Company Registration No. 01915713 (England and Wales)
Mastermelt Limited
Annual report and financial statements
for the period ended 30 August 2024
Mastermelt Limited
Company information
Directors
T Bransbury
G Couzens
Secretary
T Bransbury
Company number
01915713
Registered office
2 Leman Street
London
E1W 9US
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
Mastermelt Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 30
Mastermelt Limited
Strategic report
For the period ended 30 August 2024
1

The directors present the strategic report for the period ended 30 August 2024.

Fair review of the business

The company performed in line with expectations, showing healthy margins.

 

The increases in turnover of 47.5% to £85,757,842 (2023: £58,127,283) is mainly due to increases in certain precious metal prices, particularly Palladium and Rhodium.

Principal risks and uncertainties

The principal risks associated with the company include the continuing need to monitor precious metal prices and maintain strong relationships with suppliers, metal refiners and metal banks.

 

The company's principal financial instruments compromise of currencies and metal balances.


The main purpose of these instruments is to provide funds for the company's operations.

 

In respect of bank balances, the liquidity risk is managed by maintaining a balance between continuity of funding and flexibility through the use of metal pledging and leasing at contract set lease rates.

 

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Key performance indicators

The key financial highlights are as follows:

 

 

2024

£

2023

£

 

Turnover

85,757,842

58,127,283

Profit before taxation

5,126,600

3,431,655

 

Mastermelt Limited
Strategic report (continued)
For the period ended 30 August 2024
2
Statement by the Directors in performance of their statutory duties in accordance with s172(1) companies Act 2006

The Board considers the impact of the company’s operations on the community and environment and our wider societal responsibilities. The company supports local charities, enables staff charity events and is an active corporate citizen. As a company we are a long-term active organisation in terms of social equality, diversity and inclusion. A social Equity council drawn from all parts and levels of the company drives this work.

 

Our intention is to behave responsibly and ensure that management operate the business in a responsible manner, operating within a high standard of business conduct and good governance.

 

As a board of directors our intention is to behave responsibly towards our shareholders and treat them fairly and equally.

On behalf of the board

T Bransbury
Director
14 March 2025
Mastermelt Limited
Directors' report
For the period ended 30 August 2024
3

The directors present their annual report and financial statements for the period ended 30 August 2024.

Principal activities

The principal activity of the company continued to be that of smelting and precious metal refining.

Future developments
The company will continue to be engaged as smelters and precious metal refiners.
Results and dividends

The results for the period are set out on page 8.

Ordinary dividends were paid amounting to £3,258,272 (2023: £3,707,600). The directors do not recommend payment of a final dividend.

Directors

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

T Bransbury
G Couzens
Auditor

Saffery LLP have expressed their willingness to continue in office.

Statement of directors' responsibilities
The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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

 

 

 

 

 

Mastermelt Limited
Directors' report (continued)
For the period ended 30 August 2024
4
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.

Going concern

At 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.

On behalf of the board
T Bransbury
Director
14 March 2025
Mastermelt Limited
Independent auditor's report
To the members of Mastermelt Limited
5
Opinion

We have audited the financial statements of Mastermelt Limited (the 'company') for the period ended 30 August 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Mastermelt Limited
Independent auditor's report (continued)
To the members of Mastermelt Limited
6

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 directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

 

 

Mastermelt Limited
Independent auditor's report (continued)
To the members of Mastermelt Limited
7

Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.

 

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Michael Di Leto
Senior Statutory Auditor
For and on behalf of Saffery LLP
14 March 2025
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
Mastermelt Limited
Statement of comprehensive income
For the period ended 30 August 2024
8
Period
Period
ended
ended
30 August
25 August
2024
2023
Notes
£
£
Turnover
3
85,757,842
58,127,283
Cost of sales
(78,083,192)
(53,890,597)
Other gains and losses
4
5,860,496
3,570,778
Gross profit
13,535,146
7,807,464
Administrative expenses
(10,846,648)
(6,211,222)
Operating profit
5
2,688,498
1,596,242
Interest receivable and similar income
8
2,506,715
1,971,566
Interest payable and similar expenses
10
(68,613)
(136,153)
Profit before taxation
5,126,600
3,431,655
Tax on profit
11
(798,195)
(265,759)
Profit for the financial period
4,328,405
3,165,896

