Registered number:
FOR THE YEAR ENDED 31 MARCH 2024
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RICOR NORTH EAST LIMITED
CONTENTS
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RICOR NORTH EAST LIMITED
COMPANY INFORMATION
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RICOR NORTH EAST LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their strategic report on the company for the year ended 31 March 2024 ("FY2024"). The principal activity of the company during the year continued to be that of the manufacture of metal pressings and welded assemblies for the automotive industry.
Ricor North East Limited (“Ricor”) continues to evolve as an international player in the automotive industry and beyond. Supplying to a wide range of both Original Equipment Manufacturers (“OEM”) and Tier One customers, Ricor’s expertise is in the supply of metal stampings, tube manipulation, painting and assemblies throughout the vehicle structure. Ricor has an established international footprint which is well situated to support its customers on a worldwide basis.
The company’s results for the year ended 31 March 2024 and the balance sheet position at that date reflect the continued growth in the company since incorporation in 2020. The results have improved following a recovery in customer demand after the adverse effects of the Covid-19 pandemic, Brexit, Russia's invasion of Ukraine and microchip shortages. The company continued to be impacted by raw material price rises, inflation, trapped labour, supply chain issues, customer plant stoppages and customer insourcing. Customer production schedules continued to fluctuate as the industry as a whole wrestled with similar challenges along with changeable consumer demand.
The directors monitor the performance of the company by reference to key performance indicators, including turnover, gross profit and margin, earnings before interest, tax, depreciation and amortisation (“EBITDA”), and key areas influencing working capital. These are discussed in more detail below. The company recorded turnover of £19.6m in FY2024, an increase of 26.2% when compared with turnover in FY2023 of £15.5m. The increase in revenue reflected the continuation of the company’s growth from incorporation and recovery of OEM build volumes. The gross profit for FY2024 was £4.3m, an increase of £2.0m compared with the gross profit for FY2023 of £2.3m. The gross profit margin increased to 22.1% in FY2024 from 15.0% in FY2023. These increases reflect the impact of an ongoing operational improvement programme and the benefit of economies of scale from increased production volumes. The operating profit was £1.8m in FY2024 (FY2023: £305k) reflecting the flow through of gross profit, partially offset by an increase in administration staff costs. The financial position of the company continues to be strong; with net assets of £2.0m at 31 March 2024 (2023: £446k) and net current assets of £1.1m compared to net current liabilities of £495k at the prior year end. The increase in both measures is a result of the improved performance in the year. Stock remained fairly stable, decreasing from £1.1m at 31 March 2023 to £976k at 31 March 2024. Debtors predominantly consisted of amounts due from group undertakings of £1.7m (2023: £1.1m) and trade debtors. Trade debtors decreased from £3.2m at 31 March 2023 to £2.2m at 31 March 2024 due to comparatively lower sales in the final month of the year and improved credit control. Trade creditors remained relatively stable, decreasing from £1.2m at 31 March 2023 to £1.1m at 31 March 2024. Overall creditors falling due within one year decreased from £6.1m at 31 March 2023 to £4.8m at 31 March 2024, predominantly due to a reduction in the amounts owed to group undertakings. The company’s working capital and longer-term financing needs are met through invoice discounting and group debt. The wider group’s working capital and longer-term financing needs continue to be met through a combination of external term loans, an overdraft facility and shareholder debt and equity. The directors and the management team are dedicated to maintaining transparent and collaborative working relationships with all key stakeholders. Consequently, the group maintains ongoing dialogue with facility providers and this ensures the facilities continue to be made available.
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RICOR NORTH EAST LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Business review and key performance indicators Post balance sheet date, the group has undertaken a recapitalisation which saw the second lien lender exchange part of its debt for a majority equity stake in the group, while certain other unsecured creditors exchanged their debt for minority equity stakes. As part of this recapitalisation, the group renegotiated the terms of the loans and facilities provided by its key financing partners, extending the repayment of the loans that were previously due in June 2025 to June 2028. In addition, the deferral of some capital repayments was agreed and the interest rate applied to some of the facilities was reduced. Management considers that the covenants which have been agreed as part of this refinancing process will be complied with, based upon the board-approved forecasts that have been shared with the financing partners.
