Registration number:
Esterchem Limited
for the Year Ended 30 June 2024
Esterchem Limited
Contents
Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Profit and Loss Account |
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Statement of Comprehensive Income |
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Balance Sheet |
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Statement of Changes in Equity |
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Notes to the Financial Statements |
Esterchem Limited
Company Information
Directors |
Mr A D Bray Mr P A Bray Mrs N Bray Mrs L Bray |
Registered office |
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Auditors |
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Esterchem Limited
Strategic Report for the Year Ended 30 June 2024
The directors present their strategic report for the year ended 30 June 2024.
Principal activity
The principal activity of the company is the manufacture of esters and related chemicals
Fair review of the business
The results of the company showed a reduction in turnover of £8.5 to £30.8m (2023 - £39.3m) whilst gross profits remained steady at £6.3m (2023: £6.5m).
Gross profit margins increased by 23% in the year to 20.3% (2023: 16.5%) marking a significant achievement for the company which is a result of the continuing investments and improvements the directors have made in the efficiency of the plant and production processes.
The company made a small net loss for the year of £0.04m (2023: £1.48m). The profitability has been affected by changes in the remuneration and dividend policies as relate to the directors. Excluding director’s remuneration, the results showed a profit for the current year of £1.46m (2023: £1.91m) with net profit margins of 4.7% (2023: 4.8%).
The development of the product mix, maintenance of the supply chain has continued and there has been a focus on a programme of improvements to the plant efficiency to maintain the company's competitiveness.
The company prides itself on its innovation and continues to invest in research and development programmes to further produce niche products and refine its manufacturing systems to support further growth. Research and development expenditure totalled £0.49m (2023 - £0.57m) in the year.
The company continued to maintain its strong working capital position with net current assets of £4.5m (2023: £4.9m) at the year end. Net assets also remained strong and stable at £5.92m (2023 - £5.96m).
The company's key financial and other performance indicators during the year were as follows:
Financial KPIs |
Unit |
2024 |
2023 |
Turnover growth |
% |
(21.60) |
(5.00) |
Gross profit margin |
% |
20.30 |
16.50 |
Earnings before interest and taxation margin |
% |
(.10) |
4.40 |
Net profit ratio |
% |
(.10) |
3.80 |
The company will continue to invest profits back into it's engineering, plant and human resources infrastructures to ensure it is well placed to meet current and future demands.
Esterchem Limited
Strategic Report for the Year Ended 30 June 2024
Principal risks and uncertainties
Product risk
As a result of the EU "Reach" directive, all chemical manufacturers are required to register their products and production quantities with a central organisation. The registration of these products involves the use of external consultants and these costs will continue to increase in line with the company's production volume and new product development. The directors anticipate that these additional costs can be met from working capital funding.
Financial risk
In the course of its business, the company is exposed to a number of financial risks: market risk (including interest rate risk, foreign currency risk and other price risk), liquidity risk and credit risk. The presented information shows the susceptibility of the company concerning each of these risks. The Board of Directors reviews and establishes policies for managing each of these risks which are summarised below.
The liquidity risk associated with the bank balances, is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at variable rates of interest.
The loans to the business comprise of amounts from the directors, bank and from the Bray Family Pension Trust. The company manages the liquidity risk by ensuring that there are sufficient funds to meet the repayments.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of any amounts outstanding, in terms of both time and credit limits.
The liquidity risk involved with trade creditors is managed by ensuring that there are sufficient funds available to meet the amounts due.
The company is exposed to financial risk from fluctuating exchange rates from the UK's exit of the EU. The company is involved in both exports and imports from overseas, monitors exchange rates and maintains foreign currency bank accounts. The company is therefore confident that it has the resources and controls to ensure any finance risk from exchange rate fluctuations is mitigated.
The risks arising from inflation (specifically affecting raw material and energy costs) are difficult to mitigate, but the company has taken steps to ensure the increases are being kept to a minimum and they are also built into the long-term pricing plans.
Approved and authorised by the
......................................... |
Esterchem Limited
Directors' Report for the Year Ended 30 June 2024
The directors present their report and the financial statements for the year ended 30 June 2024.
Directors of the company
The directors who held office during the year were as follows:
The following directors were appointed after the year end:
Dividends
No dividends were declared or proposed for the year ended 30th June 2024 (2023: £450,000).
Research and development
The company develops new and innovative products for a range of different needs. It also has a policy of reviewing its production techniques to further develop its production facilities with unique and new production methods.
