Drallim Industries Limited - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 00606278 (England and Wales)

DRALLIM INDUSTRIES LIMITED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30TH JUNE 2020

Page

Company Information

1

Balance Sheet

2

to

4

Notes to the Financial Statements

5

to

13

DIRECTORS:

R P Bedford

D R Mooney

J M Staplehurst

SECRETARY:

J M Staplehurst

REGISTERED OFFICE:

Millwood House

Drury Lane

Ponswood Industrial Estate

St Leonards on Sea

East Sussex

TN38 9BA

REGISTERED NUMBER:

00606278 (England and Wales)

ACCOUNTANTS:

Gibbons Mannington & Phipps LLP

Chartered Accountants

20 Eversley Road

Bexhill-on-Sea

East Sussex

TN40 1HE

BANKERS:

HSBC Bank Plc

4 Robertson Street

Hastings

East Sussex

TN34 1HW

SOLICITORS:

Thomson Snell and Passmore

3 Lonsdale Gardens

Tunbridge Wells

Kent

TN1 1NX

FIXED ASSETS

Tangible assets

4

614,157

528,990

Investments

5

4,067

4,067

618,224

533,057

CURRENT ASSETS

Stocks

6

974,262

462,091

Debtors

7

3,571,988

3,955,580

Cash in hand

2,736,088

2,420,438

7,282,338

6,838,109

CREDITORS

Amounts falling due within one year

8

1,536,086

1,084,906

NET CURRENT ASSETS

5,746,252

5,753,203

TOTAL ASSETS LESS CURRENT LIABILITIES

6,364,476

6,286,260

CREDITORS

Amounts falling due after more than one year

9

-

(5,333

)

ACCRUALS AND DEFERRED INCOME

12

-

(30,579

)

PENSION LIABILITY

14

(2,259,900

)

(1,818,450

)

NET ASSETS

4,104,576

4,431,898

CAPITAL AND RESERVES

Called up share capital

13

400,000

400,000

Share premium

41,794

41,794

Retained earnings

3,662,782

3,990,104

SHAREHOLDERS' FUNDS

4,104,576

4,431,898

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 30th June 2020.

The members have not required the company to obtain an audit of its financial statements for the year ended 30th June 2020 in accordance with Section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for:

(a)	ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

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

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 4th February 2021 and were signed on its behalf by:

D R Mooney - Director

J M Staplehurst - Director

1.	STATUTORY INFORMATION

Drallim Industries Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Preparation of consolidated financial statements

The financial statements contain information about Drallim Industries Limited as an individual company and do not contain consolidated financial information as the parent of a group. The subsidiary companies are dormant or non trading and any consolidation would not be material.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover is recognised to the extent that the company has obtained the right to consideration through its performance under the contract. Where contracts are in progress at the year end, but have not been billed, revenue and profit is recognised to the extent that the company has obtained the right to consideration.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write down each asset over its estimated useful life taking into account the approximate residual value on disposal.

Freehold property

- in accordance with the property

Plant and machinery

- at varying rates on cost

Computer equipment, fixtures and fittings

- at varying rates on cost

Motor vehicles

- 25% on cost

No depreciation is provided on freehold land.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined benefit pension scheme closed to new accruals at 30 June 2016. Payments to reduce the current pension deficit is recognised as a finance cost in the profit and loss account for the period in which the payments are made.

The company operates a defined contribution scheme. The contributions are charged to the profit and loss account and the assets of the scheme are held separately from those of the company in an independently administered fund.

Government grants

Grants are credited to deferred revenue. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 41 (2019 - 43 ) .

4.	TANGIBLE FIXED ASSETS

Computer

equipment,

fixtures

Freehold

Plant and

and

Motor

property

machinery

fittings

vehicles

Totals

£

£

£

£

£

COST

At 1st July 2019

270,000

160,832

99,104

61,320

591,256

Additions

-

121,479

38,913

-

160,392

Disposals

-

-

(5,201

)

-

(5,201

)

At 30th June 2020

270,000

282,311

132,816

61,320

746,447

DEPRECIATION

At 1st July 2019

-

4,561

4,282

53,423

62,266

Charge for year

-

33,472

29,855

6,964

70,291

Eliminated on disposal

-

-

(267

)

-

(267

)

At 30th June 2020

-

38,033

33,870

60,387

132,290

NET BOOK VALUE

At 30th June 2020

270,000

244,278

98,946

933

614,157

At 30th June 2019

270,000

156,271

94,822

7,897

528,990

Included in cost of land and buildings is freehold land of £ 270,000 (2019 - £ 270,000 ) which is not depreciated.

