Company Registration No. 02621460 (England and Wales)
THE CDA GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
THE CDA GROUP LIMITED
COMPANY INFORMATION
Directors
I N R Kershaw
A M Jankowska-Brzoska
D A Collishaw
P Brown
D Worsley
(Appointed 1 December 2021)
Secretary
P Brown
Company number
02621460
Registered office
Harby Road
Langar
Nottingham
NG13 9HY
Auditor
UHY Hacker Young
14 Park Row
Nottingham
NG1 6GR
Business address
Harby Road
Langar
Nottingham
NG13 9HY
Bankers
Barclays Bank PLC
One Snowhill
Snowhill Queensway
Birmingham
B3 2WN
HSBC Bank Plc
130 New St
Birmingham
B2 4JU
THE CDA GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 9
Independent auditor's report
10 - 13
Profit and loss account
14
Statement of comprehensive income
15
Balance sheet
16 - 17
Statement of changes in equity
18
Notes to the financial statements
19 - 41
THE CDA GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The
directors of The CDA Group Limited present
the
ir
strategic report and financial statements for the year ended 31 December 2021.
Ownership
The company is a 100% owned subsidiary of Amica
Spółka Akcyjna
; a company listed on the Warsaw stock exchange.
Principal activity
The principal activity during the year continued to be the design, manufacture and distribution of kitchen appliances and accessories. We supply to trade customers in the retail, distribution, construction, building merchant and leisure sectors.
Review of the business
Revenue for the year ended 31 December 2021 was down by 4.2% compared with the previous year at £47.3 million (2020: £49.3 million).
Whilst the consumer demand for domestic appliances was strong throughout 2021 as a result of investing disposable income in their homes, the impact of the Covid-19 pandemic continued to provide the industry with some challenges due to the shortage of shipping containers across the world which resulted in end-to-end supply chain delays. This provided a challenging environment for us to meet our turnover expectations in the year.
The company’s gross margin for the year is 26.6% (2020: 27.1%) which was 0.5% lower compared with 2020 and was largely attributable to the significant increase in container shipping prices due to the shortage of containers during the year.
The company’s overhead costs remain well controlled with administrative expenses at 27% of turnover (2020: 25%). as a result of continuing to review and optimise our cost base, but investing in key areas to ensure we maintain a high level of serviceability for our customers.
The company reported a pre-tax loss of £0.5 million compared with a profit before tax of £1.0 million in 2020. The key explanatory factors are recorded above.
Year End Position
The net assets position has been maintained during 2021 with net assets valued at £1,508,531 at 31 December 2021 (2020: £1,571,478).
No dividend payment was made or proposed for 2021 with an agreed strategy of rebuilding the balance sheet strength in 2021.
The company has headroom within its agreed working capital facilities and also enjoys financial support from its parent company. This position is not expected to change for at least the next 12 months.
THE CDA GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Service and Operational Performance
The Directors place considerable importance on the quality of the products produced and placed on the market and measure this using a number of indicators including quality control statistics and service call rates by individual product type. All key measures have been maintained during 2021 and compare well against industry benchmarks.
The performance of the after-care operation is monitored carefully across a range of indicators including time from call registration to resolution and engineer first time fix rate.
Logistics performance is evaluated against a number of criteria with the most important one being “on time in full” delivery against customer orders which currently achieves 90%+ compliance.
Other important performance indicators that are evaluated include sales and margin analysis by product and customer, various balance sheet ratios as well as digital marketing performance, warehouse efficiency, health and safety and customer feedback.
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the business can be summarised as follows:
-
market competition and market pricing pressure
-
exchange rate movements affecting the sterling cost of overseas production
-
pressure for technical, environmental and design improvements
-
economic activity in the UK market
-
conditions in the UK property market
-
recovery of debts
-
supply chain resilience
-
reputation
The company has a well-developed risk management framework that is designed to identify, assess, monitor, manage and mitigate all of the above risks and the Directors expect that this approach will continue to manage these risks effectively along with any other risk factors that exist or may emerge in the future.
Our commercial risk management objectives are managed by a continuous review of our product range, tight control of our cost base and investment in technical and quality improvements. A supplier audit system is used to regularly evaluate the performance of key suppliers and contingency arrangements are in place to cover key supply lines and avoid pressures on stock availability. Significant benefit is derived from access to Group supply chain management synergy opportunities. Relationships exist with alternative suppliers on key product lines.