Information included in the Strategic Report
The company has chosen in accordance with section 414C(11) of Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the company's Strategic Report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Reappointment of auditors
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Harts Limited as auditors of the company is to be proposed at the forthcoming Annual General Meeting.
Approved and authorised by the
......................................... |
Esterchem Limited
Directors' Report for the Year Ended 30 June 2024
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Esterchem Limited
Independent Auditor's Report to the Members of Esterchem Limited
Opinion
We have audited the financial statements of Esterchem Limited (the 'company') for the year ended 30 June 2024, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, and Notes to the Financial Statements, 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).
In our opinion the financial statements:
• | give a true and fair view of the state of the company's affairs as at 30 June 2024 and of its loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
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 responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Esterchem Limited
Independent Auditor's Report to the Members of Esterchem Limited
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 5], 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 Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• |
the 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; |
• |
we focused on specific laws and regulations which we considered may have a direct material effect on the
|
• |
we assessed the extent of compliance with the laws and regulations through making enquiries of management and reviewing legal and professional fee invoices. |
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
Esterchem Limited
Independent Auditor's Report to the Members of Esterchem Limited
• |
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 journal entries posted during the period and at the period end to identify unusual transactions; 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; |
• |
enquiring of management as to actual and potential litigation and claims; |
• |
reviewing correspondence and agreements with HMRC; |
• |
reviewing legal and professional fees incurred during the period to identify any potential indications of non-compliance with laws and regulations. |
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 is available on the Financial Reporting Council’s website at: 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.
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For and on behalf of
Westminster House
10 Westminster Road
Cheshire
SK10 1BX
Esterchem Limited
Profit and Loss Account for the Year Ended 30 June 2024
Note |
2024 |
2023 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Distribution costs |
( |
( |
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Operating (loss)/profit |
(47,509) |
1,734,681 |
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
(145,586) |
(146,725) |
||
(Loss)/profit before tax |
( |
|
|
Tax on (loss)/profit |
|
( |
|
(Loss)/profit for the financial year |
( |
|
The above results were derived from continuing operations.
The company has no recognised gains or losses for the year other than the results above.
Esterchem Limited
Statement of Comprehensive Income for the Year Ended 30 June 2024
2024 |
2023 |
|
(Loss)/profit for the year |
( |
|
Total comprehensive income for the year |
( |
|
Esterchem Limited
(Registration number: 03546522)
Balance Sheet as at 30 June 2024
Note |
2024 |
2023 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and Reserves |
|||
Called up share capital |
1,000 |
1,000 |
|
Retained Earnings |
5,921,556 |
5,967,698 |
|
Shareholders' funds |
5,922,556 |
5,968,698 |
Approved and authorised by the
......................................... |
Esterchem Limited
Statement of Changes in Equity for the Year Ended 30 June 2024
Share capital |
Retained Earnings |
Total |
|
At 1 July 2023 |
|
|
|
Loss for the year |
- |
( |
( |
At 30 June 2024 |
|
|
|
Share capital |
Retained Earnings |
Total |
|
At 1 July 2022 |
|
|
|
Profit for the year |
- |
|
|
Dividends |
- |
( |
( |
At 30 June 2023 |
1,000 |
5,967,698 |
5,968,698 |
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention.
The financial statements cover the company as an individual entity and are presented in Pounds Sterling (£) being the functional currency.
Summary of disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
• the requirements of Section 7 Statement of Cash Flows;
• the requirement of paragraph 3.17(d);
• the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
• the requirement of paragraph 33.7.
This information is included in the consolidated financial statements of Ester Group Limited as at 30 June 2024.
Going concern
The financial statements have been prepared on a going concern basis.
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Judgements
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 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. |
Information about the significant judgements and estimates required in the provision of the financial statements is provided below in "Key sources of estimation uncertainty". |
Key sources of estimation uncertainty
- Useful lives of depreciable assets
Management reviews the useful economic lives of depreciable assets at each report date so as to allocate the cost of assets, less their residual value, over their estimated useful lives. Uncertainties in these estimates relate to technological obsolescence and physical deterioration.. The carrying amount is £1,532,948 (2023 -£1,308,975).
- Valuation of stock
Cost of stock includes costs of conversion and other costs incurred in bringing the stock to their present location and conditions. These costs have been estimated by applying a percentage based on stock held at the year end against purchase made during the year to direct costs incurred.. The carrying amount is £3,472,876 (2023 -£3,839,227).
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, after taking account of trade discounts, settlement discounts and volume rebates, excluding value added tax and other sales taxes.
