Company registration number NI017213 (Northern Ireland)
LARSEN (MANUFACTURING) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LARSEN (MANUFACTURING) LIMITED
COMPANY INFORMATION
Director
Mr D Wright
Secretary
Mr D Wright
Company number
NI017213
Registered office
4 West Bank Road
Belfast Harbour Industrial Estate
Belfast
BT3 9JL
Auditor
GMcG BELFAST
Chartered Accountants & Statutory Auditor
Alfred House
19 Alfred Street
Belfast
BT2 8EQ
Business address
4 West Bank Road
Belfast Harbour Industrial Estate
Belfast
BT3 9JL
Bankers
Bank of Ireland
Corporate & Business Banking
1 Donegall Square South
Belfast
BT1 5LR
Allied Irish Bank
78 Wellington Street
Ballymena
Co Antrim
BT43 6AF
Solicitors
Peden & Reid
22 Callender Street
Belfast
BT1 5BU
LARSEN (MANUFACTURING) LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 9
Statement of income and retained earnings
10
Balance sheet
11
Notes to the financial statements
12 - 22
LARSEN (MANUFACTURING) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The director presents the strategic report for the year ended 31 December 2023.

Principal activities

The principal activity of the company during the year was the manufacture of building products including cement additives, wood preservatives and building chemicals.

Review of the business

The results of the company for the year, as set out on page 10, show a profit on ordinary activities before tax of £1,547,986 (2022 - £1,830,050) and this was achieved on a turnover of £22,928,714 (2022 - £20,130,009). The shareholders' funds of the company increased from £1,550,917 in 2022 to a total of £1,998,537.

Principal risks and uncertainties

As for many businesses of our size, the business environment in which we operate continues to be challenging. The building products market is highly competitive and margins continue to be tight. We address risk management through a range of policies and procedures, subject to Board approval and ongoing review by management.

 

Management have identified the following primary risks and uncertainties:

 

- Economic factors - changes in the condition of the building products market and general economy.

 

-Currency Exchange risk - we are aware of the potential adverse effects on performance from exchange rate movements and have an active policy to mitigate this exposure.

Key performance indicators

A summary of principal financial KPI's are as follows:

Year to Year to

31 Dec 23 31 Dec 22

£ £

Turnover 22,928,714 20,130,009

EBITDA (excluding exceptional items) 2,133,173 2,269,924

EBITDA % 9.3% 11.3%

On behalf of the board

Mr D Wright
Director
19 September 2024
LARSEN (MANUFACTURING) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The director presents his annual report and financial statements for the year ended 31 December 2023.

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £800,000. The director does not recommend payment of a further dividend.

Director

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

Mr D Wright
Research and development

The company engages in research and development activities relating to the introduction of new products and the improvement of existing products. Research and development expenditure is written off to the profit and loss account as incurred.

Future developments

The directors do not anticipate any significant future developments in the business of the company.

Statement of director's responsibilities

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

 

 

The director is 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. He is 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.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the principal activities, business review, and disclosure of the principal risks and uncertainties facing the company.

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.

LARSEN (MANUFACTURING) LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr D Wright
Director
19 September 2024
LARSEN (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LARSEN (MANUFACTURING) LIMITED
- 4 -
Opinion

We have audited the financial statements of Larsen (Manufacturing) Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

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

 

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

LARSEN (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LARSEN (MANUFACTURING) LIMITED (CONTINUED)
- 5 -

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 director is 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:

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 director's 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:

LARSEN (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LARSEN (MANUFACTURING) LIMITED (CONTINUED)
- 6 -
Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

LARSEN (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LARSEN (MANUFACTURING) LIMITED (CONTINUED)
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

 

In identifying and assessing potential risks of material misstatement in respect of irregularities, including fraud and non-compliances with laws and regulations, we considered the following:

 

· The nature of the industry and sector, control environment and business performance, including the

company’s remuneration policies for directors, bonus levels and performance targets, if any;

 

· Results of our enquiries of management about their own identification and assessment of the risks of

irregularities;

 

· Any matters we identified having obtained and reviewed the company’s documentation of their policies and

procedures relating to:

 

· Identifying, evaluating and complying with laws and regulations and whether they were aware of

any instance of non-compliance;

 

· Detecting and responding to the risks of fraud and whether they have knowledge of any actual,

suspected or alleged fraud; and

 

· The internal controls established to mitigate risks of fraud or non-compliance with laws and

regulations;

 

· The matters discussed among the audit engagement team regarding how and where fraud

might occur in the financial statements and potential indicators of fraud.

 

As a result of these procedures, we considered that the particular areas in the financial statements that were susceptible to misstatement were related to management bias in accounting estimates and judgements and recognition of revenue. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006, and local tax legislation.

 

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

 

 

LARSEN (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LARSEN (MANUFACTURING) LIMITED (CONTINUED)
- 8 -
Audit response to risks identified:

Our procedures to respond to the risks identified included the following:

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance 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.

LARSEN (MANUFACTURING) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LARSEN (MANUFACTURING) LIMITED (CONTINUED)
- 9 -

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.

