AUTOMOTIVE_LIGHTING_UK_LI - Accounts
AUTOMOTIVE_LIGHTING_UK_LI - Accounts
The directors present the strategic report for the year ended 31 December 2022.
The Company's parent undertaking Marelli Europe S.p.A was sold to Marelli Co.Ltd (formerly CK Holdings Co.,Ltd.), a holding company of Marelli Corporation (formerly Calsonic Kansei Corporation), a leading Japanese automotive component supplier.
The company reports according to FRS101 and has taken advantage of the disclosure exemptions allowed under this standard.
The key financial performance indicators during the year were as follows:
| 2022 | 2021 |
| £'000 | £'000 |
Revenue | 744 | 884 |
Operating Loss | (385) | (645) |
Loss after taxation | (792) | (1,158) |
Shareholder's equity | (18,445) | (26,601) |
The company's results are predominantly affected by the impact of its defined benefit pension schemes.
As the company mainly transacts with its intra group entities and has limited transactions with third parties outside the group, the company is not significantly exposed to credit risks from its customers. The company at regular intervals reconciles balances receivable within its books with the counterparty records and the reconciling adjustments are investigated.
In order to manage cash flow and maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company uses the group's centralised treasury arrangements for finance.
The company is part of a group which is comitted to its operations in the United Kingdom, supplying its major motor car manufacturer customers based mainly in the Midlands and North of England. The group sees the opportunity to grow and consolidate its business with these major multinational customers going forward into the next year and the years to come. The company will continue in its operations as part of this strategy and no particular changes are expected to the size and scale of the company's role in this strategy.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The loss for the year after taxation amounted to £792,000 (2021: £1,158,000). The directors do not recommend a final dividend (2021 - £nil).
Going concern
The company meets its day-to-day working capital requirements through funding from the group of which the company forms a part. During the year, the company received an additional capital injection of £6,000,000 from the parent company via the issue of 6,000,000 £1 new ordinary shares. The company remains heavily dependent on funding being in place and available from the group to meet its obligations. The directors have obtained confirmation from Marelli Holdings Co. Ltd that they will support the business to enable the company to meet its financial commitments for a period of at least 12 months from the date of approval of these financial statements.
Whilst the directors have received confirmation of the intended provision of the required financial support, a formal facility for the entirety of the required financing, which includes committed annual defined benefit pension scheme contributions of £5,400,000, is not in place as at the date of signing these financial statements. This creates a material uncertainty which casts significant doubt on the company's ability to continue as a going concern. However, the directors expect that the group will continue to provide this support. Based on a review of the facilities in place and confirmation from the group on their expected continued support, the directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis. The financial statements therefore do not include the adjustments required should the company be unable to continue as a going concern.
The directors who have held office during the year and up to the date of signature of the financial statements were as follows:
In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.
select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
We have audited the financial statements of Automotive Lighting UK Limited (the 'company') for the year ended 31 December 2022 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss 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
Material uncertainty related to going concern
In forming our opinion, which is not modified, we have considered the adequacy of the disclosures made in note 1 of the financial statements concerning the company's ability to continue as a going concern. As set out in note 1, the company has received confirmation from Marelli Holdings Co. Ltd, of its intention to provide the financial support on which the company is reliant for a period of at least 12 months from the date of approval of these financial statements, there is however no formal facillity in place for the funding required. As stated in note 1, this indicates the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
Automotive Lighting UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Red Lion Farm, 119 Coxtie Green Road, Brentwood, Essex, CM14 5PT. The company's principal activities and nature of its operations are disclosed in the directors' report.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework":
the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;
the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 leases;
the requirements of paragraph 58 of IFRS 16;
the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers;
the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:
- paragraph 79(a)(iv) of IAS 1;
- paragraph 73(e) of IAS 16 Property, Plant and Equipment;
- paragraph 118(e) of IAS 38 Intangible Assets;
- paragraph 76 and 79(d) of IAS 40 Investment Property; and
- paragraph 50 of IAS 41 Agriculture
the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of Financial Statements;
the requirements of paragraphs 134 to 136 of IAS 1 Presentation of Financial Statements;
the requirements of IAS 7 Statement of Cash Flows;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
the requirements of paragraph 17 of IAS 24 Related Party Disclosures;
the requirements of IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group;
the requirements of paragraphs 124(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairment of Assets.