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
- the Company has transferred the significant risks and rewards of ownership to the buyer;
- the Company retains neither continuing managerial involvement to the degree usually associated
with the ownership nor effective control over the goods sold;
- the amount of revenue can be measured reliably;
- it is probable that the Company will receive the consideration due under the transaction; and
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Government grants
Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.
Foreign currency transactions and balances
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates. Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Research and development
Expenditure on research and development is written off in the year in which it is incurred.
Tax
The tax expense for the period comprises deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Leasehold property |
4% straight line |
Freehold property |
4% straight line |
Land |
Nil |
Plant and machinery |
15% reducing balance |
Fixtures and fittings |
25% reducing balance |
Office equipment |
25% reducing balance |
Commercial motor vehicles |
25% reducing balance |
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Financial instruments
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.
(i) Financial assets and liabilities
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Financial assets and liabilities are only offset in the statement of financial position when, and only when there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Debt instruments which meet the conditions for basic financial instruments set out by the FRC in 'Amendments to FRS102: Basic Financial Instruments and Hedge Accounting' are subsequently measured at amortised cost using the effective interest method.
Debt instruments that are classified as payable or receivable within one year on initial recognition and which meet these conditions are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.
Financial assets are derecognised when and only when (a) the contractual rights to the cash flows from the financial asset expire or are settled, (b) the company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or (c) the company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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.
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Turnover |
The analysis of the company's revenue for the year from continuing operations is as follows:
2024 |
2023 |
|
Sale of goods |
|
|
An analysis of turnover by geographical market is given below:
2024 |
2023 |
|
United Kingdom |
8,936,288 |
10,281,810 |
Europe |
19,050,980 |
23,629,073 |
Rest of the world |
2,816,780 |
5,394,666 |
30,804,048 |
39,305,549 |
Other operating income |
The analysis of the company's other operating income for the year is as follows:
2024 |
2023 |
|
Government grants |
|
|
Miscellaneous other operating income |
|
|
|
|
Government grants |
The amount of grants recognised in the financial statements was £
Other gains and losses |
The analysis of the company's other gains and losses for the year is as follows:
2024 |
2023 |
|
Gain on disposal of Tangible assets |
- |
|
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Operating (loss)/profit |
Arrived at after charging/(crediting)
2024 |
2023 |
|
Depreciation expense |
|
|
Foreign exchange (gains)/losses |
( |
|
Operating lease expense - plant and machinery |
|
|
Operating lease expense - other |
2,640 |
19,454 |
Profit on disposal of property, plant and equipment |
- |
( |
Interest payable and similar expenses |
2024 |
2023 |
|
Interest on bank overdrafts and borrowings |
- |
|
Interest expense on other finance liabilities |
|
|
Other finance costs |
|
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2024 |
2023 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Other short-term employee benefits |
|
|
Pension costs, defined contribution scheme |
|
|
|
|
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
2024 |
2023 |
|
Production |
|
|
Administration and support |
|
|
Sales, marketing and distribution |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
2024 |
2023 |
|
Remuneration |
|
|
In respect of the highest paid director:
2024 |
2023 |
|
Remuneration |
|
|
Auditors' remuneration |
2024 |
2023 |
|
Audit of the financial statements |
|
|
Taxation |
Tax charged/(credited) in the income statement
2024 |
2023 |
|
Current taxation |
||
UK corporation tax |
- |
( |
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
|
Tax (receipt)/expense in the income statement |
( |
|
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2023 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2024 |
2023 |
|
(Loss)/profit before tax |
( |
|
Corporation tax at standard rate |
( |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Effect of tax losses |
( |
( |
Deferred tax expense (credit) from unrecognised tax loss or credit |
|
|
Tax increase (decrease) from effect of capital allowances and depreciation |
( |
( |
Tax increase (decrease) from effect of adjustment in research and development tax credit |
( |
( |
Total tax (credit)/charge |
( |
|
Deferred tax
Deferred tax assets and liabilities
2024 |
Asset |
Liability |
Accerlerated capital allowances over depreciation charged |
- |
|
- |
|
2023 |
Asset |
Liability |
Accerlerated capital allowances over depreciation charged |
- |
|
- |
|
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Tangible assets |
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Plant and machinery |
Total |
|
Cost or valuation |
|||||
At 1 July 2023 |
|
|
|
|
|
Additions |
|
|
- |
|
|
At 30 June 2024 |
|
|
|
|
|
Depreciation |
|||||
At 1 July 2023 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
At 30 June 2024 |
|
|
|
|
|
Carrying amount |
|||||
At 30 June 2024 |
|
|
|
|
|
At 30 June 2023 |
|
|
|
|
|
The value of land and buildings £232,082 (2023 - £62,166) is made up entirely of short leasehold land and buildings.
