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Registered number: SC124655
ROLLSTUD LIMITED
DIRECTOR'S REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
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COMPANY INFORMATION
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Denmore Industrial Estate
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Anderson Anderson & Brown Audit LLP
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CONTENTS
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Directors' responsibilities statement
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Independent auditors' report
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Consolidated statement of comprehensive income
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Consolidated balance sheet
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Consolidated statement of changes in equity
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Company statement of changes in equity
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Consolidated statement of cash flows
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Consolidated analysis of net debt
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Notes to the financial statements
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GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
The directors present their annual report and the audited financial statements for the year ended 31 May 2023.
Business review and principal activities
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The principal activities of the group are the manufacture of studbolts, fasteners and ancillary products for the oil, petrochemical and engineering industries and property development in the Middle East. The directors consider the key performance indicators for the group to be turnover and operating profit.
The directors are satisfied with the group's results for the year.
Principal risks and uncertainties
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The group operates in a competitive market which is a continuing risk. The group manages this risk by providing a high quality service and maintaining strong relationships with its customers.
The group is conscious of its environmental responsibilities and endeavours to minimise any impact on the environment through safe disposal of waste, recycling and reducing energy consumption.
Financial risk management objectives and policies
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The group’s activities expose it to a number of financial risks including credit risk, foreign exchange risk, liquidity risk and price risk.
Credit risk
The group’s principal financial assets are bank balances and cash and trade receivables. The group’s credit risk is primarily attributed to trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The credit risk on liquid funds is limited because counterparties are banks with high credit ratings assigned by international credit rating agencies. The group has no significant concentration of credit risk, with exposures spread over a number of counterparties and customers.
Foreign exchange risk
The group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The group manages its risk through monitoring of net exposures.
Liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the group uses a mixture of funding from the parent company as well as short and medium term bank finance.
Price risk
The group is exposed to commodity price risk in relation to steel prices. The group continues to monitor the position but to date has not considered forward commodity contracts to be beneficial.
Page 1
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
This report was approved by the board and signed on its behalf.
Page 2
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
The directors present their report and the financial statements for the year ended 31 May 2023.
The consolidated results for the group show turnover for the year of £29,334,479 (2022 - £16,060,587) and a profit on ordinary activities before tax for the year of £3,103,630 (2022 - £687,195).
Dividends of £770,366 (2022 - £161,153) were paid in the year.
The directors who served during the year were:
Prospects for future growth and expansion, both in the United Kingdom and overseas, continue to be satisfactory. Demand in the United Kingdom for the group's services and products remains stable.
Disclosure of information to auditors
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The directors at the time when this Director's report is approved has confirmed that:
∙so far as the directors is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the directors has taken all the steps that ought to have been taken as a directors in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
The auditors, Anderson Anderson & Brown Audit LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 3
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DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2023
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group and to 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROLLSTUD LIMITED
We have audited the financial statements of Rollstud Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 May 2023, which comprise the Group Statement of comprehensive income, the Group and Company Balance sheets, the Group Statement of cash flows, the Group and Company Statement of changes in equity and the related notes, 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's affairs as at 31 May 2023 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.
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 United Kingdom, including the Financial Reporting Council'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
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We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' report 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROLLSTUD LIMITED (CONTINUED)
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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Opinion on other matters prescribed by the Companies Act 2006
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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
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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 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 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
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As explained more fully in the Directors' responsibilities statement on page 4, 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 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROLLSTUD LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' 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 obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements.
The laws and regulations we considered in this context were the Companies Act 2006 and Taxation legislation.
We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be:
• Timing and completeness of revenue recognition,
• Compliance with relevant laws and regulations which may impact on the financial statements and
those that the company needs to comply with for the purpose of trading
• Management judgements applied in calculating provisions
• Management override of controls to manipulate the Company’s key performance indicators to meet targets.