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.
The company meets its day-to-day working capital requirements through funding from the group of which the company forms a part. During the year the company received an additional capital injection of £6,000,000 from the parent company via the issue of 6,000,000 £1 new ordinary shares. The company remains heavily dependent on funding being in place and available from the group to meet its obligations. The directors have obtained confirmation from Merelli Holdings Co. Ltd that they will support the business to enable the company to meet its financial commitments for a period of at least 12 months from the date of approval of these financial statements.
Whilst the directors have received confirmation of the intended provision of the required financial support, a formal facility for the entirety of the required financing, which includes committed annual defined benefit pension scheme contributions of £5,400,000, is not in place as at the date of signing these financial statements. This creates a material uncertainty which casts significant doubt on the company's ability to continue as a going concern. However, the directors expect that the group will continue to provide this support. Based on a review of the facilities in place and confirmation from the group on their expected continued support, the directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis. The financial statements therefore do not include the adjustments required should the company be unable to continue as a going concern.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
The Company adopted IFRS 16 Leases as of the 1 January 2019 using the modified retrospective approach. The Company recognises a right-of-use asset at the date of initial application for leases previously classified as an operating lease applying IAS 17. The Company measured the right-of-use asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial position immediately before the date of initial application.
In applying IFRS 16, consideration has to be given to the terms and conditions of contracts and all relevant facts and circumstances, so that the standard can be applied consistently to contracts with similar characteristics and in similar circumstances. The Company elected to use the transition practical expedient to not reassess whether a contract is, or contains a lease at 1 January 2019. Instead the company has applied the standard only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application.
Right-of-use assets
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the adoption date.
The right-of-use asset is subsequently depreciated using the straight-line method from the adoption date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term as follows:
Vehicles 2-4 Years
The estimated useful life of right-of-use assets are determined under the depreciation requirements of IAS 16 Property, Plant and Equipment. Right-of-use assets are periodically tested for impairment, and are also adjusted for any re-measurements of the lease liability.
Estimating the incremental borrowing rate
The Company cannot readily determine the interest rate implicit in its leases, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
Lease Liabilities
Lease Liabilities are recognised at the commencement date of a lease. Lease Liabilities are initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate.
Lease Liabilities are measured at amortised cost using the effective interest method. The lease liability is re-measured when there is a change in the future lease payments. Any re-measurement is also adjusted in the carrying amount of the right-to-use asset, or is recorded in the Income Statement if the carrying amount of the right-of-use-asset has been reduced to zero.
Short-term leases and leases of low value assets
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of 12 months or less and leases of low-value assets, including IT equipment. The payments of such leases are expensed on a straight-line basis over the term of the lease, even if the payments are not made on such a basis.
Lease Term
The Lease term is a significant component in the measurement of both the right of use asset and lease liability. Judgement is exercised in determining whether there is a resasonable certainty that an option to extend the lease or purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors considered may include:
the importance of the asset to the company's operations;
comparison of terms and conditions to prevailing market rates;
incurrence of significant penalties;
existence of significant leasehold improvements; and,
the cost and distribution to replace the asset.
The company reassesses whether it is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in circumstances.
The preparation of financial statements under FRS 101 requires the use of estimates and judgements that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimated. The most significant judgements and estimates are those used in the calculation of the present value of the pension obligation, these are determined by the actuary based on market conditions.
The company turnover related exclusively to activities in the UK.
Revenue is recognised to the extent that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue mainly relates to inter group services which are predefined for the year and agreed formally by contract. Turnover is measured net of trade discounts, VAT and other sales related taxes.