The reputation of the CDA brand portfolio is very important in a competitive market and it supports successful future performance and growth. The company attaches a very high priority to the customer experience and monitors feedback from many different sources. The gathered data is used to drive improvements in the customer experience.
THE CDA GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
Our financial risk management objectives are focused on the need to ensure that the company has sufficient working capital and free cash flow to support the operating capacity of the business and to finance expansion activity when opportunities arise. Working capital is funded both internally from company operations alongside a well balanced portfolio of bank facilities that are available for draw down as required. We continuously review opportunities to improve the management of our working capital for example through credit control and collaboration with our suppliers. The company is able to draw on financial support from its parent company as required.
Currency risk is managed by the use of a variety of hedging instruments such as the use of foreign currency accounts, forward currency purchases and swaps. The policy of the company is broadly to use a hedging instrument to cover between 50 and 100% of its anticipated requirements up to twelve months forward with a lower level of cover during the 12-18 month forward windows. We do not hedge our foreign currency position further forward than 18 months currently. The exact levels of cover are set in advance of the financial year and will depend on a variety of factors such as the view of the market and future trends, market rate versus current budget rate, margin sensitivity to exchange rate movements and company views on pricing flexibility. Further details on the company’s hedging policy can be found under the accounting policy note “Derivative Financial Instruments and Hedging Instruments”.
Credit risk is managed by pursuing a policy of dealing with creditworthy customers and managing credit limit exposure very carefully. Credit insurance is used where appropriate and available and covers approximately 80-85% of our credit sales. Trade receivables consist of a large number of customers spread across a range of market sectors and geographical areas. The company does not have an excessive uninsured credit risk exposure and the Directors do not believe that the company is exposed to a significant degree of credit risk. The bad debt charge in 2021 was 0.004% of sales and 0.12% in 2020.
Interest rates and similar charges on external borrowings are at a fixed margin to UK base rates or other recognised UK interest rate benchmarks. Whilst the business has no control over UK interest rates, the Directors do not anticipate significant increases during 2022 and 2023 that would create any material impact on total financing costs. This view is based on an assessment of the UK economic position, views of senior economists and forward guidance from the Bank of England on factors which might affect interest rates.
P Brown
Director
29 September 2022
THE CDA GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity during the year continued to be the design, manufacture and distribution of kitchen appliances and accessories. We supply to trade customers in the retail, distribution, construction, building merchant and leisure sectors.
Results and dividends
The results for the year are set out on page 14.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
I N R Kershaw
M P Gibbs
(Resigned 30 June 2021)
A M Sas
(Resigned 31 December 2021)
T W Hagno
(Resigned 28 April 2022)
A M Jankowska-Brzoska
D A Collishaw
R Jaskóla
(Resigned 29 October 2021)
P Brown
D Worsley
(Appointed 1 December 2021)
Supplier payment policy
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
-
settle the terms of payment with suppliers when agreeing the terms of each transaction;
-
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
-
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end excluding group creditors were equivalent to 62 day's purchases and including group creditors were equivalent to 99 days, based on the average daily amount invoiced by suppliers during the year.
The average payment days during 2021 based on volume of transactions (rather than value) was 27 days. This reflects the methodology set out in the UK government’s guidance on reporting Business Payment Practices and Performance.
THE CDA GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 5 -
Financial instruments
Treasury operations and financial instruments
The company operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the company’s activities.
The company’s principal financial instruments include derivative financial instruments, the purpose of which is to manage currency risks arising from the company’s activities, and bank overdrafts and trade finance facilities, the main purpose of which is to raise finance for the company’s operations. In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations. Derivative transactions which the company enters into principally comprise forward exchange contracts. In accordance with the company’s treasury policy, derivative instruments are not entered into for speculative purposes.
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Foreign currency risk
The company’s principal foreign currency exposures arise from trading with overseas businesses in currencies other than UK sterling. Company policy is to use hedging instruments to manage the risk of fluctuating currency pairs. The detailed hedging approach is reviewed regularly by the Directors and the extent of the hedging coverage will vary by tenor (future timing of the currency risk), currency, level of exposure and pricing policy. The preferred instrument for managing currency risk is forward contracts for the relevant currency pair.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade Debtors are monitored on an ongoing basis and provision is made for doubtful debts, after credit insurance deductions, where necessary.
