Liquitherm Technologies Group Limited - Limited company accounts 23.2

LIQUITHERM TECHNOLOGIES GROUP LIMITED - Company Information

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1

REGISTERED NUMBER: 03651123 (United Kingdom)

Group Strategic Report, Directors' Report and

Consolidated Financial Statements for the Year Ended 31 December 2022

for

LIQUITHERM TECHNOLOGIES GROUP LIMITED

Page

Company Information

Group Strategic Report

Directors' Report

Report of the Independent Auditors

Consolidated Income Statement

Consolidated Other Comprehensive Income

Consolidated Balance Sheet

Company Balance Sheet

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Consolidated Cash Flow Statement

Notes to the Consolidated Financial Statements

DIRECTORS:

Mr B R Hickson

Mr L S Hickson

Mr S T Hickson

Mr S J Hickson

Mrs A J Evans

Mr M P Rush

Mr M E Stote

SECRETARY:

Mr M P Rush

REGISTERED OFFICE:

Unit 5 Europa Way

Swasea West Business Park

Fforestfach

Swansea

SA5 4AJ

REGISTERED NUMBER:

03651123 (United Kingdom)

AUDITORS:

Advantage Accountancy & Advisory Ltd

Chartered Certified Accountants

and Statutory Auditors

Avalon House

5-7 Cathedral Road

Cardiff

CF11 9HA

The directors present their strategic report of the company and the group for the year ended 31 December 2022.

FAIR REVIEW OF THE BUSINESS

The directors consider that there are several key performance indicators throughout the business, and report on all of these regularly. The financial performance of the company is reported by gross profit figures, and the conversion of turnover to gross profit is monitored closely, alongside net profit. The turnover, gross profit and net profit figures for 2022 are presented in the income statement on page 8. Future confirmed goods and service supply orders are a key area used to produce monthly, quarterly and annual forecasts.

During the 2022 financial year the company took the opportunity to develop and enhance the services offered by its Fluid Management Services (FMS) division, whilst continuing to explore additional, domestic and global markets that would benefit from the use of its specialist heat transfer fluids.

Research & Development (R&D) was a core activity of the company during the financial year. Many of these activities included a number of collaborative projects with external partners to develop bespoke technology solutions for a wide range of industries and markets. As a result of these R&D activities a new Engineering, Design and Fabrication (EDF) division was created at the latter end of 2022.

The company invested heavily in infrastructure and staff during 2022. Whilst the redevelopment of its Heol Y Gors site had not been completed, several areas were made serviceable during the year, allowing for several divisions to relocate their activities from the company's Fforestfach operations to the new site. Whilst overall headcount remained consistent during the year, a program of continuous personal development (CPD) was a key company policy. Several internal and external accredited training courses were undertaken by staff to increase their skill set and knowledge.

Prior to 2022 the company had been ISO 9001 accredited for a number of years. To demonstrate the company's commitment to both Health & Safety in the workplace and the impact of operations on the environment, during the year the Company achieved both ISO 45001 and ISO 14001 accreditation.

PRINCIPAL RISKS AND UNCERTAINTIES

The economic climate is a potential risk to the company, with the global uncertainty being a concern for all businesses at the present time. However, the Directors are confident that the company is in a sound financial position to withstand any potential risks.

FUTURE PLANS & DEVELOPMENTS

The company will continue to invest in Research & Development activities, including a number of collaborative projects with domestic and global partners. Investment will continue into the redevelopment of the company's Heol Y Gors site, which will facilitate an increase in the overall headcount of the company, allowing it to develop further niche products and services for both domestic and global markets.

The investment in both internal and external training and staff development, and emergence of a very strong middle management team, provides the company with confidence in its ability to grow in 2023 and beyond.

ON BEHALF OF THE BOARD:

Mr S J Hickson - Director

29 September 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2022.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the development, blending and distribution of heat transfer fluids and associated products and services.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2022 will be £ 92,851 .

