Company registration number 02399487 (England and Wales)
THOMAS DUDLEY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
THOMAS DUDLEY LIMITED
COMPANY INFORMATION
Directors
Mr M J Dudley
Mr J Parker
Mr R Holden
Mr S Boyes
Secretary
Mr J Parker
Company number
02399487
Registered office
295 Birmingham New Road
Dudley
West Midlands
DY1 4SJ
Auditor
Bache Brown & Co Limited
Swinford House
Albion Street
Brierley Hill
DY5 3EE
Business address
295 Birmingham New Road
Dudley
West Midlands
DY1 4SJ
Bankers
Barclays Bank Plc
313 High Street
West Bromwich
West Midlands
B70 8LP
Solicitors
Clarke Willmott
138 Edmund Street
Birmingham
B3 2ES
THOMAS DUDLEY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 26
THOMAS DUDLEY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Review of the business
Principal Activities
The principal activity of the company is manufacturing and the areas of specialism are plastic cistern, component and resin sanitaryware manufacturers.
The Plastics division supplies the Builders Merchant, OEM and Retail markets.
There have been no significant changes in principle activities in the year under review
Business Review and Future Developments
We consider the key performance indicators which best communicate the financial performance and strength of the business are turnover, return on capital employed and with our growth plans, continued investment and liquidity
Turnover was up 13% on the prior period due to the reshoring of work to the UK following Brexit as customers look to shorten their supply chains and increasingly source from a UK manufacturer. This has allowed us to develop some significant new customers in 2022. In addition turnover is up as a result of having to pass on raw material and component price inflation. We have not lost any significant customers in the year and generally we still operate in markets where there is fierce competition from cheap imports.
Operating profit increased by 14% compared to 2021 in line with the increased turnover. Margins improved slightly on 2021 as the order book was full all year which enabled operational efficiencies.
Return on capital employed based on operating profit was maintained for 2022 at 16% 2021 16%.
The liquidity ratio increased in 2022 from 6.2 in 2021 but was still very healthy at 7.0. Cash in the business increased from £1.9m in 2021 to almost £2.1m in 2022 a cash balance that almost matches the outstanding liabilities of the company as at the year end.
The balance sheet continues to improve with an increase in shareholders’ funds of 13% and net current assets have increased by 21% as a result of the company’s profitability.
Principal risks and uncertainties
The main risks to the company are volatile customer demand due to general economic uncertainty as a result of high inflation in 2022, increase in raw material and component prices, mandatory wage increases, energy costs, skills shortages and foreign currency exposure.
The business environment continues to be challenging with raw material price increases at levels not seen in the recent past and energy prices continuing to increase. Skilled labour continues to be in short supply so we have recruited a number of apprentices. Our exposure to the UK construction industry means that elements of the business are subject to the monetary policy adopted by the banking industry and government policy. Competition within our market continues to be fierce both from imports and two foreign competitors who purchased UK brands and businesses to assist with their UK market penetration.
In summary, given these risks and uncertainties, we are aware that the future development of the business may be influenced by unforeseen future events outside our control but feel that the current strategy of investment in acquisitions, plant and equipment, training and educating our workforce, increasing awareness of manufacturing in education, developing new innovative products and factoring risk into our decision making is correct for the long term success of the business.
THOMAS DUDLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Mr M J Dudley
Director
29 June 2023
THOMAS DUDLEY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company is manufacturing and the areas of specialism are iron founders, plastic cistern and component manufacturers and resin sanitaryware manufacturers.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £500,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr M J Dudley
Mr J Parker
Mr R Holden
Mr S Boyes
Auditor
The auditor, Bache Brown & Co Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report 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 of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
THOMAS DUDLEY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
On behalf of the board
Mr M J Dudley
Director
29 June 2023
THOMAS DUDLEY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THOMAS DUDLEY LIMITED
- 5 -
Opinion
We have audited the financial statements of Thomas Dudley Limited (the 'company') for the year ended 31 December 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, 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 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 2022 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.
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 Auditor's 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.
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 strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
THOMAS DUDLEY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THOMAS DUDLEY LIMITED
- 6 -
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 directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, 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.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.
Auditor's 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 an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Approach to assessing the risks of misstatement due to irregularities, including fraud |
We assessed the risk of material misstatement in respect of fraud by meeting with management to understand where it considered there was susceptibility to fraud. |
|
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant reporting frameworks which are likely to affect the company include FRS102 , the Companies Act 2006 and the relevant tax laws. In addition we determined that there were no significant laws and regulations which have a direct effect on the amounts and disclosures in the financial statements. |
|
Audit response to risks identified |
We considered the risk of fraud through management override of controls. We also considered how management bias may impact upon performance targets. In response we performed audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of any significant transactions outside the normal course of business, reviewing accounting estimates for management bias. |
Based on the results of our risk assessment we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved enquires with management around actual and potential claims. Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations. |
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.
