CAMBION_ELECTRONICS_LIMIT - Accounts

The directors present the strategic report for the year ended 31 December 2021.

The company’s principal activities are the design and manufacture of electronic components and interconnect solutions based around two main core competencies of precision machining and winding. With the exception of metal plating, the company is autonomous in its manufacturing capability. In addition to precision machining and winding, it also has expertise in injection and insert moulding, high speed stamping and automated and semi-automated assembly, all supported by an equipped tool room.

The Company transacts with an enviable array of ‘Blue Chip’ international organisations, serviced both directly and by its ever expanding network of global distributors. All established electronic markets are covered, such as Mil/Aero, Medical, Oil & Gas and Industrial. Export sales in 2021 equated to 66% of turnover, of which 65% was from outside of the European market. There are no capacity constraints likely to restrict the medium term growth aspirations.

The company’s turnover and profitability aspirations will be achieved by concentrating on the following strategy:

• Maintain a focused customer base, developing relationships of equal importance.

• Target only new customers with significant potentials for Group core competencies.

• Customer account development, seeking “More with Existing” by way of vertical integration of core competencies.

• Technology advancement via engineering expertise/knowhow to offer a valued proposition to achieve a low cost of acquisition.

• Greater marketing activity to support new product range launches.

• Vendor of choice via differentiation of service level excellence, exceeding customer and industry expectations.

• Greater autonomy via equipment investment to support component manufacture of generic range development and customer programmes.

• Where appropriate automation to be adopted to gain/maintain a competitive edge.

• Affect lean throughout the facility via departmental lay-outs allowing for future proofing.

• Expand USA growth via greater liaison with marketing agencies and distribution promotions.

• Elimination of waste through focus on efficiency and management.

• Continuing a 4 year program ‘SMARTer Together’ to change culture, increase productivity and engage the workforce with incentives through skills-related pay.

In addition to the stated strategies above, the company continues to seek to have greater focus on innovation by expanding and developing product ranges in line with technology, market dynamics and building on the strong relationship within its supply chain. In October 2021 the company went with its new IT business system with enhancements akin to the modern era. A second phase of IT business system upgrades is underway in 2022, building on the success of phase one with further enhancements such as automated e-mail invoicing and a capacity planning program.

The directors use KPIs as part of their process of monitoring the performance of the business and attach particular importance to the following:

Principal risks and uncertainties

Achievement of the company’s strategy is subject to a number of risks and the main business risks affecting the company are summarised below:

Competition

To counteract worldwide competitive pressures, the company aims to differentiate itself through business excellence, ever advanced Management Systems and competitive total acquisition costs. Additionally, innovation and investment will also be a significant countermeasure to main industry counterparts, embracing new technologies and continuous improvements in method, use of materials and maximising service level parameters. The company will continue to build strong, robust customer relationships offering engineering expertise at the earliest stage of our customer’s product/project development. Our industry generic products will be continually reviewed for market fit.

As part of an Asian owned group, the Company is able to respond positively both in term of cost challenges and volumetric requirements by working closely with associate group companies in the Far East. Utilising the combination of strong local engineering skills and lower Far Eastern cost structures/capacity enables the company to compete in aggressive market conditions.

Employee

The company’s performance is greatly influenced by the expertise and competencies of its workforce.

Over the coming years the company will need a significantly higher skills base to realise its productivity improvements and customer service excellence goals. Consequently within the new program ‘SMARTer Together’ the company will endeavour to seek greater flexibility through staff development of the 3Es (Education, Exposure and Experience) and skill based pay. The evolution of SMARTer Together’ over the next 3 years will continue to break down historic culture, expand a team ethos, create the environment for employee engagement, give security and identify succession.

Financial risk management

The company’s operations expose it to a variety of financial risks but these are primarily limited to credit risk, liquidity risk and price risk. The company has in place a risk management programme that seeks to limit adverse effects on its financial performance. The policies set by the directors are implemented by the company’s management team.