Research and development
The company does not currently undertake any research and development.
THE CDA GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 6 -
Future developments
The emphasis over the next 12 months is to improve trading performance as well as developing our kitchen studio channel business by developing our product portfolio, further enhancing all elements of our service proposition and strengthening the relationships with kitchen designers. The key elements in doing this are the following:
-
Improve profitability across the brand portfolio and reposition the brands within the market
-
Refine our marketing and sales offering to ensure the customer experience is at the core of our business vision
-
Continued review of our After Service support to ensure we are improving on all of our key performance indicators, as well as enhancing the level of service we offer our retail partners and consumers
-
Investment in digital processes and services to further enhance our customer service proposition
-
Improved resilience in the supply chain with emphasis on excellent stock availability
-
A continued review of our internal processes to deliver greater efficiency across all of our operations
Auditor
In accordance with the company's articles, a resolution proposing that UHY Hacker Young be reappointed as auditor of the company will be put at a General Meeting.
Energy and carbon report
2021
2020
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Electricity purchased
315,589
4,399,196
- Fuel consumed for transport
4,237,870
449,485
4,553,459
4,848,681
THE CDA GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
2021
2020
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
61.08
55.65
- Fuel consumed for owned transport
950.41
995.67
1,011.49
1,051.32
Scope 2 - indirect emissions
- Electricity purchased
73.58
104.79
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the
-
-
Total gross emissions
1,085.07
1,156.11
Intensity ratio
0.0229
0.0229%
0.0234%
Quantification and reporting methodology
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £,000 of annual sales revenue.
Measures taken to improve energy efficiency
CDA has implemented LED warehouse ECO lighting conversion and LED emergency ECO lighting conversion at their external storage site, along with the installation of E-car charging points at their premises.
THE CDA GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
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), including FRS 101 "Reduced Disclosure Framework". 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;
-
state whether applicable UK Accounting Standards have been followed, including FRS 101, subject to any material departures disclosed and explained in the financial statements; and
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
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.
Going concern
The Directors believe that it is appropriate to prepare these financial statements on a going concern basis. The company has prepared budgets and cashflow forecasts for the next 12 months and has concluded it will be able to meet its obligations as they fall due for a period of at least 12 months from the date of approval of these financial statements.
The Board is in regular discussion with its banking partners and based on its forward projections and current agreed facilities it expects to have sufficient headroom for at least the next 12 months from the approval of these financial statements. The company has a very supportive parent company and is able to call on loan and other forms of debt finance as and when required. The parent company has provided a letter of financial support to the company Board of Directors which applies until February 2024. This will provide any support necessary to meet company financial requirements.
THE CDA GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
On behalf of the board
P Brown
Director
29 September 2022
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE CDA GROUP LIMITED
- 10 -
Opinion
We have audited the financial statements of The CDA Group Limited
(the 'company')
for the year ended 31 December 2021 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 FRS 101 ‘Reduced Disclosure Framework’ (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 2021 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.
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
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.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE CDA GROUP LIMITED
- 11 -
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'
r
eport 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.
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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
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'
report
, 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.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE CDA GROUP LIMITED
- 12 -
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
.
Based on our understanding of the company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the company, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to inflated revenue and profit.
Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, review of correspondence with legal advisors, enquiries of management and review of internal audit reports in so far as they related to the financial statements, and testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE CDA GROUP LIMITED
- 13 -
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
James Simmonds (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
29 September 2022
Chartered Accountants
Statutory Auditor
14 Park Row
Nottingham
NG1 6GR
THE CDA GROUP LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 14 -
2021
2020
Notes
£
£
Turnover
3
47,354,008
49,346,033
Cost of sales
(34,741,631)
(35,981,294)
Gross profit
12,612,377
13,364,739
Administrative expenses
(13,094,286)
(12,867,270)
Other operating income
44,976
413,407
Operating (loss)/profit
4
(436,933)
910,876
Interest receivable and similar income
8
(5,624)
271,833
Interest payable and similar expenses
9
(131,374)
(144,508)
(Loss)/profit before taxation
(573,931)
1,038,201
Tax on (loss)/profit
10
109,047
(197,258)
(Loss)/profit for the financial year
(464,884)
840,943
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE CDA GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 15 -
2021
2020
£
£
(Loss)/profit for the year
(464,884)
840,943
Other comprehensive income:
Items that may be reclassified to profit or loss
Cash flow hedges:
- Hedging gain arising in the year
535,081
778,711
Tax relating to items that may be reclassified
(133,144)
(25,371)
Total items that may be reclassified to profit or loss
401,937
753,340
Total comprehensive income for the year
(62,947)
1,594,283
THE CDA GROUP LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 16 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible fixed assets
11
2,488,862
2,626,389
Investments
3
3
2,488,865
2,626,392
Current assets
Stocks
12
20,845,518
7,907,009
Deferred tax asset
18
-
12,864
Debtors
13
8,439,771
9,316,065
Cash at bank and in hand
422,222
6,039,354
29,707,511
23,275,292
Creditors: amounts falling due within one year
14
(27,910,689)
(20,935,358)
Net current assets
1,796,822
2,339,934
Total assets less current liabilities
4,285,687
4,966,326
Creditors: amounts falling due after more than one year
14
(1,586,150)
(1,674,477)
Provisions for liabilities
Deferred tax liabilities
18
(145,651)
(25,371)
Other provisions
19
(1,045,355)
(1,695,000)
Net assets
1,508,531
1,571,478
Capital and reserves
Called up share capital
21
521,741
521,741
Hedging reserve
22
510,099
108,162
Capital redemption reserve
23
2,719
2,719
Profit and loss reserves
473,972
938,856
Total equity
1,508,531
1,571,478
THE CDA GROUP LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2021
31 December 2021
2021
2020
Notes
£
£
£
£
- 17 -
The financial statements were approved by the board of directors and authorised for issue on 29 September 2022 and are signed on its behalf by:
P Brown
D Worsley
Director
Director
Company Registration No. 02621460
THE CDA GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
Share capital
Hedging reserve
Capital redemption reserve
Retained earnings
Total
£
£
£
£
£
Balance at 1 January 2020
521,741
(645,178)
2,719
97,913
(22,805)
Year ended 31 December 2020:
Profit for the year
-
-
-
840,943
840,943
Other comprehensive income:
Cash flow hedge gains
-
778,711
-
-
778,711
Tax relating to other comprehensive income
-
(25,371)
-
(25,371)
Total comprehensive income for the year
-
753,340
-
840,943
1,594,283
Balances at 31 December 2020
521,741
108,162
2,719
938,856
1,571,478
Year ended 31 December 2021:
Loss for the year
-
-
-
(464,884)
(464,884)
Other comprehensive income:
Cash flow hedge losses
-
535,081
-
-
535,081
Tax relating to other comprehensive income
-
(133,144)
-
(133,144)
Total comprehensive income for the year
-
401,937
-
(464,884)
(62,947)
Balances at 31 December 2021
521,741
510,099
2,719
473,972
1,508,531
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
1
Accounting policies
Company information
The CDA Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Harby Road, Langar, Nottingham, NG13 9HY.
The company's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101, Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
FRS 101 is part of UK GAAP and not IFRS as adopted by the EU.
However,
FRS 101 sets out a reduced disclosure framework which addresses the financial reporting requirements and disclosure exemptions for the individual financial statements of subsidiaries and ultimate parents that otherwise apply the recognition, measurement and disclosure requirements of EU-adopted IFRS.
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 on the historical cost basis, except for the revaluation of financial instruments. The principal accounting policies adopted are set out below.
As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to share based payments, financial instruments, capital management, presentation of a cash flow statement, presentation of comparative information in respect of certain assets, standards not yet effective, impairment of assets, business combinations, discontinued operations and related party transactions.
Where required, equivalent disclosures are given in the group accounts of Amica
Spółka Akcyjna
. The group accounts of Amica
Spółka Akcyjna
are available to the public and can be obtained as set out in note 27.
1.2
Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the
true
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 20 -
The Board is in regular discussion with its banking partners and based on its forward projections and current agreed facilities it expects to have sufficient headroom for at least the next 12 months from the approval date of these financial statements. The company has a very supportive parent company and
the parent
has provided a letter of financial support to the company Board of Directors which applies until February 202
4
. This will provide any support necessary to meet company financial requirements
Additional commentary on going concern has been included within the directors report.
In view of the above circumstances, the Directors believe that it is appropriate to prepare the financial statements on a going concern basis.
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, volume related rebates and direct customer marketing support.
