing costs and reduced supplier payment terms, rendered the company unable to pay HMRC debts as they fell due. All debts to 31 December 2022 were repaid in full by January 2024, with no further action being taken by HMRC. At the time of signing these accounts new Time To Pay arrangements are in place, which cover all outstanding VAT and PAYE for both Albon Engineering & Manufacturing PLC and Albon Forge Ltd which have accrued since the 2022 year end date.

 

Global conflicts are not yet having any serious implications for the Albon Group. However, we remain vigilant and continue to update ourselves on the latest situation. Transit times for some imported product is being impacted by increased transit times. However, we are currently able to adapt our schedules to minimise the impact of these delays.

 

Several of our customers have commented in recent months that they are looking to reduce their supply chain risk by procuring more product from local sources. This is seen as a positive message from our customer base as it implies there may be more opportunity for future business as customers chose to move away from supplies from lower cost countries in favour of a lower risk option.

 

The Albon Group has always been exposed to translation and transaction foreign exchange risk. Wherever possible this is managed by matching currencies for revenues and expenditure, or by agreeing exchange adjustments with stakeholders. Forward contracts are used where there is known to be a mismatch of currencies, in an attempt to mitigate foreign exchange risk.

 

Availability of cash continues to be one of the key constraints across the Albon group. We continue to seek ways to improve working capital.

 

Competitive pressures could result in loss of sales. Albon manages this risk by providing high quality products, fast response times, tight control of costs and through the engineering talent both in component build and in having an own-sourced machine tool capability that provides rapid, attractively priced, bespoke solutions.

 

Global economic uncertainty is a general risk. Albon provides product to a wide range of markets, from private vehicles to power generation, marine, mining and construction equipment. This provides some mitigation, as each market has different influencing factors long-term. Albon gathers regular information from customers and suppliers and strives to maintain a flexible cost base for short term reaction to fluctuations in demand. Albon favours investment in programmes for customers who themselves have shown commitment to long term investment.

Key performance indicators

Group Turnover improved significantly in 2022 (2022: £42.5m, 2021: £34.9m), which is a key indicator for management.

 

 

 

£millions

 

2022

2021

 

 

 

 

 

Turnover

42.5

34.9

 

 

 

 

 

Operating Profit

2.4

4.6

 

 

 

 

 

Profit before Tax

1.4

4.0

 

 

 

 

 

 

Albon UK has retained its ISO9001 and IATF/TS 16949 quality related certifications as well as ISO 14001 Environmental certification.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
Section 172 statement

Section 172 Statement

 

The directors understand that they have a duty to promote the success of the Company for the benefit for its members as a whole, as detailed in section 172(1)(a) to (f) Companies Act 2006. The directors consider the following to be key stakeholders;

 

The likely consequences of any decision in the long term

The board carefully reviews all decisions and considers the impact on the business in the long term. For example, when reviewing employment decisions future needs of the business are considered as well as short term requirements.

 

The interests of the company’s employees and co-workers

All of our Employees are offered the option of joining a union when they are employed at Albon. Regular meetings are held with the Union representative to discuss any concerns.

 

The need to foster the company’s business relationships with suppliers, customers and others

Albon works closely with both customers and suppliers. Representatives of Albon regularly attend seminars and presentations put on by members of our supply chain. Like-wise we also prepare presentations for our key stakeholders.

Frequent calls are held with all members of the supply chain to ensure that discussions can be held in a productive environment to ensure that customer schedules are met.

As a responsible company we always seek to engage with external regulators in a timely and professional manner.

 

The impact of the company’s operations on the community and the environment

We are careful to minimise noise and light pollution for our neighbouring businesses. Our premises are located within industrial areas, keeping community disruption to a minimum. In 2017/2018 we replaced all lighting in our Rochford factories with LED alternatives. We continue to look at new ways to reduce our environmental impact, most recently we are currently awaiting delivery of Electric Forklifts to replace our existing Diesel versions. We responsibly dispose of all waste through licensed carriers.

 

The desirability of the company for maintaining a reputation for high standards of business conduct

The board recognises the importance of operating a robust corporate governance framework. No political donations were made in the year (2021: £nil).

 

 

The need to act fairly as between members of the company

All shareholders hold the same class of share and therefore benefit from the same voting rights.

On behalf of the board

S Dawson
Director
20 September 2024
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the Albon Group (“Albon”) is the precision engineering of engine components and machine tools. This includes design, manufacture and assembly. Albon operates from sites in the UK, USA and Serbia and is a strategic supplier of connecting rods (a critical component in all types of combustion engine) to a number of major international companies. Albon is able to support component design and set up complete machining lines for connecting rods and similar medium to high volume components, building many of the elements (including automation) in-house. Albon makes significant investments in new lines dedicated to customer programmes and is committed to high quality and to meeting customer expectations.

 

There have not been any significant changes in the principal activities of other group companies in the year under review.

 

On 11 July 2024, the company was re-registered at Companies House from a public company to a private company.

Results and dividends

The consolidated profit and loss account for the year is set out on page 10.

An interim ordinary dividend was paid amounting to £1,350,000 (2021: £722,000). 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:

M Albon                                       (Resigned 11 June 2024)
Mrs B Albon
S Dawson
Research and development

Albon continuously works with customers to incorporate improvements in quality, efficiency and cost into component manufacture. Our machine tool facility includes a team of multi-skilled engineers, providing technical support, internally and to customers, and leading-edge innovations in connecting rod design and critical component machining.