Credit risk

The company has implemented policies in accordance with corporate governance levels of authority to ensure that appropriate credit checks are conducted on new and potential customers prior to the acceptance of orders and the recognition of sales. These checks also apply to those customers that have not had trading activity for two full calendar years. The amount of exposure to any individual customer is subject to a limit determined by the company and this is reassessed on a periodic basis.

Liquidity risk

The company’s managers monitor trade debtors, trade creditors and inventory levels in order to meet working capital requirements.

Price risk

The company operates within a highly competitive market place and puts in place agreements with key customers to reduce pricing risk. The company has entered into mutual reviews of true cost down with its customer and suppliers, particularly where technology advancement give opportunity.

Foreign exchange risk

The company is exposed to foreign exchange risk arising from sales and purchases transacted in currencies other than sterling but does not enter into any hedging instruments as it does not consider the risk to be significant. To mitigate risk further, the company has foreign currency accounts in both US Dollars and Euro so that natural hedging can take place with receipts and payments from customers and suppliers transacting in those currencies.

The War in Ukraine

The Russian invasion in February 2022, whilst not affecting the business in 2021, is having an impact in 2022 through soaring inflation, and the availability of raw materials is pushing out lead times making inventory management particularly challenging.

The company has fixed its energy deal until March 2027 prior to the recent escalation in prices so enjoys protection from the current energy market. However, energy prices are impacting the overall economy and general supply chain and logistics issues mean that the company is redoubling its efforts to maintain productivity and profitability.

Future prospects

The Directors and Management Team are confident in the company’s ability to yield its expected growth aspirations in both turnover and profitability in 2021. Cambion Electronics Limited will continue to position itself as an innovator of interconnectivity, in accordance with its values of integrity and transparency, innovation, teamwork and business excellence, strengthening business relationships with existing customers, whilst creating the environment to develop long and lasting partnerships with new ones. The Company has a number of projects with extended schedules. Capital investment plans dovetail the strategy in covering several themes, increased machining capacity, modernising material handling, automation and the expansion of its in-house testing facility. The company is expanding its worldwide distribution network, principally with ‘Design In’ partners rather than just commodity broad-liners, and with its ‘SMARTer Together’ program giving the company longevity.

COVID-19 impact

Emergence from the Covid-19 pandemic in 2021 is reflected in the improved financial performance against 2020. The company has maintained and indeed expanded its customer base in 2021, and maintaining a constant connection with customers and suppliers throughout the pandemic enabled a pleasing acceleration in performance once restrictions were lifted.

Qualifying third party indemnity insurance
Directors insurance is maintained at an appropriate level in respect of legal action against the company officials. These arrangements were in place throughout the financial year and up to the date of approval of the financial statements.

Health and safety
The directors and management are firmly committed to providing and maintaining a safe and healthy workplace environment. The company has in place appropriate policies and procedures to minimise workplace incidents and occupational injuries, and remains vigilant via its cross functional Health and Safety committee in ongoing preventative risk assessments and audits across all functions of the business to ensure compliance and opportunities for improvement. The directors and management are duly proud of the company’s historical record, with again no major accidents or incidents requiring involvement from the Health and Safety Executive in 2020. It is the company’s intention to pursue the accreditation of ISO45001 within the next two years, with 2021 preparing the way via an initial gap analysis review.

Corporate social responsibility
The company is committed to improving the socio-economic well-being of its stakeholders by ensuring corporate social responsibility practices are entrenched in its objective in growing the business. As a responsible corporate citizen, there will always be a focus on protecting the environment and reduction of its carbon footprint. The company has and will continue to drive through various initiatives in supporting its societal objectives. The company is committed to complying with recognised environmental practices, where practical exceeding applicable legal and regulatory requirements, striving for continual improvement in our environmental management system and the minimisation of waste. The Company will manage its processes, materials and employees in order to reduce environmental impact and will carry out all reasonably practical measures to seek to meet, exceed, or develop the necessary requirements to improve environmental performance in order to prevent the likelihood of a pollution incident and to ensure the efficient use of natural resources. The company to the best of its knowledge ensures that all its worldwide suppliers conform to RoHS, Reach and WEEE directives and are compliant under Conflict Minerals and Modern Slavery legislation. The company also contributes to a number of meaningful local causes.