RESEARCH AND DEVELOPMENT

Please see the Strategic Report for research and development activities undertaken.

FUTURE DEVELOPMENTS

Please see the Strategic Report for future plans and developments.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

Mr B R Hickson

Mr L S Hickson

Mr S T Hickson

Mr S J Hickson

Mr M P Rush

Mr M E Stote

Other changes in directors holding office are as follows:

Mrs A J Evans - appointed 10 November 2022

FINANCIAL INSTRUMENTS

The company does not have any non-basic financial instruments.

See note 3 in relation to disclosures on financial instruments.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Directors' 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Advantage Accountancy & Advisory Ltd, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

Mr S J Hickson - Director

29 September 2023

Opinion

We have audited the financial statements of Liquitherm Technologies Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of 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 group's and of the parent company affairs as at 31 December 2022 and of the group's 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Directors' Report, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

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

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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 a Report of the Auditors 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:

• The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.

• We obtained understanding of the legal and regulatory frameworks applicable to the company and the sector in which they operate. We determined that the following laws and regulations were most significant: The Companies Act 2006 , UK corporate taxation laws, employment legislation and health and safety legislation.

• We obtained an understanding of how the company are complying with those legal and regulatory frameworks by making inquiries to management. We corroborated our inquiries through our review of legal correspondence.

• We assessed the susceptibility of the company’s financial statements to material misstatements, including how fraud might occur. Audit procedures performed by the engagement team included:

• making enquiries of management as to where they considered there was susceptibility to fraud, their
knowledge of actual, suspected and alleged fraud;

• identifying and assessing the design effectiveness of controls management has in place to prevent and
detect fraud;

• understanding how those charged with governance considered and addressed the potential for override of
controls or other inappropriate influence over the financial reporting process;

• performing analytical procedures to identify any unusual or unexpected relationships;

• challenging assumptions and judgements made by management in its significant accounting estimates;

• identifying and testing journal entries, in particular any journal entries posted with unusual account
combinations; and

• assessing the extent of compliance with relevant laws and regulations.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Stephen John Bickerton (Senior Statutory Auditor)

for and on behalf of Advantage Accountancy & Advisory Ltd

Chartered Certified Accountants

and Statutory Auditors

Avalon House

5-7 Cathedral Road

Cardiff

CF11 9HA

29 September 2023

TURNOVER

9,301,236

9,665,017

Cost of sales

(4,993,394

)

(4,668,666

)

GROSS PROFIT

4,307,842

4,996,351

Administrative expenses

(3,578,594

)

(3,206,949

)

729,248

1,789,402

Other operating income

2,262

OPERATING PROFIT

729,248

1,791,664

Interest receivable and similar income

1,423

111

730,671

1,791,775

Interest payable and similar expenses

(30,826

)

(12,924

)

PROFIT BEFORE TAXATION

699,845

1,778,851

Tax on profit

5,108

(234,598

)

PROFIT FOR THE FINANCIAL YEAR

704,953

1,544,253

Profit attributable to:

Owners of the parent

704,953

1,544,253

PROFIT FOR THE YEAR

704,953

1,544,253

OTHER COMPREHENSIVE INCOME

Foreign currency translation

8,834

Income tax relating to other comprehensive
income

(22,176

)

OTHER COMPREHENSIVE INCOME FOR THE
YEAR, NET OF INCOME TAX

8,834

(22,176

)

TOTAL COMPREHENSIVE INCOME FOR THE
YEAR

713,787

1,522,077

Total comprehensive income attributable to:

Owners of the parent

713,787

1,522,077

FIXED ASSETS

Intangible assets

47,915

35,377

Tangible assets

3,192,961

2,684,851

Investments

3,240,876

2,720,228

CURRENT ASSETS

Stocks

971,928

864,980

Debtors

1,488,271

1,334,311

Cash at bank and in hand

1,751,309

2,429,204

4,211,508

4,628,495

CREDITORS

Amounts falling due within one year

1,162,147

1,759,812

NET CURRENT ASSETS

3,049,361

2,868,683

TOTAL ASSETS LESS CURRENT LIABILITIES

6,290,237

5,588,911

CREDITORS

Amounts falling due after more than one year

(717,654

)

