Company registration number 06531201 (England and Wales)
VICTOR PRODUCTS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
VICTOR PRODUCTS LTD
COMPANY INFORMATION
Directors
D Bonina
J L Sherman
Company number
06531201
Registered office
Unit 3A
Tyne Dock East Side
Port of Tyne
South Shields
Tyne & Wear
NE33 5SQ
Auditor
Azets Audit Services
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
Solicitors
Weightmans
1 St James Gate
Newcastle Upon Tyne
Tyne And Wear
United Kingdom
NE1 4AD
VICTOR PRODUCTS LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Income statement
8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
VICTOR PRODUCTS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The directors believe the company is well placed to take advantage of new opportunities in emerging markets where energy consumption is expected to grow, as well as ancillary markets within tunnelling.
The company made cash contributions totalling £700,000 during 2023 towards the annual service deficit of the Victor Industries Pension Plan (2022 - £700,000). This rate remained in effect until February 2024. From March 2024 to June 2027, the annual service deficit is £1,029,600.
Principal risks and uncertainties
Legislative risk - In the UK and Europe, hazardous area equipment must be manufactured to worldwide standards. These standards are subject to continuous revision and any new directive may have a material impact on the company's profit margins through additional compliance costs. The company reviews product certification as and when required by the country in which the product is sold.
Competitive risk - The markets in which the company operates can be highly competitive. The intensity of the competition can result in price discounting and margin pressures throughout the industry and can adversely affect the company's ability to increase or maintain prices for products. In addition, certain competitors may have lower overall labour or material costs. The company continually reviews profit margins by customer and product and will adjust prices as appropriate.
Operational risk - The company purchases raw material and component parts from suppliers to be used in the manufacturing of products. Changes in relationships with suppliers or increases in the costs of purchased raw materials, component parts or finished goods could result in manufacturing interruptions, delay, inefficiencies or the company's inability to market products.
In addition, profit margins would decrease if prices of purchased raw material, component parts or finished goods increase and the company was unable to pass on those increases to customers.
The company works with suppliers in maintaining competitive raw material prices, continuity of supply and quality of products received.
Key performance indicators
The company's key financial and other performance indicators during the year were as follows:
D Bonina
Director
30 September 2024
VICTOR PRODUCTS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is the design and manufacture of a comprehensive range of mining equipment for hazardous areas and explosion-proof cable connecting and drilling equipment.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. 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:
D Bonina
J L Sherman
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Financial instruments
Treasury management policy
The company's principal financial instruments comprise of cash and cash equivalents. Other financial assets and liabilities, such as trade debtors, trade creditors and group balances, arise directly from the company's operating activities.
Given that the majority of the risks below derive from transactions with other group companies, the company does not undertake any hedging activity locally. Significant financial risks from a group perspective are addressed on a case-by-case basis at group level.
The main risks associated with the company's financial assets and liabilities are set out below.
Liquidity risk
The company aims to mitigate liquidity risk by managing cash generated by its operations. Capital expenditure is approved at the group level. Flexibility is maintained by retaining surplus cash in readily accessible bank deposit accounts.
Interest rate risk
The company invests surplus cash in a floating rate interest yielding bank deposit account. Interest is charged at a variable rate on group borrowings. Therefore financial assets, liabilities, interest income and interest charges and cash flows can be affected by movements in interest rates.
VICTOR PRODUCTS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Foreign currency risk
Sales are denominated in sterling and purchases of goods in foreign currencies are currently immaterial. Therefore no hedging activity is undertaken locally to mitigate such risk.
Credit risk
The risk of financial loss due to a counterparty's failure to honour its obligations arises principally in relation to transactions where the company provides goods and services on deferred terms.
Policies are aimed at minimising losses, and require that deferred terms are granted only to customers who demonstrate an appropriate payments history and satisfy credit worthiness procedures. Individual exposures are monitored with customers subject to credit limits to ensure that the company's exposure to bad debts is not significant. Goods may be sold on a cash-with-order basis to mitigate such credit risk.