Disabled persons

The Group prohibits discrimination against disabled candidates when recruiting for vacancies or when an employee becomes disabled. Assistance and training are provided as needed.

 

Employee involvement
The Group's policy is to consult and discuss matters likely to affect employees' interests with employees, through unions, staff councils and, where appropriate, individual or plenary meetings.  Information is also provided through bulletins updating employees on financial performance, changes and new opportunities.
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
Future developments

Group Management accounts indicate that turnover is likely to be approximately £50m for 2023. Group forecasts indicate turnover is likely to be in the region of £43m for 2024, while UK facilities are streamlined (see below). Turnover in Serbia is forecast to remain stable at 47m EUROS through 2024 and 2025.

 

Over the past few years, the group has made significant investment in Serbia to build additional facilities and install manufacturing lines for new contracts. The Group now operates from 3 state of the art factories in Serbia, and has acquired land to facilitate construction of a fourth factory in the next few years.

 

Senior management have recently made the difficult decision to cease manufacturing operations in the UK and move Conn-Rod manufacture to our facilities in Serbia. Negotiations are underway with current UK customers to obtain approval to manufacture product from our Serbian facilities.

 

It is our current intention to retain a UK Head Office and warehousing facility (for rods supplied to UK customers). Both Rochford factories are being marketed for sale. Interest received will determine which factory (if any) is used as the Head Office location. If a buyer is found for each factory then the company would consider renting a smaller premises locally to accommodate offices and some factory space to use as storage/toolroom.

Albon continues to quote new business on a regular basis and has several projects under consideration with blue-chip OEMS.

 

Albon considers the development of connecting rods and critical components to be a primary opportunity for continued expansion of the business. To further that goal Albon continually explores technological advances in the development of connecting rods and other engine components.

 

Current areas of Research and Development include, but are not limited to, investigations into alternative materials, coatings and designs to improve product performance and efficiency, lower CO2 emissions, optimise cost of manufacture and ownership, minimise weight, reduce waste and defer end-of-life.

 

Albon intends to continue to expand the engineering capability in Serbia with the intention to diversify the current product range within known markets. New ICE (Internal Combustion Engine) fuels (e.g. Hydrogen) are currently being explored. We are supporting the development of these technologies through the redesign of connecting rods and currently have parts on test with one of our UK industrial customers. We are also exploring the potential expansion of our forged product offering.

Energy and carbon report
2022
2021
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
5,411,598
5,420,008
2022
2021
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
229.59
243.64
- Fuel consumed for owned transport
14.25
26.57
243.84
270.21
Scope 2 - indirect emissions
- Electricity purchased
795.82
853.75
Total gross emissions
1,039.66
1,123.96
Intensity ratio
Tonnes CO2e per £1m Turnover
93.74
101.73
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
Quantification and reporting methodology

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2022 UK Government’s Conversion Factors for Company Reporting

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1m of Turnover, the recommended ratio for the sector.

Measures taken to improve energy efficiency

We have consistently monitored our half-hourly metered electricity data, enabling us to analyse monthly consumption in relation to manufacturing output. This approach has provided valuable insights into potential efficiency improvements. Additionally, we have optimized the use of our company vans by minimizing single delivery and collection trips, leading to a significant reduction in mileage. These combined efforts have successfully reduced our carbon emissions by 84.3 tCO2e in 2022.

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 group and company, and of the profit or loss of the group 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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and 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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
S Dawson
Director
20 September 2024
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ALBON ENGINEERING AND MANUFACTURING LTD
- 7 -
Opinion

We have audited the financial statements of Albon Engineering and Manufacturing Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 set out on pages 10 to 41. 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).

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 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.

Material uncertainty related to going concern

We draw attention to note 1.3 in the financial statements, which indicates the company has cashflow challenges, primarily concerned with timing of repayment of their UK bank loan, which is now due for repayment. As stated in note 1.3, these events or conditions, along with the other matters as set forth in note 1.3, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

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.

 

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:

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ALBON ENGINEERING AND MANUFACTURING LTD
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and 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:

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 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.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The extent to which the audit was considered capable of detecting irregularities including fraud

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:

 

 

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

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ALBON ENGINEERING AND MANUFACTURING LTD
- 9 -

To address the risk of fraud through management bias and override of 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 directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

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.

Filiz Zekia FCCA (Senior Statutory Auditor)
For and on behalf of Gravita II LLP
24 September 2024
Chartered Accountants
Statutory Auditor
Aldgate Tower
2 Leman Street
London
E1 8FA
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
2022
2021
Notes
£
£
Turnover
3
42,511,284
34,904,087
Cost of sales
(33,234,932)
(25,010,745)
Gross profit
9,276,352
9,893,342
Administrative expenses
(6,994,524)
(5,961,641)
Other operating income
71,965
685,978
Operating profit
4
2,353,793
4,617,679
Interest receivable and similar income
8
63,372
40,739
Interest payable and similar expenses
9
(996,790)
(702,966)
Profit before taxation
1,420,375
3,955,452
Tax on profit
10
(307,508)
(817,900)
Profit for the financial year
25
1,112,867
3,137,552
Profit for the financial year is all attributable to the owners of the parent company.

