The directors present the strategic report for the year ended 31 December 2024.
The principal activity of the group continues to be that of physical trading in metallurgical and agricultural products, including metallurgical and related freight products on exchange traded markets.
The group’s commodity markets showed a marked reduction in demand during the year, which has impacted the group's trading volumes. Turnover in the year was $213,337,785 (2023: $175,716,645), on which the group realised a gross margin of 3.37% (2023: 3.02%).
Demand for steel products during the period persisted at similar levels to the prior year. The key drivers for this were prolonged high inflation and interest rates, which continued to push up prices. These factors caused delays, postponements and in some cases cancellations of projects for which steel products would be used.
The year was also characterised by significant political change, with over 60 countries holding elections. Steel production was highlighted as a political tool for protectionist policies, with countries threatening to use tariffs and quotas to protect their own industries. Given the risk of additional cost, buyers chose to defer purchase decisions until the policies of the new governments were clarified.
The low demand environment has increased competition and generally put pressure on trading margins. In spite of this, it remained the view of the directors that the group should focus on maintaining margins in order to provide sufficient security in its activities.
We continually monitor and review overheads. The group, its suppliers and service providers experienced high inflationary pressures in the year. In spite of this, the group has been able to manage overheads at similar levels to previous years.
The directors carried out a comprehensive review of investments held by the group and consider any impairments against its investments to be prudent.
The principal risks and uncertainties facing the group during the year were commodity and freight prices, credit, cash flow, liquidity, political and country risks.
Credit risk remains a key concern to the group. We carry out regular compliance checks on customers, including reviews of potential sanctions.
Currency, interest and commodity derivatives are used to manage price risk, to the extent that relevant products are available on exchanges that mitigate this risk. These positions are managed by the group's risk management committee. Not all products in which the group trades are traded on commodity exchanges.
The group has a conservative liquidity risk management policy to maintain adequate cash, in order to meet payments when due and to finance ongoing and potential commitments through its finance facilities. The group is also bound by the covenants of its finance facilities to maintain a minimum net asset value.
The group made a pre-tax loss of $700,899 (2023: loss of $7,880) for the year on a turnover of $213,337,785 (2023: $175,716,645).
At 31 December 2024, the group had consolidated net assets of $22,761,519 (2023: $22,563,693). Dividends of $1,304,171 (2023: $nil) were paid during the year.
The group operates in markets where demand and prices are problematic to forecast, resulting in significant variation in annual results and also relative to budgets. The directors monitor the performance of the group by reference to key performance indicators including turnover, net asset value, gross profit margin.
The group is focused on achieving a healthy net profit. The result achieved in the year was below expectations used to define this indicator. However, the directors consider that the group has maximised its potential, given the challenges in its markets arising from low demand.
The expectation of the directors is that the group should maintain a debt/equity ratio of 2 or more; 2024: 3.28 (2023: 0.65).
The group is committed to honouring its obligations under the covenants of trade finance facilities by maintaining a minimum net assets value of at least $15,000,000, in its subsidiary, Ronly Limited; 2024: $23,697,836 (2023: $21,025,129).
Future developments
The group will continue to operate in its existing markets, working to develop trade with new and existing partners. The group is investing in the development of new trade flows and will continue to explore new opportunities in order to further strengthen the core business.
The group will expand the trading activities of its recently incorporated subsidiary in Switzerland, as well as utilising its presence in other markets where benefits exists for new trading activities.
Section 172(1) statement
Section 414CZA(1) of the Companies Act 2006 requires the directors to explain how they considered the matters set out in section 172(1) (a) to (f) of the Companies Act 2006 (‘S172 (1)’) when performing their duty to promote the success of the group. When making decisions, each director ensures that they act in the way that would most likely promote the group's success for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to the following matters:
(a) The likely consequences of any decision in the long term
The directors understand the business and the evolving environment in which the group operates. There were no changes to the strategic direction of the group in the year. The directors monitor changes in regulatory requirements to ensure the group remains compliant.
(b) The interests of the group's employees
The directors recognise that the success of the business depends on attracting, retaining and motivating high quality employees. The directors take into account the implications of decisions which may affect their perception as a responsible employer, on determining remuneration and benefits, and on providing a healthy and safe workplace environment, where relevant.
(c) The need to foster the group's business relationships with suppliers, customers and others
The directors seek to promote strong mutually beneficial relationships with suppliers, customers and authorities. Such general principles are critical in the delivery of the group's strategy. The group employs Quality Management systems to monitor and maintain strong relationships with these parties.