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

Mastermelt Limited
Statement of financial position
As at 30 August 2024
9
30 August 2024
25 August 2023
Notes
£
£
£
£
Fixed assets
Tangible assets
13
6,105,945
6,127,529
Investments
14
668,042
535,961
6,773,987
6,663,490
Current assets
Stocks
17
16,769,885
20,320,440
Debtors
18
7,218,090
12,271,485
Cash at bank and in hand
10,363,627
6,040,807
34,351,602
38,632,732
Creditors: amounts falling due within one year
20
(13,551,775)
(17,160,871)
Net current assets
20,799,827
21,471,861
Total assets less current liabilities
27,573,814
28,135,351
Creditors: amounts falling due after more than one year
21
-
0
(1,650,000)
Provisions for liabilities
Deferred tax liability
25
280,364
262,034
(280,364)
(262,034)
Net assets
27,293,450
26,223,317
Capital and reserves
Called up share capital
26
92
92
Profit and loss reserves
27,293,358
26,223,225
Total equity
27,293,450
26,223,317
The financial statements were approved by the board of directors and authorised for issue on 14 March 2025 and are signed on its behalf by:
T Bransbury
Director
Company Registration No. 01915713
Mastermelt Limited
Statement of changes in equity
For the period ended 30 August 2024
10
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 27 August 2022
92
26,764,929
26,765,021
Period ended 25 August 2023:
Profit and total comprehensive income
-
3,165,896
3,165,896
Dividends
12
-
(3,707,600)
(3,707,600)
Balance at 25 August 2023
92
26,223,225
26,223,317
Period ended 30 August 2024:
Profit and total comprehensive income
-
4,328,405
4,328,405
Dividends
12
-
(3,258,272)
(3,258,272)
Balance at 30 August 2024
92
27,293,358
27,293,450
Mastermelt Limited
Statement of cash flows
For the period ended 30 August 2024
11
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
30
8,607,455
(880,964)
Interest paid
(68,613)
(136,153)
Income taxes paid
(265,136)
(636,847)
Net cash inflow/(outflow) from operating activities
8,273,706
(1,653,964)
Investing activities
Purchase of tangible fixed assets
(403,907)
(314,830)
Proceeds from disposal of tangible fixed assets
-
0
30,785
Purchase of investment
(145,762)
423
Gain or loss on derivative
(699,660)
2,535,895
Interest received
182,698
479,463
Dividends received
2,324,017
1,492,103
Net cash generated from investing activities
1,257,386
4,223,839
Financing activities
Repayment of bank loans
(1,950,000)
(300,000)
Dividends paid
(3,258,272)
(3,707,600)
Net cash used in financing activities
(5,208,272)
(4,007,600)
Net increase/(decrease) in cash and cash equivalents
4,322,820
(1,437,725)
Cash and cash equivalents at beginning of period
6,040,807
7,478,532
Cash and cash equivalents at end of period
10,363,627
6,040,807
Mastermelt Limited
Notes to the financial statements
For the period ended 30 August 2024
12
1
Accounting policies
Company information

Mastermelt Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2 Leman Street, London, E1W 9US.

1.1
Reporting period

The comparative financial period was for the period 27 August 2022 to 25 August 2023 and is not directly comparable to the current period ended 30 August 2024. The period end changes each year due to the company reporting internally on the last Friday of the period.

1.2
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.

The financial statements of the company are consolidated in the financial statements of Mastermelt Holdings Limited. These consolidated financial statements are available from its registered office, 2 Leman Street, London, E1W 9US.

1.3
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.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

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 or when the goods are made available to the customer), 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.

 

Revenue from refining services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

 

Royalty income is recognised in accordance with the substance of the relevant agreement.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
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:

Freehold land and buildings
1-10% reducing balance
Plant and machinery
20% reducing balance
Fixtures, fittings and equipment
15-33% reducing balance
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.

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.7
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.

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
1
Accounting policies (continued)
14
1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to net realisable value. Cost is based on the first-in first-out principle and includes expenditure incurred in acquiring the stock, production or conversion costs and other costs in bringing them to their existing 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.

1.9
Cash and cash equivalents

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

1.10
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, 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.

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
1
Accounting policies (continued)
15
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

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

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
1
Accounting policies (continued)
16
Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
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.

1.12
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.

1.13
Employee benefits

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

 

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

 

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

1.14
Retirement benefits

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

 

 

 

 

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
1
Accounting policies (continued)
17
1.15
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.

1.16
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.