The income statement has been prepared on the basis that all operations are continuing operations.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
2022
2021
£
£
Profit for the year
1,112,867
3,137,552
Other comprehensive income
Revaluation of tangible fixed assets
(3,702,768)
560,694
Currency translation gain/(loss) taken to retained earnings
2,188,544
(2,421,731)
Tax relating to other comprehensive income
957,155
(486,467)
Other comprehensive income for the year
(557,069)
(2,347,504)
Total comprehensive income for the year
555,798
790,048
Total comprehensive income for the year is all attributable to the owners of the parent company.
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 12 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
51,623,040
50,098,982
Investments
13
500
500
51,623,540
50,099,482
Current assets
Stocks
15
7,198,775
6,442,179
Debtors
16
18,994,186
14,634,194
Cash at bank and in hand
2,646,805
3,402,424
28,839,766
24,478,797
Creditors: amounts falling due within one year
17
(23,493,729)
(14,188,629)
Net current assets
5,346,037
10,290,168
Total assets less current liabilities
56,969,577
60,389,650
Creditors: amounts falling due after more than one year
18
(13,313,218)
(15,001,307)
Provisions for liabilities
Deferred tax liability
21
2,450,511
3,388,293
(2,450,511)
(3,388,293)
Net assets
41,205,848
42,000,050
Capital and reserves
Called up share capital
23
1,000,000
1,000,000
Revaluation reserve
24
12,530,485
15,276,098
Profit and loss reserves
25
27,675,363
25,723,952
Total equity
41,205,848
42,000,050
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:
20 September 2024
S Dawson
Director
Company registration number 01113447 (England and Wales)
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
31 December 2022
- 13 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
14,983,584
19,722,994
Investments
13
4,403,208
4,403,208
19,386,792
24,126,202
Current assets
Stocks
15
531,055
1,242,365
Debtors
16
3,998,395
3,605,794
Cash at bank and in hand
14,066
229,730
4,543,516
5,077,889
Creditors: amounts falling due within one year
17
(11,546,906)
(8,426,951)
Net current liabilities
(7,003,390)
(3,349,062)
Total assets less current liabilities
12,383,402
20,777,140
Creditors: amounts falling due after more than one year
18
(1,466,171)
(6,281,373)
Provisions for liabilities
Deferred tax liability
21
490,890
1,628,333
(490,890)
(1,628,333)
Net assets
10,426,341
12,867,434
Capital and reserves
Called up share capital
23
1,000,000
1,000,000
Revaluation reserve
24
10,123,452
12,869,065
Profit and loss reserves
25
(697,111)
(1,001,631)
Total equity
10,426,341
12,867,434

As permitted by s408 Companies Act 2006, the truecompany has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,654,520 (2021 - £445,473 profit).

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:
20 September 2024
S Dawson
Director
Company registration number 01113447 (England and Wales)
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
1,000,000
15,201,871
25,730,131
41,932,002
Year ended 31 December 2021:
Profit for the year
-
-
3,137,552
3,137,552
Other comprehensive income:
Revaluation of tangible fixed assets
-
560,694
-
560,694
Currency translation differences
-
-
(2,421,731)
(2,421,731)
Tax relating to other comprehensive income
-
(486,467)
-
0
(486,467)
Total comprehensive income
-
74,227
715,821
790,048
Dividends
11
-
-
(722,000)
(722,000)
Balance at 31 December 2021
1,000,000
15,276,098
25,723,952
42,000,050
Year ended 31 December 2022:
Profit for the year
-
-
1,112,867
1,112,867
Other comprehensive income:
Revaluation of tangible fixed assets
-
(3,702,768)
-
(3,702,768)
Currency translation differences
-
-
2,188,544
2,188,544
Tax relating to other comprehensive income
-
957,155
-
0
957,155
Total comprehensive income
-
(2,745,613)
3,301,411
555,798
Dividends
11
-
-
(1,350,000)
(1,350,000)
Balance at 31 December 2022
1,000,000
12,530,485
27,675,363
41,205,848
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
1,000,000
12,538,088
(725,104)
12,812,984
Year ended 31 December 2021:
Profit for the year
-
-
445,473
445,473
Other comprehensive income:
Revaluation of tangible fixed assets
-
560,694
-
560,694
Tax relating to other comprehensive income
-
(229,717)
-
0
(229,717)
Total comprehensive income
-
330,977
445,473
776,450
Dividends
11
-
-
(722,000)
(722,000)
Balance at 31 December 2021
1,000,000
12,869,065
(1,001,631)
12,867,434
Year ended 31 December 2022:
Profit for the year
-
-
1,654,520
1,654,520
Other comprehensive income:
Revaluation of tangible fixed assets
-
(3,702,768)
-
(3,702,768)
Tax relating to other comprehensive income
-
957,155
-
0
957,155
Total comprehensive income
-
(2,745,613)
1,654,520
(1,091,093)
Dividends
11
-
-
(1,350,000)
(1,350,000)
Balance at 31 December 2022
1,000,000
10,123,452
(697,111)
10,426,341
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
29
3,912,961
3,559,087
Interest paid
(996,790)
(702,966)
Income taxes paid
(94,989)
(87,434)
Net cash inflow from operating activities
2,821,182
2,768,687
Investing activities
Purchase of tangible fixed assets
(5,064,894)
(5,484,387)
Proceeds on disposal of tangible fixed assets
7,979
17,061
Interest received
63,372
40,739
Net cash used in investing activities
(4,993,543)
(5,426,587)
Financing activities
Repayment of borrowings
(8,463)
-
Proceeds of new bank loans
6,543,667
10,007,523
Repayment of bank loans
(2,989,199)
(8,188,646)
Payment of finance leases obligations
(811,221)
(474,284)
Dividends paid to equity shareholders
(1,350,000)
(722,000)
Net cash generated from financing activities
1,384,784
622,593
Net decrease in cash and cash equivalents
(787,577)
(2,035,307)
Cash and cash equivalents at beginning of year
3,210,489
5,245,796
Cash and cash equivalents at end of year
2,422,912
3,210,489
Relating to:
Cash at bank and in hand
2,646,805
3,402,424
Bank overdrafts included in creditors payable within one year
(223,893)
(191,935)
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
1
Accounting policies
Company information

Albon Engineering and Manufacturing Ltd (“the company”) is a limited company registered and incorporated in England and Wales. The registered office is Rochehall Way, Purdeys Industrial Estate, Rochford, Essex.