(d) The impact of the group's operations on the community and the environment
The group is committed to understanding the interests of these stakeholder groups as is relevant to the group. The directors receive information on these topics on a periodic basis to provide relevant information for specific board decisions. The group seeks to work with suppliers of services who are certified to industry recognised standards.
(e) The desirability of the group maintaining a reputation for high standards of business conduct
The directors recognise the importance of acting in ways which promote high standards of business conduct. The board periodically reviews and approves clear operating frameworks, such as implementing a Quality Management System to ensure that its high standards are maintained both within the businesses and the business relationships the group has with stakeholders.
(f) The need to act fairly as between members of the group
The directors aim to act fairly as between the group's members when delivering the group's strategy
On behalf of the board
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £1,304,171. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
In line with current Streamlined Energy and Carbon Reporting requirements (SECR), the total emissions for the operations of the group, which are in the UK, in the year ended 31 December 2024 were 47,504 kWh (2023: 47,331 kWh) based on invoices and contracted mileage over a fixed term, and 9,836 kgCO2e (2023: 9,801 kgCO2e) based on the 2024 conversion factors by the Government on greenhouse gas reporting. This is a ratio of 2,065 kWh (2023: 1,820 kWh) and 428 kgCO2e (2023: 376 kgCO2e) per head based on a UK average headcount of 23 for 2024 (2023: 26). Although the Group’s overall energy usage is modest, the directors remain committed to reducing the Group’s environmental footprint and improve energy efficiency through new and existing schemes, training and investment.
The directors seek to promote strong mutually beneficial relationships with suppliers, customers and authorities. Such general principles are critical in the delivery of the group’s strategy. The group employs Quality Management and Product Safety systems to monitor and maintain strong relationships with these parties.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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 the information on and exposure to financial risk and future developments.
We have audited the financial statements of Ronly Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Detection of irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
We enquired of management the systems and controls the group and company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The group and company did not inform us of any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the group and company. We determined that the following were most relevant: FRS 102, Companies Act 2006 and quality management.
We considered the incentives and opportunities that exist in the group and company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the group and company, together with the discussions held with the group and company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates in particular in relation to stock impairment and provisions, valuation and impairment of debtors and valuation of fixed asset investments.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
Testing revenue and expenses, in particular cut-off, for evidence of management bias.
Obtaining third-party confirmation of material bank, overdraft and stock balances.
Documenting and verifying all significant related party balances and transactions.
Reviewing documentation such as the company board minutes for discussions of irregularities including fraud.
Testing all material consolidation adjustments.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was $478,751 (2023: $122,581).
Ronly Group Limited (“the company”) is a private company limited by shares, domiciled and incorporated in England and Wales. The registered office is 3rd Floor, 201 Haverstock Hill, London, NW3 4QG.
The group consists of Ronly Group Limited and all of its subsidiaries.
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 US Dollars, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest $.
The financial statements have been prepared on the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’: Interest income/expense and net gains/losses for each category of financial instrument.
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
At the time of approving the financial statements, the directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. The directors have considered the Group and Company's current and future operations and its ability to operate in challenging trading conditions following current global political events. The directors have additionally considered the recent and current cash position of the Group and Company and lending facilities available which will facilitate continued trade and settlement of overheads. The directors are confident that the Group and Company can continue as a going concern for a period of least twelve months from the date of approval of these financial statements. Thus the directors have continued to adopt the going concern basis in these financial statements.
Where turnover represents sales in physical commodities, it is recognised at the point that the risks and rewards of ownership are transferred substantially out of the group. The group recognises all proprietary trading made through brokers as held for trading financial assets and therefore the resulting turnover represents realised gains or losses on traded positions and the market value of open positions at the period end. Turnover represents the amounts receivable net of VAT and trade discounts.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably.
Revenue from commissions receivable is recognised at the fair value of the consideration received or receivable for services
provided during the normal course of business, and is shown net of Value Added Tax.
Interest income is recognised when it is probable that the economic benefits will flow to the group and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
Dividend income from investments is recognised when the shareholder's right to receive payment has been established.
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 recognised in the profit and loss account.
Equity instruments that are not publicly traded and whose fair value cannot otherwise be measured reliably are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
At each reporting end date, the group 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).
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 is estimated to be less than its carrying amount, the carrying amount of the asset 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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
Other financial assets, including investments in equity instruments which are not subsidiaries or associates are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including trade and other payables and bank loans 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 receipts 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 payables 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 payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
When trades are agreed in a currency other than the functional currency, the group enters into forward exchange contracts to hedge against the effect of fluctuations in the relative values of the currencies involved. The hedge is established in relation to highly probable forecast transactions and establishes both the value of the transaction when it is recognised in the financial statements and the value of the amounts received in settlement of the transaction. The group designates these derivative hedging instruments as cash flow hedges.