Mrs Susan Dunlop FCA
Senior Statutory Auditor
For and on behalf of GMcG BELFAST
19 September 2024
Chartered Accountants
Statutory Auditor
Chartered Accountants & Statutory Auditor
Alfred House
19 Alfred Street
Belfast
BT2 8EQ
LARSEN (MANUFACTURING) LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
22,928,714
20,130,009
Cost of sales
(15,640,898)
(12,576,521)
Gross profit
7,287,816
7,553,488
Distribution costs
(3,532,181)
(3,348,124)
Administrative expenses
(2,019,728)
(2,423,492)
Other operating income
-
0
48,178
Operating profit
4
1,735,907
1,830,050
Interest payable and similar expenses
7
(187,921)
-
0
Profit before taxation
1,547,986
1,830,050
Tax on profit
8
(300,366)
(271,264)
Profit for the financial year
1,247,620
1,558,786
Retained earnings brought forward
1,404,628
1,890,842
Dividends
9
(800,000)
(2,045,000)
Retained earnings carried forward
1,852,248
1,404,628

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

LARSEN (MANUFACTURING) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
3,530,622
3,628,558
Current assets
Stocks
11
2,751,104
2,359,308
Debtors
12
4,029,615
2,728,968
Cash at bank and in hand
2,347,061
1,116,498
9,127,780
6,204,774
Creditors: amounts falling due within one year
13
(10,146,200)
(7,770,695)
Net current liabilities
(1,018,420)
(1,565,921)
Total assets less current liabilities
2,512,202
2,062,637
Provisions for liabilities
Deferred tax liability
14
513,665
511,720
(513,665)
(511,720)
Net assets
1,998,537
1,550,917
Capital and reserves
Called up share capital
16
27,901
27,901
Revaluation reserve
17
118,388
118,388
Profit and loss reserves
18
1,852,248
1,404,628
Total equity
1,998,537
1,550,917

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved and signed by the director and authorised for issue on 19 September 2024
Mr D Wright
Director
Company registration number NI017213 (Northern Ireland)
LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Larsen Manufacturing Limited is a private company limited by shares incorporated in Northern Ireland. The registered office is 4 West Bank Road, Belfast Harbour Industrial Estate, Belfast, BT3 9JL.

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 under the historical cost convention. 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 Larsen Newco 5 Limited. These consolidated financial statements are available from its registered office, Alfred House, 19 Alfred Street, Belfast, BT2 8EQ.

1.2
Going concern

Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues 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.

LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies (Continued)
- 13 -

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:

Land and buildings
2% straight line for buildings. Land with a net book value of £947,212 is not depreciated.
Plant & Equipment
5% - 25% straight line
Motor vehicles
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.

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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

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

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

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies (Continued)
- 14 -
1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

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.

LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies (Continued)
- 15 -
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.

Other financial liabilities

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.

 

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

LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies (Continued)
- 16 -
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.

 

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

1.12
Retirement benefits

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

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 in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is 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.

Depreciation method and assets useful lives

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Stock valuation

At each balance sheet date the company's stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The assessment of the selling price of such stock involves some estimation uncertainty.

Bad debt provision

The company has recognised impairment provisions in respect of bad and doubtful trade debtors. The judgements, estimates and associated assumptions necessary to calculate these provisions are based on historical experience and other reasonable factors.

LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
22,928,714
20,130,009

The directors consider it to be seriously prejudicial to the interests of the company to further disclose information regarding turnover.

4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(83,416)
209,662
Fees payable to the company's auditor for the audit of the company's financial statements
7,500
7,000
Depreciation of owned tangible fixed assets
417,038
464,682
Profit on disposal of tangible fixed assets
(19,772)
(24,808)
5
Employees

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

2023
2022
Number
Number
Production staff
59
58
Administrative staff
5
5
Management staff
1
1
Total
65
64

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,420,868
2,098,326
Social security costs
251,176
227,780
Pension costs
57,545
53,399
2,729,589
2,379,505
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
12,000
8,200
LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Director's remuneration (Continued)
- 18 -

The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 1 (2022 - 1).

7
Interest payable and similar expenses
2023
2022
£
£
Other interest on financial liabilities
173,542
-
0
Other interest
14,379
-
0
187,921
-
0
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
298,421
359,489
Deferred tax
Origination and reversal of timing differences
1,945
(88,225)
Total tax charge
300,366
271,264