(653,748

)

PROVISIONS FOR LIABILITIES

(151,678

)

(135,194

)

NET ASSETS

5,420,905

4,799,969

CAPITAL AND RESERVES

Called up share capital

250,106

Revaluation reserve

271,539

273,539

Retained earnings

4,899,260

4,276,324

SHAREHOLDERS' FUNDS

5,420,905

4,799,969

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2023 and were signed on its behalf by:

Mr S J Hickson - Director

FIXED ASSETS

Intangible assets

47,915

35,377

Tangible assets

3,138,527

2,684,851

Investments

2,650

3,189,092

2,720,304

CURRENT ASSETS

Stocks

868,920

864,980

Debtors

1,867,121

1,334,311

Cash at bank and in hand

1,741,471

2,429,204

4,477,512

4,628,495

CREDITORS

Amounts falling due within one year

1,133,023

1,759,888

NET CURRENT ASSETS

3,344,489

2,868,607

TOTAL ASSETS LESS CURRENT LIABILITIES

6,533,581

5,588,911

CREDITORS

Amounts falling due after more than one year

(702,652

)

(653,748

)

PROVISIONS FOR LIABILITIES

(151,678

)

(135,194

)

NET ASSETS

5,679,251

4,799,969

CAPITAL AND RESERVES

Called up share capital

250,106

Revaluation reserve

271,539

273,539

Retained earnings

5,157,606

4,276,324

SHAREHOLDERS' FUNDS

5,679,251

4,799,969

Company's profit for the financial year

972,133

1,544,253

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2023 and were signed on its behalf by:

Mr S J Hickson - Director

Called up

Retained

Revaluation

Total

capital

earnings

reserve

equity

Balance at 1 January 2021

250,105

2,889,489

369,608

3,509,202

Changes in equity

Issue of share capital

Total comprehensive income

1,544,253

(22,176

)

1,522,077

Dividends

(231,311

)

(231,311

)

Transfers (excess depreciation

and deferred tax)

73,893

(73,893

)

Balance at 31 December 2021

250,106

4,276,324

273,539

4,799,969

Changes in equity

Total comprehensive income

713,787

Dividends

(92,851

)

(92,851

)

Transfers (excess depreciation

and deferred tax)

2,000

(2,000

)

Balance at 31 December 2022

250,106

4,899,260

271,539

5,420,905

Called up

Retained

Revaluation

Total

capital

earnings

reserve

equity

Balance at 1 January 2021

250,105

2,889,489

369,608

3,509,202

Changes in equity

Profit for the year

1,544,253

Other comprehensive income

(22,176

)

(22,176

)

Total comprehensive income

1,544,253

(22,176

)

1,522,077

Dividends

(231,311

)

(231,311

)

Issue of share capital

Transfers (excess depreciation

and deferred tax)

73,893

(73,893

)

Balance at 31 December 2021

250,106

4,276,324

273,539

4,799,969

Changes in equity

Profit for the year

972,133

Total comprehensive income

972,133

Dividends

(92,851

)

(92,851

)

Transfers (excess depreciation

and deferred tax)

2,000

(2,000

)

Balance at 31 December 2022

250,106

5,157,606

271,539

5,679,251

Cash flows from operating activities

Cash generated from operations

257,566

1,240,924

Interest paid

(23,734

)

(9,321

)

Interest element of hire purchase payments
paid

(7,092

)

(3,603

)

Tax paid

(212,622

)

(201,186

)

Net cash from operating activities

14,118

1,026,814

Cash flows from investing activities

Purchase of intangible fixed assets

(24,798

)