Future developments
The directors do not expect the trading will change significantly in the short term but believe the company is well placed to take advantage of new opportunities in emerging markets where energy consumption is expected to grow, as well as ancillary markets within tunnelling.
Auditor
In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
D Bonina
Director
30 September 2024
VICTOR PRODUCTS LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
VICTOR PRODUCTS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VICTOR PRODUCTS LTD
- 5 -
Opinion
We have audited the financial statements of Victor Products Ltd (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
VICTOR PRODUCTS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VICTOR PRODUCTS LTD
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
VICTOR PRODUCTS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VICTOR PRODUCTS LTD
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
We identified the following applicable laws and regulations as those most likely to have a material impact on the financial statements: Health and Safety; employment law (including the Working Time Directive); and compliance with the UK Companies Act.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Brian Laidlaw BA CA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
1 October 2024
Chartered Accountants
Statutory Auditor
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
VICTOR PRODUCTS LTD
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
3,465,840
2,511,113
Cost of sales
(2,296,933)
(1,727,077)
Gross profit
1,168,907
784,036
Distribution costs
(22,758)
(32,435)
Administrative expenses
(319,764)
(470,535)
Operating profit
4
826,385
281,066
Interest receivable and similar income
7
132,857
58,053
Profit before taxation
959,242
339,119
Tax on profit
8
Profit for the financial year
959,242
339,119
The income statement has been prepared on the basis that all operations are continuing operations.
VICTOR PRODUCTS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
959,242
339,119
Other comprehensive income
Actuarial loss on defined benefit pension schemes
(730,000)
(656,000)
Total comprehensive income for the year
229,242
(316,881)
VICTOR PRODUCTS LTD
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
76,118
96,194
Current assets
Stocks
10
533,919
481,793
Debtors
11
881,156
536,812
Cash at bank and in hand
1,142,799
1,282,500
2,557,874
2,301,105
Creditors: amounts falling due within one year
12
(972,080)
(964,629)
Net current assets
1,585,794
1,336,476
Total assets less current liabilities
1,661,912
1,432,670
Net assets excluding pension liability
1,661,912
1,432,670
Defined benefit pension liability
13
Net assets
1,661,912
1,432,670
Capital and reserves
Called up share capital
14
9,999
9,999
Profit and loss reserves
15
1,651,913
1,422,671
Total equity
1,661,912
1,432,670
The financial statements were approved by the board of directors and authorised for issue on 30 September 2024 and are signed on its behalf by:
D Bonina
Director
Company Registration No. 06531201
VICTOR PRODUCTS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
9,999
1,739,552
1,749,551
Year ended 31 December 2022:
Profit for the year
-
339,119
339,119
Other comprehensive income:
Actuarial gains on defined benefit plans
-
(656,000)
(656,000)
Total comprehensive income for the year
-
(316,881)
(316,881)
Balance at 31 December 2022
9,999
1,422,671
1,432,670
Year ended 31 December 2023:
Profit for the year
-
959,242
959,242
Other comprehensive income:
Actuarial gains on defined benefit plans
-
(730,000)
(730,000)
Total comprehensive income for the year
-
229,242
229,242
Balance at 31 December 2023
9,999
1,651,913
1,661,912
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Victor Products Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 3A, Tyne Dock East Side, Port of Tyne, South Shields, Tyne & Wear, NE33 5SQ.
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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Federal Signal Corporation. These consolidated financial statements are available from its registered office, 1333 Butterfield Road, Suite 500, Downers Grove, Illinois 60515.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
VICTOR PRODUCTS LTD
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:
Leasehold land and buildings
Straight line over the term of the lease
Plant and equipment
6% to 33% per annum straight line
Office Equipment
20% to 30% per annum 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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
VICTOR PRODUCTS LTD
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 statement of financial position 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.
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.
VICTOR PRODUCTS LTD
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.
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
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.
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Defined benefit pension obligation
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
There are considered to be no significant judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies which effect the amounts recognised in the financial statements.
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
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.
