Company registration number 03989736 (England and Wales)
KREMPEL INDUSTRIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
KREMPEL INDUSTRIES LIMITED
COMPANY INFORMATION
Director
Mr J Beer
Secretary
Mr J Tythcott
Company number
03989736
Registered office
Delanco Works
Clovelly Road
Bideford
EX39 3EX
Auditor
MHA
Richard House
9 Winckley Square
Preston
PR1 3HP
KREMPEL INDUSTRIES LIMITED
CONTENTS
Page
Strategic report
1 - 4
Director's report
5
Director's responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
KREMPEL INDUSTRIES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -

The director presents the strategic report for the year ended 31 December 2024.

Fair review of the business

The company has four separate business units, the directors consider that the key financial performance indicators are those that monitor the performance in respect of each of these divisions. The revenue of the company from the sale of products analysed by division is as follows:

Business Unit

 

 

2024

 

2023

 

 

Tube & Cage

 

 

£6,222,309

 

£5,348,303

 

 

Machining

 

 

£2,444,294

 

£1,927,763

 

 

Moulding

 

 

£589,490

 

£485,958

 

 

Composites

 

 

£653,403

 

£223,877

 

 

 

 

 

£9,909,496

 

£7,985,901

 

 

2024 saw an increase in sales, largely attributable to growth in the Defence and Aerospace sector and also our US Industrial markets. Whilst a welcome stabilisation of the European Industrial markets occurred, no real growth was witnessed.

The Composites business unit performed strongly although not to expectation as delays in awarded contracts were experienced due to design changes that led to redevelopment of the parts. Production volumes are expected to be realised during 2025.

The US market continues to develop positively, following an acquisition in the Americas region by the group in the latter part of 2024 this area of the world remains a significant focus and opportunity for Krempel Industries.

The continued focus on new business development saw an increase in new business sales of 137% over the previous year, this is expected to continue to develop positively during 2025.

The operating profit of the company has increased from £64,865 to £707,493.

The director monitors gross profit margins from continuing activities as another key performance indicator. During 2024 the company had to deal with ongoing increases in raw material costs and large increases in labour costs. This resulted in a small drop in gross margin percentage from 50.7% in 2023 to 50.4% in 2024. The implementation of an aggressive cost reduction program, introduction of automation, a full years benefit from the introduction of solar energy support and improved labour management all contributed to minimising the impact of the raw material and labour increases.

 

 

 

 

 

 

KREMPEL INDUSTRIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
Principal risks and uncertainties

The company faces several business risks and uncertainties due to worsening trading conditions and new competition. In view of this, the directors are looking carefully at both existing and potential new markets. In particular, this table sets out the key risks that have been identified, with the company’s approach to mitigating those risks.

Risk

 

Impact on company

 

 

 

Mitigation

Recruitment

 

 

 

 

Specialisms such as CNC setters & Composite assembly staff are in short supply not just nationally but internationally. We do not see this situation changing in the near future

 

 

 

During 2024 we further developed the internal training programs to upskill existing and new employees to the level of CNC setting Composite assembly capability that the business requires. Apprentices continue to be introduced to the business to ensure that we develop the skills of the future that the business will require.

Global unrest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over recent years several Global events have had had a significant impact on the company, these have included, Brexit, Covid, war in Ukraine and more recently troubles in the middle east. This raises an increased risk of supply chain disruptions and wider economic disruption that may impact customer demand and margins in the future.

 

 

 

 

 

 

 

 

 

 

 

 

The company is continuing to work closely with its long-standing suppliers and is also working with new suppliers to minimise the risk of future disruption.

The company has a loyal but diverse customer base, both in terms of revenue and concentration, reducing its exposure to a temporary downturn in trade.

The company continues to adopt robust credit check procedures ahead of new customer engagement and also monitors credit worthiness of existing customers on and ongoing basis to mitigate the risk of non-payment.

 

 

 

 

 

 

 

 

 

 

 

 

 

KREMPEL INDUSTRIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
Principal risks and uncertainties (cont)

Exposure to foreign economies

 

 

 

 

 

 

 

New entrants to the market

 

 

 

 

 

 

 

 

The company exports more than 50% of its products, these sales give rise to foreign exchange risks. Changing legislation in other regulations can affect product specification, as will the effect of the UK having left the European Union. More diversity in legislation can only increase manufacturing costs.

 

 

 

 

The barriers to entry are fairly low, and new entrants who specialise in only one item and invest significant capital can make cost savings, particularly if their production is based overseas. New entrants can therefore potentially offer low selling prices to gain initial market share, which directly affects sales.