Financing risk
As noted above, the company, through its parent company, is reliant upon third party lenders. The group’s directors and management team are dedicated to maintaining a transparent and collaborative working relationship with these lenders, ensuring that the financing requirements of the group are met, taking account of both short-term and longer-term needs. After the balance sheet date and before the date of approval of these financial statements, the group has renegotiated the terms of the loans and facilities provided by its key financing partners, extending the repayment of the loans due in June 2025 to June 2028. In addition, management considers that the covenants which have been agreed as part of this refinancing will be complied with based upon the board approved forecasts which have been shared with financing partners. The forecasts have been prepared based on available data surrounding assumed pricing, volumes and liquidity including information received from customers on expected order volumes. The group directors have considered relevant actions to mitigate any negative variances against the forecast and believe such actions, if necessary, will allow the group to continue to meet the loan covenants. The group, as a key supplier, continues to enjoy strong customer relationships. The nature of these strategic relationships coupled with similarly strong supplier relationships is considered by the directors to be pivotal, should the need arise, to discuss financial arrangements. Raw material price movement Certain customer contracts allow for the update of raw material price movement, on a periodic basis. This provides security against commodity price movements. Other customer contracts provide for the purchase of material at a price fixed by the customer, at the start of the contract. Collectively, our contracts with customers protect the business from the impact of volatility in raw material prices. Inflation The UK and European inflation rates remain relatively high, although easing in recent months. This has increased costs within the company. In mitigation, we have discussed and agreed price increases with our customers, in line with the inflationary impact on the business. The price of steel has a major impact on the financial performance of the company, but currently is remaining at lower levels than the exceptionally high prices experienced during previous financial years. Semiconductor (micro) chips Our customers have seen an easing of the difficulties procuring the quantity of microchips required to meet their scheduled production requirements as result of production disruption caused by Covid-19. This had caused operational difficulties through the entire automotive supply chain and the company was impacted with short-term and longer-term production disruption, caused by these issues. While the situation appears to have stabilised, we continue to closely monitor and remain ready to react quickly to any short-term and longer-term demand fluctuations. Mitigations include maintaining a flexible workforce, in addition to limiting the financial impact of any disruptions by seeking potential recovery of cost from our customers.
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RICOR NORTH EAST LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Principal risks and uncertainties (continued) Customer concentration The company is reliant of certain key customers who comprise a significant percentage of the company’s annual revenues. The company mitigates this risk by maintaining a strong relationship with key customers and providing a high-quality product and efficient service and thus being recognised as a reliable strategic business partner. Geo-political uncertainty The ongoing war in Ukraine continues to be closely monitored by the company. The conflict has had an indirect impact to the business despite having no direct suppliers in Ukraine or Russia. The indirect risk of disruption in our customer supply chains is closely monitored by the company as Ukraine is a prime location for the production and assembly of wiring looms for many vehicle OEM's. The secondary impact of sanctions and counter sanctions is also being monitored by the company. Our customers are adept at managing disruptions in their global supply chains and we anticipate that the long-term impact on the company will be moderate. Data and compliance risk The company is aware of the increased risk of ransomware and other IT security issues. To mitigate this risk, the company ensures it is running the latest versions of all software and maintains a strict firewall discipline. Data is regularly backed up. The directors consider compliance risk including the requirement to comply with the Data Protection Act 2018 and UK General Data Protection Regulations ("GDPR") as essential to the operations of its core activities. Ensuring sensitive data is protected under GDPR is fundamental for both compliance and reputation. Other key performance indicators Health and safety The group invests in training and is committed to maintaining a good quality and motivated workforce. The company holds ISO 45001 accreditation and the directors are committed to taking measures to continuously improve the health, safety and welfare of all their staff, this includes a training and risk assessment programme. There were no RIDDOR reportable accidents in the company during 2024 (2023: nil). All accidents are thoroughly investigated, and steps taken to avoid a re-occurrence. Quality control The manufacturing plant holds ISO/TS 16949 accreditation, the de facto automotive quality standard. Individual site quality management systems are externally audited against this standard on an annual basis. The directors are committed to reduce energy consumption and CO2 emissions. The company holds ISO14001 accreditation, which incorporates an action plan for environmental improvement planning, a part of which is addressing energy consumption and CO2 emission reduction.