(39,073

)

Purchase of tangible fixed assets

(688,012

)

(1,458,409

)

Sale of tangible fixed assets

43,613

Interest received

1,423

111

Net cash from investing activities

(667,774

)

(1,497,371

)

Cash flows from financing activities

New loans in year

147,379

456,581

Loan repayments in year

(35,555

)

(22,971

)

Finance lease repayments

(52,046

)

(34,787

)

Share issue

Equity dividends paid

(92,851

)

(231,311

)

Net cash from financing activities

(33,073

)

167,513

Decrease in cash and cash equivalents

(686,729

)

(303,044

)

Cash and cash equivalents at beginning of
year

2,429,204

2,732,248

Effect of foreign exchange rate changes

8,834

Cash and cash equivalents at end of year

1,751,309

2,429,204

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2022

2021

Profit before taxation

699,845

1,778,851

Depreciation charges

166,275

114,695

(Profit)/loss on disposal of fixed assets

(17,726

)

8,140

Finance costs

30,826

12,924

Finance income

(1,423

)

(111

)

877,797

1,914,499

Increase in stocks

(106,948

)

(282,302

)

Increase in trade and other debtors

(132,197

)

(20,267

)

Decrease in trade and other creditors

(381,086

)

(371,006

)

Cash generated from operations

257,566

1,240,924

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2022

31.12.22

1.1.22

Cash and cash equivalents

1,751,309

2,429,204

Year ended 31 December 2021

31.12.21

1.1.21

Cash and cash equivalents

2,429,204

2,732,248

3.	ANALYSIS OF CHANGES IN NET FUNDS

Changes in

Other

exchange

non-cash

At 1.1.22

Cash flow

rate

changes

At 31.12.22

Net cash

Cash at bank

and in hand

2,429,204

(686,729

)

8,834

1,751,309

2,429,204

(686,729

)

8,834

1,751,309

Debt

Finance leases

(115,398

)

52,046

(147,379

)

(210,731

)

Debts falling due

within 1 year

(39,164

)

(18,096

)

(57,260

)

Debts falling due

after 1 year

(617,494

)

53,651

(563,843

)

(772,056

)

87,601

(147,379

)

(831,834

)

Total

1,657,148

(599,128

)

8,834

(147,379

)

919,475

1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND KEY ACCOUNTING ESTIMATES

The principal accounting policies applied in the preparation of these financial statements are set out below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

2.	STATUTORY INFORMATION

Liquitherm Technologies Group Limited is a private company, limited by shares , registered in United Kingdom. The company's registered number and registered office address can be found on the General Information page.

3.	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" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The financial statements are prepared in sterling, which is the functional currency of the entity.

Going Concern

The financial statements have been prepared on a going concern basis.

Financial Reporting Standard 102 - reduced disclosure exemptions

The group has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirement of paragraph 3.17(d);

•

the requirement of paragraph 33.7.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings up to 31 December 2022. Further information regarding the subsidiary undertakings, Liquitherm, Inc. (a company incorporated in the USA in 2021) and Liquitherm Iberica, S.L.U. (a company incorporated in Spain in 2022), is provided in note 15. This is the first set of consolidated financial statements prepared by the group with the 2021 comparative results only including the results of the parent entity. The American subsidiary did not start trading until 2022 and the Spanish subsidiary did not trade in 2022.

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

The results of subsidiaries acquired or disposed of during the year are included in the profit and loss accounts from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transaction between the company and its subsidiaries which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interest in the net assets of consolidated subsidiaries are identified separately from the group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder's share of changes in equity since the date of the combination.

Where the foreign subsidiaries in the group have a different functional currency, its results and financial position are translated into sterling so that consolidated financial statements can be presented. Assets and liabilities for each subsidiary balance sheet are translated at the closing rate at the balance sheet date. Income and expenditure for each subsidiary income statement are translated at exchange rates at the dates of transactions. Exchange differences arising on a monetary item that forms part of the company's net investment in a foreign operation are recognised in other comprehensive income and accumulated in equity in the consolidated financial statements.

