REGISTERED NUMBER: |
TONG ENGINEERING LIMITED |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
REGISTERED NUMBER: |
TONG ENGINEERING LIMITED |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 3 | to | 4 |
Report of the Independent Auditors | 5 | to | 7 |
Income Statement | 8 |
Other Comprehensive Income | 9 |
Statement of Financial Position | 10 |
Statement of Changes in Equity | 11 |
Statement of Cash Flows | 12 |
Notes to the Statement of Cash Flows | 13 |
Notes to the Financial Statements | 14 | to | 29 |
TONG ENGINEERING LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 JANUARY 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
5 Resolution Close |
Endeavour Park |
Boston |
Lincolnshire |
PE21 7TT |
SOLICITORS: |
Bank Street |
Lincoln |
LN2 1DR |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 JANUARY 2023 |
The directors present their strategic report for the year ended 31 January 2023. |
REVIEW OF BUSINESS |
Results for the year ended 31 January 2023 showed sales and profit have decreased compared to the prior year. Economic uncertainty and inflationary cost of materials and services have been deemed the leading factors for this change. |
The completion and move of all operating activities to our new custom-built factory also contributed to a loss of efficiency during the year, and an increased use of sub contract services during this move period having a considerable effect on margin. |
The gross profit percentage has changed due to the sales mix. The directors continue to control and review the company's operating costs which are comparable as a percentage of turnover year on year. The company continues to conduct research and development activity. |
The pension scheme surplus is nil (2022 - liability of £79,000). The amount reported by the actuary valued the surplus at £212,000, but this has not been recognised in line with treatment prescribed under FRS 102 1A. The main reasons for the change in the deficit to a surplus over the period can be summarised as follows: |
1) The significant rise in bond yields over the period led to a large increase in the discount rate and reduced the value placed on the liabilities. This was compounded by a decrease in future inflation expectations, which also served to reduce the liabilities. The overall impact of changes in market conditions is to reduce the Scheme's liabilities by £946,000. |
2) Actual inflation has been shown for with some pension increases being higher than previously expected, which increased the scheme's liabilities by approximately £8,000. |
3) The Scheme's assets fell in value over the period (partly due to bond yields rising and therefore prices falling). This partially offsets the improvement from the reduction in liabilities by £781,000. |
4) Employer contributions of £134,000 during the period increased the asset value and hence reduced the deficit. |
Overall, the directors are satisfied with the company's performance in 2022-23 and believe that the company will consolidate its position during the subsequent financial year. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The principal risks and uncertainties facing the company are largely the speed of recovery to pre-pandemic levels of economic activity, inflationary price rises affecting margins and the pension scheme deficit. |
With regards to the pension deficit the directors continue to monitor the current situation, and where possible, increase company contributions into the scheme. |
FINANCIAL KEY PERFORMANCE INDICATORS |
Results for the year ended 31 January 2023 show a change in sales to £17,648,408 (2022 - £21,061,730) with a change in gross profit margin to 19.15% (2022 - 20.49%). |
The decrease in gross profit margin has resulted in the company reporting a profit before tax of £258,558 compared to £976,889 achieved in the prior year. |
The results of the period have meant that shareholders' funds have increased from £7,250,943 to £7,518,356. |
OTHER KEY PERFORMANCE INDICATORS |
The directors closely monitor sales mix, supplier turnover, production output, staff attendance and working capital. These key performance indicators are within the targets set for the year. |
ON BEHALF OF THE BOARD: |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
The directors present their report with the financial statements of the company for the year ended 31 January 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of manufacture of agricultural machinery and recycling equipment. |
DIVIDENDS |
Dividends are voted prior to the year end date, with the value being dependent on year end results. The dividend agreed at the meeting is that 5% of profit before tax will be payable to those holding Ordinary A shares at the year end. No dividend was declared for those shareholders holding Ordinary shares. |
RESEARCH AND DEVELOPMENT |
The company continues to invest in research and development activity. |
FUTURE DEVELOPMENTS |