At the inception of the hedge relationship, the group documents the relationship between the hedging instrument and the hedged item along with the risk management objectives and strategy for undertaking the hedge transactions. At the inception of the hedge and on an ongoing basis, the group documents whether the hedging instrument is highly effective in offsetting changes in cash flows of the hedged item.
The gain or loss relating to any ineffective portion is recognised immediately in profit or loss.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges and that relate to physical transactions which have yet to be recognised in the financial statements are included in other comprehensive income and accumulated in equity in a hedging reserve.
When the hedged item is recognised in the financial statements, the related amount is transferred from the hedging reserve so that, in effect, the transaction is reflected at the hedged rate. Subsequent changes in the value of the hedging instruments are matched, in the profit and loss account, with exchange differences in the related balances.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
The costs of short-term employee benefits are recognised as a liability and an expense.
Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
The group operates a defined contribution pension scheme. Contributions are charged to the profit and loss account as they become payable.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
The group's financial statements are presented in U.S. dollars which is deemed to be the functional currency in the markets in which it operates.
Transactions during the year in currencies other than U.S. dollars are recorded at rates of exchange ruling at the dates of those transactions. Monetary assets and liabilities in currencies other than U.S. dollars are recorded at the rates ruling at the Balance Sheet date.
In order to hedge its exposure to certain foreign exchange risks, the group enters into forward contracts. Certain movements on foreign exchange transactions are therefore recognised in the Statement of Comprehensive Income.
Exchange differences arising on the translation of the opening net assets of subsidiaries are also reported in the Statement of Comprehensive Income.
All other exchange differences recognised in the Profit and Loss Account.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
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.
Stocks are valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for
slow moving stocks. Calculation of these provisions require judgements to be made which includes input from third party
quality control reports and changes in the competitive and economic environment. No stock provision has been recognised in the financial statements as at 31 December 2024 (2023: nil).
Debtors are initially held at the transaction price and are subsequently held at amortised cost, including, where necessary, provisions for any debts that are not deemed recoverable. Calculations of these provisions require judgement to be made, which include the likelihood of receiving the monies owed, or the goods prepaid, the situation of the customer or the supplier prepaid and any other external factors which may affect the recoverability.
The value of the debtors provision increased by $2,107,903 (2023: decreased by $36,300), of which $698,082 has been included in “Cost of sales” and $1,409,821 has been included in the “Administrative expenses”. The provision included within the Administrative expenses related to a payment made on account made to a supplier. In 2025 the directors became aware that the contract could not be fulfilled, as the stock could not be delivered; however it is not clear if the circumstances were in existence at the balance sheet date. The directors have therefore applied judgement in determining that the circumstances that came to light in 2025 are an adjusting post balance sheet event and that the the prepayment should be provided against in full as at the balance sheet date. If the judgement is incorrect, and the circumstances were deemed to be non-adjusting, the provision would have fallen in the next financial year ended 31 December 2025. The impact on the financial statements presented would be an uplift in the net asset position by $1,409,821 and the loss for the financial year of $692,086 would have presented as a profit of $717,735.
Investments are held at the transaction price less impairment, except for investments in associates which are initially recorded at transaction price and then adjusted each period for the investor's share of profit or loss, comprehensive income and equity of the associate. The assessment of impairment requires judgements to be made, which include the assessment of the future performance of investments outside the control of the group.
The impairment loss recognised in the year in respect of the investments held in the Group is $nil (2023: $146,193), the cost of which has been included in "Amounts written off investments" in the profit and loss.
The impairment loss recognised in the year in respect of the investments held in the Company is $437,955 (2023: $nil), the cost of which has been included in the Company's profit and loss.
An analysis of the group's turnover is as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
No deferred tax asset was recognised in relation to tax losses created in the period as it is uncertain whether there will be sufficient future taxable profits to deduct against this balance. The estimated trade losses available for carry forward are $nil (2023: $nil). The estimated non-trade losses available for carry forward are $2,580,011 (2023: $3,582,980).
Factors that may affect future tax charges
Changes to the UK corporation tax rates were substantially enacted as part of the 2021 budget on 3 March 2021. This included an increase to the main rate from 19% to 25% from April 2023. The company will be taxed at a rate of 25% unless its profits are sufficiently low enough to qualify for a lower rate of tax, the lowest being 19%.
Where applicable, deferred taxes at the balance sheet date have been measured using a tax rate of 25% to reflect the rate that the timing differences are likely to unwind and are reflected in the financial statements.
