Libra Systems Limited - Limited company accounts 23.2

REGISTERED NUMBER: 04793167 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST OCTOBER 2023

FOR

LIBRA SYSTEMS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

13

DIRECTORS:

Mr S J Scowcroft

Mr D A Rees

Mr D Berry

SECRETARY:

Mrs F J Scowcroft

REGISTERED OFFICE:

Unit E

Halesfield 10

Telford

Shropshire

TF7 4QP

REGISTERED NUMBER:

04793167 (England and Wales)

AUDITORS:

Stanton Ralph & Co Limited

Chartered Accountants

Statutory Auditor

The Old Police Station

Whitburn Street

Bridgnorth

Shropshire

WV16 4QP

The directors present their strategic report for the year ended 31st October 2023.

REVIEW OF BUSINESS

The company experienced another excellent year maintaining sales & profit at levels consistent with 2022. Gross margin dropped slightly to 18.3% from 20.1% (2022).

Overheads & raw material prices are closely observed & controlled. Due to internal efficiencies, we have again been able to improve the output per employee during the year, without negative impact to our capacity or service. Management have also implemented numerous mitigation strategies to limit the impact of rising costs.

Some key changes throughout 2023 include our Aluminium Partitioning line being discontinued, committed spending being allocated to the installation of a new stud & track production line and having the previous Financial Director retire in January 2023 after 7.5 years with Libra Systems Ltd, completing a successful hand over to the new Company Accountant.

The company has continued to invest in extensive fire, structural & acoustic testing to be able to support its product offering and maintain its advantage in the marketplace, with an increasing amount of work guaranteed through specifications.

Due to uncertainties in the UK economy, we expect the coming 12 months to present difficult trading conditions, however the company has welcomed many new customers, whilst positively maintaining its existing customer base.

We are striving to improve our sustainability as a business, having published our first Environmental Product Declaration earlier in 2023, indicative of our intentions to become a greener manufacturer.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's principal financial assets are stock and trade debtors.

The company's product base is largely manufactured from raw steel and therefore the company is susceptible to variations in the global steel price. Management maintain a strong relationship with multiple suppliers and constantly monitor the purchase price of steel.

Credit risk is primarily attributable to the company's trade debtors. Overdue amounts are reviewed on a regular basis and queried with customers if they arise.

In order to maintain liquidity the company utilises an invoice discounting facility secured against its trade debtors. As a result of the invoice discounting facility the company is exposed to interest rate risk due to the variable interest charged on the facilities.

KEY PERFORMANCE INDICATORS

2023

2022

Turnover

11,180,324

10,969,040

Gross margin

18.3%

20.1%

Shareholders funds

2,913,062

2,491,477

Headcount

34

37

ON BEHALF OF THE BOARD:

Mr S J Scowcroft - Director

18th January 2024

The directors present their report with the financial statements of the company for the year ended 31st October 2023.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the manufacture of partitioning and other metal products which serve the construction industry.

DIVIDENDS

Dividends of £70,000 (2022: £200,000) were declared during the year.

DIRECTORS

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

Mr S J Scowcroft

Mr D A Rees

Mr D Berry

Other changes in directors holding office are as follows:

Mr M J Harrison - resigned 31st January 2023

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.

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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mr S J Scowcroft - Director

18th January 2024

Opinion

We have audited the financial statements of Libra Systems Limited (the 'company') for the year ended 31st October 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31st October 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.

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 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures include the following:

- Enquiring of the directors and senior management.

- Discussing among the engagement team, including the tax team, how and where fraud might occur in the financial statements.

- Obtaining an understanding of the legal and statutory framework that the company operates in. The key laws and regulations we considered in this context include the Companies Act 2006, Tax Legislation and Environmental and Health and Safety legislation.

Audit response to risks identified

As a result of performing the above we identified the occurrence of revenue, and accuracy of creditors as significant risks at the assertion level.

In addition to the above, our procedures to respond to risks identified included the following:

- Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations as detailed above.

- Enquiring of management and the directors concerning actual and potential litigation and claims.

- Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.

- Completing focused testing on revenue and creditors via a detailed review of a sample of documents supporting revenue recorded during the year and confirmation of supplier balances at the balance sheet date.