Tong Engineering Limited has a long history of manufacturing in the agriculture sector and continues to focus on this core activity as well as other product handling markets. The company had agreed the purchase of land surrounding their main manufacturing site, in order to ensure space is available for future expansion opportunities as they arise. The purchase was not completed at the balance sheet date, but has completed prior to the signing of this report. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 February 2022 to the date of this report. |
E C Tong |
C E Tong |
T Morgan |
N Martin |
S Lee |
C Rich |
FINANCIAL INSTRUMENTS |
The company makes sales on credit, and manages the risks arising through its credit control procedures. |
The company makes sales in foreign currencies. If the value of the sale is significant, forward exchange contracts for the value of the order are entered into when the order is placed. This eliminates the impact of the exchange risk on the pricing of sales. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
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 company'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 company's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
TONG ENGINEERING LIMITED |
Opinion |
We have audited the financial statements of Tong Engineering Limited (the 'company') for the year ended 31 January 2023 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 company's affairs as at 31 January 2023 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, 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 Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
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, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
TONG ENGINEERING LIMITED |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
We have identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial experience, knowledge of the sector, a review of regulatory and legal correspondence and through discussions with Directors and other management obtained as part of the work required by auditing standards. We have also discussed with the Directors and other management the policies and procedures relating to compliance with laws and regulations. We communicated laws and regulations throughout the team and remained alert to any indications of non-compliance throughout the audit. |
The potential impact of different laws and regulations varies considerably. Firstly, the company is subject to laws and regulations that directly impact the financial statements (for example financial reporting legislation) and we have assessed the extent of compliance with such laws as part of our financial statements audit. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including risk of override of controls) and determined that the principal risks were related to management bias in accounting estimates and judgemental areas of the financial statements such as the stage of completion on contracted work in progress, as well as the risk of inappropriate journal entries to increase reported profitability. Audit procedures performed by the engagement team included the identification and testing of material and unusual journal entries and challenging management on key accounting estimates, assumptions and judgements made in the preparation of the financial statements. We carried out detailed substantive tests on accounting estimates, including reviewing the methods used by management to make those estimates and re-performing the calculation. |
Secondly, the company is subject to other laws and regulations where the consequence for non-compliance could have a material effect on the amounts or disclosures in the financial statements. We identified the following areas as those most likely to have such an effect: Health and Safety, and Employment laws. |
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection. This inspection included a review of the company's employment and Health and Safety controls to ensure no areas of non-compliance. Through these procedures, if we became aware of any non-compliance, we considered the impact on the procedures performed on the related financial statement items. |
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. The further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. As with any audit, there is a greater risk of non-detection of irregularities as these may involve collusion, intentional omissions of the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all 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 Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
TONG ENGINEERING LIMITED |
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. |
for and on behalf of |
5 Resolution Close |
Endeavour Park |
Boston |
Lincolnshire |
PE21 7TT |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 JANUARY 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
3,313,074 | 3,430,262 |
66,300 | 885,171 |
Other operating income |
OPERATING PROFIT | 5 |
Interest receivable and similar income |
375,402 | 1,057,936 |
Interest payable and similar expenses | 6 |
Other finance costs | 22 |
116,844 | 81,047 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 JANUARY 2023 |
2023 | 2022 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME |
Actuarial (loss)/gain on pension scheme |
Derecognition of pension scheme surplus | ( |
) |
Income tax relating to components of other comprehensive income |
( |
) |
( |