 

 

 

 

Foreign exchange risk is mitigated to some degree by the purchase of raw materia;s in foreign currency. When pricing export goods, movement in exchange rates are considered to reduce the effect of any adverse currency fluctuations. Following the growth in the Defense sector we expect further opportunities in our domestic markets and are looking to expand sales in this region. Whilst we are taking a more cautious approach to exports this remains a growing area of our business and a number of new opportunities continue to be identified and realised in the US.

The company has a sufficiently diverse product range to allow some absorption of problems from temporary loss of trade. Development of new products continues, with effort directed towards innovation so that the company’s products can be clearly distinguished from those of competitors. Investment in automation will be a key element of our future growth strategy.

Increasing cost base

 

Materials, Energy, and labour continue to negatively influence our cost base, this is expected to continue.

 

 

 

 

 

Investment in automation will be a key element of our future growth strategy. We are working with new suppliers across the globe to ensure our material supply is as competitive as possible and we will continue to develop strategies to reduce our energy consumption/cost.

 

KREMPEL INDUSTRIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -

Cashflow

 

During 2024 the company’s cash balance increased by £386,000 following the strong trading performance. This should continue into 2025 although capital investment plans may reduce cashflow in the short term.

 

 

 

 

 

 

The company has a credit line with Deutsche Bank up to a value of €1m which can be drawn down at any time and continues to be supported by group through its joint banking facility which allows access to funds should it be required.

.

 

 

Future developments

The directors anticipate the business environment will remain competitive. They believe that the company is in a good financial position and that the risks that have been identified are being well managed. With careful focus on appropriate diversification and development of new products, as well as a continuing review of the state of the market and the activities of competitors, the directors are confident in the company's ability to maintain and build on this position, albeit with cautious growth expectations.

Financial instruments

The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are conducted in both sterling, dollars and euros. The company does not enter into any formally designated hedging arrangements.

Research and development

The company is currently undertaking research and development to improve the internal processes and expand product offering.

On behalf of the board

Mr J Beer
Director
4 March 2025
KREMPEL INDUSTRIES LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 5 -

The director presents his annual report and financial statements for the year ended 31 December 2024.

Principal activities

The principal activities of the company continued to be that of Injection & Compression Mouldings, Advanced Composites, Super Precision Machined parts, and the Assembly of high technology products.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Mr J Beer
Auditor

In accordance with the company's articles, a resolution proposing that MHA be reappointed as auditor of the company will be put at a General Meeting.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial instruments, research & development and future developments.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr J Beer
Director
4 March 2025
KREMPEL INDUSTRIES LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 6 -

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

 

 

The director is 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. He is 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.

KREMPEL INDUSTRIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KREMPEL INDUSTRIES LIMITED
- 7 -
Opinion

We have audited the financial statements of Krempel Industries Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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 financial statements are authorised for issue.

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.

KREMPEL INDUSTRIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KREMPEL INDUSTRIES LIMITED (CONTINUED)
- 8 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

 

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 director's report.

Matters on which we are required to report by exception

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

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

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

KREMPEL INDUSTRIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KREMPEL INDUSTRIES LIMITED (CONTINUED)
- 9 -

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

 

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

Use of our report

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

Joe Sullivan FCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Preston, United Kingdom
4 March 2025
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
KREMPEL INDUSTRIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
9,909,496
7,985,901
Cost of sales
(4,918,319)
(3,938,146)
Gross profit
4,991,177
4,047,755
Administrative expenses
(4,283,684)
(3,982,890)
Operating profit
4
707,493
64,865
Interest receivable and similar income
7
435
303
Interest payable and similar expenses
8
(5,648)
-
0
Profit before taxation
702,280
65,168
Tax on profit
9
(180,631)
(13,289)
Profit for the financial year
521,649
51,879

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.