The freehold land was professionally revalued on 30th June 2019, by a RICS registered valuer.

The freehold property was insured for rebuilding costs up to the current valuation of the former building. The valuation amounting to £2,511,227 has been professionally obtained by the loss adjusters acting for the insurers and is provided within these accounts under current debtors.

The new building on the existing site was completed and handed over by the contractors to the company on 18 September 2020. The building was fully occupied by the company by the end of October 2020.

5.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 1st July 2019

and 30th June 2020

4,067

NET BOOK VALUE

At 30th June 2020

4,067

At 30th June 2019

4,067

The company's investments at the Balance Sheet date in the share capital of companies include the following:

Drallim Controls Limited

Registered office: Inside of the United Kingdom

Nature of business: Dormant

%

Class of shares:

holding

Ordinary

100.00

2020

2019

£

£

Aggregate capital and reserves

1,000

1,000

Cargo Aids Limited

Registered office: Inside of the United Kingdom

Nature of business: Dormant

%

Class of shares:

holding

Ordinary

100.00

2020

2019

£

£

Aggregate capital and reserves

2,000

2,000

Drallim Telecommunications Limited

Registered office: Inside of the United Kingdom

Nature of business: Dormant

%

Class of shares:

holding

Ordinary

100.00

2020

2019

£

£

Aggregate capital and reserves

1,000

1,000

Drallim Industries Inc.

Registered office: Outside of the United Kingdom

Nature of business: Dormant

%

Class of shares:

holding

Ordinary

100.00

2020

2019

£

£

Aggregate capital and reserves

(12,325

)

(12,325

)

Drallim USA Inc

Registered office: Outside of the United Kingdom

Nature of business: Dormant

%

Class of shares:

holding

Ordinary

100.00

6.

STOCKS

2020

2019

£

£

Inventory parts

974,262

462,091

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Trade debtors

770,868

667,340

Other debtors

17,430

436,436

Freehold property re-instatement costs

2,533,128

2,511,227

Tax

79,494

130,029

VAT

106,073

125,078

Accrued income

5,350

17,051

Prepayments

59,645

68,419

3,571,988

3,955,580

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Bank loans and overdrafts

5,333

5,333

Trade creditors

824,068

595,920

Amounts owed to group undertakings

4,000

4,000

Social security and other taxes

52,891

51,721

Other creditors

620,995

390,344

Accrued expenses

28,799

37,588

1,536,086

1,084,906

9.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2020

2019

£

£

Bank loans

-

5,333

10.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2020

2019

£

£

Within one year

55,308

167,958

Between one and five years

5,146

13,294

60,454

181,252

11.	SECURED DEBTS

On 30 April 2018, HSBC Bank plc were granted a charge over cash deposits totalling £119,000 held by the company and deposited with the bank on a 3 month revolving fixed rate deposit. The charge covers all present and future debts, money and liabilities owed to HSBC Bank plc including interest, fees, costs and expenses.

12.	ACCRUALS AND DEFERRED INCOME

2020

2019

£

£

Deferred government grants

30,579

32,471

Grant released

(30,579

)

(1,892

)

-

30,579

13.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2020

2019

value:

£

£

400,000

Ordinary

£1

400,000

400,000

14.	EMPLOYEE BENEFIT OBLIGATIONS

The Company sponsors Drallim Industries Limited Retirement Benefit Scheme, a funded defined benefit pension scheme in the UK. The scheme is set up on a tax relieved basis as a separate trust independent of the Company and is supervised by its trustees. They are responsible for ensuring that the correct benefits are paid, that the scheme is appropriately funded and that scheme assets are appropriately invested.

The Company pays the cost as determined by the annual actuarial valuations. The Trustees are required to use prudent assumptions to value the liabilities and costs of the scheme whereas the accounting assumptions must be best estimates. Following the formal actuarial valuation dated 30 June 2016, the company agreed to pay increased monthly contributions from 1 October 2019 of £17,250 per month for 7 years and 9 months until 30 June 2027 as set out in the Schedule of Contributions dated 19 September 2017 and the scheme deficit recovery plan dated 18 September 2017, submitted and accepted by the Pension Regulator.