THOMAS DUDLEY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THOMAS DUDLEY LIMITED
- 7 -
Mr Ian Baker (Senior Statutory Auditor)
for and on behalf of Bache Brown & Co Limited
29 June 2023
Chartered Certified Accountants
Statutory Auditor
Swinford House
Albion Street
Brierley Hill
DY5 3EE
THOMAS DUDLEY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
27,656,520
24,578,622
Cost of sales
(17,202,573)
(15,902,011)
Gross profit
10,453,947
8,676,611
Distribution costs
(4,377,813)
(2,846,995)
Administrative expenses
(3,388,431)
(3,531,548)
Other operating income
57,624
113,346
Operating profit
4
2,745,327
2,411,414
Interest receivable and similar income
7
250,506
695
Profit before taxation
2,995,833
2,412,109
Tax on profit
8
(471,505)
(372,544)
Profit for the financial year
2,524,328
2,039,565
THOMAS DUDLEY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
£
£
Profit for the year
2,524,328
2,039,565
Other comprehensive income
-
-
Total comprehensive income for the year
2,524,328
2,039,565
THOMAS DUDLEY LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
4,476,134
4,600,782
Investments
11
926,803
926,803
5,402,937
5,527,585
Current assets
Stocks
13
6,178,743
5,509,120
Debtors
14
7,290,755
5,672,323
Cash at bank and in hand
2,073,090
1,895,564
15,542,588
13,077,007
Creditors: amounts falling due within one year
15
(2,210,525)
(2,098,597)
Net current assets
13,332,063
10,978,410
Total assets less current liabilities
18,735,000
16,505,995
Creditors: amounts falling due after more than one year
16
(8,955)
Provisions for liabilities
Deferred tax liability
17
594,142
398,420
(594,142)
(398,420)
Net assets
18,131,903
16,107,575
Capital and reserves
Called up share capital
20
100,000
100,000
Profit and loss reserves
21
18,031,903
16,007,575
Total equity
18,131,903
16,107,575
The notes on pages 12 to 26 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 29 June 2023 and are signed on its behalf by:
Mr M J Dudley
Director
Company Registration No. 02399487
THOMAS DUDLEY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2021
100,000
13,968,010
14,068,010
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
2,039,565
2,039,565
Balance at 31 December 2021
100,000
16,007,575
16,107,575
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
2,524,328
2,524,328
Dividends
9
-
(500,000)
(500,000)
Balance at 31 December 2022
100,000
18,031,903
18,131,903
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
1
Accounting policies
Company information
Thomas Dudley Limited is a private company limited by shares incorporated in England and Wales. The registered office is 295 Birmingham New Road, Dudley, West Midlands, DY1 4SJ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Thomas Dudley Limited is a wholly owned subsidiary of Thomas Dudley Group Limited and the results of Thomas Dudley Limited are included in the consolidated financial statements of Thomas Dudley Group Limited which are available from the Registrar of Companies.
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
Up to 20% straight line
Fixtures, fittings & equipment
6.67% straight line / 20% straight line
Motor vehicles
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Defined contribution schemes
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Defined benefit scheme
The company operates within the group defined benefit pension scheme. The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
1.14
Leases
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Inventory
Inventories are valued at the lower of cost and net realisation. Net realisation value includes where necessary, provisions for slow moving and obsolete stocks. The calculation of these provisions is made on a line by line basis based on a combination of the item’s age, sales history and classification as a discontinued line. The adequacy of the provision is monitored with reference to the amounts realised when old stock is cleared.
Bad debt provision
A bad debt provision is set up when the likelihood of recovering the debt is diminished. The level of provision will be based on any current repayment plan entered into and which is being adhered to by the debtor, together with an estimate of the likelihood of the amounts due being fully recovered.
Useful economic lives of non current assets
The useful economic lives of non-current assets have been derived from the judgement of the directors, using their best estimate of write-down period.
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
2
Judgements and key sources of estimation uncertainty
(Continued)
- 18 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Rebates
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are the estimation of rebate and discount accruals by the directors which are based on turnover and agreements in place.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Sale of goods
27,656,520
24,578,622
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
21,881,982
20,045,145
Exports
5,774,538
4,533,477
27,656,520
24,578,622
2022
2021
£
£
Other revenue
Interest income
506
695
Dividends received
250,000
-
Grants received
57,624
113,346
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(136,175)
(1,956)
Government grants
(57,624)
(113,346)
Fees payable to the company's auditor for the audit of the company's financial statements
13,260
12,750
Depreciation of owned tangible fixed assets
1,087,656
1,193,123
Profit on disposal of tangible fixed assets
(24,116)
(26,540)
Operating lease charges
201,587
201,252
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Administration
39
70
Sales and distribution
67
30
Works
110
118
Total
216
218
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
6,638,055
6,000,769
Social security costs
674,854
588,837
Pension costs
497,990
470,756
7,810,899
7,060,362
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
269,995
541,734
Company pension contributions to defined contribution schemes
13,254
36,098
283,249
577,832
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021 - 3).
The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 1 (2021 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
137,304
151,633
Company pension contributions to defined contribution schemes
-
14,253
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
6
Directors' remuneration
(Continued)
- 20 -
Certain directors of this company are employed by the parent company and their costs are included in parent company net recharges of £832,580 (2021 £856,954). Retirement benefits are accruing to 0 (2021 - 0) of these directors under a defined benefit pension scheme, and to 2 (2021 - 2) under a defined contribution scheme.