Our audit procedures to respond to these risks included:
• Testing of journal entries and other adjustments for appropriateness
• Evaluating the business rationale of significant transactions outside the normal course of business
• Reviewing judgments made by management in their calculation of accounting estimates for
potential management bias
• Enquiries of management about litigation and claims and inspection of relevant correspondence
• Reviewing legal and professional fees to identify indications of actual or potential litigation, claims
and any non-compliance with laws and regulations
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 Auditors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROLLSTUD LIMITED (CONTINUED)
This report is made solely to the Company's members 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 Auditors' 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 for our audit work, for this report, or for the opinions we have formed.
Graeme Penman (Senior statutory auditor)
for and on behalf of
Anderson Anderson & Brown Audit LLP
Statutory Auditor
Kingshill View
Prime Four Business Park
Kingswells
Aberdeen
AB15 8PU
29 February 2024
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
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Interest payable and expenses
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Profit for the financial year
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Profit for the year attributable to:
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Owners of the parent Company
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The notes on pages 17 to 37 form part of these financial statements.
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Page 9
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ROLLSTUD LIMITED
REGISTERED NUMBER:SC124655
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CONSOLIDATED BALANCE SHEET
AS AT 31 MAY 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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Equity attributable to owners of the parent Company
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Non-controlling interests
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Page 10
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ROLLSTUD LIMITED
REGISTERED NUMBER:SC124655
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CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 37 form part of these financial statements.
Page 11
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ROLLSTUD LIMITED
REGISTERED NUMBER:SC124655
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COMPANY BALANCE SHEET
AS AT 31 MAY 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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Profit and loss account brought forward
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Other changes in the profit and loss account
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Profit and loss account carried forward
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Page 12
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ROLLSTUD LIMITED
REGISTERED NUMBER:SC124655
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COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 37 form part of these financial statements.
Page 13
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
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Capital redemption reserve
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Equity attributable to owners of parent Company
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Non-controlling interests
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Dividends: Equity capital
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Dividends: Equity capital
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The notes on pages 17 to 37 form part of these financial statements.
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
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Capital redemption reserve
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Dividends: Equity capital
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The notes on pages 17 to 37 form part of these financial statements.
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Page 14
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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Gain on disposal of tangible assets
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Decrease/(increase) in debtors
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Increase in amounts owed by groups
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Repayment of finance leases
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Net cash used in financing activities
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Net increase/(decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 17 to 37 form part of these financial statements.
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Page 15
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CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MAY 2023
The notes on pages 17 to 37 form part of these financial statements.
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Page 16
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
The company is a private company limited by shares and is incorporated in Scotland. The address of the registered office is Unit 5, Denmore Industrial Estate, Bridge of Don, Aberdeen, AB25 8LW. The principal activities of the group are the manufacture of studbolts, fasteners and ancillary products for the oil, petrochemical and engineering industries and property development in the Middle East.
2.Accounting policies
The directors, having made due and careful enquiry, are of the opinion that the group has adequate working capital to execute its operations over the next 12 months. The directors, therefore, have made an informed judgement, at the time of approving the financial statements, that there is a high expectation that the group can continue in operational existence for the foreseeable future.
This assessment is based on the understanding that the group will continue to trade profitability. Management also regularly review forecasts to consider the availability of working capital to ensure there is adequate liquidity to be able to continue to meet obligations as they arise. As part of this assessment management have considered possible downside scenarios and concluded that there are adequate reserves in place to meet its obligations as they fall due.
As a result, the director has continued to adopt the going concern basis of accounting in preparing the annual financial statements.
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of Group and its own subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
Page 17
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Group has transferred the significant risks and rewards of ownership to the buyer;
∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated statement of comprehensive income over its useful economic life.
Software
Software assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
Amortisation is charged on a straight line basis over a period of 3-5 years.