 

The group consists of Albon Engineering and Manufacturing Ltd and all of its subsidiaries, as set out in note 14.

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 and group. 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.

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:

 

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 £1,654,520 (2021 - £445,473 profit).

1.2
Basis of consolidation

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -

The consolidated group financial statements consist of the financial statements of the parent company Albon Engineering and Manufacturing Ltd 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 2022. 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.

1.3
Going concern

The group's business activities together with the factors likely to affect its future development, performance and position, are set out in the Business Review section of the Strategic Report. The financial statements have been prepared on a going concern basis.

Albon Engineering & Manufacturing PLC, as a standalone entity, has been loss making and cash negative for a number of years. The Serbian entities have historically been able to generate sufficient surplus cash to support UK trading. However, at the start of 2024 the management team took some time to re-assess the sustainability of this strategy long term. Several factors were taken into consideration during discussions:

- Expiration of existing UK bank loan Aug-24;

- Current UK and Serbian business levels and profitability;

- Expected future trading levels;

- Creditor pressure;

- Working Capital requirements of the business;

- Availability of funding;

- Performance of Serbian Operations;

- Available capacity within Serbian facilities.

Having reviewed these factors, a decision was made in Q2 2024 to stop manufacturing within the UK and concentrate efforts on growing Serbian operations, with the intention on retaining a UK Head Office to support Group Sales and Finance functions.

Given that existing facilities in Serbia have surplus floor-space available, all key customers and suppliers have been consulted and given the option to transfer existing contracts to Serbia. Following this consultation, two significant contracts are being transferred, while the remainder are to be phased out. A plan is underway to move required equipment to Serbia and start manufacture during Q4 2024. Given the lower cost base in Serbia, existing contracts will be more profitable once parts are produced in Serbia.

Following these restructuring decisions in Q2 and Q3 2024, the majority of Manufacturing staff in the UK have now been made redundant. Members of the maintenance team have been retained in order to assist with decommissioning and transfer of equipment.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -

The Company owns two Freehold properties in Rochford which both act as security for the Mortgage held with Lloyds Bank which is currently due for repayment. The Company has now accepted an offer (in July 2024) on the smaller of the 2 factories, with the sale expected to complete during Q4 2024. This will provide a cash injection to be used to substantially settle the Lloyds Mortgage. The plan is for further funds to be transferred from Serbia to clear the remainder of the UK bank debt, thus leaving the remaining UK property un-encumbered and removing any pressure relating to repayment of bank debt and bank covenants. Representatives of Lloyds bank have been closely involved with the entire sales process and payments continue to be made on an interest only basis. We cannot however predict timing of any action the bank might take to recover their debt though the bank have communicated some flexibility in timing to support the company as it disposes of the UK factory asset.

Payment plans have been agreed with Key Suppliers, including HMRC. With support from Serbian operations, all commitments have been met and suppliers continue to work with the business to ensure debts are cleared before. Serbian operations continue to meet their own commitments while supporting the UK entity with cash flow.

As part of the change in group strategy, management have reviewed the business model of Albon Forge Ltd. They are exploring opportunities for future development for the entity. In the short term, the majority of the Forge staff have been made redundant while management consider the future direction of the entity.

Moving forward all costs associated with the UK head office will be recharged to Serbian entities on a monthly basis to ensure the UK Operations continue to break even and have sufficient cash to support ongoing commitments.

The directors believe that moving manufacturing operations to Serbia is in the best interests of the Group as a whole, and give the best opportunities in terms of ongoing margins and profitability. The directors have considered the impact of all of the above, and with sale of the factory and cash support from Serbian operations, remain confident that the company will continue in operational existence for the foreseeable future and consequently continue to adopt the going concern basis in preparing these accounts.

1.4
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.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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.

1.5
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.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -

Freehold and long leasehold land and buildings are carried in the financial statement at cost or professional valuation. Group properties are revalued professionally on a regular basis in line with the requirements of FRS102.

 

Depreciation is provided by the company to write off the cost or valuation less the estimated residual value of tangible fixed assets over their estimated useful economic lives as follows:

Land and buildings Freehold
50 years
Land and buildings Leasehold
Life of lease
Plant and machinery
5 to 15 years
Fixtures, fittings & equipment
3 to 7 years
Motor vehicles
5 years

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 income statement.

The assets' residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

1.6
Impairment of fixed assets

At each reporting period end date, the group 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 21 -
1.8
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.

1.9
Financial instruments

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

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.

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

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.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 22 -
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 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.

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 group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group 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 receipts 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

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.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 23 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

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

 

The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

1.14
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

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.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 24 -
1.15
Government grants

Government grant represents the fair value of the income received or receivable from the furlough scheme introduced by the UK government due to the pandemic caused by COVID-19.

 

Income from the furlough scheme is recognised in the period the furlough income relates to and recorded as ‘other income’.

 

Furlough scheme income has also been received from the government in Serbia.

1.16
Foreign exchange

Transactions in foreign currencies are recorded using the rate of exchange ruling at the end of the month following the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account.