By order of the board

The directors present their annual report and financial statements for the year ended 31 December 2021.

The principal activity of the company continued to be that of design and manufacture of electronic components and interconnect solutions.

The profit for the year after taxation amounted to £560,463 (2020 – profit of £283,640). The directors have recommended a final dividend payment against 2021 of £350,000, and this was ratified at the Annual General Meeting on the twenty-fifth day of May 2022 (2021 – £275,000).

Ordinary dividends were paid amounting to £275,000.

No preference dividends were paid.

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

The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     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.

We have audited the financial statements of Cambion Electronics Limited (the 'company') for the year ended 31 December 2021 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:

•     give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the year then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

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's 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 other 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 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 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

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

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.

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 directors' report. 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:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are 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 directors determine 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 directors are 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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

We focused on laws and regulations, relevant to the company, which could give rise to a material misstatement in the financial statements. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management, review of company minutes and legal expenses. There are inherent limitations in the audit procedures described and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of the nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

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.

Cambion Electronics Limited is a private company limited by shares incorporated in England and Wales. The registered office is Mill Lane, Castleton, Hope Valley, Derbyshire, S338WR.

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.

At the time of approving the financial statements, ttruehe directors have a reasonable expectation that the company will be able to generate positive cash flows from its business operations and have adequate resources to continue in operational existence for the foreseeable future. In addition, overall liquidity is supported by the group if required, though the company currently enjoys a cash rich position. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

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.

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:

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.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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.

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

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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, 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 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.

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.

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 company’s contractual obligations expire or are discharged or cancelled.

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 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.

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

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.

Grants received in relation to the government’s Coronavirus Job Retention Scheme have been recognised within other operating income. The grant is accounted for on the accruals basis once the related payroll return has been submitted.

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.

In the application of the company’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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The cost of defined benefit pension plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to significant uncertainty. In determining the appropriate discount rate, management considers the interest rates of corporate bonds in the respective currency with extrapolated maturities corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific country. Future salary increases and pension increases are based on expected future inflation rates for the respective country. Further details are given in note 16.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 1 (2020 - 1).

Investment income includes the following:

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:

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

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

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

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 company operates a defined benefit scheme for qualifying employees. Under the scheme the employees currently accrue 1/80th of their pensionable salary for every year they are in active service.

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 31 December 2021 by the scheme actuary. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.

Assumed life expectations on retirement at age 65:

Amounts recognised in the profit and loss account

Amounts taken to other comprehensive income

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

Movements in the present value of defined benefit obligations

The defined benefit obligations arise from plans funded as follows:

Movements in the fair value of plan assets

The actual return on plan assets was £9,000 (2020 - £9,000).

Fair value of plan assets at the reporting period end

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:

Amounts contracted for but not provided in the financial statements:

The company is a wholly owned subsidiary of WBL Technology (Private) Limited, a company incorporated in Singapore. The directors consider Yanlord Holdings Pte Limited, also incorporated in Singapore, to be the ultimate parent undertaking and ultimate controlling party at the year end. Yanlord Holdings Pte Limited is the smallest and largest group for which group financial statements are prepared for the year ended 31 December 2021. The company is included in the group financial statements of Yanlord Holdings Pte Limited which are publicly available.

The Company has taken advantage of the exemption, as permitted by paragraph 1(A) of chapter 33 of FRS 102, not to disclose related party transactions between fellow wholly owned subsidiaries within the Group. There have been no related party transactions in the year other than those with wholly owned subsidiaries within the Group.

Copies of the financial statements of Yanlord Holdings Pte Limited can be obtained by writing to Yanlord Holdings Pte Limited, 9 Temasek Blvd No 36-02, Suntec Tower 2 Singapore, 038989 Singapore.