) |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
( |
) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
STATEMENT OF FINANCIAL POSITION |
31 JANUARY 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 9 |
Investments | 10 |
CURRENT ASSETS |
Stocks | 11 |
Debtors | 12 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 13 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 14 | ( |
) | ( |
) |
PROVISIONS FOR LIABILITIES | 19 | ( |
) | ( |
) |
PENSION LIABILITY | 22 | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Capital redemption reserve | 21 |
Retained earnings | 21 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 JANUARY 2023 |
Called up | Capital |
share | Retained | redemption | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 February 2021 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - |
Balance at 31 January 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - |
Balance at 31 January 2023 |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) | ( |
) |
Interest element of hire purchase payments paid | ( |
) | ( |
) |
Pension contribution | ( |
) | ( |
) |
Tax paid | ( |
) |
Taxation refund |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
New loans in year |
Loan repayments in year | ( |
) | ( |
) |
Capital repayments in year | ( |
) | ( |
) |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) |
Decrease in cash and cash equivalents | ( |
) | ( |
) |
Cash and cash equivalents at beginning of year | 2 | 2,779,449 |
Cash and cash equivalents at end of year | 2 | 404,283 | 659,259 |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Profit before taxation |
Depreciation charges |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Finance costs | 116,844 | 81,047 |
Finance income | (493 | ) | (168 | ) |
634,968 | 1,370,107 |
Increase in stocks | ( |
) | ( |
) |
Decrease/(increase) in trade and other debtors | ( |
) |
Increase in trade and other creditors |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 January 2023 |
31.1.23 | 1.2.22 |
£ | £ |
Cash and cash equivalents | 404,283 | 659,259 |
Year ended 31 January 2022 |
31.1.22 | 1.2.21 |
£ | £ |
Cash and cash equivalents | 659,259 | 2,779,449 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
Other |
non-cash |
At 1.2.22 | Cash flow | changes | At 31.1.23 |
£ | £ | £ | £ |
Net cash |
Cash at bank |
and in hand | 659,259 | (254,976 | ) | 404,283 |
659,259 | ( |
) | 404,283 |
Debt |
Finance leases | (509,735 | ) | 281,300 | (243,732 | ) | (472,167 | ) |
Debts falling due |
within 1 year | (82,212 | ) | (458,891 | ) | 458,619 | (82,484 | ) |
Debts falling due |
after 1 year | (1,241,403 | ) | - | (458,619 | ) | (1,700,022 | ) |
(1,833,350 | ) | (177,591 | ) | (243,732 | ) | (2,254,673 | ) |
Total | (1,174,091 | ) | (432,567 | ) | (243,732 | ) | (1,850,390 | ) |
4. | RECONCILING ADJUSTMENTS |
The purchase of tangible fixed assets has been calculated by taking the cash outflow, excluding hire purchase finance. |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
1. | STATUTORY INFORMATION |
Tong Engineering Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 (FRS 102), the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland and the Companies Act 2006. |
The company's accounting reference date is 31 January. These financial statements are for the period 31 January 2022 to 29 January 2023. The comparative figures are for the period 1 February 2021 to 30 January 2022. |
Preparation of consolidated financial statements |
The financial statements contain information about Tong Engineering Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 402 of the Companies Act 2006 from the requirement to prepare consolidated financial statements. |
Significant judgements and estimates |
In the application of the Company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experiences and other factors that are considered to be relevant. Actual results may differ from these estimates. |
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below. |
(i) Work in progress assumptions |
The estimations and assumptions used to assess that work in progress under contract is valued in line with applicable accounting frameworks are the contracted sales price (exclusive of VAT) and the stage of completion. The stage of completion is estimated by senior management using standardised methodology and is regularly reviewed. |
(ii) Defined benefit pension scheme assumptions |
The estimations and assumptions supplied by the actuary when preparing the actuarial report for the defined benefit pension scheme operated by the client are in line with market conditions at the time of the report. The actuary is an experienced and qualified actuarial institution, and subject to the standards and regulations of the relevant governing body. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Sale of goods are recognised upon delivery to the customer, or upon collection by the customer, when title has passed. |
Revenue from construction contracts is recognised based on the stage of completion of the contracted activity over the course of the contract. |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Fixed assets are stated at cost or valuation less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended. |