Sale of Products and Parts
Revenue from the sale of products is recognised when all the following conditions are satisfied:
-
the significant risks and rewards of ownership of the products have passed to the buyer (usually on delivery to the buyer);
-
the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the products sold;
-
the amount of revenue can be measured reliably;
-
it is probable that the economic benefits associated with the transaction will flow to the company and;
-
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Service Provision
Revenue from a contract to provide services is recognised when the contracted service provision is complete.
For construction contracts, the “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
Bank interest accruing on capital borrowed to fund the production of long term contracts is carried forward within long term contract balances.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 21 -
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:
Land and buildings Leasehold
2% per annum straight line
Fixtures, fittings & equipment
25% per annum straight line
Plant and machinery
25% per annum straight line
Motor vehicles
25% and 33.33% per annum 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 recognised in the
profit and loss account
.
1.5
Fixed asset investments
Investments in subsidiaries and associates are all held at cost in the separate financial statements of the company.
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 tangible and intangible assets
At each reporting 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.
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.
Stocks
held for distribution at no or nominal consideration are measured
at
the lower of cost and replacement cost,
adjusted where applicable for any loss of service potential.
Cost is calculated using the first-in, first-out method.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 22 -
1.8
Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted
. The company is exempt under FRS 101 from the disclosure requirements of IFRS 13. There was no impact on the company from the adoption of IFRS 13.
1.9
Cash at bank and in hand
Cash and cash equivalents 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.
1.10
Financial assets
Financial assets are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets at fair value through profit or loss
Financial assets are classified as at FVTPL when the financial asset is held for trading. This is the case if:
-
the asset has been acquired principally for the purpose of selling in the near term, or
-
on initial recognition it is part of a portfolio of identified financial instruments that the
manages together and has a recent actual pattern of short-term profit taking, or
-
it is a derivative that is not designated and effective as a hedging instrument.
Financial assets at FVTPL are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Interest and dividends are included in 'Investment income' and gains and losses on remeasurement included in 'other gains and losses' in the statement of comprehensive income.
Financial assets held at amortised cost
Financial assets with fixed or determinable payments and fixed maturity dates that the Company has the positive intent and ability to hold to maturity are classified as held to maturity investments.
Held to maturity investments are measured at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 23 -
Trade Debtors
, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
Financial assets classified as available for sale are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income. Where an AFS financial asset is disposed of or determined to be impaired, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss.
Dividends and interest earned on AFS financial assets are included in the investment income line item in the statement of comprehensive income.
Impairment of financial assets
Financial assets, other than those
measured
at fair value through profit or 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 of the investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 24 -
1.11
Financial liabilities
The company recogni
s
es financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either
'
financial liabilities at fair value through profit or loss
'
or
'
other financial liabilities
'
.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as
measured at
fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:
-
it has been incurred principally for the purpose of
repurchasing it in the near term, or
-
on initial recognition it is part of a portfolio of identified financial instruments that the
manages together and has a recent actual pattern of short-term profit taking, or
-
it is a derivative that is not
designated and effective hedging instrument.
Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or
loss
.
Other financial liabilities
Other financial liabilities, including borrowings
, t
rade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs
directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method
.
For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
company’s
obligations are discharged, cancelled, or they expire.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Derivatives
The company enters into foreign exchange forward contracts in order to manage its exposure to foreign exchange risk.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 25 -
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are classified as current.
1.14
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 is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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.
1.15
Provisions
Provisions are recognised when the
company
has a legal or constructive present obligation as a result of a past event
and
it is probable that the
company
will be required to settle that obligation
,
and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 26 -
1.16
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
inventories
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.
1.17
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.18
Leases
At inception, the company assesses whether a contract is
,
or contains
,
a lease
within the scope of IFRS 16. A contract is
,
or contains
,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within
tangible fixed assets,
apart from those that meet the definition of investment property
.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other tangible fixed assets. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 27 -
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in
:
future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
1.19
Grants
Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.
1.20
Warranties
Costs relating to the company's post sale warranty policy are recognised in the year that the product is sold
and its basis and calculation is further explained in note 2.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 28 -
1.21
Derivative Financial Instruments and Hedging Instruments
Derivative instruments used by the company to hedge the risks associated with foreign currency exchange rate fluctuations include primarily forward exchange contracts. Such derivative financial instruments are measured at fair value. Derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
Gains and losses arising from changes in fair value of derivatives that do not qualify for hedge accounting are taken directly to the profit or loss in the financial year.
