Trolex Limited - Limited company accounts 18.2

REGISTERED NUMBER: 00644260 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

FOR

TROLEX LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Income Statement

6

Other Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTORS:

J Pierce-Jones

G Pierce-Jones

L Pierce-Jones

G D Christopher

P Brian

REGISTERED OFFICE:

Newby Road

Hazel Grove

Stockport

Cheshire

SK7 5DY

REGISTERED NUMBER:

00644260 (England and Wales)

AUDITORS:

Moss & Williamson Limited

Chartered Accountants

Statutory Auditor

Booth Street Chambers

Ashton-under-Lyne

Lancashire

OL6 7LQ

The directors present their strategic report for the year ended 31 December 2017.

REVIEW OF BUSINESS

The underlying business of Trolex continued in a positive trend, despite the fact that 2016 included a large

unusual contract the current year's normal business maintained a comparable healthy profit

As disclosed in note 7 the company wrote off a loan to it's parent company and provided for guarantees given.

This exceptional loss is as a direct result of a fellow subsidiary in a non-related industry entering into

liquidation after the end of the reporting period.

The company continues to invest heavily in new and innovative developments together with diversification into

other markets and products

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risk and uncertainties facing the company continue to be the current global issues surrounding

the mining and gas markets, during 2018 there has been signs of improvement, but have still not recovered

to previous levels. Events outside the control of the company and the unpredictability of the currency market

can lead to significant increases on cost and variance in margins. The directors continue to focus on all the

risks and uncertainties that face the company in order to minimise the effect on the company's performance.

ON BEHALF OF THE BOARD:

G D Christopher - Director

28 September 2018

The directors present their report with the financial statements of the company for the year ended 31 December 2017.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2017.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2017 to the date of

this report.

J Pierce-Jones

G Pierce-Jones

L Pierce-Jones

G D Christopher

P Brian

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.

AUDITORS

The auditors, Moss & Williamson Limited, will be proposed for re-appointment at the forthcoming Annual

General Meeting.

ON BEHALF OF THE BOARD:

G D Christopher - Director

28 September 2018

Opinion

We have audited the financial statements of Trolex Limited (the 'company') for the year ended

31 December 2017 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet,

Statement of Changes in Equity and 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 December 2017 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

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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to

report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

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 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, based on the work we

have performed, we conclude that there is a material misstatement of this other information, we are required

to report that fact. We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

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.

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.

D Evans FCA (Senior Statutory Auditor)

for and on behalf of Moss & Williamson Limited

Chartered Accountants

Statutory Auditor

Booth Street Chambers

Ashton-under-Lyne

Lancashire

OL6 7LQ

28 September 2018

TURNOVER

3

7,141,902

9,741,266

Cost of sales

2,284,950

4,272,564

GROSS PROFIT

4,856,952

5,468,702

Distribution costs

-

10,171

Administrative expenses

4,711,529

5,271,396

4,711,529

5,281,567

145,423

187,135

Other operating income

4

11,667

35,000

OPERATING PROFIT

6

157,090

222,135

Exceptional items

7

1,950,168

-

(1,793,078

)

222,135

Interest payable and similar expenses

8

30,796

26,025

(LOSS)/PROFIT BEFORE TAXATION

(1,823,874

)

196,110

Tax on (loss)/profit

9

(146,093

)

(129,257

)

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(1,677,781

)

325,367

(LOSS)/PROFIT FOR THE YEAR

(1,677,781

)

325,367

OTHER COMPREHENSIVE INCOME

Scheme asset return less interest income

232,000

123,000

Experience gains/(losses)

(10,000

)

27,000

Changes in actuarial assumptions

(52,000

)

(487,000

)

Change in irrecoverable surplus

(200,000

)

307,000

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(30,000

)

(30,000

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(1,707,781

)

295,367

FIXED ASSETS

Intangible assets

11

977,239

843,026

Tangible assets

12

2,589,220

2,424,139

3,566,459

3,267,165

CURRENT ASSETS

Stocks

13

1,169,543

954,667

Debtors

14

1,504,837

2,356,440

Cash in hand

61,798

837,984

2,736,178

4,149,091

CREDITORS

Amounts falling due within one year

15

2,096,247

2,495,043

NET CURRENT ASSETS

639,931

1,654,048

TOTAL ASSETS LESS CURRENT LIABILITIES

4,206,390

4,921,213

CREDITORS

Amounts falling due after more than one year

16

(823,046

)

(355,088

)

PROVISIONS FOR LIABILITIES

20

(525,000

)

-

NET ASSETS

2,858,344

4,566,125

CAPITAL AND RESERVES

Called up share capital

21

61,739

61,739

Share premium

22

29,779

29,779

Revaluation reserve

22

577,619

577,619

Capital redemption reserve

22

98,606

98,606

Retained earnings

22

2,090,601

3,798,382

SHAREHOLDERS' FUNDS

2,858,344

4,566,125

The financial statements were approved by the Board of Directors on 28 September 2018 and were signed on its behalf by:

G D Christopher - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2016

61,739

3,583,015

29,779

Changes in equity

Dividends

-

(80,000

)

-

Total comprehensive income

-

295,367

-

Balance at 31 December 2016

61,739

3,798,382

29,779

Changes in equity

Total comprehensive income

-

(1,707,781

)

-

Balance at 31 December 2017

61,739

2,090,601

29,779

Capital

Revaluation

redemption

Total

reserve

reserve

equity

£

£

£

Balance at 1 January 2016

577,619

98,606

4,350,758

Changes in equity

Dividends

-

-

(80,000

)

Total comprehensive income

-

-

295,367

Balance at 31 December 2016

577,619

98,606

4,566,125

Changes in equity

Total comprehensive income

-

-

(1,707,781

)

Balance at 31 December 2017

577,619

98,606

2,858,344

1.	STATUTORY INFORMATION

Trolex 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 as modified by the revaluation of certain assets.