Defined benefit pension assumptions
The cost of the defined benefit pension plan is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of returns on assets, mortality rates and future pension increases. Due to the long-term nature of the scheme, such estimates are subject to significant uncertainty. These assumptions are reviewed by management at the end of each year. Any difference between the assumptions and the actual outcome will impact future net assets and net income. The assumptions as at 31 December 2023 have been disclosed within the notes to these financial statements.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
3,465,840
2,511,113
2023
2022
£
£
Turnover analysed by geographical market
UK
1,477,800
1,413,661
Europe
235,982
287,696
Rest of world
1,752,058
809,756
3,465,840
2,511,113
2023
2022
£
£
Other revenue
Interest income
132,857
58,053
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Exchange losses
42
Fees payable to the company's auditor for the audit of the company's financial statements
13,300
12,300
Depreciation of owned tangible fixed assets
29,071
45,156
Operating lease charges
77,825
73,464
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
10
12
Admin and support
2
2
Total
12
14
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
539,590
563,379
Social security costs
57,354
64,631
Pension costs
115,969
140,456
712,913
768,466
6
Directors' remuneration
No remuneration was paid to the directors.
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
22,857
2,053
Other interest income
110,000
56,000
Total income
132,857
58,053
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
8
Taxation
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
959,242
339,119
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
225,614
64,433
Tax effect of expenses that are not deductible in determining taxable profit
1,177
(2,600)
Tax effect of utilisation of tax losses not previously recognised
(226,791)
(61,833)
Taxation charge for the year
-
-
9
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Office Equipment
Total
£
£
£
£
Cost
At 1 January 2023
192,134
507,150
253,426
952,710
Additions
8,400
595
8,995
At 31 December 2023
192,134
515,550
254,021
961,705
Depreciation and impairment
At 1 January 2023
192,134
461,346
203,036
856,516
Depreciation charged in the year
11,184
17,887
29,071
At 31 December 2023
192,134
472,530
220,923
885,587
Carrying amount
At 31 December 2023
43,020
33,098
76,118
At 31 December 2022
45,804
50,390
96,194
10
Stocks
2023
2022
£
£
Raw materials and consumables
283,744
239,030
Work in progress
77,716
96,827
Finished goods and goods for resale
172,459
145,936
533,919
481,793
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
718,781
415,240
Amounts owed by group undertakings
126,027
88,056
Prepayments and accrued income
36,348
33,516
881,156
536,812
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
117,318
139,387
Amounts owed to group undertakings
634,294
634,592
Taxation and social security
75,245
48,623
Other creditors
145,223
142,027
972,080
964,629
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
35,969
40,456
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.
Contributions totalling £6,128 (2022 - £7,273) were payable to the scheme at the end of the year and are included in creditors.
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Retirement benefit schemes
(Continued)
- 21 -
Defined benefit schemes
Victor Products Section of the Citrus Pension Plan
The company operates a defined benefit scheme in the UK, the Victor Products Section of the Citrus Pension Plan. The scheme is funded by the payment of contributions to a separately administered fund. Unpaid contributions at the period end date amounted to £Nil (2022 - £Nil).
For the defined benefit scheme, the pension costs are determined with the advice of an independent qualified actuary on the basis of a triennial valuation using the projected unit method.
The company ceased to make contributions to the defined benefit scheme for future accruing benefits with effect from December 2002. The company made cash contributions totalling £700,000 during 2023 towards the past service deficit (2022 - £700,000). As the schemes are closed to new members, under the projected unit method, the current service cost will increase as the members of the schemes approach retirement.
The date of the most recent comprehensive actuarial valuation was 31 March 2021. The valuation used for FRS 102 disclosures has been based on the results of the actuarial valuation as at 31 March 2021 and projected forward to 31 December 2023 by Hymans Robertson LLP to take account of the requirements of FRS 102 in order to assess the liabilities of the scheme at 31 December 2023. Scheme assets are stated at their market value using the single swinging price at the respective balance sheet dates and include the balance of the trustee bank accounts.
The total cost relating to defined benefit schemes for the year recognised in profit or loss as other income was £30,000 (2022 - Expense of £44,000).