1.17

Interest receivable and interest payable

 

Interest income and interest payable are recognised in profit or loss as they accrue, using the effective interest method. Dividend income is recognised in the profit and loss account on the date the entity's right to receive payments is established.

2
Critical accounting 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.

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
18
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Precious metal refining activities
85,757,842
58,127,283
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
85,757,842
58,127,283
2024
2023
£
£
Other significant revenue
Interest income
182,698
479,463
Dividends received
2,324,017
1,492,103
4
Other gains and losses
2024
2023
£
£
Fair value gains/(losses) on financial instruments
Change in the fair value of borrowed metal payable
285,324
1,034,883
Value of metal returned under borrowed metal payable
6,274,832
-
0
Gain/(loss) on derivative contracts (metal hedging)
(699,660)
2,535,895
5,860,496
3,570,778
5
Operating profit
2024
2023
Operating profit for the period is stated after charging:
£
£
Exchange losses
26,936
56,150
Depreciation of owned tangible fixed assets
425,491
409,394
Operating lease charges
252,202
423,221
Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
19
6
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
66,000
64,000
For other services
Taxation compliance services
6,000
5,900
All other non-audit services
27,950
-
0
33,950
5,900
7
Employees

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

2024
2023
Number
Number
Directors
2
2
Administration
45
44
Total
47
46

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
6,859,254
5,144,463
Social security costs
631,105
598,646
Pension costs
97,129
86,653
7,587,488
5,829,762
Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
20
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
182,698
98,184
Other interest income
-
0
381,279
Total interest revenue
182,698
479,463
Other income from investments
Dividends received
2,324,017
1,492,103
Total income
2,506,715
1,971,566
9
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
885,552
899,279
Company pension contributions to defined contribution schemes
38,933
38,680
924,485
937,959

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
651,521
704,279
Company pension contributions to defined contribution schemes
21,633
21,380
10
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
68,237
136,153
Other finance costs:
Other interest
376
-
0
68,613
136,153
Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
21
11
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
779,865
237,997
Adjustments in respect of prior periods
-
0
27,139
Total current tax
779,865
265,136
Deferred tax
Origination and reversal of timing differences
18,330
623
Total tax charge
798,195
265,759

The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
5,126,600
3,431,655
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.42%)
1,281,650
735,167
Tax effect of expenses that are not deductible in determining taxable profit
63,316
39,547
Tax effect of income not taxable in determining taxable profit
(581,032)
(558,510)
Adjustments in respect of prior years
-
0
27,139
Fixed asset taxation differences
34,261
22,328
Remeasurement of deferred tax for changes in tax rates
-
0
88
Taxation charge for the period
798,195
265,759
12
Dividends
2024
2023
£
£
Interim paid
3,258,272
3,707,600
Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
22
13
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 26 August 2023
6,343,070
1,894,029
1,591,083
26,000
9,854,182
Additions
42,432
244,738
116,737
-
0
403,907
At 30 August 2024
6,385,502
2,138,767
1,707,820
26,000
10,258,089
Depreciation and impairment
At 26 August 2023
1,141,927
1,361,352
1,210,305
13,069
3,726,653
Depreciation charged in the period
137,044
140,587
144,637
3,223
425,491
At 30 August 2024
1,278,971
1,501,939
1,354,942
16,292
4,152,144
Carrying amount
At 30 August 2024
5,106,531
636,828
352,878
9,708
6,105,945
At 25 August 2023
5,201,143
532,677
380,778
12,931
6,127,529
14
Fixed asset investments
2024
2023
£
£
Unlisted investments
668,042
535,961
Movements in fixed asset investments
Investments
£
Cost or valuation
At 26 August 2023
535,961
Additions
145,762
Disposals
(13,681)
At 30 August 2024
668,042
Carrying amount
At 30 August 2024
668,042
At 25 August 2023
535,961
Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
23
15
Associates

Details of the company's associates at 30 August 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
% Held
shares held
Shares held 2024
Shares held 2023
Mastermelt (Thailand) Co. Limited *
Thailand
Ordinary
49.00
49.00
Gold Pop Limited **
England and Wales
Ordinary
25.00
25.00
Mastermelt Refining Services Limited ***
England and Wales
Ordinary
-
27.00
Entity
Principal activity
Currency
Capital and Reserves
Profit/(Loss) for the period 2024
Mastermelt (Thailand) Co., Limited
Agency for precious metal refining services
THB
(3,377,437)
(225,339)
Gold Pop Ltd ~
Wholesale of waste and scrap
GBP
3,439
-
Mastermelt Refining Services Limited
Precious metal refining services
GBP
2,149,735
1,324,603