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful |
life. |
Land & freehold property (land) | - | Not provided for on land |
Land & freehold property (buildings) | - | 2% straight line |
Asset under the course of construction | - | Not provided |
Plant and machinery | - | 5 - 10% straight line |
Office Equipment | - | 10 - 20% straight line and 33% straight line |
Motor vehicles | - | 25 -33% straight line |
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. |
Government grants |
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the company will comply with conditions attaching to them and the grants will be received using the accruals model. |
The government grants received relate to support in respect of capital investment. |
Investments in subsidiaries and associates |
Investments in subsidiary and associate undertakings are recognised at cost. |
Stocks |
Raw material and work in progress stocks are stated at the lower of cost and 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 includes labour and attributable overheads. |
Contracted work in progress stocks are stated at the estimated revenue due from customers for contract work performed as at the reporting date. Work performed to date is valued using the percentage of completion method as prescribed under FRS 102. On the realisation of income arising from construction contracts, additional costs incurred in excess of the costs recognised are presented within work in progress. |
Finished machines are valued at the lower of cost and the estimated selling price less costs to complete and sell after making due allowance for obsolete and slow moving stocks. Cost is determined by reference to the sales price less the margin. For part complete machines, the stage of completion of the machine is estimated and multiplied by the cost to determine the stock value. |
At each financial reporting 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 and loss. |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks, other third parties and related parties. |
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement. |
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate.If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. |
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the financial reporting date. |
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is as 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. |
The company does not generally apply hedge accounting in respect of forward foreign exchange contracts held to manage the cash flow exposure of forecast transactions denominated in foreign currencies. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the financial reporting date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
2. | ACCOUNTING POLICIES - continued |
Foreign currency translation |
The company's functional and presentational currency is the Pound Sterling (£). |
Transactions and balances |
Foreign currency transactions are initially recognised by applying the foreign currency amount at spot exchange rate between the functional currency and the foreign currency at the date of transaction. |
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 the 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 the income statement. |
Foreign exchange gains and losses that relate to borrowings of cash and cash equivalents are presented in the income statement within 'financial income or costs'. All other foreign exchange gains and losses are presented in the income statement within administrative expenses. |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the statement of financial position. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to the income statement over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to the income statement on a straight line basis over the period of the lease. |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
2. | ACCOUNTING POLICIES - continued |
Pensions |
Defined contribution pension plan |
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payments obligations. |
The contributions are recognised as an expenses in the income statement when they fall due. Amounts not paid are shown in accruals as a liability in the statement of financial position. The assets of the plan are held separately from the Company in independently administered funds. |
Defined benefit pension plan |
The Company operates a defined benefit plan. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan. |
The liability recognised in the statement of financial position in respect of the defined benefit plan us the present value of the defined benefit obligation at the financial reporting date less the fair value of plan assets at the financial reporting date (if any) out of which the obligations are to be settled. |
The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate'). |
The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques. |
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'. |
The cost of the defined benefit plan, recognised in the income statement as employee costs, except where included in the cost of an asset, comprises: |
