Company registration number SC182499 (Scotland)
Forfar Galvanisers Limited
financial statements
for the year ended 31 May 2024
Pages for filing with registrar
Forfar Galvanisers Limited
Contents
Page
Balance sheet
1
Notes to the financial statements
2 - 8
Forfar Galvanisers Limited
Balance sheet
as at 31 May 2024
- 1 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
3
608,107
661,883
Current assets
Stocks
553,843
695,352
Debtors
4
170,732
43,006
Cash at bank and in hand
30
46
724,605
738,404
Creditors: amounts falling due within one year
5
(1,386,202)
(1,080,727)
Net current liabilities
(661,597)
(342,323)
Total assets less current liabilities
(53,490)
319,560
Creditors: amounts falling due after more than one year
6
(12,000)
Provisions for liabilities
(60,826)
(44,825)
Net (liabilities)/assets
(114,316)
262,735
Capital and reserves
Called up share capital
7
500,000
500,000
Profit and loss reserves
8
(614,316)
(237,265)
Total equity
(114,316)
262,735
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 23 May 2025
Dr AR Edwards
Director
Company registration number SC182499 (Scotland)
Forfar Galvanisers Limited
Notes to the financial statements
for the year ended 31 May 2024
- 2 -
1
Accounting policies
Company information
Forfar Galvanisers Limited is a private company limited by shares incorporated in Scotland. The registered office is Carseview Road, Forfar, DD8 3BT.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies' regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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.
1.2
Going concern
The financial statements have been prepared on a going concern basis.
The company has experienced challenging market pricing conditions which have led to losses in recent years and created pressure on working capital. Further investment is required to continue upgrading plant and machinery to prevent sustained periods of shutdown. As a result, the company has continued to receive funding from its parent company, David Ritchie (Implements) Limited, during the current financial year to allow it to deal with these conditions. The parent company has confirmed that amounts advanced will not be called for repayment in the 12 months following the date of signing these financial statements and that there is a desire to provide further funding, if possible, to ensure that galvanising services can continue to be sourced within the group. However, economic headwinds and trading challenges across the whole group mean that the parent company could find itself in a position where it is not possible to provide further loan or working capital support. If this was to be the case, it would be difficult for the company to continue to meet its liabilities as they fall due.
On the basis that the parent company is forecasting that it will have sufficient funds and has a desire to make surplus funds available to the company for investment, the directors have concluded that they can continue to adopt the going concern basis in preparing the annual report and financial statements.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Forfar Galvanisers Limited
Notes to the financial statements (continued)
for the year ended 31 May 2024
1
Accounting policies (continued)
- 3 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
Over 20 to 50 years
Plant and machinery
Over 5 to 10 years
Fixtures, fittings & equipment
Over 3 to 5 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
Forfar Galvanisers Limited
Notes to the financial statements (continued)
for the year ended 31 May 2024
1
Accounting policies (continued)
- 4 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Forfar Galvanisers Limited
Notes to the financial statements (continued)
for the year ended 31 May 2024
1
Accounting policies (continued)
- 5 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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.
1.12
Retirement benefits
The company's employees are members of a defined contribution pension scheme. Contributions payable are charged to the profit and loss account in the period they are payable.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Total
13
12
Forfar Galvanisers Limited
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 6 -
3
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 June 2023
920,602
2,022,031
2,942,633
Additions
41,817
41,817
At 31 May 2024
920,602
2,063,848
2,984,450
Depreciation and impairment
At 1 June 2023
504,207
1,776,543
2,280,750
Depreciation charged in the year
35,640
59,953
95,593
At 31 May 2024
539,847
1,836,496
2,376,343
Carrying amount
At 31 May 2024
380,755
227,352
608,107
At 31 May 2023
416,395
245,488
661,883
4
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
63,752
12,865
Corporation tax recoverable
9,517
Other debtors
106,980
20,624
170,732
43,006
5
Creditors: amounts falling due within one year
2024
2023
£
£
Bank loan and overdraft
230,385
259,941
Trade creditors
13,646
128,064
Amounts owed to group undertakings
1,088,375
552,724
Taxation and social security
9,466
Other creditors
53,796
130,532
1,386,202
1,080,727
There are no fixed repayment terms for amounts due to group undertakings and no interest applies.
Forfar Galvanisers Limited
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 7 -
6
Creditors: amounts falling due after more than one year
2024
2023
£
£
Bank loan
12,000
7
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
500,000
500,000
500,000
500,000
The company has one class of ordinary shares which carry full ownership, voting and equity rights.
8
Profit and loss reserves
Profit and loss reserves include all current and prior period retained profits and losses.
9
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Material uncertainty related to going concern
We draw attention to the going concern accounting policy in note 1 of the financial statements which discloses the significant uncertainties facing the company in terms of ongoing trading and support from its parent company. As stated in the going concern accounting policy, these conditions, along with the other matters as set forth in the note, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Senior Statutory Auditor:
Gavin Black
Statutory Auditor:
Henderson Loggie LLP
Date of audit report:
23 May 2025
10
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2024
2023
£
£
Total
115,200
120,000
Forfar Galvanisers Limited
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 8 -
11
Financial commitments, guarantees and contingent liabilities
The bank holds a standard security over the parent company property at Carseview Road, Forfar and a bond and floating charge over all the property and undertaking of the company.
12
Parent company
The company's parent undertaking is David Ritchie (Implements) Limited, a company incorporated in Great Britain and registered in Scotland.
There is no individual controlling party of David Ritchie (Implements) Limited.