* Registered address is 33/4, The Ninth Tower, Tower A, 35th Floor, Rama 9 Road, Huaykwang Sub-district,

Bangkok, Thailand

** Registered address is The Old School, St. Johns Road, Dudley, West Midlands, England, DY2 7JT

*** Registered address is 2 Leman Street, London, E1W 9US

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
24
16
Joint ventures

Details of the company's joint ventures at 30 August 2024 are as follows:

Name of undertaking
Registered office
Interest held
% Held
Direct
Indirect
Eco-Mastermelt Pte Limited
Singapore
Ordinary
50.00
-
Entity
Principal activity
Currency
Capital and Reserves
Profit for the period 2024
Eco Mastermelt Pte Limited
Agency for precious
metal refining services
SGD
23,976,863
6,587,055

Registered address is 21, Tuas View Circuit, Singapore 637358.

17
Stocks
2024
2023
£
£
Metals for resale (Company owned stock)
11,052,083
8,042,482
Metals for resale (Borrowed Stock*)
5,717,802
12,277,958
16,769,885
20,320,440

*These stock represent metal borrowed from an individual lender that are used in the normal course of business. Refer to notes 22 and 23 for more details.

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
25
18
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,166,902
1,355,782
Amounts owed by group undertakings
515,665
600,000
Amounts owed by undertakings in which the company has a participating interest
2,862,485
223,667
Other debtors
529,018
336,690
Prepayments and accrued income
1,016,068
340,765
7,090,138
2,856,904
2024
2023
Amounts falling due after more than one year:
£
£
Other debtors
127,952
9,414,581
Total debtors
7,218,090
12,271,485
19
Financial instruments
2024
2023
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
668,017
535,936

Derivatives contracts

The company enters into derivative contracts with financial institutions in order to hedge the exposure arising on changes in prices. These financial instruments are recognised at fair value and resultant gain or loss on measurement to fair value is recognised immediately in profit or loss.

 

The value of open derivative contracts at 30 August 2024 were immaterial. Therefore no associated derivative asset or liability is recognised as at 30 August 2024.

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
26
20
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Mortgage
22
-
0
300,000
Liability on borrowed metal
22
5,717,802
12,277,958
Trade creditors
411,618
160,541
Amounts owed to undertakings in which the company has a participating interest
3,263,918
1,900,300
Corporation tax
779,865
265,135
Other taxation and social security
124,603
86,761
Other creditors
7,334
7,334
Accruals and deferred income
3,246,635
2,162,842
13,551,775
17,160,871
21
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Mortgage
22
-
0
1,650,000

See further details on the bank loan in note 22.

22
Loans and overdrafts
2024
2023
£
£
Mortgage
-
0
1,950,000
Liability on metal borrowed
5,717,802
12,277,958
5,717,802
14,227,958
Payable within one year
5,717,802
12,577,958
Payable after one year
-
0
1,650,000

The bank loan related to mortgage loan obtained from Coutts & Co bank and includes financial covenants attached, being 12 months rolling EBITDA to Debt Service Liability Ratio tested quarterly and consolidated annual Cash Flow less Capital expenditure to Debt Service liability tested annually. Entity was in compliance with both covenants throughout the year. The mortgage has a nominal interest rate of 3.00% over LIBOR and a year of maturity in 2024. This loan repayment schedule is quarterly. This loan was repaid in full on 15 January 2024.

 

Coutts & Co held security for the mortgage, dated 2 December 2019, over the freehold property at Hatton Garden. A mortgage debenture had also been provided by Mastermelt Limited dated 2 December 2019. This charge was satisfied on 29 January 2024 following full repayment of the mortgage.

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
27
23
Liability on borrowed metal

The group has borrowed metal from an individual lender, a related party, on which it pays metal leasing charges based at agreed rates. The liability is accounted at the fair value of the metal borrowed as at the reporting date and changes in the fair value and volume borrowed are accounted in income statement.

2024
2023
£
£
Balance as at the beginning of the year
12,277,958
13,312,841
Decrease in fair value
(285,324)
(1,034,883)
Metal returned
(6,274,832)
-
Balance as at the end of the year
5,717,802
12,277,958
24
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
97,129
86,653

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.