The fair value of foreign exchange forward contracts is calculated by reference to current forward exchange rates in contracts with similar maturity profiles.
In hedge accounting, hedges are classified as:
-
Fair value hedges against the exposure to changes in fair value of a recognised asset or liability; or
-
Cash flow hedges against exposure to variability in cash flows that can be attributable to a particular risk associated with a recognised asset, liability or future transaction. The hedging of currency risk of the firm commitment is accounted for as the cash flow hedge.
At the inception of the hedge relationship, the company documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking hedge transactions. Furthermore, the company assesses at inception and on an ongoing basis whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged items.
Fair Value Hedge
A fair value hedge is a hedge against changes in the fair value of a recognised asset or liability or an unrecognised firm commitment. In the case of fair value hedges, the carrying amount of the hedged item is adjusted for gains and losses arising from changes in fair value attributable the hedged risk. The hedging instrument is measured at fair value and gains and losses on the hedging instrument and the hedged items are recognised in profit or loss.
When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss recognised in profit or loss.
The company discontinues hedge accounting if the hedging instrument expires or is sold, terminated or exercised, the hedge no longer meets the criteria for hedge accounting or the company revokes the hedging relationship.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 29 -
1.22
Cash Flow Hedge
A cash flow hedge is a hedge against the exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction and could affect profit or loss. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and accumulated in the hedging reserve. Any gain or loss relating to the ineffective portion is recognised in profit or loss.
Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit and loss in the periods when the hedged item is recognised in profit or loss. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or non-financial liability, the gains and losses previously accumulated in equity are transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.
The company discontinues hedge accounting if the hedging instrument expires or is sold, terminated or exercised, the hedge no longer meets the criteria for hedge accounting or the company revokes the hedging relationship. Any gain or loss recognised in other comprehensive income at that time is accumulated in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 30 -
2
Critical accounting estimates and judgements
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Provision for warranty repairs
The criteria used in estimating the provision for future warranty repairs are as follows:
-
The period covered by the guarantee to the consumer;
-
The historical unit cost of the repair or replacement;
-
Estimated product reliability;
-
Average use of spare parts in the repair.
The value of the above variables may change in future periods.
The company reviews the adopted variables to reflect the company’s actual liability under the provision for warranty repair obligations every six months.
The provision in the financial statements at 31 December 2021 was £1,045,355 (2020: £1,695,000).
Obsolete stock provision
The obsolete stock provision is calculated on the basis of the following factors:
-
Historical and forecast sales by product;
-
Estimated market prices by product;
-
Assessment of costs to be incurred in achieving sales of stock;
-
Assessment of future market developments and opportunities.
The provision in the financial statements at 31 December 2021 was £659,507 (2020: £394,865).
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 31 -
3
Turnover
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Design, manufacture and distribution of kitchen appliances
47,354,008
49,346,033
2021
2020
£
£
Turnover analysed by geographical market
UK
46,855,426
48,971,218
Rest of the world
498,582
374,815
47,354,008
49,346,033
2021
2020
£
£
Other significant revenue
Grants received
44,976
413,407
4
Operating (loss)/profit
2021
2020
£
£
Operating (loss)/profit for the year is stated after charging/(crediting):
Government grants
(44,976)
(413,407)
Depreciation of property, plant and equipment
1,017,906
877,436
Profit on disposal of tangible fixed assets
(28,708)
(3,000)
Cost of inventories recognised as an expense
34,741,631
35,981,294
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 32 -
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
35,500
34,000
For other services
Tax services
3,625
4,625
Recruitment and remuneration services
15,448
11,193
Other services
250
Total non-audit fees
19,073
16,068
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Directors
5
6
Drivers
21
24
Warehouse
22
30
Engineers
21
23
Admin
145
138
Total
214
221
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
6,914,175
7,123,700
Social security costs
591,626
615,269
Pension costs
246,103
251,933
7,751,904
7,990,902
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 33 -
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
288,762
394,877
Company pension contributions to defined contribution schemes
12,100
15,788
300,862
410,665
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2020 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
120,517
142,218
Pension contributions paid in respect of the highest paid director total £4,500 (2020: £5,872).
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Other interest income
(5,624)
271,833
9
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
68,337
91,532
Interest on other financial liabilities:
Interest on lease liabilities
63,037
52,976
Total interest expense
131,374
144,508
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 34 -
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
(109,047)
197,258
The tax rate reduced to 19% from 1 April 2017 (previously 20%).