 

The assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rate whilst the profit and loss accounts are translated using the average rate for the year. Gains and losses arising on these translations are taken to reserves, net of exchange differences on related foreign currency borrowings.

 

Exchange differences arising on translation differences at year end rates on investments made by way of loans to subsidiary undertakings, intended to be, for all practical purposes, as permanent as equity, are accounted for on consolidation as an adjustment to reserves.

2
Judgements and key sources of estimation uncertainty

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.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
2
Judgements and key sources of estimation uncertainty
(Continued)
- 25 -
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.

Stock provision

When calculating the stock provision, management considers the nature and condition of the stock, as well as applying assumptions around anticipated saleability of finished goods. See note 15 for the net carrying amount of the stock and associated provision.

Work in progress

When calculating the work in progress, management calculates labour & utility costs per rod for each product and allocates 50% to the cost of raw materials.

Land and buildings at revalued amounts

Land and buildings are recorded at fair value either based on directors' valuation or external valuation if there has been any significant movements in the property market.

 

At the end of each reporting period, the directors update their assessment of the fair value of each property, taking into account the most recent independent valuations. The directors determine a property's value within a range of reasonable fair value estimates.

 

The latest external valuation was performed on 30 January 2012 and 15 August 2013 for Agena Technology Doo and Albon Manufacturing & Engineering Doo respectively. The valuation was based on rental yields that can be achieved by the properties. As at 31 December 2022, an external valuer confirmed that there has been no significant movements in general market conditions in Serbia on the basis of which the directors can conclude that the value of the properties remained at the same level as previous years.

 

The properties owned by the parent company were revalued by the directors based on a professional valuation carried out by external valuers, Glenny LLP. The valuation was dated 5 September 2024 but provided a valuation as at 31 December 2022.

3
Turnover and other revenue

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

2022
2021
£
£
Turnover - sale of goods
Manufacturing
42,511,284
34,904,087
Other significant revenue
Interest income
63,372
40,739
Grants received
-
234,335
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Turnover and other revenue
(Continued)
- 26 -
Turnover analysed by geographical market
2022
2021
£
£
UK
4,660,311
5,931,332
Europe
8,559,026
2,778,889
USA
28,322,290
25,665,336
Rest of the World
969,657
528,530
42,511,284
34,904,087
4
Operating profit
2022
2021
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange gains
(49,453)
(118,656)
Government grants
-
(234,335)
Depreciation of owned tangible fixed assets
3,198,186
2,912,635
Depreciation of tangible fixed assets held under finance leases
189,296
220,342
(Profit)/loss on disposal of tangible fixed assets
(5,172)
4,911
Operating lease charges
111,996
111,996
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
84,500
77,000
For other services
All other non-audit services
27,141
21,550
6
Employees

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

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Production
518
433
83
87
Sales and administration
42
58
19
19
Total
560
491
102
106
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
6
Employees
(Continued)
- 27 -

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
9,208,102
8,077,617
3,162,406
3,202,857
Social security costs
416,099
392,737
342,980
331,007
Pension costs
138,721
142,034
130,938
133,240
9,762,922
8,612,388
3,636,324
3,667,104
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
622,496
605,640
Company pension contributions to defined contribution schemes
31,218
31,049
653,714
636,689

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2021 - 2).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
316,484
316,176
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
32,170
16,392
Other interest income
31,202
24,347
Total income
63,372
40,739
2022
2021
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
32,170
16,392
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
9
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
209,727
131,480
Other interest on financial liabilities
450,067
358,214
659,794
489,694
Other finance costs:
Interest on finance leases and hire purchase contracts
211,370
106,644
Other interest
125,626
106,628
Total finance costs
996,790
702,966
10
Taxation
2022
2021
£
£
Current tax
Corporation tax on profits for the current period
131,011
132,630
Foreign current tax on profits for the current period
217,422
-
0
Total current tax
348,433
132,630
Deferred tax
Origination and reversal of timing differences
(40,925)
685,270
Total tax charge
307,508
817,900

The tax rate for the current period was 19% (2021: 19%).

 

As of 1 April 2023, the UK corporation tax rate increased to 25%.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Taxation
(Continued)
- 29 -

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:

2022
2021
£
£
Profit before taxation
1,420,375
3,955,452
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
269,871
751,536
Tax effect of expenses that are not deductible in determining taxable profit
40,715
40,138
Tax effect of utilisation of tax losses not previously recognised
-
0
(22,683)
Unutilised tax losses carried forward
107,744
(162,951)
Permanent capital allowances in excess of depreciation
363,889
384,747
Effect of overseas tax rates
(194,528)
(224,328)
Other tax adjustments
(239,258)
(633,829)
Deferred tax movement
(40,925)
685,270
Taxation charge
307,508
817,900

In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:

2022
2021
£
£
Deferred tax arising on:
Revaluation of property
(957,155)
486,467
11
Dividends
2022
2021
Recognised as distributions to equity holders:
£
£
Interim paid
1,350,000
722,000
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
12
Tangible fixed assets
Group
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2022
29,528,325
72,985,253
2,726,732
210,071
105,450,381
Additions
20,504
6,664,388
62,782
80,870
6,828,544
Disposals
-
0
-
0
-
0
(13,030)
(13,030)
Revaluation
(4,180,000)
-
0
-
0
-
0
(4,180,000)
Exchange adjustments
715,190
1,742,119
47,047
10,149
2,514,505
At 31 December 2022
26,084,019
81,391,760
2,836,561
288,060
110,600,400
Depreciation and impairment
At 1 January 2022
1,137,342
51,551,223
2,518,775
144,059
55,351,399
Depreciation charged in the year
692,127
2,563,087
107,465
24,803
3,387,482
Eliminated in respect of disposals
-
0
-
0
-
0
(10,223)
(10,223)
Revaluation
(477,232)
-
0
-
0
-
0
(477,232)
Exchange adjustments
73,608
598,704
46,041
7,581
725,934
At 31 December 2022
1,425,845
54,713,014
2,672,281
166,220
58,977,360
Carrying amount
At 31 December 2022
24,658,174
26,678,746
164,280
121,840
51,623,040
At 31 December 2021
28,390,983
21,434,030
207,957
66,012
50,098,982
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
12
Tangible fixed assets
(Continued)
- 31 -
Company
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2022
17,000,000
45,250,746
2,006,403
52,766
64,309,915
Additions
-
0
64,476
-
0
50,771
115,247
Disposals
-
0
(598,020)
-
0
(13,030)
(611,050)
Revaluation
(4,180,000)
-
0
-
0
-
0
(4,180,000)
At 31 December 2022
12,820,000
44,717,202
2,006,403
90,507
59,634,112
Depreciation and impairment
At 1 January 2022
-
0
42,683,219
1,854,594
49,108
44,586,921
Depreciation charged in the year
477,232
594,968
60,037
3,391
1,135,628
Eliminated in respect of disposals
-
0
(584,566)
-
0
(10,223)
(594,789)
Revaluation
(477,232)
-
0
-
0
-
0
(477,232)
At 31 December 2022
-
0
42,693,621
1,914,631
42,276
44,650,528
Carrying amount
At 31 December 2022
12,820,000
2,023,581
91,772
48,231
14,983,584
At 31 December 2021
17,000,000
2,567,527
151,809
3,658
19,722,994

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2022
2021
2022
2021
£
£
£
£
Plant and machinery
1,144,454
1,120,784
1,081,454
1,053,117
Motor vehicles
31,022
5,480
-
0
-
0
1,175,476
1,126,264
1,081,454
1,053,117

Group

Serbia - Albon Engineering & Manufacturing Doo - The property was revalued by external valuers, SGS Beograd Ltd, on 15 August 2013, to open market value based on existing use value.

 

Serbia - Agena Technology Doo - An external valuation was carried out on the property on 30 January 2012 by LeRoy Realty Consultants Doo on an open market value basis.

 

As at 31 December 2022 the directors consider the aggregate market value of the properties in Albon Engineering & Manufacturing Doo & Agena Technology Doo to be £11,835,367.

 

Company

The property was revalued to £12.82m by the directors based on a professional valuation carried out by external valuers, Glenny LLP. The valuation was dated 5 September 2024 but provided a valuation as at 31 December 2022.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
12
Tangible fixed assets
(Continued)
- 32 -

If revalued assets were stated on an historical cost basis (after foreign exchange adjustment) rather than a fair value basis, the total amounts included would have been as follows:

 

2022
2021
£
£
Group
Cost
17,860,914
17,279,648
Accumulated depreciation
(4,159,939)
(3,775,863)
Carrying value
13,700,975
13,503,785
Company
Cost
7,437,000
7,437,000
Accumulated depreciation
(2,833,000)
(2,708,000)
Carrying value
4,604,000
4,729,000
13
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
4,402,708
4,402,708
Listed investments
500
500
500
500
500
500
4,403,208
4,403,208

Listed investments included above:

Listed investments carrying amount
500
500
500
500
Movements in fixed asset investments
Group
Shares
£
Cost or valuation
At 1 January 2022 & 31 December 2022
500
Carrying amount
At 31 December 2022
500
At 31 December 2021
500
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
13
Fixed asset investments
(Continued)
- 33 -
Movements in fixed asset investments
Company
Shares
£
Cost or valuation
At 31 December 2022
7,214,286
At 31 December 2022
7,214,286
Impairment
At 31 December 2022
2,811,078
At 31 December 2022
2,811,078
Carrying amount
At 31 December 2022
4,403,208
At 31 December 2021
4,403,208
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 34 -
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Agena Technology Doo
Serbia
Ordinary
100.00
-
Albon Engineering & Manufacturing Doo
Serbia
Ordinary
100.00
-
Albon Holdings LLC
USA
Ordinary
100.00
-
Albon Manufacturing LLC
USA
Ordinary
-
100.00
Albon Property LLC
USA
Ordinary
-
100.00
Albon Forge Limited
UK
Ordinary
100.00
-

The registered office addresses of the subsidiary companies are:

USA entities: 3001 NW 36th, Norman, Oklahoma 73072, USA

Serbian entities: Industrijska 94, Ruma, Serbia

UK entities: Rochehall Way, Purdeys Industrial Estate, Rochford, Essex, United Kingdom, SS4 1JU

 

Under section 479C - audit exemption for a subsidiary company, the company has provided a statement of guarantee by a parent undertaking of a subsidiary undertaking on behalf of Albon Forge Limited. Consequently, Albon Forge Limited is exempt from the requirements of the Companies Act relating to the audit of its individual accounts.

15
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Raw materials and consumables
434,167
780,380
461,597
807,810
Work in progress
17,045
196,558
17,045
196,558
Finished goods and goods for resale
6,747,563
5,465,241
52,413
237,997
7,198,775
6,442,179
531,055
1,242,365

There is no significant difference between the replacement cost of finished goods and their carrying amounts.

Stock is stated after provisions for impairment of £566,777 (2021: £532,815).

