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 2021

Page

Company Information

1

Balance Sheet

2

to

3

Notes to the Financial Statements

4

to

12

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

3,565,564

614,157

Investments

5

4,067

4,067

3,569,631

618,224

CURRENT ASSETS

Stocks

6

994,201

974,262

Debtors

7

966,574

3,571,988

Cash in hand

1,464,060

2,736,088

3,424,835

7,282,338

CREDITORS

Amounts falling due within one year

8

534,887

1,536,086

NET CURRENT ASSETS

2,889,948

5,746,252

TOTAL ASSETS LESS CURRENT LIABILITIES

6,459,579

6,364,476

PENSION LIABILITY

13

(1,487,970

)

(2,259,900

)

NET ASSETS

4,971,609

4,104,576

CAPITAL AND RESERVES

Called up share capital

12

400,000

400,000

Share premium

41,794

41,794

Retained earnings

4,529,815

3,662,782

SHAREHOLDERS' FUNDS

4,971,609

4,104,576

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 30th June 2021.

The members have not required the company to obtain an audit of its financial statements for the year ended 30th June 2021 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 16th December 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. The current pension deficit is spread in the profit and loss account over the remaining service lives of current employees.

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 34 (2020 - 41 ) .

4.	TANGIBLE FIXED ASSETS

Computer

equipment,

fixtures

Freehold

Plant and

and

Motor

property

machinery

fittings

vehicles

Totals

£

£

£

£

£

COST

At 1st July 2020

270,000

282,311

132,816

61,320

746,447

Additions

3,037,037

26,931

8,777

-

3,072,745

At 30th June 2021

3,307,037

309,242

141,593

61,320

3,819,192

DEPRECIATION

At 1st July 2020

-

38,033

33,870

60,387

132,290

Charge for year

50,532

37,135

32,746

925

121,338

At 30th June 2021

50,532

75,168

66,616

61,312

253,628

NET BOOK VALUE

At 30th June 2021

3,256,505

234,074

74,977

8

3,565,564

At 30th June 2020

270,000

244,278

98,946

933

614,157

Included in cost of land and buildings is freehold land of £ 270,000 (2020 - £ 270,000 ) which is not depreciated.

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

The freehold property is insured for rebuilding costs to the value of £3,600,000.

5.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 1st July 2020

and 30th June 2021

4,067

NET BOOK VALUE

At 30th June 2021

4,067

At 30th June 2020

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

2021

2020

£

£

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

2021

2020

£

£

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

2021

2020

£

£

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

2021

2020

£

£

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

2021

2020

£

£

Inventory parts

994,201

974,262

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

£

£

Trade debtors

685,119

770,868

Other debtors

6,236

17,430

Freehold property re-instatement costs

-

2,533,128

Tax

119,792

79,494

VAT

37

106,073

Accrued income

25,910

5,350

Prepayments

129,480

59,645

966,574

3,571,988

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

£

£

Bank loans and overdrafts

-

5,333

Trade creditors

336,648

824,068

Amounts owed to group undertakings

4,000

4,000

Social security and other taxes

52,880

52,891

Other creditors

125,199

620,995

Accrued expenses

16,160

28,799

534,887

1,536,086

9.	LEASING AGREEMENTS

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

2021

2020

£

£

Within one year

9,712

55,308

Between one and five years

18,921

5,146

28,633

60,454

10.	SECURED DEBTS

On 1st March 2021, HSBC Bank plc were granted a charge over cash deposits totalling £170,500 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.

11.	ACCRUALS AND DEFERRED INCOME

2021

2020

£

£

Deferred government grants

-

30,579

Grant released

-

(30,579

)

12.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2021

2020

value:

£

£

400,000

Ordinary

£1

400,000

400,000

13.	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 2019, 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 24 September 2020 and the scheme deficit recovery plan dated 30th September 2020, submitted and accepted by the Pension Regulator.

The amounts recognised in the balance sheet are as follows:

Defined benefit

pension plans

2021

2020

£

£

Present value of funded obligations

(7,198,000

)

(7,408,000

)

Fair value of plan assets

5,361,000

4,618,000

(1,837,000

)

(2,790,000

)

Present value of unfunded obligations

-

-

Deficit

(1,837,000

)

(2,790,000

)

Deferred tax asset

349,030

530,100

Net liability

(1,487,970

)

(2,259,900

)

The amounts recognised in profit or loss are as follows:

Defined benefit

pension plans

2021

2020

£

£

Current service cost

-

-

Net interest from net defined benefit asset/liability

39,000

49,000

Past service cost

-

-

39,000

49,000

Actual return on plan assets

749,000

(136,250

)

Actual return on plan assets is represented by the following amounts:

2021

2020

£

£

Income return

67,000

116,000

Capital return

682,000

(252,250

)

749,000

(136,250

)

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

Defined benefit

pension plans

2021

2020

£

£

Opening defined benefit obligation

7,408,000

7,536,000

Interest cost

106,000

165,000

Actuarial losses/(gains)

(111,000

)

434,000

Benefits paid

(205,000

)

(727,000

)

7,198,000

7,408,000

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

Defined benefit

pension plans

2021

2020

£

£

Opening fair value of scheme assets (adjusted)

4,618,000

5,291,000

Contributions by employer

207,000

197,250

Assets expenses

(8,000

)

(7,000

)

Expected return

67,000

116,000

Actuarial gains/(losses)

682,000

(252,250

)

Benefits paid

(205,000

)

(727,000

)

5,361,000

4,618,000

The amounts recognised in other comprehensive income are as follows:

Defined benefit

pension plans

2021

2020

£

£

Actuarial gains/(losses)

953,000

(545,000

)

953,000

(545,000

)

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

Defined benefit

pension plans

2021

2020

Diversified Growth Fund

100%

100%

100.00%

100.00%

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

2021

2020

Liability discount rate

1.85%

1.45%

Inflation assumption - RPI

3.20%

2.85%

Inflation assumption - CPI

2.40%

2.05%

Revaluation of deferred pensions

2.40%

2.05%

Increases for pensions in payment

3.20%

2.85%

Proportion of employees commuting pension for cash

100%

100%

Forecast mortality rates are:

Male aged 65 at year end

86.9

86.9

Female aged 65 at year end

89.3

89.2

Male aged 45 at year end

88.2

88.2

Female aged 45 at year end

90.7

90.6

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:

2021

2020

Inflation rate increase

£114,000

£123,000

Discount rate decrease

£116,000

£125,000

The pension scheme deficit after tax relief measured by the Scheme Actuary using current practice applying a discount rate of 1.85% based on the current return on 17 year high grade (AA rated) corporate bonds amounts to £1,487,970. The pension scheme's assets are currently invested in a Diversified Growth Fund with a benchmark return of 5.25% per annum. Using the investment rate of 5.25% 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 5.25% per annum is a valid measure in the medium term and is incorporated in the Pension Scheme Deficit Recovery Plan 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.

14.	CONTINGENT LIABILITIES

Deferred guarantees totalling £86,185 were outstanding at 30 June 2021 (2020 - £10,000).

15.	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.