Company registration number 02971665 (England and Wales)
NORDELL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
NORDELL LIMITED
COMPANY INFORMATION
Directors
P Mason
P Rowe
A Hodge
Secretary
M Briggs
Company number
02971665
Registered office
4-5 Teville Industrials
Dominion Way
Worthing
West Sussex
BN14 8NW
Auditor
PHH Accountancy Limited
Second Floor
3 Liverpool Gardens
Worthing, West Sussex
BN11 1TF
Business address
4-5 Teville Industrials
Dominion Way
Worthing
West Sussex
BN14 8NW
NORDELL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 26
NORDELL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 1 -
The directors present the strategic report for the year ended 31 October 2022.
Review of the business
Nordell is an independent Plastics Manufacturing and Design refinement company offering a comprehensive range of dedicated services to complement a core Plastic Injection moulding manufacturing business.
Following the impact of the COVID-19 pandemic, resultant lockdowns and geopolitical uncertainty, the company has experienced rising overhead, energy and material costs whilst improving revenue from capitalising on exceptional pandemic market opportunities.
The turnover was £13.0 million for the year compared to £11.3 million for the year ended 31 October 2021. The cost of sales was £9.7 million in the year compared to £7.7 million in the year to 31 October 2021. The profit after tax was £0.7 million in the year compared to £1.0 million in the year to 31 October 2021.
Principal risks and uncertainties
The company is exposed to financial risk in different areas. The goal is to reduce the financial risk where feasible. This is continuously being assessed by the Board of Directors.
The company's trade receivables are primarily from established companies with a generally high credit rating. The directors believe that the exposure to credit risk from the loss of trade receivables is relatively low. Credit evaluations of customers are performed regularly in order to manage potential risk. The maximum risk exposure is represented by the carrying amount of the financial assets in the balance sheet, which is carefully managed by the directors.
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company's approach to managing liquidity risk is to strive to always having sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company's reputation.
As a result of international operations, the entity is exposed to exchange rate fluctuations. A significant portion of operational cost and financial cost as well as the revenues are in USD. The currency risk for 2022 is related to exposure of GBP to USD since the majority of the personnel costs are denominated in GBP. The company has not entered into any agreements to reduce the risk at 31 December 2022.
Development and performance
Despite the impact of COVID-19 the company was able to maintain good utilisation of all resources and maintain strong operational cash flow, whilst investing and delivering further exceptional pandemic driven market demand.
The company continues to invest and prioritise its staff learning and development initiative, proven to deliver agility on internal systems performance, service levels and customer product value & developments.
The on-going investment in research and development has also been key to continue the success and strength for the company, developing new and innovative ways to achieve market leading solutions across multiple sectors, whilst testing improving systems, technology, and efficiency initiatives in existing and new services as well as solutions for current and some exciting new projects.
Looking forwards the company has a positive outlook post the pandemic exceptional projects, where revenue levels continue to show sustainable growth from pre-pandemic levels.
NORDELL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 2 -
P Mason
Director
24 July 2023
NORDELL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 October 2022.
Principal activities
The principal activity of the company continued to be that of plastic injection moulding.
Results and dividends
The results for the year are set out on page 8.
Particulars of dividends are detailed in note 10 to the financial statements.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
P Mason
P Rowe
A Hodge
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.
On behalf of the board
P Mason
Director
24 July 2023
NORDELL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 4 -
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.
NORDELL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NORDELL LIMITED
- 5 -
Opinion
We have audited the financial statements of Nordell Limited (the 'company') for the year ended 31 October 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 October 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
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.
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.
NORDELL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NORDELL 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, employment, and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulation were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
NORDELL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NORDELL LIMITED
- 7 -
We assessed the susceptibility of the Company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
To address the risk of fraud through management bias and override of controls, we; |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which indicated, but were not limited to: |
|
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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.
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.