25
Deferred taxation

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

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
285,171
266,273
Other timing differences
(4,807)
(4,239)
280,364
262,034
2024
Movements in the period:
£
Liability at 26 August 2023
262,034
Charge to profit or loss
18,330
Liability at 30 August 2024
280,364
Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
28
26
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
92
92
92
92
27
Acquisitions

On 22 January 2024 the company acquired the business of IEX Technologies Limited.

Book Value
£
Property, plant and equipment
100,036
Inventories
19,000
Trade and other receivables
44,518
Cash and cash equivalents
57,935
Trade and other payables
(925)
Tax liabilities
(16,109)
Total identifiable net assets
204,455
Non-controlling interests
(51,114)
Goodwill
(7,579)
Total consideration
145,762
Satisfied by:
£
Cash
145,762
28
Ultimate controlling party

The ultimate parent undertaking is Mastermelt Holdings Limited, a company incorporated in England with address 2 Leman Street, London, United Kingdom. E1W 9US. The ultimate controlling party remains as Robert Davis.

 

The financial statements of the company are consolidated in the financial statements of Mastermelt Holdings Limited. These consolidated financial statements are available from its registered office, 2 Leman Street, London, United Kingdom, E1W 9US.

29
Related party transactions
Transactions with related parties

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

Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
29
Related party transactions (continued)
29
Sales
Purchases
2024
2023
2024
2023
£
£
£
£
Presman Bullion Ltd
411,912
475,054
128,306
131,323
Mastermelt Refining Services Ltd
561,855
727,245
5,899,466
5,731,897
Mastermelt America LLC
25,745
1,257,887
61,273
36,291
Mastermelt Germany GmBh
85,266
24,349
-
-
Mastermelt Thailand Ltd
-
-
29,868
29,978
Peter Hartnell (Precious Metals) Ltd
6,651
1,371,698
110,992
751,804
ECO Mastermelt PTY Ltd
279,953
302,320
398,465
381,931
Phoenix County Metals Ltd
105,773
-
-
-
IEX Technologies Ltd
292,911
-
82,993
-
1,770,066
4,158,553
6,711,363
7,063,224

The following amounts were outstanding at the reporting end date:

2024
2023
Amounts due to related parties
£
£
Mastermelt Refining Services Ltd
233,887
1,947,200
Presman (Bullion) Ltd
3,037
1,258
Eco Mastermelt PTY Ltd
32,303
-
MM Switzerland AG
3,230,994
-
3,500,221
1,948,458
2024
2023
Amounts due from related parties
£
£
Mastermelt Refining Services Limited
4,440
47,304
Presman (Bullion) Limited
3,311
602,200
Eco Mastermelt pty Ltd
604
1,645
Homestead Rel Limited
-
9,286,629
Mastermelt GmbH
2,770,480
1,680
Phoenix County Metals Limited
20,979
20,979
Mastermelt Thailand Ltd
-
155,000
Mastermelt Holdings Limited
-
68,867
IEX Texhnologies Ltd
339,491
-
Peter Hartnell (Precious Metals) Ltd
1,497
-
3,140,802
10,184,304
Mastermelt Limited
Notes to the financial statements (continued)
For the period ended 30 August 2024
30
30
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit for the period after tax
4,328,405
3,165,896
Adjustments for:
Taxation charged
798,195
265,759
Finance costs
68,613
136,153
Investment income
(2,506,715)
(1,971,566)
Depreciation and impairment of tangible fixed assets
425,491
409,394
Loss on sale of investments
13,681
-
Other gains and losses
(5,860,496)
(3,570,778)
Movements in working capital:
Decrease in stocks
3,550,555
5,342,897
Decrease/(increase) in debtors
5,053,395
(3,882,927)
Increase/(decrease) in creditors
2,736,331
(775,792)
Cash generated from/(absorbed by) operations
8,607,455
(880,964)
31
Analysis of changes in net funds/(debt)
26 August 2023
Cash flows
Other non-cash changes
Metal loan movement
30 August 2024
£
£
£
£
£
Cash at bank and in hand
6,040,807
4,322,820
-
-
10,363,627
Borrowings excluding overdrafts
(14,227,958)
2,649,660
(699,660)
6,560,156
(5,717,802)
(8,187,151)
6,972,480
(699,660)
6,560,156
4,645,825
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