a) the increase in net pension benefit liability arising from employee service during the period; and |
b) the cost of plan introductions, benefit changes, curtailments and settlements. |
The net interest cost is calculated by applying the discount rate to the net balance of the defines benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'. |
Impairment |
Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each reporting year end date. If such indication exists, the recoverable amount of the asset or the asset's cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in the income statement unless the asset is carried at a revalued amount where the impairment loss is recognised in the revaluation reserve. |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom |
Europe |
Rest of the World | 4,934,950 | 3,610,390 |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Production | 158 | 155 |
Sales and distribution | 8 | 7 |
Administration | 11 | 12 |
2023 | 2022 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Auditors' remuneration |
Foreign exchange differences | ( |
) | ( |
) |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank interest |
Bank loan interest |
Hire purchase interest |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
7. | TAXATION |
Analysis of the tax (credit)/charge |
The tax (credit)/charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | ( |
) |
Adjustment re previous years | - | (66,546 | ) |
Total current tax | ( |
) |
Deferred tax | ( |
) |
Tax on profit | ( |
) |
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: |
2023 | 2022 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes | ( |
) | ( |
) |
Income not taxable for tax purposes | ( |
) | ( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) |
Deduction for qualifying research and development expenditure | (30,782 | ) | (91,289 | ) |
Change of rate | - | 108,893 |
Total tax (credit)/charge | (96,533 | ) | 146,980 |
Tax effects relating to effects of other comprehensive income |
2023 |
Gross | Tax | Net |
£ | £ | £ |
Actuarial (loss)/gain on pension scheme | (72,750 | ) | 84,250 |
Derecognition of pension scheme surplus | ( |
) | 53,000 | (159,000 | ) |
(55,000 | ) | (19,750 | ) | (74,750 | ) |
2022 |
Gross | Tax | Net |
£ | £ | £ |
Actuarial (loss)/gain on pension scheme | (74,680 | ) | 215,320 |
Factors that may affect future tax charges |
The statutory UK corporation tax rate is currently 19%, however the UK Government announced on 3 March 2021 its intention to increase the UK corporation tax rate to 25% from 1 April 2023. This was substantially enacted on 24 May 2021. |
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised, based on tax law and the corporation tax rates that have been enacted, or substantially enacted, at the year end date. |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
8. | DIVIDENDS |
2023 | 2022 |
£ | £ |
Ordinary shares of £1 each |
Final |
9. | TANGIBLE FIXED ASSETS |
Land & |
freehold | Plant and | Office | Motor |
property | machinery | equipment | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 February 2022 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 January 2023 |
DEPRECIATION |
At 1 February 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 January 2023 |
NET BOOK VALUE |
At 31 January 2023 |
At 31 January 2022 |
Included in cost of land and buildings is freehold land of £ 346,284 (2022 - £ 346,284 ) which is not depreciated. |
Included in cost of land and freehold property is Nil (2022 - £2,473,824) which relates to assets in the course of construction, which are not depreciated. |
The net book value of tangible fixed assets includes £863,487 (2022 - £773,560) in respect of assets held under hire purchase contracts. |
10. | FIXED ASSET INVESTMENTS |
Shares in | Interest |
group | in |
undertakings | associate | Totals |
£ | £ | £ |
COST |
At 1 February 2022 |
and 31 January 2023 | 24,660 |
NET BOOK VALUE |
At 31 January 2023 | 24,660 |
At 31 January 2022 | 24,660 |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
10. | FIXED ASSET INVESTMENTS - continued |
The company's investments at the Statement of Financial Position date in the share capital of companies include the following: |
Subsidiary |
Name of subsidiary | % Held | Principle activity |
100 | Dormant |
E.J. Tong & Sons (Engineering) Ltd | 100 | Dormant |
All of the above are companies registered in England and Wales and the shares held are £1 Ordinary shares. |
All of the above companies have the same registered office as the parent company, being Tong Engineering Limited, Vale Road, Spilsby, Lincolnshire, PE23 5HE. |
Associated company |
Registered office: Tong Engineering Limited, Vale Road, Spilsby, Lincolnshire, PE23 5HE |
Nature of business: |
% |
Class of shares: | holding |
£ | £ |
Aggregate capital and reserves |
Profit for the period/year |
11. | STOCKS |
2023 | 2022 |
£ | £ |
Raw materials |
Work-in-progress |
Finished goods |
Within work in progress is £1,029,997 (2022 - £462,168) related to gross amounts due from customers for contract work. |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Tax |
Prepayments and accrued income |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans and overdrafts (see note 15) |