16
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
16,711,063
12,440,570
363,076
892,677
Corporation tax recoverable
271,411
18,131
270,690
18,131
Amounts owed by group undertakings
-
-
1,841,229
913,882
Other debtors
1,445,480
1,810,371
1,191,058
1,559,600
Prepayments and accrued income
566,232
365,122
332,342
221,504
18,994,186
14,634,194
3,998,395
3,605,794
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
16
Debtors
(Continued)
- 35 -

Trade debtors disclosed above are measured at amortised cost.

 

Trade debtors are stated after provisions for impairment of £137,400 (2021: £nil).

17
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
19
10,706,708
4,640,678
5,869,785
666,152
Obligations under finance leases
20
593,533
432,619
567,273
417,176
Other borrowings
19
51,130
59,593
51,130
59,593
Trade creditors
7,967,101
5,848,539
1,868,906
2,819,071
Amounts owed to group undertakings
-
0
-
0
-
0
1,824,696
Corporation tax payable
287,417
58,412
276,040
-
0
Other taxation and social security
2,586,503
2,109,112
2,517,028
2,054,161
Other creditors
365,887
253,551
120,509
163,484
Accruals and deferred income
935,450
786,125
276,235
422,618
23,493,729
14,188,629
11,546,906
8,426,951

Company

The bank loans are secured by fixed and floating charges over the freehold property and all further undertakings of the company.

 

The aggregate amount of secured bank creditors due within one year at the year end was £5,869,785 (2021: £666,152).

 

Obligations under finance lease contracts are secured against the related assets. The aggregate amount of secured finance lease creditors due within one year at the year end was £567,273 (2021: £417,176).

 

Group

Agena Technology Doo loan is secured over the assets of the company in favour of Societe Generale Bank, Procredit Bank and Eurobank AD. Albon Engineering & Manufacturing Doo loan is secured over the assets of the company in favour of Halkbank.

 

Albon Manufacturing LLC - No bank loans at the year end.

 

Albon Forge Ltd overdraft is secured over the assets of the company in favour of Lloyds Bank.

 

The aggregate amount of secured bank creditors due within one year is £10,706,708 (2021: £4,640,678).

 

Obligations under finance lease contracts are secured against the related assets. The aggregate amount of secured finance lease creditors due within one year at the year end was £593,533 (2021: £432,619).

 

The terms of the bank loans, interest rates and repayment details are as follows:

 

Company

At the year end the company had a bank loan fully repayable by 2024 in quarterly instalments £100,000 at an interest rate of 2.6% above the Base Rate.


At the year end the company had a bank loan fully repayable by 2024 in monthly instalments of £6,428 at an interest rate of 6% per annum.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
17
Creditors: amounts falling due within one year
(Continued)
- 36 -

Group

USA - No bank loans at the year end.

 

Serbia - There are 15 bank loans:

 

- loan 1 - fully repayable by September 2023 by monthly instalments of €33,033 at an interest rate of 2.5% above 6 month EURIBOR;

 

- loan 2 - fully repayable by November 2029 by monthly instalments of €7,721 at an interest rate of 2.95% above 6 month EURIBOR;

 

- loan 3 - fully repayable by November 2031 in monthly instalments of €23,333 at an interest rate of 3.3% above 6 month EURIBOR;

 

- loan 4 - fully repayable by December 2025 in monthly instalments of €37,500 at an interest rate of 3.3% above 6 month EURIBOR;

 

- loan 5 - fully repayable by November 2023 in monthly instalments of €25,000 at an interest rate of 3% above 3 month EURIBOR;

 

- loan 6 - fully repayable by October 2023 in one instalment of the full amount at an interest rate of 2.95% above 3 month EURIBOR;

 

- loan 7 - fully repayable by November 2023 in monthly instalments of €16,667 at an interest rate of 3% above 3 month EURIBOR;

 

- loan 8 - fully repayable by December 2023 in monthly instalments of €41,667 at an interest rate of 3% above 3 month EURIBOR;

 

- loan 9 - fully repayable by December 2023 in monthly instalments of €41,667 at an interest rate of 3% above 3 month EURIBOR.

 

- loan 10 - fully repayable by February 2026 in monthly instalments of €54,167 at an interest rate of 3.3% above 6 month EURIBOR.

 

- loan 11 - fully repayable by May 2026 in monthly instalments of €16,667 at an interest rate of 3.3% above 6 month EURIBOR.

 

- loan 12 - fully repayable by December 2026 in monthly instalments of €22,107 at an interest rate of 2.95% above 6 month EURIBOR.

 

- loan 13 - fully repayable by March 2028 in monthly instalments of €20,000 at an interest rate of 2.9% above 3 month EURIBOR.

 

- loan 14 - fully repayable by March 2028 in monthly instalments of €66,667 at an interest rate of 2.9% above 3 month EURIBOR.

 

- loan 15 - fully repayable by July 2028 in monthly instalments of €41,666.67 at an interest rate of 2.85% above 3 month EURIBOR.

 

- loan 16 - fully repayable by December 2027 in monthly instalments of €41,666.67 at an interest rate of 2.89% above 3 month EURIBOR.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 37 -
18
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
19
11,791,593
14,271,197
-
0
5,600,496
Obligations under finance leases
20
1,521,625
730,110
1,466,171
680,877
13,313,218
15,001,307
1,466,171
6,281,373

Company

The aggregate amount of secured bank creditors due in more than one year is £nil (2021: £5,600,496).

 

Obligations under finance lease contracts are secured against the related assets. The aggregate amount of secured finance lease creditors due after one year at the year end was £1,466,171 (2021: £680,877).