Turnover

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

The company recognises revenue when:

The amount of revenue can be reliably measured;

it is probable that future economic benefits will flow to the entity;

and specific criteria have been met for each of the company's activities.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Patents and licences are being amortised evenly over their estimated useful life of ten years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Land and buildings

2% straight line

Plant and machinery

25% on reducing balance

Fixtures and fittings

25% on reducing balance

Motor vehicles

25% on reducing balance

Stocks

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

Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, call deposits, and other short-term highly liquid investment that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors and recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Provisions

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividend is declared.

Financial instruments

Classification

Basic financial instrument are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provision of the instrument.

Debt instruments are subsequently measured at amortised cost.

Impairment

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated 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.

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

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the leases.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lease.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the group.

An analysis of turnover by geographical market is given below:

2022

2021

United Kingdom

8,402,218

8,974,888

Overseas

899,018

690,129

9,301,236

9,665,017

5.	EMPLOYEES AND DIRECTORS

2022

2021

Wages and salaries

1,947,768

2,029,204

Social security costs

229,578

199,430

Other pension costs

133,294

104,327

2,310,640

2,332,961

The average number of employees during the year was as follows:

2022

2021

Production & engineering

Admin & support

Sales and marketing

2022

2021

Directors' remuneration

458,790

416,606

Directors' pension contributions to money purchase schemes

56,174

34,676

Information regarding the highest paid director is as follows:

2022

2021

Emoluments etc

123,757

131,535

6.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2022

2021

Depreciation - owned assets

82,933

74,555

Depreciation - assets on hire purchase contracts

71,082

36,446

(Profit)/loss on disposal of fixed assets

(17,726

)

8,140

Patents and licences amortisation

12,260

3,696

Foreign exchange differences

2,829

6,626

Operating lease expense - property

7,800

Operating lease expense - motor and equipment

137,376

126,090

7.	AUDITORS' REMUNERATION

2022

2021

Fees payable to the company's auditors for the audit of the company's
financial statements

14,750

9,500

INTEREST RECEIVABLE AND SIMILAR INCOME

2022

2021

Bank interest receivable

1,423

111

INTEREST PAYABLE AND SIMILAR EXPENSES

2022

2021

Bank loan interest

23,734

9,321

Hire purchase

7,092

3,603

30,826

12,924

10.

TAXATION

Analysis of the tax (credit)/charge

The tax (credit)/charge on the profit for the year was as follows:

2022

2021

Current tax:

UK corporation tax

59,866

219,257

Over/under provision in prior year

(81,660

)

(6,599

)

USA tax charge

202

Total current tax

(21,592

)

212,658

Deferred tax

16,484

21,940

Tax on profit

(5,108

)

234,598

UK corporation tax has been charged at 19 % .

Reconciliation of total tax (credit)/charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2022

2021

Profit before tax

699,845

1,778,851

Profit multiplied by the standard rate of corporation tax in the UK of 19 %
(2021 - 19 %)

132,971

337,982

Effects of:

Expenses not deductible for tax purposes

7,166

6,791

Capital allowances in excess of depreciation

(2,396

)

(22,431

)

Adjustments to tax charge in respect of previous periods

(81,650

)

(6,599

)

Rate changes

3,957

6,293

R&D and other claims

(116,073

)

(87,438

)

Subsidiary results not considered for UK Corporation Tax

50,917

Total tax (credit)/charge

(5,108

)

234,598

Tax effects relating to effects of other comprehensive income

2022

Gross

Tax

Net

Foreign currency translation

8,834

2021

Gross

Tax

Net

Deferred tax on surplus/(deficit) on

(22,176

)

(22,176

)

revaluation of PPE

(22,176

)

(22,176

)

11.	INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

12.