Matthew Pedder BA(Hons) FCA
Senior Statutory Auditor
For and on behalf of PHH Accountancy Limited
24 July 2023
Chartered Accountants
Statutory Auditor
Second Floor
3 Liverpool Gardens
Worthing, West Sussex
BN11 1TF
NORDELL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
13,045,297
11,289,102
Cost of sales
(9,707,312)
(7,729,896)
Gross profit
3,337,985
3,559,206
Administrative expenses
(2,809,828)
(2,486,527)
Other operating income
16,961
19,267
Operating profit
4
545,118
1,091,946
Interest payable and similar expenses
8
(57,812)
(48,653)
Profit before taxation
487,306
1,043,293
Tax on profit
9
185,097
930
Profit for the financial year
672,403
1,044,223
The profit and loss account has been prepared on the basis that all operations are continuing operations.
NORDELL LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2022
31 October 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
11
61,924
24,474
Tangible assets
12
1,547,049
1,693,363
1,608,973
1,717,837
Current assets
Stocks
14
1,390,068
1,206,550
Debtors
15
4,079,340
3,846,380
Cash at bank and in hand
6,265
11,487
5,475,673
5,064,417
Creditors: amounts falling due within one year
16
(2,840,770)
(2,682,335)
Net current assets
2,634,903
2,382,082
Total assets less current liabilities
4,243,876
4,099,919
Creditors: amounts falling due after more than one year
17
(213,451)
(585,925)
Provisions for liabilities
Deferred tax liability
20
274,791
149,263
(274,791)
(149,263)
Net assets
3,755,634
3,364,731
Capital and reserves
Called up share capital
22
50,000
50,000
Profit and loss reserves
3,705,634
3,314,731
Total equity
3,755,634
3,364,731
The financial statements were approved by the board of directors and authorised for issue on 24 July 2023 and are signed on its behalf by:
P Mason
Director
Company Registration No. 02971665
NORDELL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 November 2020
50,000
2,596,608
2,646,608
Year ended 31 October 2021:
Profit and total comprehensive income for the year
-
1,044,223
1,044,223
Dividends
10
-
(326,100)
(326,100)
Balance at 31 October 2021
50,000
3,314,731
3,364,731
Year ended 31 October 2022:
Profit and total comprehensive income for the year
-
672,403
672,403
Dividends
10
-
(281,500)
(281,500)
Balance at 31 October 2022
50,000
3,705,634
3,755,634
NORDELL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2022
- 11 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
869,949
844,552
Interest paid
(57,812)
(48,653)
Income taxes refunded
70,512
59,514
Net cash inflow from operating activities
882,649
855,413
Investing activities
Purchase of intangible assets
(62,703)
(23,089)
Proceeds from disposal of intangibles
48,500
Purchase of tangible fixed assets
(194,580)
(1,114,202)
Proceeds from disposal of tangible fixed assets
12,400
43,895
Net cash used in investing activities
(244,883)
(1,044,896)
Financing activities
Repayment of bank loans
(83,334)
(6,944)
Payment of finance leases obligations
(278,154)
452,056
Dividends paid
(281,500)
(326,100)
Net cash (used in)/generated from financing activities
(642,988)
119,012
Net decrease in cash and cash equivalents
(5,222)
(70,471)
Cash and cash equivalents at beginning of year
11,487
81,958
Cash and cash equivalents at end of year
6,265
11,487
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
- 12 -
1
Accounting policies
Company information
Nordell Limited is a private company limited by shares incorporated in England and Wales. The registered office is 4-5 Teville Industrials, Dominion Way, Worthing, West Sussex, BN14 8NW.
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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
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.
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 13 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Computer software
3 years straight line basis
1.6
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:
Leasehold improvements
5-10 years straight line basis
Plant and machinery
3-10 years straight line basis
Fixtures, fittings and equipment
3-10 years straight line basis
Computers
3 years straight line basis
Motor vehicles
3 years straight line basis
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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 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.
1.8
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.
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.
1.9
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.
1.10
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.
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 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.
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 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.
1.11
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.