Accounts receivable are recognised when the right to consideration becomes unconditional.
All performance obligations relating to the year ended 31 December 2022 are satisfied within the year.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
From 1 January 2021 the employees previously directly contracted by the company had their contracts of service transferred to another group company. Their average numbers and remuneration are still disclosed in these financial statements as staff costs as they continue to work full time for the company and the company continues to bear the cost for their services.
The directors received no remuneration for their services to the company in either the current year or the preceding year. The directors are also directors of other group companies and have been remunerated by other entities within the group. The majority of the directors' activities relate to services carried out in relation to these other group companies and therefore the directors deem it appropriate not to directly allocate any of their costs to the income statement of this company.
The charge for the year can be reconciled to the loss per the income statement as follows:
A deferred tax asset of £10.9m (2021: £11.4m) has not been recognised in respect of the pension deficit of£4.9m (2021: £6.9m) and losses carried forward of £6.0m (2021: £4.5m) as, in the opinion of the directors, it cannot be regarded as more likely than not that there will be suitable taxable profits against which these assets can be recovered.
The amounts due from fellow group undertakings includes:
- £1,218,000 (2021: £1,107,000) - cash pool balances and accrued interest owed from the group centralized treasury Marelli Europe SpA, the interest earned is the monthly average of the daily Euribor IM.
- £1,613,000 (2021: £869,000) - relates to trading activities and is unsecured, interest free and has no fixed repayment date.
The amounts due to fellow group undertakings consists of £1,241,000 (2021: £613,000) relating to trading activities and is unsecured, interest free and has no fixed repayment date.
Other creditors includes the lease liability of £Nil (2021: £10,000) based on the application of IFRS16.
The company operates three funded defined benefit schemes, the assets of which are held in separate trustee administered funds. The contributions to the schemes are determined with the advice of independent qualified actuaries, using the projected unit method, based on valuations as detailed below.
The scheme exposes the Company to actuarial risks such as longevity risk, interest rate risk and market (investment) risk. The Trustees of the plan are cognisant of these risks and work with the Employers to manage these risks appropriately. Actions implemented or being implemented includes diversification of investments and the introduction of Liability Driven Investment strategies to remove interest rate and inflation risks at the appropriate time.
The company paid £5,400,000 of total employer contributions in the year ended 31 December 2022 (2021: £5,400,000). The schemes are closed to new members following the cessation of the manufacturing operations.
The cumulative amount of actuarial losses recognised for the three pension schemes in the Other Comprehensive Income is £5,070,000 (2021: cumulative £8,018,000).
The major financial assumptions used by the actuary for FRS 101 purposes in 2022 were:
| Staff pension scheme | Works pension scheme | Magneti/ Carello SRBS |
|
| % | % | % |
|
Discount rate | 4.75 | 4.75 | 4.75 |
|
Expected return on plan assets at the start of the year | 1.80 | 1.80 | 1.80 |
|
Expected return on plan assets at the end of the year | 4.75 | 4.75 | 4.75 |
|
Future inflation CPI | 3.55 3.15 | 3.55 | 3.55 3.15 |
|
Future pensionable salary increases | n/a | n/a | n/a |
|