- In addressing the risk of fraud through management override of controls, reviewing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are indicative of a potential bias and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Darren Foot FCA (Senior Statutory Auditor)

for and on behalf of Stanton Ralph & Co Limited

Chartered Accountants

Statutory Auditor

The Old Police Station

Whitburn Street

Bridgnorth

Shropshire

WV16 4QP

18th January 2024

10,969,040

TURNOVER

3

11,180,324

8,761,510

Cost of sales

9,086,035

2,207,530

GROSS PROFIT

2,094,289

1,413,500

Administrative expenses

1,382,283

794,030

712,006

6,200

Other operating income

4

6,200

800,230

OPERATING PROFIT

6

718,206

75,547

Interest receivable and similar income

7

141,779

875,777

859,985

27,690

Interest payable and similar expenses

8

34,108

848,087

PROFIT BEFORE TAXATION

825,877

138,336

Tax on profit

9

233,501

709,751

PROFIT FOR THE FINANCIAL YEAR

592,376

-

OTHER COMPREHENSIVE INCOME

-

709,751

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

592,376

FIXED ASSETS

-

Intangible assets

11

-

427,746

Tangible assets

12

838,039

427,746

838,039

CURRENT ASSETS

918,170

Stocks

13

800,754

4,204,683

Debtors

14

4,519,124

7,670

Cash at bank and in hand

1,883

5,130,523

5,321,761

CREDITORS

2,644,153

Amounts falling due within one year

15

3,096,794

2,486,370

NET CURRENT ASSETS

2,224,967

2,914,116

TOTAL ASSETS LESS CURRENT LIABILITIES

3,063,006

CREDITORS

(329,817

)

Amounts falling due after more than one year

16

-

(92,822

)

PROVISIONS FOR LIABILITIES

20

(190,932

)

2,491,477

NET ASSETS

2,872,074

CAPITAL AND RESERVES

90

Called up share capital

21

90

2,491,387

Retained earnings

22

2,871,984

2,491,477

SHAREHOLDERS' FUNDS

2,872,074

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 18th January 2024 and were signed on its behalf by:

Mr S J Scowcroft - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1st November 2021

90

2,057,183

2,057,273

Changes in equity

Dividends

-

(200,000

)

(200,000

)

Total comprehensive income

-

709,751

709,751

Capital distribution

-

(75,547

)

(75,547

)

Balance at 31st October 2022

90

2,491,387

2,491,477

Changes in equity

Dividends

-

(70,000

)

(70,000

)

Total comprehensive income

-

592,376

592,376

Capital distribution

-

(141,779

)

(141,779

)

Balance at 31st October 2023

90

2,871,984

2,872,074

Cash flows from operating activities

415,936

Cash generated from operations

1

1,069,305

(3,049

)

Interest paid

-

(459

)

Interest element of hire purchase or finance lease rental payments paid

-

(144,120

)

Tax paid

(148,991

)

268,308

Net cash from operating activities

920,314

Cash flows from investing activities

(71,791

)

Purchase of tangible fixed assets

(565,026

)

37,500

Sale of tangible fixed assets

4,750

(34,291

)

Net cash from investing activities

(560,276

)

Cash flows from financing activities

(144,182

)

Loan repayments in year

(459,292

)

(43,551

)

HP repayments in year

-

(254,048

)

Amounts advanced to parent undertaking

-

414,109

Invoice financing draw downs

200,075

-

Invoice financing interest and charges

(36,608

)

(200,000

)

Equity dividends paid

(70,000

)

(227,672

)

Net cash from financing activities

(365,825

)

6,345

(Decrease)/increase in cash and cash equivalents

(5,787

)

1,325

Cash and cash equivalents at beginning of year

2

7,670

7,670

Cash and cash equivalents at end of year

2

1,883

1.	RECONCILIATION OF PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

31.10.23

31.10.22

£

£

Profit for the financial year

592,376

709,751

Depreciation charges

153,649

130,127

Profit on disposal of fixed assets

(3,666

)

(27,693

)

Invoice financing charges

21,792

-

Government grants

(6,200

)

(6,200

)

Finance costs

34,108

27,690

Finance income

(141,779

)

(75,547

)

Taxation

233,501

138,336

883,781

896,464

Decrease in stocks

117,416

85,901

(Increase)/decrease in trade and other debtors

(314,441

)

408,358

Increase/(decrease) in trade and other creditors

382,549

(974,787

)