The charge for the year can be reconciled to the (loss)/profit per the profit and loss account as follows:
2021
2020
£
£
(Loss)/profit before taxation
(573,931)
1,038,201
Expected tax (credit)/charge based on a corporation tax rate of 19.00% (2020: 19.00%)
(109,047)
197,258
Tax charged in the financial statements
(109,047)
197,258
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2021
2020
£
£
Reclassifications from equity to profit or loss:
Relating to cash flow hedges
133,144
25,371
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 35 -
11
Tangible fixed assets
Land and buildings Leasehold
Fixtures, fittings & equipment
Plant and machinery
Motor vehicles
Total
£
£
£
£
£
Cost
At 31 December 2020
2,475,406
1,445,369
171,103
1,905,632
5,997,510
Additions
101,926
123,510
179,884
487,492
892,812
Disposals
(5,070)
(255,697)
(260,767)
At 31 December 2021
2,577,332
1,563,809
350,987
2,137,427
6,629,555
Accumulated depreciation and impairment
At 31 December 2020
713,531
1,151,217
112,635
1,393,738
3,371,121
Charge for the year
442,725
161,262
60,438
353,481
1,017,906
Eliminated on disposal
(739)
(247,595)
(248,334)
At 31 December 2021
1,156,256
1,311,740
173,073
1,499,624
4,140,693
Carrying amount
At 31 December 2021
1,421,076
252,069
177,914
637,803
2,488,862
At 31 December 2020
1,761,875
294,152
58,468
511,894
2,626,389
Tangible fixed assets includes right-of-use assets, as follows:
Right-of-use assets
2021
2020
£
£
Net values
Property
1,417,346
1,754,108
Plant and machinery
181,142
58,469
Motor vehicles
636,312
504,568
Computer equipment
-
18,616
2,234,800
2,335,761
Depreciation charge for the year
Property
438,689
333,835
Plant and machinery
62,047
64,703
Motor vehicles
348,329
278,644
Computer equipment
2,422
18,743
851,487
695,925
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
11
Tangible fixed assets
(Continued)
- 36 -
Included within right-of-use assets are also assets held on finance leases or on hire purchase contracts. The net carrying value in respect of these items was £3,227 (2020: £9,717) for the year. The depreciation charge in respect of such assets amounted to £6,490 (2020: £51,461) for the year.
12
Stocks
2021
2020
£
£
Finished goods
20,845,518
7,907,009
Stock includes goods in transit from suppliers, where risk has transferred to the company with the corresponding liability reflected in trade creditors.
13
Debtors
2021
2020
£
£
Trade debtors
7,095,176
8,935,524
Provision for bad and doubtful debts
(277,092)
(325,457)
6,818,084
8,610,067
Corporation tax recoverable
134,432
-
Other debtors
917,504
164,222
Prepayments and accrued income
569,751
541,776
8,439,771
9,316,065
14
Creditors
Due within one year
Due after one year
2021
2020
2021
2020
Notes
£
£
£
£
Loans and overdrafts
15
5,838,615
2,126
Creditors
16
20,166,802
18,605,368
Taxation and social security
1,209,614
1,703,787
Lease liabilities
17
695,658
624,077
1,586,150
1,674,477
27,910,689
20,935,358
1,586,150
1,674,477
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 37 -
15
Loans and overdrafts
2021
2020
£
£
Borrowings held at amortised cost:
Bank overdrafts
5,838,615
2,126
Borrowings are classified based on the amounts that are expected to be settled within the next 12
months.
HSBC UK Bank plc, being one of the company's bankers, hold a fixed and floating charge over all assets held by the company.