Page 18
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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S/Term Leasehold Property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is 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.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Page 19
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
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|
Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Group's Balance sheet when the Group 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
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans
Page 20
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
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|
Financial instruments (continued)
|
due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 21
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
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|
|
Foreign currency translation
|
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Page 22
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
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|
Leased assets: the Group as lessee
|
Where assets are financed by leasing agreements that give rights approximating to ownership (finance leases), the assets are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable over the term of the lease. The corresponding leasing commitments are shown as amounts payable to the lessor. Depreciation on the relevant assets is charged to the Statement of comprehensive income over the shorter of estimated useful economic life and the term of the lease.
Lease payments are analysed between capital and interest components so that the interest element of the payment is charged to the Statement of comprehensive income over the term of the lease and is calculated so that is represents a constant proportion of the balance of capital repayments outstanding. The capital part reduces the amounts payable to the lessor.
The Group contributes to a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.
All borrowing costs are recognised in consolidated profit or loss in the year in which they are incurred.
|
|
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Provisions for liabilities
|
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
Page 23
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
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|
Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
|
|
Judgments in applying accounting policies and key sources of estimation uncertainty
|
The preparation of financial statements, requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of financial position date and the amounts reported during the year for revenue and costs. However, the nature of estimation means that actual outcomes could differ from those estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The following judgements and estimates have had the most significant impact on amounts recognised in the financial statements.
Impairment of debtors
The company makes an assessment of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management consider various factors including the ageing profile of debtors, credit rating of customers and historical experience. Trade debtors have been included in note 16.
Stock provision
The company makes an assessment of any stock items that are slow moving or obsolete. When assessing any stock provision required management consider various factors including the physical state of the stock and any items that are slow moving. Stock balances can be found at note 15.
Page 24
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
|
|
No further analysis of turnover is provided as the directors believe that this may be prejudicial to the best interests of the group.
All turnover relates to the sale of the goods.
|
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|
Government grants receivable
|
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|
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The operating profit is stated after charging:
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|
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Depreciation of tangible fixed assets
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the year, the Group obtained the following services from the Company's auditors:
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|
|
|
|
|
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Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
|
|
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Page 25
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
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|
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|
Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
|
|
|
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|
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|
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|
|
|
|
|
|
The average monthly number of employees, including the directors, during the year was as follows:
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Management and administration
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Group contributions to defined contribution pension schemes
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|
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During the year retirement benefits were accruing to 1 director (2022 - NIL) in respect of defined contribution pension schemes.
|
|
|
The highest paid director received remuneration of £571,379 (2022 - £50,004).
|
|
|
The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £3,522 (2022 - £NIL).
|
|
|
The directors are the only individuals considered to be key management personnel in the year.
|
Page 26
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
|
|
Interest payable and similar expenses
|
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Finance leases and hire purchase contracts
|
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|
|
|
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|
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|
|
|
|
|
|
|
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Current tax on profits for the year
|
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Origination and reversal of timing differences
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|
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Taxation on profit on ordinary activities
|
|
|
|
|
Factors affecting tax charge for the year
|
|
|
The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 20% (2022 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
|
|
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|
|
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 20% (2022 - 19%)
|
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|
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
|
|
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Capital allowances for year in excess of depreciation
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Remeasurement of deferred tax for changes in tax rates
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|
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Movement in deferred tax not recognised
|
|
|
|
|
|
|
|
|
|
Total tax charge for the year
|
|
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Page 27
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Page 28
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
|
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S/Term Leasehold Property
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Charge for the year on owned assets
|
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Charge for the year on financed assets
|
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The net book value of fixed assets at 31 May 2023 includes £49,514 (2022 - £108,916) in respect of assets held under finance lease and hire purchase contracts.
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Page 29
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
13.Tangible fixed assets (continued)
|
|
S/Term Leasehold Property
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Charge for the year on owned assets
|
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Charge for the year on financed assets
|
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The net book value of fixed assets at 31 May 2023 includes £24,978 (2022 - £70,997) in respect of assets held under finance lease and hire purchase contracts.
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Page 30
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
|
|
Investments in subsidiary companies
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The following were subsidiary undertakings of the Company:
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Rollstud Middle East Inc.
|
PO Box 18348, Jebel Ali Free Zone, Dubai, UAE
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PO Box 18348, Jebel Ali Free Zone, Dubai, UAE
|
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|
Rollstud Middle East Inc. is considered to be a subsidiary as the company controls the investment.
