Company registration number 04037228 (England and Wales)
UK THERMOS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
UK THERMOS LIMITED
COMPANY INFORMATION
Directors
N J Kime
R J Dias
Y A Huang
Y Katoaka
T Koizumi
Secretary
M Snape
Company number
04037228
Registered office
1-2 Lockwood Park
Leeds
West Yorkshire
LS11 5UX
Auditor
BHP LLP
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
Solicitors
Gordons LLP
Riverside West
Whitehall Road
Leeds
LS1 4AW
UK THERMOS 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
Notes to the financial statements
11 - 24
UK THERMOS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
UK Thermos Limited is the UK distributor for Thermos branded vacuum, hydration and cooler products. The company is a subsidiary of King Warm Investments (Hong Kong) and an affiliate of Thermos KK (Japan)
The channels of distribution include all major supermarkets, high street retailers, online, mail order, DIY, leisure, cash and carry, food service and independent traders. These channels continue to be developed and expanded.
Although the general economy has seen the benefit of the ending of lockdown measures caused by the COVID-19 pandemic, retail activity and consumer demand were constrained and unpredictable. This affected all sales divisions during 2022.
The income statement on page 8 shows overall turnover was down at £15m. Profit after tax was £2.25m.
The balance sheet on page 9 of the financial statements shows the company’s financial position at the year end. Debtors of £5.4m are in line with expectations with stock levels at £4m to ensure continuous retail supply in 2023. Overall net assets are comparable to the prior year.
Principal risks and uncertainties
We look to 2023 to see further normalising of trading conditions, although continuing tensions and conflict in eastern Europe will continue to cause come global disruption. Inflation will continue to impact the wider economy, particularly consumer demand into 2023.
The company is well positioned to manage these risks and will continue to build on the strength of our market leading brands together with our outstanding service levels. UK Thermos will continue to maintain and build on our strong and effective relationships with all stakeholders including our investors, suppliers, customers and bank.
Currency Risk
The majority of goods purchased are in US$ with sales largely in sterling. Foreign exchange risk is managed through forward purchase of currency contracts during the year; however as at 31 December 2022 there are no forward currency contracts in place.
Credit Risk
The company mainly trades with customers whom it has a long-standing relationship. Risk is further mitigated through credit risk insurance.
Liquidity risks
The company finances its operations through reserves and bank financing facilities. Cash flow is effectively managed through accurate purchasing forecasts and credit control.
Key performance indicators
Turnover for 2022 decreased to £14.9m (2021 £18m) with profit after tax of £2.25m.
Maintaining strong liquidity performance is a key aim of the board. Overall, the key indicators show a continuing strong position and improving performance.
The current ratio remains in strong positive territory at 2.4 (2021 - 1.7) and the inventory holding period has decreased from 186 days to 100 days. The level peaked in 2021 to manage supply disruption.
Future developments
As part of the Thermos group, we will continue to develop and enhance our relationship with our customers through excellent support and service as well as delivering market leading product innovation.
UK THERMOS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
N J Kime
Director
1 April 2023
UK THERMOS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of a distributor supplying leading branded home and leisure products through multiple channels to UK wide retail and wholesale customers.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £2,000,000. 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:
N J Kime
R J Dias
Y A Huang
Y Katoaka
T Koizumi
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Auditor
In accordance with the company's articles, a resolution proposing that BHP LLP be reappointed as auditor of the company will be put at a General Meeting.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 which previously would have been contained in the directors' report including financial risk management and future developments.
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
N J Kime
Director
1 April 2023
UK THERMOS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 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.
The directors are responsible for the maintenance and integrity of the company website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
UK THERMOS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF UK THERMOS LIMITED
- 5 -
Opinion
We have audited the financial statements of UK Thermos Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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.
UK THERMOS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF UK THERMOS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that 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.
We focused on laws and regulations, relevant to the company, which could give rise to a material misstatement in the financial statements. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management, review of client’s operation of controls within the year, review of provisions and review of legal expenses. There are inherent limitations in the audit procedures described 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.
As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
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.
UK THERMOS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF UK THERMOS LIMITED
- 7 -
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Jamie Williams
Senior Statutory Auditor
For and on behalf of BHP LLP
1 April 2023
Chartered Accountants
Statutory Auditor
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
UK THERMOS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
14,909,020
18,046,613
Cost of sales
(10,503,258)
(13,325,817)
Gross profit
4,405,762
4,720,796
Distribution costs
(328,929)
(424,533)
Administrative expenses
(1,277,598)
(1,316,160)
Operating profit
4
2,799,235
2,980,103
Interest receivable and similar income
7
953
Interest payable and similar expenses
8
(24,145)
(11,042)
Profit before taxation
2,775,090
2,970,014
Tax on profit
9
(524,551)
(567,183)
Profit for the financial year
2,250,539
2,402,831
The profit and loss account has been prepared on the basis that all operations are continuing operations.