Future pension increases RPI (max 5%) | 3.40 | 3.40 | 3.40 |
|
Future pension increases CPI (max 3%) | 2.50 | 2.50 | 2.50 |
|
Mortality rate | 100% | 110% | 100% |
|
| S3PMA CMI 2019 1.20% LTR of improvement | S2PMA/PFA CMI 2019 1.20% LTR of improvement | S2PMA/PFA CMI 2019 1.20% LTR of improvement |
|
The major financial assumptions used by the actuary for FRS 101 purposes in 2021 were:
| Staff pension scheme | Works pension scheme | Magneti/ Carello RBS |
|
| % | % | % |
|
Discount rate | 1.80 | 1.80 | 1.80 |
|
Expected return on plan assets at the start of the year | 1.20 | 1.20 | 1.20 |
|
Expected return on plan assets at the end of the year | 1.80 | 1.80 | 1.80 |
|
Future inflation CPI | 3.70 3.20 | 3.70 3.20 | 3.70 |
|
Future pensionable salary increases | 3.95 | N/A | N/A |
|
Future pension increases RPI (max 5%) | 3.50 | 3.50 | 3.50 |
|
Future pension increases CPI (max 3%) | 2.50 | 2.50 | 2.50 |
|
Mortality rate | 100% | 110% | 100% |
|
| S2PMA/PFA CMI 2019 1.20% LTR of improvement | S2PMA/PFA CMI 2019 1.20% LTR of improvement | S2PMA/PFA CMI 2019 1.20% LTR of improvement |
|
The life expectancy assumptions used by the actuary for FRS 101 purposes in 2022 were:
| Staff pension scheme | Works pension scheme | Magneti/ Carello SRBS |
Life expectancy of male age 65 - active | 23.3 | 22.5 | 23.3 |
Life expectancy of female age 65 - active | 25.7 | 25.0 | 25.7 |
Life expectancy of male age 65 - pensioner | 22.0 | 21.3 | 22.0 |
Life expectancy of female age 65 - pensioner | 24.3 | 23.6 | 24.3 |
The life expectancy assumptions used by the actuary for FRS 101 purposes in 2021 were:
| Staff pension scheme | Works pension scheme | Magneti/ Carello SRBS |
Life expectancy of male age 65 - active | 23.2 | 22.5 | 23.2 |
Life expectancy of female age 65 - active | 25.6 | 24.9 | 25.6 |
Life expectancy of male age 65 - pensioner | 21.9 | 21.2 | 21.9 |
Life expectancy of female age 65 - pensioner | 24.2 | 23.5 | 24.2 |
The asset composition assumption used by the actuary for FRS 101 purposes in 2022 is:
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
| % | % | % |
Equities | 3 | 4 | 2 |
Property / Other | 97 | 96 | 98 |
| ------------ | ------------ | ------------ |
| 100 | 100 | 100 |
| ------------ | ------------ | ------------ |
The asset composition assumption used by the actuary for FRS 101 purposes in 2021 is:
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
| % | % | % |
Equities | 6 | 14 | 3 |
Property / Other | 94 | 86 | 97 |
| ------------ | ------------ | ------------ |
| 100 | 100 | 100 |
| ------------ | ------------ | ------------ |
The amount charged to operating profit is as follows:
|
| 2022 | 2021 |
|
| £000 | £000 |
Current Service Cost |
| - | 2 |
Past Service Cost |
| - | - |
|
| ------------ | ------------ |
|
| - | 2 |
|
| ------------ | ------------ |
The amounts charged to other finance costs are as follows:
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
Total |
| 2022 | 2022 | 2022 | 2022 |
| £000 | £000 | £000 | £000 |
Expected return on pension scheme assets | (795) | (1,244) | (45) | (2,084) |
Interest on pension scheme liabilities | 893 | 1,587 | 52 | 2,532 |
| ------------ | ---------- | ---------- | --------- |
Net finance cost | 98 | 343 | 7 | 448 |
| ------------ | ---------- | ---------- | --------- |
|
|
|
|
|
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
Total |
| 2021 | 2021 | 2021 | 2021 |
| £000 | £000 | £000 | £000 |
Expected return on pension scheme assets | (513) | (790) | (29) | (1,332) |
Interest on pension scheme liabilities | 675 | 1,154 | 40 | 1,869 |
| ------------ | ---------- | ---------- | --------- |
Net finance cost | 162 | 364 | 11 | 537 |
| ------------ | ---------- | ---------- | --------- |
The details of pension scheme balances are as follows:
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
Total |
|