The amounts recognised in the balance sheet are as follows:

Defined benefit

pension plans

2020

2019

£

£

Present value of funded obligations

(7,408,000

)

(7,536,000

)

Fair value of plan assets

4,618,000

5,291,000

(2,790,000

)

(2,245,000

)

Present value of unfunded obligations

-

-

Deficit

(2,790,000

)

(2,245,000

)

Deferred tax asset

530,100

426,550

Net liability

(2,259,900

)

(1,818,450

)

The amounts recognised in profit or loss are as follows:

Defined benefit

pension plans

2020

2019

£

£

Current service cost

-

-

Net interest from net defined benefit asset/liability

49,000

40,000

Past service cost

-

-

49,000

40,000

Actual return on plan assets

(136,250

)

78,000

The interest cost less expected return from the scheme's assets and liabilities totals £49,000 (2019 - £40,000).

Changes in the present value of the defined benefit obligation are as follows:

Defined benefit

pension plans

2020

2019

£

£

Opening defined benefit obligation

7,536,000

6,745,000

Interest cost

165,000

182,000

Actuarial losses/(gains)

434,000

836,000

Benefits paid

(727,000

)

(227,000

)

7,408,000

7,536,000

Changes in the fair value of scheme assets are as follows:

Defined benefit

pension plans

2020

2019

£

£

Opening fair value of scheme assets (adjusted)

5,291,000

5,137,000

Contributions by employer

197,250

309,000

Assets expenses

(7,000

)

(6,000

)

Expected return

116,000

142,000

Actuarial gains/(losses)

(252,250

)

(64,000

)

Benefits paid

(727,000

)

(227,000

)

4,618,000

5,291,000

The amounts recognised in other comprehensive income are as follows:

Defined benefit

pension plans

2020

2019

£

£

Actuarial gains/(losses)

(545,000

)

(591,000

)

(545,000

)

(591,000

)

The major categories of scheme assets as a percentage of total scheme assets are as follows:

Defined benefit

pension plans

2020

2019

Diversified Growth Fund

100%

100%

100.00%

100.00%

Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):

2020

2019

Liability discount rate

1.45%

2.30%

Inflation assumption - RPI

2.85%

3.30%

Inflation assumption - CPI

2.05%

2.30%

Revaluation of deferred pensions

2.05%

2.30%

Increases for pensions in payment

2.85%

3.30%

Proportion of employees commuting pension for cash

100%

100%

Forecast mortality rates are:

Male aged 65 at year end

86.9

87.0

Female aged 65 at year end

89.2

88.9

Male aged 45 at year end

88.2

88.4

Female aged 45 at year end

90.6

90.5

Sensitivity rates

The increase in the scheme deficit in the current financial year for each 0.1% change in the variable rate for the following assumptions amounted to:

2020

2019

Inflation rate increase

£123,000

£120,000

Discount rate decrease

£125,000

£123,000

The pension scheme deficit after tax relief measured by the scheme actuary using current practice applying a discount rate of 1.45% based on the current return on 17 year high grade (AA rated) corporate bonds amounts to £2,259,900. The pension scheme's assets are currently invested in a Diversified Growth Fund with a benchmark return of 4.60% per annum. Using the investment rate of 4.60% per annum for the calculation of the scheme liabilities, the scheme deficit after tax relief is reduced significantly.

The directors view, after consultation with the scheme trustees, is that the targeted return of 4.60% per annum is a valid measure in the medium term and is incorporated in the pension scheme deficit recovery plan previously submitted to the pensions regulator. The measure of this deficit is kept under constant review by the directors. However, for the purposes of these accounts, full provision at the rate proposed by the scheme actuary has been included in the accounts in accordance with FRS102.

Defined contribution scheme

The company operates a defined contribution pension scheme and the contributions are charged to the profit and loss account.

15.	CONTINGENT LIABILITIES

Deferred guarantees totalling £10,000 were outstanding at 30 June 2020 (2019 - £51,222).

16.	CONTROLLING PARTIES

Throughout the year the company was under the control of the board of directors. The ultimate controlling party is the A W Millard 1983 Trust, which has the majority shareholding in the company.