In the event of a change in the ultimate ownership of the group, the 60% shareholders of Rollstud Middle
East Inc have the option to purchase the remaining 40% owned by Rollstud Limited for a consideration of
£1.
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Raw materials and consumables
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Payments on account for properties
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Finished goods and goods for resale
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The difference between purchase price or production cost of stocks and their replacement cost is not material.
|
Page 31
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
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Amounts owed by group undertakings
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Prepayments and accrued income
|
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Taxation and social security
|
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Obligations under finance lease and hire purchase contracts
|
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Accruals and other creditors
|
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Page 32
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
|
|
Creditors: Amounts falling due after more than one year
|
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Net obligations under finance leases and hire purchase contracts
|
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Financial assets measured at fair value through profit or loss
|
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Financial assets that are debt instruments measured at amortised cost
|
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Financial liabilities measured at amortised cost
|
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Financial assets measured at fair value through profit or loss comprise trade debtors, other debtors and amounts owed to group companies.
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Financial assets that are debt instruments measured at amortised cost includes cash.
|
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Financial liabilities measured at amortised cost comprise trade creditors, accruals, other creditors, and amounts owed to group companies.
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Page 33
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
|
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Charged to profit or loss
|
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Charged to profit or loss
|
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|
The provision for deferred taxation is made up as follows:
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Fixed asset timing differences
|
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Short term timing differences
|
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Page 34
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
|
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|
Allotted, called up and fully paid
|
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81,800 (2022 - 81,800) 'A' Ordinary shares shares of £1.00 each
|
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58,333 (2022 - 58,333) Ordinary shares of £1.00 each
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The main rights attached to each class of share are as follows:
'A' ordinary shares of £1 each
On a winding up these shares rank first and are entitled to repayment of the subscription price plus any arrears on dividends.
Ordinary shares of £1 each
The ordinary shares are not entitled to receive dividends unless, and until, cumulative dividends due to the 'A' ordinary shares were paid. A dividend paid to the holders of ordinary shares must be ratified by 75% of the 'A' ordinary shareholders. On a winding up these shares are entitled to be repaid their subscription price after the capital subscribed on the 'A' ordinary shares has been repaid. Any surplus on winding up will be distributed pari passu between the ordinary and 'A' ordinary shares. All shares have equal voting rights.
|
The group contributes to a money purchase pension scheme, the assets of which are held in independently administered funds for eligible employees. The pension cost charge for the year represents group contributions which amounted to £115,250 (2022: £190,780). Pension payment accrued at 31 May 2023 was £9,645 (2022: £8,958).
Page 35
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
|
|
Commitments under operating leases
|
|
|
At 31 May 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Later than 1 year and not later than 5 years
|
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Non-controlling interests
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Share of profit for the financial year
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The immediate and ultimate parent company is Rollstud Holdings Limited. Copies of its financial statements can be obtained from Companies House, 4th Floor, Edinburgh Quay 2, 139 Fountainbridge, Edinburgh, E3 9FF.
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Related party transactions
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The company has taken advantage of the exemptions conferred by Financial Reporting Standard 102
Section 33.1A "Related Party Disclosures" and not disclosed transactions with fellow members of the Rollstud Holdings Limited Group.
Outwith these exemptions, the company paid fees of £NIL (2022 - £40,000) to a company with a common director. There were no amounts outstanding in relation to these transactions at the year end.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
The group has a bank guarantee of £80,000 to cover payments in the normal course of its business with HM Revenue and Customs.
The group has also given performance bonds and guarantees of £652,171 (2022 - £731,289) in respect of the normal course of trade.
There is a cross corporate guarantee between Rollstud Holdings Limited and Rollstud Limited. All debt with the Bank of Scotland is secured with a bond and floating charge over the whole assets of Rollstud Limited.
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