1.12
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.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 17 -
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.16
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.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
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.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Manufacturing
12,737,121
10,656,295
Tooling
308,176
632,807
13,045,297
11,289,102
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
3
Turnover and other revenue
(Continued)
- 18 -
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
9,601,156
8,308,620
Europe
2,337,914
2,023,177
Rest of the world
1,106,227
957,305
13,045,297
11,289,102
2022
2021
£
£
Other revenue
Grants received
16,961
19,267
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(77,512)
(97,087)
Government grants
(16,961)
(19,267)
Depreciation of owned tangible fixed assets
161,853
54,412
Depreciation of tangible fixed assets held under finance leases
179,041
98,536
Profit on disposal of tangible fixed assets
(12,400)
(6,500)
Amortisation of intangible assets
25,253
6,793
Profit on disposal of intangible assets
(48,500)
Operating lease charges
182,742
145,647
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
6,000
For other services
All other non-audit services
4,000
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 19 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Direct - production
101
99
Semi-direct
47
40
Indirect - administrative
26
21
Directors
3
3
Total
177
163
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
4,947,887
4,458,178
Social security costs
439,669
360,476
Pension costs
112,829
144,309
5,500,385
4,962,963
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
174,839
160,943
Company pension contributions to defined contribution schemes
11,387
11,379
186,226
172,322
8
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
35,462
13,515
Other finance costs:
Interest on finance leases and hire purchase contracts
22,350
35,138
57,812
48,653
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 20 -
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(86,523)
Adjustments in respect of prior periods
(224,102)
(59,514)
Total current tax
(310,625)
(59,514)
Deferred tax
Origination and reversal of timing differences
125,528
58,584
Total tax credit
(185,097)
(930)
The actual credit 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
487,306
1,043,293
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
92,588
198,226
Tax effect of expenses that are not deductible in determining taxable profit
2,280
4,319
Permanent capital allowances in excess of depreciation
1,707
(191,936)
Research and development tax credit
(183,098)
(10,608)
Under/(over) provided in prior years
(224,102)
(59,515)
Deferred tax adjustment
125,528
58,584
Taxation credit for the year
(185,097)
(930)
10
Dividends
2022
2021
£
£
Final paid
281,500
326,100
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 21 -
11
Intangible fixed assets
Goodwill
Computer software
Total
£
£
£
Cost
At 1 November 2021
198,626
102,784
301,410
Additions
62,703
62,703
At 31 October 2022
198,626
165,487
364,113
Amortisation and impairment
At 1 November 2021
198,626
78,310
276,936
Amortisation charged for the year
25,253
25,253
At 31 October 2022
198,626
103,563
302,189
Carrying amount
At 31 October 2022
61,924
61,924
At 31 October 2021
24,474
24,474
12
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures, fittings and equipment
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 November 2021
163,442
2,755,395
257,155
29,534
53,273
3,258,799
Additions
130,334
21,105
10,001
33,140
194,580
Disposals
(237,235)
(237,235)
At 31 October 2022
163,442
2,648,494
278,260
39,535
86,413
3,216,144
Depreciation and impairment
At 1 November 2021
110,711
1,331,817
44,651
24,984
53,273
1,565,436
Depreciation charged in the year
15,565
253,884
56,993
5,246
9,206
340,894
Eliminated in respect of disposals
(237,235)
(237,235)
At 31 October 2022
126,276
1,348,466
101,644
30,230
62,479
1,669,095
Carrying amount
At 31 October 2022
37,166
1,300,028
176,616
9,305
23,934
1,547,049
At 31 October 2021
52,731
1,423,578
212,504
4,550
1,693,363
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
12
Tangible fixed assets
(Continued)
- 22 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2022
2021
£
£
Plant and machinery
889,420
513,784
Fixtures, fittings and equipment
113,063
192,036
Motor vehicles
23,934
1,026,417
705,820
13
Subsidiaries
Details of the company's subsidiaries at 31 October 2022 are as follows:
Name of undertaking
Class of
% Held
shares held
Direct
Business Data Supplies Limited
Ordinary
100.00
Component Moulders Limited
Ordinary
100.00
P.B. Extrusions Limited
Ordinary
100.00
All subsidiaries have remained dormant for the year and continue to have a Registered Office address of 4 & 5 Teville Industrials, Dominion Way, Worthing, West Sussex, BN14 8NW.