The cost relating to defined benefit plans for the fiscal year ending 31 December 2023 includes a plan amendment charge of £Nil (2022 - £Nil in respect of Guaranteed Minimum Pension (GMP) equalisation. This follows a High Court ruling on 20 November 2020 which confirmed that pension schemes are required to equalise GMP benefits in prior year transfer values.
In the year ended 31 December 2023 the actuarial valuation for FRS 102 showed a surplus over liabilities at that date of £4,010,000. In accordance with FRS 102 paragraph 28.22, a pension scheme asset is recognised on the balance sheet only to the extent that it is able to recover the surplus either through reduced contributions in the future or through refunds from the plan. This condition was not met at the balance sheet date and therefore the surplus was not recognised.
2023
2022
Key assumptions
%
%
Discount rate
4.50
4.75
Expected rate of increase of pensions in payment
2.90
3.00
Inflation
2.3
2.35
Mortality assumptions
2023
2022
Assumed life expectations on retirement at age 65:
Years
Years
Retiring today
- Males
20.4
20.90
- Females
22.6
23.00
Retiring in 20 years
- Males
21.9
22.40
- Females
25.7
26.10
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Retirement benefit schemes
(Continued)
- 22 -
2023
2022
Amounts recognised in the income statement
£
£
Current service cost
80,000
100,000
Net interest on net defined benefit liability/(asset)
(110,000)
(56,000)
Total costs/(income)
(30,000)
44,000
2023
2022
Amounts taken to other comprehensive income
£
£
Actual return on scheme assets
1,215,000
13,579,000
Less: calculated interest element
1,336,000
740,000
Return on scheme assets excluding interest income
2,551,000
14,319,000
Actuarial changes related to obligations
203,000
(10,876,000)
Total costs
2,754,000
3,443,000
The amounts included in the statement of financial position arising from the company's obligations in respect of defined benefit plans are as follows:
2023
2022
£
£
Present value of defined benefit obligations
26,285,000
26,786,000
Fair value of plan assets
(26,285,000)
(26,786,000)
Deficit in scheme
-
-
2023
Movements in the present value of defined benefit obligations
£
Liabilities at 1 January 2023
26,786,000
Current service cost
80,000
Benefits paid
(2,010,000)
Actuarial gains and losses
203,000
Interest cost
1,226,000
At 31 December 2023
26,285,000
The defined benefit obligations arise from plans which are wholly or partly funded.
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Retirement benefit schemes
(Continued)
- 23 -
2023
Movements in the fair value of plan assets
£
Fair value of assets at 1 January 2023
28,810,000
Interest income
1,336,000
Return on plan assets (excluding amounts included in net interest)
1,459,000
Benefits paid
(2,010,000)
Contributions by the employer
700,000
Asset restriction (included in actuarial gain/ loss)
(4,010,000)
At 31 December 2023
26,285,000
The actual return on plan assets was £1,215,000 (2022 - £13,579,000).
2023
2022
Fair value of plan assets at the reporting period end
£
£
Equity instruments
3,190,000
1,172,000
Debt instruments
20,555,000
20,004,000
Cash and ash equivalents
6,550,000
7,634,000
Asset restriction
(4,010,000)
(2,024,000)
26,285,000
26,786,000
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
9,999
9,999
9,999
9,999
15
Profit and loss reserves
This reserve records accumulated profits and losses generated by the company.
16
Financial commitments, guarantees and contingent liabilities
Victor Products Holdings Ltd, of which Victor Products Ltd is a wholly owned subsidiary undertaking, has issued a guarantee to HMRC in respect of VAT import duties amounting to £20,000 on behalf of the company (2022 - £20,000).
VICTOR PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
17
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
78,250
78,250
Between two and five years
39,125
115,553
117,375
193,803
18
Ultimate controlling party
The company's immediate parent is Victor Products Holdings Ltd, incorporated in England and Wales.
The ultimate parent is Federal Signal Corporation, incorporated in United States of America.
The most senior parent entity producting publically available financial statements is Federal Signal Corporation. These financial statements are available upon request from 1333 Butterfield Road, Suite 500, Downers Grove, Illinois 60515.
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