The functional currency of Trolex Limited is considered to be pounds sterling as this is the currency of

the primary economic environment in which the company operates.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial

statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and

Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Turnover

The turnover shown in the profit and loss account represents amounts invoiced during the year,

exclusive of Value Added Tax.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a businesses in 2015 and 2017 is

amortised over its expected useful life of 10 years. Annual impairment reviews are carried out.

Patents and licences

Patents and licences are amortised at rates calculated to write off the assets on a straight line basis

over their estimated useful economic lives. Impairment of intangible assets is reviewed where

circumstances indicate that the carrying value of an asset may not be fully recoverable.

Tangible fixed assets

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

Freehold property

-

2% on valuation

Plant and machinery

-

at varying rates on cost

Motor vehicles

-

25% on cost

Freehold buildings are depreciated at 2% on valuation. Freehold land is not depreciated.

Stock and work in progress

Stock is valued at the lower of cost and net realisable value, after making due allowance for obsolete

and slow moving items.

Work in progress is valued on the basis of direct costs plus attributable overheads based on normal

level of activity. Provision is made for any foreseeable losses where appropriate. No element of profit is

included in the valuation of work in progress.

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 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 rates of exchange ruling at

the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of

exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at

the operating result.

Pension costs and other post-retirement benefits

The company operates two funded pension schemes, these schemes fall within the following

categories:

Defined Contribution Scheme

The company operates a defined contribution pension scheme for the benefit of qualifying employees.

The assets of the scheme are held separately from those of the group in an independently

administered fund. The pension cost charge for the year represents contributions payable by the

company to the fund.

Defined Benefit Scheme

The company also operates a defined benefit scheme for certain employees, providing benefits based

on final pensionable pay. The assets of the scheme are held separately from those of the company

and invested at the discretion of the trustees under the terms of the definitive trust deed.

The regular pension cost is charged to profit and loss account and is based on the expected pension

costs over the service lives of the employees. Contributions to the pension plan are paid according to

the advice of actuaries.

A pension surplus or deficit is recorded as the difference between the present value of the scheme

liabilities and the fair value of the scheme assets. The Company's share of pension surplus is

recognised to the extent that the company is able to recover a surplus through reduced contributions in

the future or through refunds from the scheme.

Operating lease agreements

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership

remain with the lessor are charged against profits on a straight line basis over the period of the lease.

3.

TURNOVER

The turnover and loss (2016 - profit) before taxation are attributable to the one principal activity of the

company.

An analysis of turnover by geographical market is given below:

2017

2016

£

£

Europe

4,025,947

7,713,556

America/Canada

636,292

364,360

Africa

163,824

147,605

Asia/Middle East

859,479

323,605

Australia/New Zealand

1,456,360

1,192,140

7,141,902

9,741,266

4.	OTHER OPERATING INCOME

2017

2016

£

£

Rent receivable

11,667

35,000

11,667

35,000

5.	EMPLOYEES AND DIRECTORS

2017

2016

£

£

Wages and salaries

2,754,625

3,161,611

Social security costs

330,237

351,626

Other pension costs

217,573

252,668

3,302,435

3,765,905

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

2017

2016

Office and Management

30

31

Technical/Engineers

16

16

Operatives

28

28

74

75

2017

2016

£

£

Directors' remuneration

622,900

690,480

Information regarding the highest paid director is as follows:

2017

2016

£

£

Emoluments etc

154,167

174,000

6.	OPERATING PROFIT

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

2017

2016

£

£

Depreciation - owned assets

152,868

173,650

(Profit)/loss on disposal of fixed assets

(5,750

)

2,104

Goodwill amortisation

89,319

66,989

Patents and licences amortisation

6,468

6,468

Auditors' remuneration

16,000

15,000

7.	EXCEPTIONAL ITEM

The exceptional item of £1,950,168 relates to the write off of non-recoverable loans and provision for

guarantees made on behalf of the parent company and fellow subsidiaries.

8.

INTEREST PAYABLE AND SIMILAR EXPENSES

2017

2016

£

£

Bank interest

30,796

26,025

9.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

2017

2016

£

£

Current tax:

UK corporation tax

(146,093

)

(129,257

)

Tax on (loss)/profit

(146,093

)

(129,257

)

Reconciliation of total tax credit included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The

difference is explained below:

2017

2016

£

£

(Loss)/profit before tax

(1,823,874

)

196,110

(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19.250% (2016 - 20%)

(351,096

)

39,222

Effects of:

Expenses not deductible for tax purposes

379,050

5,679

Capital allowances in excess of depreciation

(1,822

)

-

Depreciation in excess of capital allowances

-

13,340

Enhanced capital allowances

(166,450

)

(181,498

)

Pension provision

(5,775

)

(6,000

)

Total tax credit

(146,093

)

(129,257

)

Tax effects relating to effects of other comprehensive income

2017

Gross

Tax

Net

£

£

£

Scheme asset return less interest income

232,000

-

232,000

Experience gains/(losses)

(10,000

)

-

(10,000

)

Changes in actuarial assumptions

(52,000

)

-

(52,000

)

Change in irrecoverable surplus

(200,000

)

-

(200,000

)

(30,000

)

-

(30,000

)

2016

Gross

Tax

Net

£

£

£

Scheme asset return less interest income

123,000

-

123,000

Experience gains/(losses)

27,000

-

27,000

Changes in actuarial assumptions

(487,000

)

-

(487,000

)

Change in irrecoverable surplus

307,000

-

307,000

(30,000

)

-

(30,000

)

10.

DIVIDENDS

2017

2016

£

£

Ordinary shares of £0.05 each

Interim

-

80,000