Cash generated from operations

1,069,305

415,936

2.	CASH AND CASH EQUIVALENTS

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

Year ended 31st October 2023

31.10.23

1.11.22

£

£

Cash and cash equivalents

1,883

7,670

Year ended 31st October 2022

31.10.22

1.11.21

£

£

Cash and cash equivalents

7,670

1,325

3.	ANALYSIS OF CHANGES IN NET (DEBT)/FUNDS

At 1.11.22

Cash flow

At 31.10.23

£

£

£

Net cash

Cash at bank and in hand

7,670

(5,787

)

1,883

7,670

(5,787

)

1,883

Debt

Debts falling due within 1 year

(120,000

)

120,000

-

Debts falling due after 1 year

(320,000

)

320,000

-

(440,000

)

440,000

-

Total

(432,330

)

434,213

1,883

1.	STATUTORY INFORMATION

Libra Systems Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements are prepared in Sterling and contain information about Libra Systems Limited as an individual company.

Turnover

Turnover comprises revenue recognised by the company in respect of goods and services services supplied, exclusive of value added tax and trade discounts. Revenue is recognised at the point at which economic benefits of the company's products pass to customer, normally on delivery of the goods.

Government grants

Government grants in respect of capital expenditure are credited to a deferred income account and released to the profit and loss account over the expected useful lives of the relevant assets to which they relate.

All income relating to government grants is included within other operating income.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2015, has been fully amortised in prior years.

Patent and licences

Patent costs, being the amount paid in connection with the acquisition of intellectual property rights, have been fully amortised in prior years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Plant and machinery

-

33% on cost, 25% on cost, 20% on cost, 10% on cost and 5% on cost

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

Assets are depreciated from the date they are brought into use.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the costs of purchase on a first in, first out basis. Finished goods include labour and directly attributable overheads.

At each 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 the Statement of Comprehensive Income.

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 debtors and creditors, loans from banks and other third parties and loans to related parties.

Debt instruments (other than those wholly repayable or receivable within one year), including loans

and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.

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 Statement of Comprehensive Income.

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 of the recoverable amount, which

is an approximation of the amount that the company would receive for the asset if it were to be sold at

the balance sheet date.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the spot rate of exchange. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Any differences are taken to the statement of comprehensive income.

Leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

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

Invoice financing

The company has entered into a sales invoice financing arrangement for certain trade debtors. Amounts due from the customers are shown in full in trade debtors, with amounts due to the finance company in creditors due within twelve months.

Group relief

The benefit of group relief is accounted for within the tax charge of the profit making undertaking. No payment is made for group relief between group undertakings.

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:

31.10.23

31.10.22

£

£

United Kingdom

11,109,248

10,839,700

Rest of world

71,076

129,340

11,180,324

10,969,040

4.	OTHER OPERATING INCOME

31.10.23

31.10.22

£

£

Government grants

6,200

6,200

5.	EMPLOYEES AND DIRECTORS

31.10.23

31.10.22

£

£

Wages and salaries

1,047,286

1,015,592

Social security costs

98,636

115,671

Other pension costs

62,531

113,664

1,208,453

1,244,927

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

31.10.23

31.10.22

Direct labour

20

23

Indirect labour

13

14

33

37

31.10.23

31.10.22

£

£

Directors' remuneration

196,188

196,694

Directors' pension contributions to money purchase schemes

45,800

87,599

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

3

4

6.	OPERATING PROFIT

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

31.10.23

31.10.22

£

£

Hire of plant and machinery

45,394

43,749

Depreciation - owned assets

153,649

130,127

Profit on disposal of fixed assets

(3,666

)

(27,693

)

Auditors' remuneration

9,000

8,500

Foreign exchange losses

444

1,718

7.

INTEREST RECEIVABLE AND SIMILAR INCOME

31.10.23

31.10.22

£

£

Interest receivable from group undertakings

141,779

75,547

8.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.10.23

31.10.22

£

£

Bank loan interest

19,292

24,182

Other interest payable

14,816

3,049

Hire purchase

-

459

34,108

27,690

9.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

31.10.23

31.10.22

£

£

Current tax:

UK corporation tax

139,038

152,638

Over provision

(3,647

)

(9,739

)

Total current tax

135,391

142,899

Deferred tax

98,110

(4,563

)

Tax on profit

233,501

138,336

UK corporation tax has been charged at 22.52% (2022 - 19%).