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RICOR NORTH EAST LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Post balance sheet activity and future plans
Subsequent to the year end, as a result of a corporate restructuring in February 2025, D R Johanson ceased to be the ultimate controlling party and the ultimate controlling party of the group became Tosca Debt Capital GP II LLP ("TDC"). There has been no change in the business of the group, strategy or the executive management team. As part of the on-going restructuring, certain debts have been cancelled or waived, including capitalised interest and redemption premium of the debt-like preferred shares, loans from shareholders and deferred consideration. The second lien lender, Tosca Debt Capital (Luxembourg) SARL, has confirmed that they will write down existing debt to a residual balance of £9.5m by swapping capitalised interest on other loans and the redemption premium fee for new and existing equity. In addition, TDC will make additional funding available in the form of a new £6.1m facility. Both of the group’s lenders have credit committee approval to an extension of the existing finance facilities by 36 months to June 2028. In addition, the senior lender has agreed to a deferral of capital repayments until January 2027.
This report was approved by the board and signed on its behalf.
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RICOR NORTH EAST LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their report and the financial statements for the year ended 31 March 2024.
The profit for the year, after taxation, amounted to £1,511,977 (2023 - £329,371).
The directors do not recommend a dividend.
The directors who served during the year were:
As permitted by s414c(11) of the Companies Act 2006, the directors have elected to disclose information, required to be in the directors' report by Schedule 7 of the 'Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008', in the strategic report.
Subsequent to the year end, as a result of a corporate restructuring in February 2025, D R Johanson ceased to be the ultimate controlling party and the ultimate controlling party of the group became Tosca Debt Capital GP II LLP ("TDC"). There has been no change in the business of the group, strategy or the executive management team.
As part of the on-going restructuring, certain debts have been cancelled or waived, including capitalised interest and redemption premium of the debt-like preferred shares, loans from shareholders and deferred consideration. The second lien lender, Tosca Debt Capital (Luxembourg) SARL, has confirmed that they will write down existing debt to a residual balance of £9.5m by swapping capitalised interest on other loans and the redemption premium fee for new and existing equity. In addition, TDC will make additional funding available in the form of a new £6.1m facility. Both of the group’s lenders have credit committee approval to an extension of the existing finance facilities by 36 months to June 2028. In addition, the senior lender has agreed to a deferral of capital repayments until January 2027.
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RICOR NORTH EAST LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
This report was approved by the board and signed on its behalf.
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RICOR NORTH EAST LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
The directors are responsible for preparing the strategic report, the directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙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 to 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.
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RICOR NORTH EAST LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RICOR NORTH EAST LIMITED
FOR THE YEAR ENDED 31 MARCH 2024
We have audited the financial statements of Ricor North East Limited (the 'company') for the year ended 31 March 2024, which comprise the profit and loss account, the balance sheet, the statement of changes in equity and the related notes, including a summary of 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).
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 United Kingdom, including the Financial Reporting Council'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.
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.
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RICOR NORTH EAST LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RICOR NORTH EAST LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
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.
In our opinion, based on the work undertaken in the course of the 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.
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.
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RICOR NORTH EAST LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RICOR NORTH EAST LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the company's sector;
∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, employment legislation and health and safety legislation;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙tested a sample of journal entries to identify unusual transactions;
∙assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias; and
∙investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙reading the minutes of meetings of those charged with governance; and
∙enquiring of management as to actual and potential litigation and claims;
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RICOR NORTH EAST LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RICOR NORTH EAST LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Auditor's responsibilities for the audit of the financial statements (continued)
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
16 Great Queen Street
Covent Garden
WC2B 5AH
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RICOR NORTH EAST LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
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RICOR NORTH EAST LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 33 form part of these financial statements.
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RICOR NORTH EAST LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Ricor North East Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is Arrow Works, Birmingham Road, Studley, England, B80 7AS. The address of its principal place of business is Gurney Way, Aycliffe Industrial Park, Newton Aycliffe, County Durham, DL5 6UJ.
The financial statements are presented in Sterling (£) which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102:
∙Section 3 Financial Statement Presentation paragraph 3.17(d) (inclusion of statement of cash flows);
∙Section 7 Statement of Cash Flows (inclusion of statement of cash flows); and
∙Section 11 Financial Instruments paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii),11.48(a)(iv), 11.48(b) and 11.48(c) (disclosures relating to financial instruments).
The following principal accounting policies have been applied:
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
The company is part of the Ricor Global Limited group which is reliant on the continuing support of its lenders. At the date that these financial statements are approved, the group is in the process of restructuring the balance sheet, with £7.8m of debt written off and a further proposed debt waiver as well as securing additional funding. As part of this process, on 6 February 2025 the group came under the control of Tosca Debt Capital GP II LLP. The level of expected debt write off is illustrated in the strategic report of the Ricor Global Limited financial statements.