The total net book value of assets with a carrying value of £1,532,948 (2023 - £1,308,975) is pledged as security for bank borrowings.
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Stocks |
2024 |
2023 |
|
Raw materials and consumables |
|
|
Work in progress |
|
|
Finished goods and goods for resale |
|
|
|
|
Stocks with a carrying value of £3,472,876 (2023 - £3,839,227) is pledged as security for bank borrowings.
Debtors |
Current |
Note |
2024 |
2023 |
Trade debtors |
|
|
|
Amounts owed by related parties |
|
|
|
Other debtors |
|
- |
|
Prepayments |
|
|
|
Income tax asset |
- |
|
|
|
|
Creditors |
Note |
2024 |
2023 |
|
Due within one year |
|||
Loans and borrowings |
|
|
|
Trade creditors |
|
|
|
Amounts due to related parties |
|
- |
|
Social security and other taxes |
|
|
|
Outstanding defined contribution pension costs |
|
|
|
Other payables |
|
|
|
Accrued expenses |
|
|
|
Deferred income |
|
|
|
|
|
||
Due after one year |
|||
Deferred income |
|
|
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Provisions for liabilities |
Deferred tax |
Total |
|
At 1 July 2023 |
|
|
Increase (decrease) in existing provisions |
( |
( |
At 30 June 2024 |
|
|
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £
Share capital |
Allotted, called up and fully paid shares
2024 |
2023 |
|||
No. |
£ |
No. |
£ |
|
|
|
250 |
|
250 |
|
|
240 |
|
240 |
|
|
340 |
|
340 |
|
|
170 |
|
170 |
|
|
|
|
All shares rank pari passu in all respects. There are no restrictions on the distribution of dividends and the repayment of capital. All shares are entitled to one vote under any circumstances, and carry the same rights on winding up.
Other borrowings are secured by way of a charge over the shares of the company.
Reserves |
Retained earnings
Retained earnings represents the accumulated profits less accumulated losses and distributions up to the reporting date. This is a distributable reserve.
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Loans and borrowings |
2024 |
2023 |
|
Current loans and borrowings |
||
Bank borrowings |
|
|
Other borrowings |
- |
|
|
|
Bank Borrowings
The invoice discounting facility of £2,190,016 (2023- £1,901,222) is secured by a fixed and floating charge over all assets of the company.
Other borrowings
Other borrowings consist of loans from Trustees of the Bray Family Pension Trust. The loans are secured by way of a charge over the shares of the company. Interest is charged at 3.00 % per annum. The loan is repayable in monthly installments and was fully repaid in the year.
Obligations under leases and hire purchase contracts |
Operating leases
The total of future minimum lease payments is as follows:
2024 |
2023 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
Later than five years |
|
- |
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Dividends |
Interim dividends paid
2024 |
2023 |
|||
Interim dividend of £Nil (2023 - £ |
- |
|
||
Esterchem Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Related party transactions |
Bray Family Pension Trust
The company occupies land and buildings owned by the Bray Family Pension Trust, in which the following directors, Mr A Bray, Mr P Bray and Mr D Bray are all beneficiaries. The Bray Family Pension Trust provided a loan of £400,000 in February 2019.
During the year the company paid rent of £66,092 (2023 - £66,300) to the Bray Family Trust. At the year end £nil (2023 - £nil) was outstanding in relation to rents.
The company made loan repayments during the year of £57,500 (2023 - £86,250) and was charged interest in the year of £642 (2023 - £3,064) in relation to the loan with the Bray Family Trust. The outstanding loan at the year end was £nil (2023 - £56,858).
Key management
During the year, close family members of key management received salary, pensions and benefits from the company totalling £304,820 (2023 - £284,283). No balances were outstanding at the year end.
Group balances
The company made loans to group companies during the year.
A loan of £98,707 was made during the year to Ester Group Ltd, the company's parent company. The outstanding loan at the end of the year was £2,255,325 (2023: £2,156,618).
A loan of £7,700 was made during the year to Esterchem (2022) Ltd, a fellow subsidiary company. The outstanding loan at the end of the year was £27,812 (2023: £20,112).
The loans are repayable on demand and interest free.
Parent and ultimate parent undertaking |
The company's immediate parent is
These financial statements are available upon request from Brooklands Way, Basford Lane Industrial Estate, Leek, Staffordshire, ST13 7QF.
There is no ultimate controlling party.