DIVIDENDS

2022

2021

Ordinary shares of £1 each

Interim

7,998

9,725

A Ordinary shares of £15.97 each

Interim

62,986

160,097

B Ordinary share of £1

Interim

4,183

11,821

C Ordinary share of £1

Interim

2,000

10,651

D Ordinary share of £1

Interim

2,000

E Ordinary share of £1

Interim

5,684

11,017

F Ordinary share of £1

Interim

2,000

G Ordinary shares of £1 each

Interim

2,000

20,000

H Ordinary share of £1

Interim

2,000

I Ordinary share of £1

Interim

2,000

92,851

231,311

13.	INTANGIBLE FIXED ASSETS

Group

Patents

and

licences

COST

At 1 January 2022

39,073

Additions

24,798

At 31 December 2022

63,871

AMORTISATION

At 1 January 2022

3,696

Amortisation for year

12,260

At 31 December 2022

15,956

NET BOOK VALUE

At 31 December 2022

47,915

At 31 December 2021

35,377

The aggregate amount of research and development expenditure recognised as an expense during the period is £9,498 (2021: £8,556).

Company

Patents

and

licences

COST

At 1 January 2022

39,073

Additions

24,798

At 31 December 2022

63,871

AMORTISATION

At 1 January 2022

3,696

Amortisation for year

12,260

At 31 December 2022

15,956

NET BOOK VALUE

At 31 December 2022

47,915

At 31 December 2021

35,377

14.	TANGIBLE FIXED ASSETS

Group

Fixtures

Land and

Plant and

and

Motor

buildings

machinery

fittings

vehicles

Totals

COST

At 1 January 2022

2,396,158

211,384

154,051

224,933

2,986,526

Additions

349,062

155,944

37,243

145,763

688,012

Disposals

(47,000

)

(47,000

)

At 31 December 2022

2,745,220

367,328

191,294

323,696

3,627,538

DEPRECIATION

At 1 January 2022

38,315

87,363

55,660

120,337

301,675

Charge for year

20,660

59,107

27,450

46,798

154,015

Eliminated on disposal

(21,113

)

(21,113

)

At 31 December 2022

58,975

146,470

83,110

146,022

434,577

NET BOOK VALUE

At 31 December 2022

2,686,245

220,858

108,184

177,674

3,192,961

At 31 December 2021

2,357,843

124,021

98,391

104,596

2,684,851

Included within the net book value of land and buildings above is £1,837,245 (2021: £1,490,843) in respect of freehold land and buildings and £849,000 (2021: £867,000) in respect of long leasehold land and buildings.

The fair value of the company's Leasehold property was revalued on 25 March 2020 by an independent valuer. The property was valued on the basis of Market Value in accordance with the RICS Appraisal and Valuation Standards. The directors are satisfied that this valuation was appropriate at the year end. The name and qualification of the independent valuer are RJ Chartered Surveyors who are RICS regulated.

Had this class of asset been measured on a historical cost basis, the carrying amount would have been £494,313 (2021: £508,812).

Company

Fixtures

Land and

Plant and

and

Motor

buildings

machinery

fittings

vehicles

Totals

COST

At 1 January 2022

2,396,158

211,384

154,051

224,933

2,986,526

Additions

349,062

107,163

21,014

145,763

623,002

Disposals

(47,000

)

(47,000

)

At 31 December 2022

2,745,220

318,547

175,065

323,696

3,562,528

DEPRECIATION

At 1 January 2022

38,315

87,363

55,660

120,337

301,675

Charge for year

20,660

48,531

27,450

46,798

143,439

Eliminated on disposal

(21,113

)

(21,113

)

At 31 December 2022

58,975

135,894

83,110

146,022

424,001

NET BOOK VALUE

At 31 December 2022

2,686,245

182,653

91,955

177,674

3,138,527

At 31 December 2021

2,357,843

124,021

98,391

104,596

2,684,851

15.	FIXED ASSET INVESTMENTS

Company

Shares in

group

undertakings

COST

At 1 January 2022

Additions

2,574

At 31 December 2022

2,650

NET BOOK VALUE

At 31 December 2022

2,650

At 31 December 2021

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

Subsidiaries

Liquitherm, Inc.