| 2022 | 2022 | 2022 | 2022 |
|
| £000 | £000 | £000 | £000 |
|
Present value of defined benefit obligation | (35,243) | (60,228) | (2,259) | (97,730) |
|
Fair value of scheme assets | 30,727 | 45,395 | 1,940 | 78,062 |
|
| ----------- | ----------- | ---------- | ------------- |
|
Deficit in the scheme | (4,516) | (14,833) | (319) | (19,668) |
|
| ----------- | ----------- | ---------- | -------------- |
|
|
|
|
|
|
|
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
Total |
|
| 2021 | 2021 | 2021 | 2021 |
|
| £000 | £000 | £000 | £000 |
|
Present value of defined benefit obligation | (50,536) | (89,687) | (2,973) | (143,196) |
|
Fair value of scheme assets | 44,302 | 68,792 | 2,534 | 115,628 |
|
| ------------- | ------------ | ---------- | -------------- |
|
Deficit in the scheme | (6,234) | (20,895) | (439) | (27,568) |
|
| ------------- | ------------ | ----------- | ------------- |
|
Changes in the fair value of scheme assets are analysed as follows:
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
Total |
| 2022 | 2022 | 2022 | 2022 |
| £000 | £000 | £000 | £000 |
Total market value of assets 1 Jan 2022 | 44,302 | 68,792 | 2,534 | 115,628 |
Expected return on assets | 795 | 1,244 | 45 | 2,084 |
Actuarial gains | (14,148) | (25,245) | (606) | (39,999) |
Contribution by employer | 1,659 | 3,620 | 121 | 5,400 |
Benefits paid | (1,881) | (3,016) | (154) | (5,051) |
| ------------ | ----------- | ----------- | ------------ |
Total market value of assets 31 Dec 2022 | 30,727 | 45,395 | 1,940 | 78,062 |
| ------------ | ----------- | ----------- | ------------ |
|
|
|
|
|
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
Total |
| 2021 | 2021 | 2021 | 2021 |
| £000 | £000 | £000 | £000 |
Total market value of assets 1 Jan 2021 | 42,930 | 65,808 | 2,409 | 111,147 |
Expected return on assets | 513 | 790 | 29 | 1,332 |
Actuarial gains | 1,271 | 2,195 | 107 | 3,573 |
Contribution by employer | 1,751 | 3,541 | 108 | 5,400 |
Contribution by employees | - | - | - | - |
Benefits paid | (2,163) | (3,542) | (119) | (5,824) |
| ------------ | ----------- | ----------- | ------------ |
Total market value of assets 31 Dec 2021 | 44,302 | 68,792 | 2,534 | 115,628 |
| ------------ | ----------- | ----------- | ------------ |
Changes in the present value of the defined benefit obligations are analysed as follows:
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
Total |
| 2022 | 2022 | 2022 | 2022 |
| £000 | £000 | £000 | £000 |
Present value of scheme liabilities 1 Jan 2022 | (50,536) | (89,687) | (2,973) | (143,196) |
Actuarial gains/(losses) | 14,305 | 28,030 | 612 | 42,947 |
Interest cost | (893) | (1,587) | (52) | (2,532) |
Benefits paid | 1,881 | 3,016 | 154 | 5,051 |
| ------------ | ----------- | ----------- | ------------ |
Present value of scheme liabilities 31 Dec 2022 | (35,243) | (60,228) | (2,259) | (97,730) |
| ------------ | ----------- | ----------- | ------------ |
| Staff pension scheme | Works pension scheme | Magneti / Carello SRBS |
Total |
| 2021 | 2021 | 2021 | 2021 |
| £000 | £000 | £000 | £000 |
Present value of scheme liabilities 1 Jan 2021 | (57,367) | (97,918) | (3,384) | (158,669) |
Current service cost less employee contributions | (2) | - | - | (2) |
Actuarial gains/(losses) | 5,345 | 5,843 | 332 | 11,520 |
Interest cost | (675) | (1,154) | (40) | (1,869) |
Benefits paid | 2,163 | 3,542 | 119 | 5,824 |
| ------------ | ----------- | ----------- | ------------ |
Present value of scheme liabilities 31 Dec 2021 | (50,536) | (89,687) | (2,973) | (143,196) |
| ------------ | ----------- | ----------- | ------------ |
Sensitivity
The table below shows the impact on the defined benefit obligation of a small change in the significant assumptions. Unless otherwise indicated, where one assumption has been changed all the other assumptions are kept the same.
