CORROTHERM_INTERNATIONAL_ - Accounts

The directors present their annual report and financial statements for the year ended 30 April 2020.

The principal activity of the company continued to be that of sale of high alloy metal products.

Coronavirus (COVID-19)

The COVID-19 pandemic will have a negative impact on the business, the industry and the economy as a whole. However, the directors have taken active steps to mitigate these exposures through various measures whilst complying with the guidelines imposed by the government.

The company is exploring new opportunities to increase sales and at the same time, the company is actively engaging with their bankers to organise additional facilities and to renew existing facilities, to see the company through these challenging times.

With an established brand and image in the industry and as a leading player in the market, the directors remain confident regarding the longer-term prospects of the company.

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

Morgan Berkeley Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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.

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

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Corrotherm International Limited is a private company limited by shares incorporated in England and Wales. The registered office is Westgate Chambers, 8a Elm Park Road, Pinner, Middlesex, HA5 3LA.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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

Turnover is recognised at the fair value of the consideration received or receivable for goods and services 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.

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.

Revenue from a contract to provide 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. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. .

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

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

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases, using the straight line method:

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.

Interests in subsidiaries, are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

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.

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.

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

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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, 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.

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

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

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

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.

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 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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

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.

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

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.

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.

The average monthly number of persons (including directors) employed by the company during the year was 16 (2019 - 15).

Details of the company's subsidiaries at 30 April 2020 are as follows:

Clydesdale Bank Plc has a fixed and floating charge over the trade debtors of the company, present and future.

Other investments represents ring fenced bank accounts relating to performance bond guarantees given to customers for specified sales when requested by the customer.

The bank overdraft is secured by a fixed and floating charge over all current and future assets of the company.

The bank loans are secured by way of first legal charge over the property.

Net obligations under finance leases and purchase obligations are secured against the assets to which they are relate.

The invoice discounting creditor balance of £470,519 (2019: £600,867) which is included under other creditors, Clydesdale Bank Plc have a fixed and floating charge over the undertaking, property, book debts and all assets of the company, present and future.

The bank overdraft is secured by a fixed and floating charge over all current and future assets of the company.

The bank loans are secured by way of first legal charge over the property.

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. The pension charge amounted to £7,597 (2019: £4,815). There were no outstanding or prepaid contributions at either the beginning or end of the financial year.

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

At 30 April 2020, the company holds a total of 6 performance bonds (2019: 2). These guarantees can be claimed by the customer for any issues within the products supplied until their expiry date.

At 30 April 2020 the company held 6 performance bonds for GBP 150,915 in total.

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

During the year, the company entered into various forward exchange contracts.

At the year end, the company was committed to purchasing Euros of 280,000 (2019: nil) at a deal rate of €0.833 to $1.

At the year end, the company was committed to selling US Dollars of 84,000 (2019: nil) at an average deal rate of $1.3271 to £1)

At the year end, the company was committed to purchasing US Dollars of 335,260 (2019: nil). at an average deal rate of $1.2994 to £1.

At the year end, the company was committed to purchasing Euros of nil (2019: 217,315 at an average deal rate of €1.159381 to £1).

At the year end, the company was committed to selling Euros of 91,118 (2019: 385,000) at an average deal rate of €1.1886 to £1.

At the year end, the company was committed to selling South African Rands of 8,800,017 (2019: 2,485,500) at an average deal rate of ZAR 21.6948 to £1.

During the year the company entered into the following transactions with related parties:

Corrotherm International FZC is a company under common control. During the year, the company made sales of £865,168 (2019: £739,597) to Corrotherm International FZC and made purchases of £2,750 (2019: £nil ) from Corrotherm International FZC.

During the year, the company made payments, advances and payments on behalf of Corrotherm International FZC amounting to £nil (2019: £1,430.395 ).

At the year end, Corrotherm International FZC owed the company £34,186 (2019: £36,234) and was owed £287,301 (2019: £276,693) by the company. These amounts were included in trade debtors and trade creditors respectively.

At the year end, Corrotherm International FZC owed the company £317,010 (2019: £512,619). These amounts were included in other debtors.

Dividends totalling £270,000 (2019 - £199,222) were paid in the year in respect of shares held by the company's directors.

At the year end, an amount of £255 (2019: £2,498 owed to) was owed by J Ward, an amount of £nil (2019: £3,051) was due to I Newman, and an amount of £3,049 (2019: £ 3,878) was owed by P Strand, all are directors of the company. These amounts are included within other creditors and other debtors.

J Ward and P Strand repaid the amounts owed, £255 and £3,878 respectively, within nine months of the end of the accounting period.

All five directors of the company have provided personal guarantees of £65,000 (2019: £65,000) each against the bank loans.

The ultimate controlling parties are the directors by virtue of their holding of their issued voting share capital in the company. There is no single individual controlling party.