The directors of the group have also renegotiated the terms of the loans and facilities provided by its key financing partners; this includes an extension of the repayment date of its bank loans from June 2025 to June 2028. This restructure has been undertaken to unlock a significant investment in the group and its facilities and will enable the group to deliver existing and new work packages. At the date of signing the financial statements management have agreed specific details to extend facilities with both major lenders. This has been undertaken as part of the wider restructure. The positions of the major lenders have been credit and investment committee approved and agreed by the Board of Directors of the group and is subject to the finalisation of legal documents. The Directors have formed a view that there is a reasonable expectation that these agreements will be signed as agreed, once legal documents are finalised. As of the date the financial statements are approved, the current terms apply. Management have prepared a forecast which incorporates the proposed restructure of the balance sheet, extended funding terms, additional finance availability and major investment in new production facilities. This forecast shows that the group will be able to comply with covenants and meet its liabilities as they fall due for the term of the new facilities for 36 months from the date these financial statements were approved. The forecasts are sensitive primarily to the level of volumes from key OEMs and management have modelled a volume drop sensitivity. Should the volumes drop significantly against forecast, management have in place plans that can be executed to mitigate any cash shortfall, supported by financial models. Under these scenarios the forecast shows that with mitigating actions the group can still meet its liabilities as they fall due for at least 18 months from the date of approval of these financial statements. Therefore, after making enquiries, the directors have a reasonable expectation that the company and group has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account.
Current tax is the amount of income tax payable in respect of taxable profit for the year or prior years. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
Ordinary shares are classified as equity.
The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument.
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.
The company’s policies for its major classes of financial assets and financial liabilities are set out below.
Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances, and amounts owed by group undertakings, are initially recognised at transaction price, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.
Financial liabilities
Basic financial liabilities, including trade and other creditors, bank loans, and amounts owed to group undertakings, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
Impairment of financial assets
Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
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 and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The following are critical judgements and estimations that the directors have made in the process of applying the company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements. Absorption of attributable production overhead costs into the value of stock The company allocates certain production overheads to the cost of stock based on normal capacity of the production facilities. The determination of normal capacity levels is an area of management judgement. Dilapidations provisions The company has entered into various operating leases which include dilapidations conditions. These may involve an outflow of resources at the termination of the lease. The directors have not recognised a provision for these amounts because, although their amount is uncertain, it is not anticipated to be material to understanding the financial position of the company. Impairment of intercompany debtor balances The carrying amounts of the company’s intercompany loans and trading balances of £1,741,990 (2023: £1,144,635) are reviewed on a periodic basis. In determining whether there is a need for a provision, management is required to determine their best estimate of the future expected cash flows.
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Analysis of turnover by country of destination:
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Page 29
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Page 30
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Profit and loss account
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £62,264 (2023: £47,199).
Contributions totalling £12,928 (2023: £11,715) were payable to the fund at the balance sheet date and are included in creditors.
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
20.Other financial commitments
The company is party to a cross-guarantee in respect of a bank loan and overdraft facilities of itself and other group companies.
At 31 March 2024 the total amount of indebtedness covered by this guarantee was £17,552,386 (2023: £18,191,191). The bank hold as security a fixed and floating charge over the assets of the group.
The remuneration of key management personnel was £253,016.
As part of the on-going restructuring, certain debts have been cancelled or waived, including capitalised interest and redemption premium of the debt-like preferred shares, loans from shareholders and deferred consideration. The second lien lender, Tosca Debt Capital (Luxembourg) SARL, has confirmed that they will write down existing debt to a residual balance of £9.5m by swapping capitalised interest on other loans and the redemption premium fee for new and existing equity. In addition, TDC will make additional funding available in the form of a new £6.1m facility. Both of the group’s lenders have credit committee approval to an extension of the existing finance facilities by 36 months to June 2028. In addition, the senior lender has agreed to a deferral of capital repayments until January 2027.
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RICOR NORTH EAST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
The immediate parent undertaking is Ricor Global Limited.
The parent undertaking of the smallest group of undertakings for which group financial statements are drawn up and of which the company is a member is Ricor Global Limited whose registered office is Arrow Works, Birmingham Road, Studley, England, B80 7AS. Copies of these group financial statements are available to the public from Companies House. In the opinion of the directors the ultimate controlling party was D R Johanson during the year. Subsequent to the year end, the controlling party changed to Tosca Debt Capital Gp II LLP.
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