| Staff pension scheme | Works pension scheme | Magneti/ Carello SRBS |
Total |
| 2022 | 2022 | 2022 | 2022 |
| £000 | £000 | £000 | £000 |
0.1% Decrease in discount rate | 390 | 760 | 20 | 1,170 |
0.1% Increase in RPI inflation | 270 | 540 | 10 | 820 |
90% Qx Post retirement mortality | 1,270 | 2,000 | 110 | 3,380 |
The above sensitivity analysis has been calculated by approximate methods which take into account the expected cashflows of the members, the normal retirement age and pension increase provisions and the maximum and minimum pension increase for each significant tranche of pension, both in payment and in deferment.
Carello Lighting Staff Pension Scheme
Under the Schedule of Contributions and Recovery Plan dated 31 March 2020, the Company makes/made deficit contributions as follows:
- Annual contributions of £715,000 paid in the year to 31 March 2018; and
- £1,228,000 paid in the year to 31 March 2019,
- £1,825,000 paid in the year to 31 March 2020,
- £1,822,655 paid in the year to 31 March 2021,
-£1,698,000 paid in the year to 31 March 2022.
The duration of the defined benefit obligation for the whole scheme is approximately 12 years.
The defined benefit obligation can be attributed to the membership categories for the Carello Lighting Staff Pension Scheme as follows:
Active members | - |
Deferred pensioners | 35% |
Pensioners | 65% |
Carello Lighting Works Pension Scheme
Under the Schedule of Contributions and Recovery Plan dated 31 March 2020 the Company makes/made deficit contributions as follows:
- Annual contributions of £1,820,000 paid in the year to 31 March 2018; and
- £2,456,000 paid in the year to 31 March 2019,
- £3,485,000 paid in the year to 31 March 2020,
- £3,485,000 paid in the year to 31 March 2021,
- £3,586,251 paid in the year to 31 March 2022.
The duration of the defined benefit obligation for the whole scheme is approximately 12 years.
The defined benefit obligation can be attributed to the membership categories for the Carello Lighting Works Pension Scheme as follows:
Active members | - |
Deferred pensioners | 47% |
Pensioners | 53% |
Magneti Marelli Supplementary Retirement Benefits Scheme
Under the Schedule of Contributions and Recovery Plan dated 30 March 2020 the Company makes/made deficit contributions as follows:
- Annual contributions of £39,000 paid in the year to 31 March 2018; and
- £67,000 paid in the year to 31 March 2019,
- £100,000 paid in the year to 31 March 2020,
- £100,000 paid in the year to 31 March 2021,
-£115,749 paid in the year to 31 March 2022.
The duration of the defined benefit obligation for the whole scheme is approximately 7 years.
The defined benefit obligation can be attributed to the membership categories for the Magneti Marelli Supplementary Retirement Benefits Scheme as follows:
Active members | - |
Deferred pensioners | 13% |
Pensioners | 87% |
The company issued 6,000,000 £1 new ordinary shares on 3 February 2022 at par.
The company is a wholly owned subsidiary of Marelli Europe S.p.A., and a qualifying entity for the purpose of FRS101 and takes advantage of disclosure exemptions of IAS 24 Related Party disclosures.
The company receives charges from Charles De Alwis C.S. Ltd for consultancy, legal and secretarial services of the company's secretary, Charles De Alwis. The amount charged in the year ended 31 December 2022 was £46,800 (2021: £46,800).