16
Creditors
2021
2020
£
£
Trade creditors
12,997,463
10,404,607
Accruals and deferred income
7,169,339
5,200,761
Other creditors
-
3,000,000
20,166,802
18,605,368
17
Lease liabilities
2021
2020
Maturity analysis
£
£
Short term lease liabilities
695,658
624,077
Long term lease liabilities
1,586,150
1,674,477
Total undiscounted liabilities
2,281,808
2,298,554
18
Deferred taxation
2021
2020
£
£
Deferred tax liabilities
145,651
25,371
Deferred tax assets
(12,864)
145,651
12,507
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
18
Deferred taxation
(Continued)
- 38 -
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Accelerated capital allowances
Hedging reserve
Total
£
£
£
Deferred tax asset at 1 January 2020
(12,864)
-
(12,864)
Deferred tax movements in prior year
Charge/(credit) to other comprehensive income
-
25,371
25,371
Deferred tax liability at 1 January 2021
25,371
25,371
Deferred tax asset at 1 January 2021
(12,864)
-
(12,864)
Deferred tax movements in current year
Charge/(credit) to other comprehensive income
-
133,144
133,144
Deferred tax liability at 31 December 2021
(12,864)
158,515
145,651
Deferred tax assets and liabilities are offset in the financial statements only where the company has a legally enforceable right to do so.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 39 -
19
Provisions for liabilities
2021
2020
£
£
Warranty repairs and returns
1,045,355
1,695,000
Movements on provisions:
Warranty repairs and returns
Total
£
£
At 1 January 2021
1,695,000
1,695,000
Utilisation of provision
(649,645)
(649,645)
At 31 December 2021
1,045,355
1,045,355
The warranty repairs and returns provision covers the expected future costs of warranty repairs and returns relating to products sold before the balance sheet date covering the unexpired warranty period on those products at the balance sheet date. The period of warranty is between 12 and 24 months from the date of customer purchase depending on the product type. It is anticipated that most of these warranty costs will be incurred within one year of the balance sheet date with all costs incurred within two years. The calculation is based on the level of repairs and returns recorded in previous years and incorporates data relating to sales levels, current cost levels and technical data relating to products sold.
20
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
246,103
251,933
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.
21
Share capital
2021
2020
Ordinary share capital
£
£
Authorised
Ordinary shares of £1 each
521,741
521,741
Issued and fully paid
Ordinary shares of £1 each
521,741
521,741
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 40 -
22
Hedging reserve
2021
2020
£
£
At the beginning of the year
108,162
(645,178)
Gains and losses on cash flow hedges
535,081
778,711
Income tax related to gains and losses transferred to income
(133,144)
(25,371)
At the end of the year
510,099
108,162
23
Capital redemption reserve
2021
2020
£
£
At the beginning and end of the year
2,719
2,719
24
Other leasing information
Following transition to IFRS 16 in the prior year, assets and liabilities have been recognised for all leases with a term of more than 12 months.
Information relating to lease liabilities is included in note 17.
25
Other financial instruments
At the period end the company had entered into forward contracts on currency exchanges with a total value of £19,600,665 (2020: £25,358,927) and accounted for FVTPL. At the period end a derivative asset exists with a value of £917,437 (2020: £164,222) reflected in the balance sheet in other creditors.
THE CDA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 41 -
26
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, including directors, is set out below in aggregate for each of the categories specified in IAS 24
Related Party Disclosures
.
Other information
During the year to 31 December 2021 the company paid rent to Kaaimans Limited
, a company controlled by
I N R Kershaw
, a Director, totalling £264,808 (2020: £232,072). At the year end the company owed Kaaimans Limited £nil (2020: £nil).
As at the year end there is a receivable of £519 (2020: £nil) due from I N R Kershaw.
Key management personnel are considered by the company to be the directors and their remuneration is disclosed in note 7.
27
Controlling party
The company is owned 100% by
Amica Spółka Akcyjna
, a company listed on the Warsaw stock exchange.
The Parent Company is registered in
Poland in
the register of entrepreneurs - the National Court Register maintained by
the District Court in Poznań - Nowe Miasto and Wilda in Poznań, 9th Commercial Division of the National
Court Register, under the number KRS 000017514.
The accounts for
Amica Spółka Akcyjna
are available from www.amica.pl.
The company is part of the Amica Capital Group which comprises Amica SA and all of its subsidiary companies. The results of The CDA Group Ltd are consolidated with the results of all members of the Amica Capital Group and published as the Amica SA Consolidated Financial Statements. These financial statements are available from
www.amica.pl
.
The ultimate parent company which prepares consolidated accounts (including the results of the Amica Capital Group) is Holding Wronki Spolka Z Ograniczona Odpowiedzialnoscia (or Holding Wronki Sp.z.o.o to abbreviate), a company registered in Poland.
2021-12-31
2021-01-01
I N R Kershaw
M P Gibbs
A M Sas
M P Gibbs
A M Jankowska-Brzoska
D A Collishaw
R Jaskóla
P Brown
A M Sas
P Brown
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