KREMPEL INDUSTRIES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,557,609
3,751,084
Current assets
Stocks
12
2,967,534
2,851,712
Debtors
13
1,858,322
1,322,570
Cash at bank and in hand
93,293
144,789
4,919,149
4,319,071
Creditors: amounts falling due within one year
14
(1,198,420)
(1,447,419)
Net current assets
3,720,729
2,871,652
Total assets less current liabilities
7,278,338
6,622,736
Provisions for liabilities
Deferred tax liability
16
511,850
377,897
(511,850)
(377,897)
Net assets
6,766,488
6,244,839
Capital and reserves
Called up share capital
18
1,833,001
1,833,001
Profit and loss reserves
4,933,487
4,411,838
Total equity
6,766,488
6,244,839

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved and signed by the director and authorised for issue on 4 March 2025
Mr J Beer
Director
Company registration number 03989736 (England and Wales)
KREMPEL INDUSTRIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2023
1,833,001
4,359,959
6,192,960
Year ended 31 December 2023:
Profit and total comprehensive income
-
51,879
51,879
Balance at 31 December 2023
1,833,001
4,411,838
6,244,839
Year ended 31 December 2024:
Profit and total comprehensive income
-
521,649
521,649
Balance at 31 December 2024
1,833,001
4,933,487
6,766,488
KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 13 -
1
Accounting policies
Company information

Krempel Industries Limited is a private company limited by shares incorporated in England and Wales. The registered office is Delanco Works, Clovelly Road, Bideford, EX39 3EX.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of August Krempel Söhne GmbH & Co. KG. These consolidated financial statements are filed at Companies House, together with the entity financial statements of the immediate parent company, Krempel (UK) Holdings Limited.

1.2
Going concern

The financial statements report a increase in financial performance compared to the prior financial year, with significant profitability and even higher generation of positive operating cash flows. true

Management have prepared forecasts to the end of 2026, which show the company expects to continue its profitable trading over a period of 12 months beyond the approval of these financial statements. Cash balances are expected to increase as a consequence of this. Further, the company has a credit line of €1m with Deutsche Bank which can be drawn down at any point and is part of a strong, global group from which financial and operational support would be available.

Therefore at the time of approving the financial statements the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and continues to adopt the going concern basis of accounting in preparing the financial statements.

 

1.3
Turnover

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

KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -

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
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of the business in 2000, over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.5
Tangible fixed assets

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

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
2%, 4% or 10% per annum straight line
Plant and equipment
20% per annum on a reducing balance basis
Fixtures and fittings
15% or 20% per annum on a reducing balance basis

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.

Assets under construction represents the cost incurred on tangible fixed assets under construction which are not ready and available for use at the balance sheet date. Assets under construction are not depreciated. Depreciation commences once the assets are completed and have been transferred to the appropriate tangible fixed assets category. Assets under construction are usually completed in less than a year.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.

KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -

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.

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.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

Where relevant, cost is calculated using the latest purchase invoice value.

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.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
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.

KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
Other financial assets

All of the company's financial assets are basic financial instruments.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

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

Other financial liabilities

All of the company's financial liabilities are basic financial instruments.

Derecognition of financial liabilities

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

KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 17 -
1.10
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.

1.11
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.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exception:

 

Deferred tax assets are recognised only to the extent that the director considers that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

 

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

1.12
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.

1.13
Retirement benefits

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

1.14
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.

KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 18 -
1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Depreciation and useful economic life of tangible fixed assets

Depreciation is provided so as to write down the assets to their residual values over their estimated useful lives. The selection of these residual values and estimated lives requires the exercise of management judgement and is reviewed at each balance sheet date.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

WIP and finished goods valuation

Within the accounts, an estimate is made for the labour and overhead rates applied to work in progress and finished goods. Management calculate the labour and overhead rates using expected costs and normal working activity of the company. As such, these rates applied, and subsequently the valuation of work in progress and finished goods, is an estimation of uncertainty.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sales of goods
9,909,496
7,985,901
KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
3
Turnover and other revenue
(Continued)
- 19 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
4,569,927
4,109,380
Europe
2,303,384
1,614,845
Asia
154,207
73,851
America
2,881,978
2,187,825
9,909,496
7,985,901
2024
2023
£
£
Other revenue
Interest income
435
303
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
4,656
9,589
Fees payable to the company's auditor for the audit of the company's financial statements
16,920
14,975
Depreciation of owned tangible fixed assets
436,076
421,677
Operating lease charges
43,876
33,306
5
Employees

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

2024
2023
Number
Number
Administration
19
18
Manufacturing
86
88
Total
105
106
KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
5
Employees
(Continued)
- 20 -

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
3,575,737
3,279,612
Social security costs
328,506
289,823
Pension costs
116,795
101,852
4,021,038
3,671,287
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
193,168
179,170
Company pension contributions to defined contribution schemes
16,440
15,797
209,608
194,967

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).