 

Group

The aggregate amount of secured bank creditors due in more than one year is £11,791,593 (2021: £14,271,197).

 

The bank loans are secured by fixed and floating charges over the Groups's freehold land, buildings and by a charge on specific items of plant and machinery.

 

Obligations under finance lease contracts are secured against the related assets. The aggregate amount of secured finance lease creditors due after one year at the year end was £1,521,625 (2021: £730,110).

19
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans
22,274,408
18,719,940
5,654,131
6,074,792
Bank overdrafts
223,893
191,935
215,654
191,856
Other loans
51,130
59,593
51,130
59,593
22,549,431
18,971,468
5,920,915
6,326,241
Payable within one year
10,757,838
4,700,271
5,920,915
725,745
Payable after one year
11,791,593
14,271,197
-
0
5,600,496
20
Finance lease obligations
Group
Company
2022
2021
2022
2021
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
593,533
432,619
567,273
417,176
In two to five years
1,521,625
730,110
1,466,171
680,877
2,115,158
1,162,729
2,033,444
1,098,053
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
20
Finance lease obligations
(Continued)
- 38 -

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

21
Deferred taxation

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:

Liabilities
Liabilities
2022
2021
Group
£
£
Accelerated Capital Allowances
1,648,167
1,628,795
Revaluations
802,344
1,759,498
2,450,511
3,388,293
Liabilities
Liabilities
2022
2021
Company
£
£
Accelerated Capital Allowances
490,890
671,179
Revaluations
-
957,154
490,890
1,628,333
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 January 2022
3,388,293
1,628,333
Credit to profit or loss
(40,925)
(180,288)
Credit to other comprehensive income
(896,857)
(957,155)
Liability at 31 December 2022
2,450,511
490,890
22
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
138,721
142,034
ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
22
Retirement benefit schemes
(Continued)
- 39 -

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.

23
Share capital
Group and company
2022
2021
Ordinary share capital
£
£
Issued and fully paid
1,000,000 Ordinary of £1 each
1,000,000
1,000,000

There is a single class of Ordinary shares. There are no restrictions on the distribution of dividends and prepayment of capital.

24
Revaluation reserve
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning of the year
15,276,098
15,201,871
12,869,065
12,538,088
Revaluation surplus arising in the year
(3,702,768)
560,694
(3,702,768)
560,694
Deferred tax on revaluation of tangible assets
957,155
(486,467)
957,155
(229,717)
At the end of the year
12,530,485
15,276,098
10,123,452
12,869,065
25
Profit and loss reserves
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning of the year
25,723,952
25,730,131
(1,001,631)
(725,104)
Profit for the year
1,112,867
3,137,552
1,654,520
445,473
Dividends
(1,350,000)
(722,000)
(1,350,000)
(722,000)
Currency translation differences
2,188,544
(2,421,731)
-
0
-
0
At the end of the year
27,675,363
25,723,952
(697,111)
(1,001,631)

Retained earnings represents accumulated comprehensive income for the year and prior periods less dividends paid.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 40 -
26
Operating lease commitments
Lessee

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:

Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
13,007
11,821
-
-
Between two and five years
34,924
46,975
-
-
47,931
58,796
-
-
27
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2022
2021
£
£
Aggregate compensation
841,545
802,848
Transactions with related parties

The following amounts were outstanding at the reporting end date:

 

Amounts owed by related parties

At 31 December 2022 the balance (included within other debtors) owed by key management personnel stood at £926,119 (2021: £1,348,172). Interest has been charged by the company in respect of this balance at the HMRC official rate of interest.

28
Events after the reporting date

On 11th July 2024, Albon Engineering and Manufacturing Plc passed a special resolution of re-registration. As a result of this the entity was registered as a private limited company under the name Albon Engineering and Manufacturing Limited.

 

In August 2024, management reviewed the business model of Albon Forge and began looking at alternative opportunities to continue the business activities. In the short term this led to redundancies of the staff currently working for that entity.

ALBON ENGINEERING AND MANUFACTURING LTD
(FORMERLY ALBON ENGINEERING AND MANUFACTURING PLC)
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 41 -
29
Cash generated from group operations
2022
2021
£
£
Profit for the year after tax
1,112,867
3,137,552
Adjustments for:
Taxation charged
307,508
817,900
Finance costs
996,790
702,966
Investment income
(63,372)
(40,739)
(Gain)/loss on disposal of tangible fixed assets
(5,172)
4,911
Depreciation and impairment of tangible fixed assets
3,387,482
3,132,977
Net effect of foreign exchange differences
399,974
(343,424)
Movements in working capital:
(Increase) in stocks
(756,596)
(1,607,238)
(Increase) in debtors
(4,106,712)
(3,157,332)
Increase in creditors
2,640,192
911,514
Cash generated from operations
3,912,961
3,559,087
30
Analysis of changes in net debt - group
1 January 2022
Cash flows
New finance leases
Exchange rate movements
31 December 2022
£
£
£
£
£
Cash at bank and in hand
3,402,424
(664,035)
-
(91,584)
2,646,805
Bank overdrafts
(191,935)
(31,958)
-
-
(223,893)
3,210,489
(695,993)
-
(91,584)
2,422,912
Borrowings excluding overdrafts
(18,779,533)
(3,546,005)
-
-
(22,325,538)
Obligations under finance leases
(1,162,729)
811,221
(1,763,650)
-
(2,115,158)
(16,731,773)
(3,430,777)
(1,763,650)
(91,584)
(22,017,784)
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