Hire purchase contracts (see note 16) |
Trade creditors |
Amounts owed to group undertakings |
Other taxes and social security |
VAT | 152,628 | 21,655 |
Other creditors |
Directors' current accounts | 12,928 | 48,844 |
Accruals and deferred income |
Deferred government grants |
Within other creditors is £1,774,922 (2022 - £1,444,151) related to gross amounts due to customers for contract work. |
Government grants deferred in the prior year have been recognised in full in the current year, on fulfilment of the covenants of the agreements. |
14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans (see note 15) |
Hire purchase contracts (see note 16) |
Deferred government grants |
15. | LOANS |
An analysis of the maturity of loans is given below: |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Amounts falling due between one and two years: |
Bank loans |
Amounts falling due between two and five years: |
Bank loans |
16. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
16. | LEASING AGREEMENTS - continued |
The hire purchase contracts relate to a number of fixed assets. The remaining lease terms range from three months to four years. At the end of the lease, title of the assets passes to the company for a nominal fee. |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
Lease payments recognised as an expense during the year amount to £80,719 (2022 - £98,330). |
17. | SECURED DEBTS |
The following secured debts are included within creditors: |
2023 | 2022 |
£ | £ |
Bank loans |
Hire purchase contracts | 472,167 | 509,735 |
Hire purchase creditors are secured on the assets concerned. |
The bank has a fixed and floating charge over all assets of the company and a legal mortgage over the land and property. |
18. | FINANCIAL INSTRUMENTS |
The company has the following financial instruments: |
2023 | 2022 |
£ | £ |
Financial assets that are debt instruments measured at amortised cost |
Cash at bank and in hand | 404,283 | 659,259 |
Trade debtors | 2,711,104 | 2,663,580 |
Financial liabilities measured at amortised cost |
Hire purchase | 472,167 | 509,735 |
Trade creditors | 1,902,983 | 1,546,812 |
Bank loan | 1,782,506 | 1,323,615 |
There is no interest income or expense for financial assets and liabilities that are not measured at fair value through profit or loss. |
19. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax |
Accelerated capital allowances |
Tax losses carried forward | ( |
) |
Defined benefit pension scheme timing differences |
- |
(19,750 |
) |
Other timing differences | (19,096 | ) | (19,096 | ) |
461,822 | 538,605 |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
19. | PROVISIONS FOR LIABILITIES - continued |
Deferred |
tax |
£ |
Balance at 1 February 2022 |
Provided during year | ( |
) |
Movement on pension scheme | 19,750 |
Balance at 31 January 2023 |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 107,500 | 107,500 |
Ordinary A | £1 | 50,000 | 50,000 |
157,500 | 157,500 |
21. | RESERVES |
Capital |
Retained | redemption |
earnings | reserve | Totals |
£ | £ | £ |
At 1 February 2022 | 7,093,443 |
Profit for the year | - |
Dividends | ( |
) | - | ( |
) |
Net actuarial gain/loss on |
pension scheme | 84,250 | - | 84,250 |
Derecogntion of pension surplu | (159,000 | ) | - | (159,000 | ) |
At 31 January 2023 | 7,360,856 |
Capital redemption reserve |
This reserve records the nominal value of shares repurchased by the company. |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
22. | EMPLOYEE BENEFIT OBLIGATIONS |
Tong Engineering Limited (the Company) operates a defined benefit pension arrangement called the Tong Engineering Retirement Benefits Scheme (the Scheme). The Scheme provides benefits based on final salary and length of service on retirement, leaving service or death. The Company also operates a defined contribution scheme, but this is not included in these disclosures. |
The Scheme is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Scheme is carried out at least once every three years to determine whether the Statutory Funding Objective is met. |
The most recent comprehensive actuarial valuation of the Scheme was carried out as at 31 January 2021 and the next valuation of the scheme is due as at 31 January 2024. In the event that the valuation reveals a larger deficit than expected the company may be required to increase contributions above those set out in the existing Schedule of Contributions. Conversely, if the position is better than expected, it is possible that contributions may be reduced. |
The Company expects to pay contributions of £134,300 in the year to 31 January 2024. |
The Scheme is managed by an independent corporate Trustee appointed by the Company. The Trustee has responsibility for obtaining valuations of the fund, administering benefit payments and investing the Scheme's assets. The Trustee delegates some of these functions to their professional advisers where appropriate. |
The effect of the judgements regarding equalisation of Guaranteed Minimum Pensions for ongoing benefits and past transfers has been allowed for in the disclosed liabilities. These were accounted for as past service costs in the previous years, and there is no additional past service cost item in respect of these for the current period. |