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Other interest income
506
695
Income from fixed asset investments
Income from shares in group undertakings
250,000
Total income
250,506
695
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
272,968
17,395
Adjustments in respect of prior periods
2,815
(2,409)
Group tax relief
344,052
Total current tax
275,783
359,038
Deferred tax
Origination and reversal of timing differences
195,722
13,506
Total tax charge
471,505
372,544
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
8
Taxation
(Continued)
- 21 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
2,995,833
2,412,109
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
569,208
458,301
Tax effect of expenses that are not deductible in determining taxable profit
2,260
1,209
Depreciation on assets not qualifying for tax allowances
2,466
4,298
Research and development tax credit
(85,600)
(64,714)
Under/(over) provided in prior years
2,815
(2,409)
Dividend income
(47,500)
Patent box deduction
(36,900)
(40,500)
Other tax adjustments
(77,838)
16,359
Deferred tax reserved at 25%
142,594
Taxation charge for the year
471,505
372,544
9
Dividends
2022
2021
£
£
Final paid
500,000
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
10
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2022
25,686,472
1,010,376
674,015
27,370,863
Additions
791,797
79,086
104,541
975,424
Disposals
(26,434)
(55,860)
(82,294)
At 31 December 2022
26,451,835
1,089,462
722,696
28,263,993
Depreciation and impairment
At 1 January 2022
21,584,531
718,352
467,198
22,770,081
Depreciation charged in the year
927,067
53,421
107,168
1,087,656
Eliminated in respect of disposals
(23,682)
(46,196)
(69,878)
At 31 December 2022
22,487,916
771,773
528,170
23,787,859
Carrying amount
At 31 December 2022
3,963,919
317,689
194,526
4,476,134
At 31 December 2021
4,101,941
292,024
206,817
4,600,782
11
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
12
926,803
926,803
12
Subsidiaries
These financial statements are separate company financial statements for Thomas Dudley Limited.
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Rugby Plastics Limited
England and Wales
Ordinary
100.00
Thomas Dudley Foundry Limited
England and Wales
Ordinary
100.00
Waterfit Limited
England and Wales
Ordinary
100.00
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
13
Stocks
2022
2021
£
£
Raw materials and consumables
4,921,991
4,232,372
Work in progress
256,063
290,693
Finished goods and goods for resale
1,000,689
986,055
6,178,743
5,509,120
14
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
4,431,933
3,393,859
Corporation tax recoverable
79,693
113,375
Amounts owed by group undertakings
2,584,826
1,911,669
Other debtors
6,345
81,551
Prepayments and accrued income
187,958
171,869
7,290,755
5,672,323
15
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Trade creditors
1,780,570
1,371,885
Amounts owed to group undertakings
13,990
514,111
Corporation tax
17,395
Other taxation and social security
374,496
88,886
Government grants
18
15,350
81,929
Other creditors
26,119
24,391
2,210,525
2,098,597
16
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Government grants
18
8,955
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
594,142
398,420
2022
Movements in the year:
£
Liability at 1 January 2022
398,420
Charge to profit or loss
195,722
Liability at 31 December 2022
594,142
18
Government grants
2022
2021
£
£
Arising from government grants
24,305
81,929
Deferred income is included in the financial statements as follows:
2022
2021
£
£
Current liabilities
15,350
81,929
Non-current liabilities
8,955
19
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
246,979
228,015
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
19
Retirement benefit schemes
(Continued)
- 25 -
Defined benefit scheme
The parent company also operates a pension scheme providing benefits based on final pensionable pay. The assets of the scheme are held separately from those of the company, being invested with insurance companies. Contributions to the scheme are charged to the profit and loss account so as to spread the cost of pensions over employees' working lives with the company. The regular cost is attributed to the individual years using the projected unit credit method. Variations in cost which are identified as a result of actuarial valuations, are amortised over the average expected remaining working lives of employees in proportion to their expected payroll costs.
Due to the nature of the group scheme the company cannot identify its share of the underlying assets and liabilities of the scheme, nor can it identify any surplus or deficit and the implications of that surplus or deficit to the company.
20
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
100,000
100,000
100,000
100,000
21
Profit and loss reserves
2022
2021
£
£
At the beginning of the year
16,007,575
13,968,010
Profit for the year
2,524,328
2,039,565
Dividends declared and paid in the year
(500,000)
-
At the end of the year
18,031,903
16,007,575
22
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for certain of its properties which include property rental and equipment rental.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
274,291
227,175
Between two and five years
857,267
850,240
In over five years
725,852
836,108
1,857,410
1,913,523
THOMAS DUDLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2022
2021
£
£
Acquisition of tangible fixed assets
107,628
502,516
24
Ultimate controlling party
The ultimate parent company is Thomas Dudley Group Limited, a company registered in England and Wales.
The ultimate controlling party is The Executors of HJT Dudley (deceased).
Thomas Dudley Group Limited prepares group financial statements and copies can be obtained from its registered office.
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