Company Registration No. 03113328 (England and Wales)
DROM INTERNATIONAL (UK) LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
PAGES FOR FILING WITH REGISTRAR
DROM INTERNATIONAL (UK) LIMITED
CONTENTS
Page
Balance sheet
3
Notes to the financial statements
4 - 9
DROM INTERNATIONAL (UK) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 1 -
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.
DROM INTERNATIONAL (UK) LIMITED
CHARTERED ACCOUNTANTS' REPORT TO THE BOARD OF DIRECTORS ON THE PREPARATION OF THE UNAUDITED STATUTORY FINANCIAL STATEMENTS OF DROM INTERNATIONAL (UK) LIMITED FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
We have performed certain procedures in respect of the Company's unaudited financial statements for the year ended 31 December 20
20
as set out on pages 4 to 10, made enquiries of the Company's directors and assessed accounting policies adopted by the directors, in order to gather sufficient evidence for our conclusion in this report,
This report is made solely to the Company's directors, as a body, in accordance with the terms of our engagement letter dated
2 November 2020
. It has been released to the directors on the basis that this report shall not be copied, referred to or disclosed, in whole (save for the directors' own internal purposes or as may be required by law or by a competent regulator) or in part, without our prior written consent. Our work has been undertaken so that we might state to the directors those matters that we have agreed to state to them in this 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 directors as a body for our work, for this report or the conclusions we have formed.
You have confirmed that you have met your duty as set out in the directors' statement on page
2
. You consider that the Company is exempt from the statutory requirement for an audit for the year. Our responsibility is to form and express an independent conclusion, based on the work carried out, to you on the financial statements.
Based on our work, nothing has come to our attention to refute the directors' confirmation that in accordance with the Companies Act 2006 the financial statements give a true and fair view of the state of the Company's affairs as at 31 December 20
20
and of its loss for the year then ended and have been properly prepared in accordance with the Financial Reporting Standard for Smaller Entities.
25 August 2021
Chartered Accountants
DROM INTERNATIONAL (UK) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2020
31 December 2020
- 3 -
2020
2019
Notes
£
£
£
£
Current assets
Debtors
7
254,187
294,809
Cash at bank and in hand
74,493
254,187
369,302
Creditors: amounts falling due within one year
8
(2,105,681)
(2,809,015)
Net current liabilities
(1,851,494)
(2,439,713)
Capital and reserves
Called up share capital
30,000
30,000
Profit and loss reserves
(1,881,494)
(2,469,713)
Total equity
(1,851,494)
(2,439,713)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
For the financial year ended 31 December 2020 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he member has not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 25 August 2021 and are signed on its behalf by:
P Parmar
Director
Company Registration No. 03113328
DROM INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 4 -
1
Accounting policies
Company information
Drom International (UK) Limited is a limited company domiciled and incorporated in England and Wales. The registered office is Givaudan Uk Limited Kennington Road, Willesborough, Ashford, England, TN24 0LT
.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The financial statements have been prepared on a going concern basis, the validity of which is dependent upon the continuing financial support of the parent undertaking.
true
Drom International UK Limited is part of a large multinational Givaudan Group. Despite the Covid 19 crisis, the group has managed to achieve decent sales growth for Q1 2021 and recoverability of debts is not expected to deteriorate. The company and group do not also anticipate any issues with sourcing of raw materials.
The director
s
of the company ha
ve
confirmed th
at
support
for the company
will continue, and will enable the company to meet its liabilities going forward.
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
recover
ed
.
DROM INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 5 -
1.4
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.
1.5
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.
Classification of 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
paymen
ts 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. A
m
ounts 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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.6
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.
DROM INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 6 -
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.
1.7
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.
1.8
Leases
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 lease
s
asset are consumed.
1.9
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
1.10
Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
2
Turnover and other revenue
An analysis of the company's turnover is as follows:
DROM INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2
Turnover and other revenue
(Continued)
- 7 -
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
1,120,128
895,436
Outside the United Kingdom
287,378
429,443
1,407,506
1,324,879
3
Operating profit
2020
2019
Operating profit for the year is stated after charging:
£
£
Exchange losses/(gains)
71,568
(134,302)
Research and development costs
135,652
Depreciation of owned tangible fixed assets
358
Cost of stocks recognised as an expense
658,645
786,341
Operating lease charges
8,968
15,905
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was 3
(201
9
: 3)
5
Taxation
The company has losses carried forward of £
1
,735,824 (201
9
: £2,
323
,2
99
). A deferred tax asset of £
3
29,807 (201
9
: £
395
,
702
) has not been recognised on the basis that there is uncertainty to its recoverability.
DROM INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 8 -
6
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2020
53,307
Disposals
(53,307)
At 31 December 2020
Depreciation and impairment
At 1 January 2020
53,307
Eliminated in respect of disposals
(53,307)
At 31 December 2020
Carrying amount
At 31 December 2020
At 31 December 2019
7
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
209,183
290,586
Other debtors
45,004
4,223
254,187
294,809
8
Creditors: amounts falling due within one year
2020
2019
£
£
Trade creditors
5,453
Amounts owed to group undertakings
2,001,711
2,647,673
Taxation and social security
35,614
47,372
Other creditors
68,356
108,517
2,105,681
2,809,015
Amounts owed to fellow group companies are subject to interest, unsecured and repayable on demand.
DROM INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 9 -
9
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2020
2019
£
£
8,363
10
Related party transactions
At the year end the company owed £2,001,711 (2019: £2,647,673) to its parent, Givaudan SA and other group companies.
11
Parent company
The ultimate parent company is Givaudan SA, a company incorporated in Switzerland. The consolidated financial statements for the parent are publicly available from its registered office and principal address at 5 Chemin de la Parfumerie, 1214 Vernier, Switzerland.