Registered office: 30 Old Kings Highway South, 1st Floor Suite 202, Darien, CT, 06820, United States of America

Nature of business: is the same as that of the parent company.

Class of shares:

holding

Ordinary

100.00

Liquitherm Iberica, S.L.U.

Registered office: 260 Mallorca, Barcelona, Spain, 08008

Nature of business: is the same as that of the parent company.

Class of shares:

holding

Ordinary

100.00

The company was incorporated on the 5th December 2022 and did not trade during the period ending 31 December 2022.

16.

STOCKS

Group

Company

2022

2021

2022

2021

Stocks

971,928

864,980

868,920

864,980

17.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2022

2021

2022

2021

Trade debtors

1,371,898

1,275,710

1,371,898

1,275,710

Amounts owed by group undertakings

395,176

Other debtors

632

3,178

632

3,178

Tax

21,763

Prepayments and accrued income

93,978

55,423

77,652

55,423

1,488,271

1,334,311

1,867,121

1,334,311

18.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2022

2021

2022

2021

Bank loans and overdrafts (see note 20)

57,260

39,164

57,260

39,164

Hire purchase contracts (see note 21)

56,920

79,144

52,822

79,144

Trade creditors

521,572

668,108

502,579

668,108

Amounts owed to group undertakings

2,574

Tax

207

212,658

Social security and other taxes

289,592

193,759

289,592

193,759

Other creditors

66,879

61,585

65,085

61,661

Directors' current accounts

1,451

46,957

1,451

46,957

Accruals and deferred income

168,266

458,437

161,660

458,437

1,162,147

1,759,812

1,133,023

1,759,888

The company has two outstanding loans that make up the bank loans figure of £57,260 (2021: £39,164) due within one year. The interest rates on these loans range from 1.42% over base to 3.03% over base.

Bank loans and overdrafts are secured by debenture against the assets of the company. Hire purchase

agreements are secured against the assets to which they relate.

19.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group

Company

2022

2021

2022

2021

Bank loans (see note 20)

563,843

617,494

563,843

617,494

Hire purchase contracts (see note 21)

153,811

36,254

138,809

36,254

717,654

653,748

702,652

653,748

The company has two outstanding loans that make up the bank loans figure of £563,843 (2021: £617,494) due in greater than one year. The interest rates on these loans range from 1.42% over base to 3.03% over base.

Bank loans and overdrafts are secured by debenture against the assets of the company. Hire purchase

agreements are secured against the assets to which they relate.

20.

LOANS

An analysis of the maturity of loans is given below:

Group

Company

2022

2021

2022

2021

Amounts falling due within one year or on

demand:

Bank loans

57,260

39,164

57,260

39,164

Amounts falling due between two and five

years:

Bank loans - 2-5 years

255,070

259,811

255,070

259,811

Amounts falling due in more than five years:

Repayable by instalments

Bank loans over 5 years

308,773

357,683

308,773

357,683

21.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group

Hire purchase contracts

2022

2021

Net obligations repayable:

Within one year

56,920

79,144

Between one and five years

153,811

36,254

210,731

115,398

Company

Hire purchase contracts

2022

2021

Net obligations repayable:

Within one year

52,822

79,144

Between one and five years

138,809

36,254

191,631

115,398

Group

Non-cancellable operating

leases

2022

2021

Within one year

127,853

130,807

Between one and five years

69,573

146,807

197,426

277,614

The amount on non-cancellable operating lease payments recognised as an expense during the year was £145,176 (2021: £133,890).