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
1,547,986
1,830,050
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
386,997
347,710
Tax effect of expenses that are not deductible in determining taxable profit
(2,016)
(3,868)
Adjustments in respect of prior years
-
0
9,705
Effect of change in corporation tax rate
(18,771)
-
0
Group relief
-
0
(7,863)
Permanent capital allowances in excess of depreciation
3,021
(14,116)
Research and development tax credit
(68,865)
(60,304)
Taxation charge for the year
300,366
271,264
LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Dividends
2023
2022
£
£
Interim paid
800,000
2,045,000
10
Tangible fixed assets
Land and buildings
Plant & Equipment
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 January 2023
1,558,199
8,043,965
478,002
10,080,166
Additions
-
0
182,622
150,495
333,117
Disposals
-
0
-
0
(71,600)
(71,600)
At 31 December 2023
1,558,199
8,226,587
556,897
10,341,683
Depreciation and impairment
At 1 January 2023
415,508
5,754,982
281,118
6,451,608
Depreciation charged in the year
12,220
316,452
88,366
417,038
Eliminated in respect of disposals
-
0
-
0
(57,585)
(57,585)
At 31 December 2023
427,728
6,071,434
311,899
6,811,061
Carrying amount
At 31 December 2023
1,130,471
2,155,153
244,998
3,530,622
At 31 December 2022
1,142,691
2,288,983
196,884
3,628,558

The carrying amount of the company's land and buildings includes freehold property of £805,674, long leasehold property of £324,797 and short leasehold property of £Nil.

 

Land with a net book value of £947,212 is not depreciated.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Long leasehold
2023
2022
£
£
Cost
620,987
620,987
Accumulated depreciation
(398,796)
(386,576)
Carrying value
222,191
234,411
LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Stocks
2023
2022
£
£
Raw materials and consumables
1,862,328
1,623,218
Finished goods and goods for resale
888,776
736,090
2,751,104
2,359,308
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,453,215
2,440,906
Amounts owed by group undertakings
1,317,748
42,500
Other debtors
1,579
5,000
Prepayments and accrued income
257,073
240,562
4,029,615
2,728,968
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
741,273
1,161,333
Amounts owed to group undertakings
8,251,033
5,522,676
Corporation tax
-
0
349,784
Other taxation and social security
511,065
421,620
Accruals and deferred income
642,829
315,282
10,146,200
7,770,695
14
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
513,665
511,720
LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Deferred taxation (Continued)
- 21 -
2023
Movements in the year:
£
Liability at 1 January 2023
511,720
Charge to profit or loss
1,945
Liability at 31 December 2023
513,665
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
57,545
53,399

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.

16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary 'A' shares of £1 each
27,900
27,900
27,900
27,900
Ordinary 'B' shares of £1 each
1
1
1
1
27,901
27,901
27,901
27,901
17
Revaluation reserve

On transition to FRS 102 the company elected to use the revaluation of leasehold property at 1 January 2015 as the deemed cost for those assets and continues to adopt a policy of non-revaluation from that date, as permitted under Section 35 of FRS 102. The revaluation reserve represents surpluses arising on the revaluation of the leasehold property.

18
Profit and loss reserves

The profit and loss account represents the retained earnings of the company.

LARSEN (MANUFACTURING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
19
Related party transactions

The following companies were deemed to be related parties of the company during the year with transactions and/or balance sheet balances requiring disclosure under FRS 102 and Companies Act 2006:

    

Larsen Newco 5 Limited             Larsen Building Products Limited

    Larsen Building Products (IRL) Limited    Larsen Group Limited

    Larsen Newco 3 Limited            Larsen Property Development Limited

    Larsen Associates Limited

    

The net transactions between the company and Larsen Building Products (IRL) Limited during the year were as follows:- purchases of £774,423 (2022: sales of £4,200,317), shared administration charges receivable of £Nil (2022: £Nil), shared administration charges payable of £29,115 (2022: £86,966) and intercompany loan interest payable of £173,542 (2022: £Nil).

Dividends paid by the company to Larsen Associates Limited and Larsen Newco 3 Limited amounted to a total of £800,000 (2022: £2,045,000). Dividends paid are shown in note 9 in the notes to the financial statements.

The company made available an interest free loan to Larsen Property Development Limited in the sum of £1,275,000 during the year which is repayable on demand.

During the year £100,000 (2022: £80,000) rent was paid to the directors.

At the balance sheet date, the respective balances owed by related companies are shown in the "Debtor" note to the financial statements and include: £1,275,248 due from Larsen Property Development Limited and £42,500 due from Larsen Associates Limited.

At the balance sheet date, the respective balances owed to related companies are shown in the "Creditors: amounts falling due within one year" note to the financial statements and include: £7,698,228 due to Larsen Building Products (Irl) Limited of which with effect from 1st January 2023, 5,000,000 Euros of this balance is in the form of an interest bearing loan with an interest rate of 4% per annum; £541,057 due to Larsen Building Products Limited; and £11,748 due to Larsen Newco 5 Limited.

All related party debtor and creditor balances are repayable on demand.

20
Ultimate controlling party

In the opinion of the directors the company's immediate parent undertaking is Larsen Associates Limited; and the company's ultimate parent undertaking is Larsen Newco 5 Limited. Both of these companies are registered in Northern Ireland at the same registered office.

 

Larsen Newco 5 Limited is the smallest and largest group in which the results of the company are consolidated. The consolidated financial statements of Larsen Newco 5 Limited can be obtained from its registered office at Alfred House, 19 Alfred Street, Belfast, BT2 8EQ.

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