7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
435
303
8
Interest payable and similar expenses
2024
2023
£
£
Other interest
5,648
-
0
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
46,375
-
0
Adjustments in respect of prior periods
303
(16,977)
Total current tax
46,678
(16,977)
KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
9
Taxation
2024
2023
£
£
(Continued)
- 21 -
Deferred tax
Origination and reversal of timing differences
134,449
21,532
Adjustment in respect of prior periods
(496)
8,734
Total deferred tax
133,953
30,266
Total tax charge
180,631
13,289

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

2024
2023
£
£
Profit before taxation
702,280
65,168
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
175,570
15,328
Tax effect of expenses that are not deductible in determining taxable profit
307
4,930
Adjustments in respect of prior years
303
-
0
Effect of change in corporation tax rate
-
0
1,274
Permanent capital allowances in excess of depreciation
4,947
-
0
Under/(over) provided in prior years
-
0
(16,977)
Deferred tax adjustments in respect of prior years
(496)
8,734
Taxation charge for the year
180,631
13,289
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2024 and 31 December 2024
1,882,664
Amortisation and impairment
At 1 January 2024 and 31 December 2024
1,882,664
Carrying amount
At 31 December 2024
-
0
At 31 December 2023
-
0
KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
11
Tangible fixed assets
Freehold land and buildings
Assets under construction
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
£
Cost
At 1 January 2024
1,352,070
1,165,914
6,155,597
1,881,457
10,555,038
Additions
-
0
242,601
-
0
-
0
242,601
Transfers
489,634
(1,323,102)
746,584
86,884
-
0
At 31 December 2024
1,841,704
85,413
6,902,181
1,968,341
10,797,639
Depreciation and impairment
At 1 January 2024
453,333
-
0
5,109,200
1,241,421
6,803,954
Depreciation charged in the year
46,944
-
0
265,933
123,199
436,076
At 31 December 2024
500,277
-
0
5,375,133
1,364,620
7,240,030
Carrying amount
At 31 December 2024
1,341,427
85,413
1,527,048
603,721
3,557,609
At 31 December 2023
898,737
1,165,914
1,046,397
640,036
3,751,084
12
Stocks
2024
2023
£
£
Raw materials and consumables
815,895
746,594
Work in progress
500,073
421,528
Finished goods and goods for resale
1,651,566
1,683,590
2,967,534
2,851,712
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,638,602
1,133,688
Corporation tax recoverable
-
0
8,932
Amounts owed by group undertakings
112,563
30,769
Other debtors
681
92,658
Prepayments and accrued income
106,476
56,523
1,858,322
1,322,570
KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
-
0
437,827
Trade creditors
354,508
433,218
Amounts owed to group undertakings
258,910
150,130
Corporation tax
46,375
-
0
Other taxation and social security
102,515
77,726
Accruals and deferred income
436,112
348,518
1,198,420
1,447,419
15
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
-
0
437,827
Payable within one year
-
0
437,827

Any overdrafts utilised are secured against the following:

 

An inter-company guarantee, dated 23 March 2007, is held between the reporting entity, Krempel UK Limited, and Krempel (UK) Holdings Limited.

 

Legal charges over the company's land and buildings at Clovelly Road, Bideford, Devon, EX39 3EX, dated 22 June 2004 and over land and buildings owned by Krempel UK Limited at Queen Street, Longridge, Lancashire, PR3 3BS, are held by Natwest Bank PLC.

16
Deferred taxation

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

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
514,520
530,073
Tax losses
(2,670)
(147,756)
Retirement benefit obligations
-
(4,420)
511,850
377,897
KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
16
Deferred taxation
(Continued)
- 24 -
2024
Movements in the year:
£
Liability at 1 January 2024
377,897
Charge to profit or loss
133,953
Liability at 31 December 2024
511,850

It is not possible to accurately predict the movement of deferred taxation provisions in the upcoming twelve months as the company's capital expenditure programme has not been finalised.

17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
116,795
101,852

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,833,001
1,833,001
1,833,001
1,833,001
19
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
21,982
22,260
Between two and five years
35,814
18,773
57,796
41,033
KREMPEL INDUSTRIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 25 -
20
Capital commitments

Amounts contracted for but not provided in the financial statements:

2024
2023
£
£
Acquisition of tangible fixed assets
110,000
120,000
21
Related party transactions

Key management personnel remuneration for the year totalled £556,469.

22
Ultimate controlling party

The immediate parent undertaking is Krempel (UK) Holdings Limited, a company registered in England and Wales.

 

The ultimate parent company during the year under review was August Krempel Söhne GmbH & Co. KG (Papierfabrikstrasse 4, 71665 Vaihingen, Enz, Germany), a company registered in Germany.

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