The aggregate of the share capital and reserves as at 31 October 2022 and the profit or loss for the year ended on that date for the subsidiary undertakings was as follows;
Business Data Supplies Limited - Capital and Reserves £nil and Profit and Loss £nil
Component Moulders Limited - Capital and Reserves £nil and Profit and Loss £nil
P.B. Extrusions Limited - Capital and Reserves £nil and Profit and Loss £nil
14
Stocks
2022
2021
£
£
Finished goods and goods for resale
1,390,068
1,206,550
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 23 -
15
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
2,089,394
2,015,546
Corporation tax recoverable
240,113
Amounts owed by group undertakings
1,550,628
1,550,185
Other debtors
27,025
8,670
Prepayments and accrued income
172,180
271,979
4,079,340
3,846,380
16
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
18
83,333
83,334
Obligations under finance leases
19
370,828
359,841
Trade creditors
663,998
806,382
Taxation and social security
211,813
319,207
Other creditors
1,184,679
678,164
Accruals and deferred income
326,119
435,407
2,840,770
2,682,335
The company has an invoice discounting agreement with a carrying amount of £1,165,397 (2021 - £659,104) denominated in GBP with a nominal interest rate of 2.3% above base rate.
The invoice discounting facility is available for the draw down on the company's trade debtors. The agreement is with recourse which ensures that the bad debt risk remains with the company. The liability is due within one year.
Security has been given over this facility in the form of a fixed and floating charge over the undertaking and all property and assets present and future.
17
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
18
76,389
159,722
Obligations under finance leases
19
137,062
426,203
213,451
585,925
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 24 -
18
Loans and overdrafts
2022
2021
£
£
Bank loans
159,722
243,056
Payable within one year
83,333
83,334
Payable after one year
76,389
159,722
The above loan relates to a Coronavirus Business Interruption Loan which has limited security over the company's assets. Interest is charged on the loan at a rate of 3.99% per annum over the Bank of England Base rate.
19
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
382,618
380,183
In two to five years
139,730
435,361
522,348
815,544
Less: future finance charges
(14,458)
(29,500)
507,890
786,044
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
274,791
149,263
2022
Movements in the year:
£
Liability at 1 November 2021
149,263
Charge to profit or loss
125,528
Liability at 31 October 2022
274,791
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
20
Deferred taxation
(Continued)
- 25 -
The deferred tax liability set out above is expected to reverse within 3 - 5 years and relates to accelerated capital allowances that are expected to mature within the same period.
21
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
112,829
144,309
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.
22
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000
23
Operating lease commitments
Lessee
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
229,338
169,873
Between two and five years
349,366
124,124
578,704
293,997
24
Ultimate controlling party
The company’s immediate parent company is Nordell Group Ltd and its ultimate parent company is Nordell Holdings Ltd. Nordell Holdings Limited registered office and principal place of business is 4 & 5 Teville Industrials, Dominion Way, Worthing, West Sussex, BN14 8NW. Nordell Holdings Limited prepares group accounts which are available from the company's registered office.
NORDELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 26 -
25
Cash generated from operations
2022
2021
£
£
Profit for the year after tax
672,403
1,044,223
Adjustments for:
Taxation credited
(185,097)
(930)
Finance costs
57,812
48,653
Gain on disposal of tangible fixed assets
(12,400)
(6,500)
Gain on disposal of intangible assets
(48,500)
Amortisation and impairment of intangible assets
25,253
6,793
Depreciation and impairment of tangible fixed assets
340,894
152,948
Movements in working capital:
Increase in stocks
(183,518)
(475,396)
Decrease/(increase) in debtors
7,153
(657,874)
Increase in creditors
147,449
805,139
Decrease in deferred income
-
(24,004)
Cash generated from operations
869,949
844,552
26
Analysis of changes in net debt
1 November 2021
Cash flows
31 October 2022
£
£
£
Cash at bank and in hand
11,487
(5,222)
6,265
Borrowings excluding overdrafts
(243,056)
83,334
(159,722)
Obligations under finance leases
(786,044)
278,154
(507,890)
(1,017,613)
356,266
(661,347)
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