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Registered office addresses:
Details of associates at 31 December 2024 are as follows:
The financial instruments measured at fair value are based on quoted market prices in an active market.
As at 31 December 2024, $45,785,528 (2023: $6,281,442) of goods for resale are pledged as security for bank overdrafts. The pledges remain in place until the stock items secured have been sold.
Trade debtors disclosed above are measured at amortised cost.
Included in amounts owed by group undertakings for the company is a loan totalling $71,630 (2023: $580,663) from a wholly-owned subsidiary.
Derivative financial instruments
The derivative financial instruments of debit $2,111,197 (2023: credit $712,880) comprises cash flow hedges against foreign currency balances and the ultimate settlement of future transactions, which are subject to foreign currency risk.
The forward currency contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. They key assumptions used in valuing the derivatives are the forward exchange rates for USD:GBP, USD:EUR, USD:CHF and USD:TKL.
The cash flows are expected to occur in the period to 31 December 2025 with the profit or loss being recognised in the same period. Where a forecast transaction is delayed, arrangements are made with the brokers to extend terms of the hedging instrument.
During the year, the amount of the change in fair value of the hedging instrument that was recognised in other comprehensive income during the period was a credit of $2,194,083 (2023: debit of $473,700).
During the year, the amount of hedge ineffectiveness recognised in profit or loss was a credit of $629,994 (2023: credit of $963,041).
Trade banking facilities are secured by individual transactions on relevant stock items, in addition to fixed and floating charges over the assets of the Group.
Finance lease payments represent rentals payable by the company for certain items of plant and machinery, of which there was an average of 2 years left to run. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Operating lease payments represent rentals payable by the group for its property.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The group has entered into a Guarantee and Indemnity agreement in respect of a trade banking facility provided to an associated company for the total aggregate amount of $5,000,000. The facility is secured by individual transactions on relevant stock items or receivables in the associate, in addition to fixed and floating charges over the assets of that company. As at the year-end, the directors consider the maximum risk to the company in relation to goods financed under this facility to be $578,204 (2023: $450,707).
S479 Parent Company Guarantee
For the financial year ended 31 December 2024, the below subsidiaries are exempt from the requirements stipulating that they be audited since they fulfil all the conditions for exemption under section 479A of the Companies Act 2006.
51 Mill Hill Road Limited
The outstanding liabilities at the balance sheet date of the above subsidiary undertakings have been guaranteed by Ronly Group Limited pursuant to s479A to s479C of the Companies Act 2006.
Transactions with companies under common control
As at the year end, debtors included $5,398,073 (2023: $2,299,145) and creditors included $13,693 (2023: $13,664). During the year, sales of $7,291,534 (2023: $2,191,301), service fees receivable of $212,365 (2023: $447,703), recharge income receivable of $nil (2023: $40,204), purchases of $9,414,506 (2023: $12,509,597) and recharged expenses of $114,829 (2023: $73,201) were recognised.
Transactions with companies under control of close family members
As at the year end debtors included $203 (2023: $50) and creditors included $471 (2023: $610). During the year recharge income receivable of $303 (2023: $1,013) was recognised.
Transactions with participating interests
As at the year end, debtors included loans of $1,823,738 (2023: $2,887,996) against which a provision of $1,620,852 (2023: $1,574,813) has been made. During the year, sales of $nil (2023: $4,603,001), recharge income receivable of $288,108 (2023: $65), recharge expenditure of $nil (2023: $572,208) and interest income of $86,313 (2023: $52,697) were recognised.
Transactions with directors, companies and charities in which directors hold an interest
At the year end debtors included $1,598,765 (2023: $1,202,828) due from directors. During the year recharge expense payable of $1,747 (2023: $nil) and interest receivable of $17,857 (2023: $nil) were recognised.
Of this outstanding balance, $1,598,765 (2023: $1,115,450) relates to a loan advanced to a director. The loan attracts interest at 2.25% and is repayable in full in 2026. The remaining balance due from directors is repayable on demand and attracts no interest.
During the year, donations of $80,000 (2023: $25,261) were made to charities for which directors are also Trustees.
On 28 February 2025, Ronly Group Limited sold its investment in associate, Ronly Gida Sanay ve Ticaret AS, to Ronly Limited, for $450,000.
On 27 May 2025, the Group sold its investment in associate, Ronly Gida Sanay ve Ticaret AS, to Oparza Holdings Limited. The impact on the consolidated results of the Group was $106,172.
On 8 August 2025, Ronly Gida Sanay ve Ticaret AS transferred 51% of the shares of its wholly-owned subsidiary, Ronly Gida UK Limited to Ronly Limited.