Company

Non-cancellable operating

leases

2022

2021

Within one year

127,853

130,807

Between one and five years

69,573

146,807

197,426

277,614

The amount on non-cancellable operating lease payments recognised as an expense during the year was £145,176 (2021:£133,890).

22.	PROVISIONS FOR LIABILITIES

Group

Company

2022

2021

2022

2021

Deferred tax

151,678

135,194

151,678

135,194

Group

Deferred

tax

Balance at 1 January 2022

135,194

Provided during year

16,484

Balance at 31 December 2022

151,678

Company

Deferred

tax

Balance at 1 January 2022

135,194

Provided during year

16,484

Balance at 31 December 2022

151,678

23.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2022

2021

value:

46,849

Ordinary

£1

46,849

12,526

A Ordinary

£15.9

200,000

B Ordinary

£1

C Ordinary

£1

D Ordinary

£1

E Ordinary

£1

F Ordinary

£1

3,250

G Ordinary

£1

3,250

H Ordinary

£1

I Ordinary

£1

250,106

24.

RESERVES

Group

Retained

Revaluation

earnings

reserve

Totals

At 1 January 2022

4,276,324

273,539

4,549,863

Profit for the year

704,953

Dividends

(92,851

)

(92,851

)

Other movement

8,834

Transfers (excess depreciation

and deferred tax)

2,000

(2,000

)

At 31 December 2022

4,899,260

271,539

5,170,799

Company

Retained

Revaluation

earnings

reserve

Totals

At 1 January 2022

4,276,324

273,539

4,549,863

Profit for the year

972,133

Dividends

(92,851

)

(92,851

)

Transfers (excess depreciation

and deferred tax)

2,000

(2,000

)

At 31 December 2022

5,157,606

271,539

5,429,145

25.	PENSION COMMITMENTS

The group operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the group to the scheme and amounted to £133,294 (2021: £104,327)

Contributions totalling £17,246 (2021: £14,730) were payable to the scheme at the end of the period and are included in creditors.

26.	DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to directors subsisted during the years ended 31 December 2022 and 31 December 2021:

2022

2021

Mr B R Hickson

Balance outstanding at start of year

(9,628

)

846

Amounts advanced

20,508

9,721

Amounts repaid

(10,880

)

(20,195

)

Amounts written off

Amounts waived

Balance outstanding at end of year

(9,628

)

Mr L S Hickson

Balance outstanding at start of year

(9,203

)

224

Amounts advanced

19,135

2,789

Amounts repaid

(9,932

)

(12,216

)

Amounts written off

Amounts waived

Balance outstanding at end of year

(9,203

)

Mr M E Stote

Balance outstanding at start of year

(19,628

)

366

Amounts advanced

40,340

836

Amounts repaid

(21,569

)

(20,830

)

Amounts written off

Amounts waived

Balance outstanding at end of year

(857

)

(19,628

)

Mr S T Hickson

Balance outstanding at start of year

(9,631

)

(64

)

Amounts advanced

15,121

1,650

Amounts repaid

(6,084

)

(11,217

)

Amounts written off

Amounts waived

Balance outstanding at end of year

(594

)

(9,631

)

Mr S J Hickson

Balance outstanding at start of year

1,134

733

Amounts advanced

18,577

13,528

Amounts repaid

(19,711

)

(13,127

)

Amounts written off

Amounts waived

Balance outstanding at end of year

1,134

27.	RELATED PARTY DISCLOSURES

In the opinion of the directors, the ultimate controlling party is Mr S J Hickson, a director and shareholder of the company with the majority of the voting rights.

The group have taken advantage of an exemption, under the terms of Section 33 of the Financial Reporting Standard 102 "The Reporting Standard applicable in the UK and Republic of Ireland", not to disclose related party transactions with wholly owned subsidiaries within the group.

Included within other creditors at the year end, are balances totalling £1,451 (2021: £46,957) due to the directors. The balances and movement within the year are summarised in note 26. The balances are interest free, unsecured and have no set repayment terms.