There were no plan amendments, curtailments or settlements during the period. |
Risk mitigation strategies |
The Scheme's investment strategy includes an allocation to LDI and corporate bond assets. These assets will, to some degree, move in line with the liabilities when interest rates and inflation expectations change, the results being that the scheme is partially protected against interest rate and inflation risk. |
Profile of defined benefit obligation |
The duration of liabilities depends on the assumptions used and has reduced since the previous disclosures due to the significant movements in bond yields underlying the discount rate assumptions. The weighted average duration of the defined benefit obligation is around 10 years at 31 January 2023. |
The amounts recognised in the balance sheet are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Present value of funded obligations | ( |
) | ( |
) |
Fair value of plan assets |
212,000 | (79,000 | ) |
Present value of unfunded obligations |
Derecogntion of plan surplus | (212,000 | ) | - |
Deficit | ( |
) |
Net liability | ( |
) |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
22. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
The amounts recognised in profit or loss are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Current service cost |
Net interest from net defined benefit asset/liability |
- |
6,000 |
Past service cost |
- | 6,000 |
Actual return on plan assets | ( |
) |
Changes in the present value of the defined benefit obligation are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Opening defined benefit obligation |
Interest cost |
Benefits paid | ( |
) | ( |
) |
Remeasurements: |
Actuarial (gains)/losses from changes in demographic assumptions |
- |
7,000 |
Actuarial (gains)/losses from changes in financial assumptions |
(946,000 |
) |
(302,000 |
) |
Experience (gains)/losses on liabilities | 8,000 | 26,000 |
Changes in the fair value of scheme assets are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Opening fair value of scheme assets |
Contributions by employer |
Interest on assets | 86,000 | 55,000 |
Benefits paid | (177,000 | ) | (171,000 | ) |
Return on plan assets (excluding interest income) | (781,000 | ) | 21,000 |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
22. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
The amounts recognised in other comprehensive income are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Actuarial (gains)/losses from changes in demographic assumptions |
- |
(7,000 |
) |
Actuarial (gains)/losses from changes in financial assumptions |
946,000 |
302,000 |
Experience (gains)/losses on liabilities | (8,000 | ) | (26,000 | ) |
Return on plan assets (excluding interest income) | (781,000 | ) | 21,000 |
157,000 | 290,000 |
The major categories of scheme assets as amounts of total scheme assets are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Equities |
Corporate bonds | 527,000 | 860,000 |
LDI | 763,000 | - |
Diversified Growth Fund |
Cash | 179,000 | 39,000 |
Insured Assets | 230,000 | 295,000 |
3,273,000 | 4,011,000 |
The assets do not include any investment in shares of the Company. |
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages): |
2023 | 2022 |
Discount rate |
Inflation assumption (RPI) |
Inflation assumption (CPI) |
Revaluation in deferment |
Pension increase (CPI max 5%) |
At 31 January 2023 | At 31 January 2022 |
Post retirement mortality | - | S3PA tables with CMI 2020 projections using a long-term improvement rate of 1% pa. The initial addition of 0.25% pa and the 2020 weight parameter is 0%. | S3PA tables with CMI 2020 projections using a long-term improvement rate of 1% pa. The initial addition of 0.25% pa and the 2020 weight parameter is 0%. |
Commutation | - | Members are assumed to take 75% of their maximum lump sum | Members are assumed to take 75% of their maximum lump sum |
Life expectancy |
... at age 65 of male aged 45 | - | 23.1 | 23.0 |
... at age 65 of male aged 65 | - | 22.1 | 22.0 |
... at age 65 of female aged 45 | - | 25.6 | 25.5 |
... at age 65 of female aged 65 | - | 24.4 | 24.3 |
TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JANUARY 2023 |
22. | - continued |
Derecognition |
Per the actuary assessment of the scheme as at 31 January 2023, the scheme reported a surplus of £212,000. The company has opted not to recognise this surplus as an asset on the face of the Statement of Financial Position as the conditions for recognition (per FRS 102) cannot be confirmed to be present. |
Defined contribution scheme |
The company also operates a defined contribution pension scheme. |
The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £266,082 (2021 - £259,093). |
At the year end, no balance remained outstanding to the pension scheme (2022 - Nil). |
23. | CAPITAL COMMITMENTS |
2023 | 2022 |
£ | £ |
Contracted but not provided for in the |
financial statements |
24. | RELATED PARTY DISCLOSURES |
2023 | 2022 |
£ | £ |
Sales |
Transfers | 2,388 | 2,211 |
Amount due from related party |
Amount due to related party |
During the year, a total of key management personnel compensation of £ |