UK THERMOS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
11
39,223
50,370
Tangible assets
12
45,808
52,821
85,031
103,191
Current assets
Stocks
13
4,002,178
7,039,274
Debtors
14
5,410,751
6,124,517
Cash at bank and in hand
316,482
127,141
9,729,411
13,290,932
Creditors: amounts falling due within one year
15
(4,034,901)
(7,859,001)
Net current assets
5,694,510
5,431,931
Total assets less current liabilities
5,779,541
5,535,122
Provisions for liabilities
Deferred tax liability
16
6,120
-
(6,120)
Net assets
5,779,541
5,529,002
Capital and reserves
Called up share capital
18
159,575
159,575
Capital redemption reserve
127,930
127,930
Profit and loss reserves
5,492,036
5,241,497
Total equity
5,779,541
5,529,002
The financial statements were approved by the board of directors and authorised for issue on 1 April 2023 and are signed on its behalf by:
N J Kime
Director
Company Registration No. 04037228
UK THERMOS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
159,575
127,930
5,088,666
5,376,171
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
2,402,831
2,402,831
Dividends
10
-
-
(2,250,000)
(2,250,000)
Balance at 31 December 2021
159,575
127,930
5,241,497
5,529,002
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
2,250,539
2,250,539
Dividends
10
-
-
(2,000,000)
(2,000,000)
Balance at 31 December 2022
159,575
127,930
5,492,036
5,779,541
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
1
Accounting policies
Company information
UK Thermos Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1-2 Lockwood Park, Leeds, West Yorkshire, LS11 5UX.
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of UK Thermos Holdings Limited. These consolidated financial statements are available from its registered office, 1-2 Lockwood Park, Leeds, West Yorkshire, LS11 5UX.
1.2
Going concern
Atruet the time of approving the financial statements, having prepared forecasts and cashflows for at least twelve months from the signing date of these accounts, 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.
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.
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.4
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:
Software
20% straight line
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
20% straight line
Fixtures, fittings and equipment
20% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
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.
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.
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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 leases asset are consumed.
1.15
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.
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock provisioning
The company distributes branded home and leisure products to its customers. As a result it is necessary to consider the recoverability of the cost of stock and associated provisioning required. When calculating the stock provision, management considers the nature and condition of the stock, as well as applying assumptions around anticipated saleability of finished goods.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Distribution of branded home and leisure products
14,909,020
18,046,613
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
14,598,307
17,670,086
Rest of Europe
280,913
356,514
Rest of the World
29,800
20,013
14,909,020
18,046,613
2022
2021
£
£
Other revenue
Interest income
-
953
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(524,434)
(17,957)
Fees payable to the company's auditor for the audit of the company's financial statements
12,190
12,160
Depreciation of owned tangible fixed assets
19,306
18,536
Amortisation of intangible assets
16,782
15,522
Operating lease charges
241,360
233,391
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Production
4
4
Sales & Distribution
12
12
Administrative
8
10
Total
24
26
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
1,187,917
1,329,387
Social security costs
135,408
160,969
Pension costs
48,849
49,230
1,372,174
1,539,586
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
286,627
229,404
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
286,627
229,404
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
953
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
953
8
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on invoice finance arrangements
21,821
10,359
Other finance costs:
Other interest
2,324
683
24,145
11,042
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
536,888
569,246
Adjustments in respect of prior periods
(311)
1,215
Total current tax
536,577
570,461
Deferred tax
Origination and reversal of timing differences
(12,026)
(3,278)
Total tax charge
524,551
567,183
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
2,775,090
2,970,014
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
527,267
564,303
Tax effect of expenses that are not deductible in determining taxable profit
1,197
806
Change in unrecognised deferred tax assets
(3,602)
859
Under/(over) provided in prior years
(311)
1,215
Taxation charge for the year
524,551
567,183
10
Dividends
2022
2021
£
£
Dividends paid
2,000,000
2,250,000
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
11
Intangible fixed assets
Software
£
Cost
At 1 January 2022
429,164
Additions
5,635
At 31 December 2022
434,799
Amortisation and impairment
At 1 January 2022
378,794
Amortisation charged for the year
16,782
At 31 December 2022
395,576
Carrying amount
At 31 December 2022
39,223
At 31 December 2021
50,370
12
Tangible fixed assets
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
Cost
At 1 January 2022
92,979
226,067
319,046
Additions
12,293
12,293
At 31 December 2022
92,979
238,360
331,339
Depreciation and impairment
At 1 January 2022
92,979
173,246
266,225
Depreciation charged in the year
19,306
19,306
At 31 December 2022
92,979
192,552
285,531
Carrying amount
At 31 December 2022
45,808
45,808
At 31 December 2021
52,821
52,821
13
Stocks
2022
2021
£
£
Finished goods and goods for resale
4,002,178
7,039,274
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
14
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
4,756,080
5,430,763
Amounts owed by group undertakings
513,754
513,754
Other debtors
9
22
Prepayments and accrued income
135,002
179,978
5,404,845
6,124,517
Deferred tax asset (note 16)
5,906
5,410,751
6,124,517
Amounts owed by group undertakings are interest free and repayable on demand.
15
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
1,820,328
1,888,924
Corporation tax
336,888
296,246
Other taxation and social security
263,755
408,714
Other creditors
5,997
3,631,052
Accruals and deferred income
1,607,933
1,634,065
4,034,901
7,859,001
The invoice discounting facility of £nil (2021: £3,623,982) included in other creditors is secured against the assets of the company and the cross guarantee and debenture outlined in note 18.
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2022
2021
2022
2021
Balances:
£
£
£
£
Accelerated capital allowances
-
22,740
(18,751)
-
Tax losses
-
(16,620)
24,657
-
-
6,120
5,906
-
2022
Movements in the year:
£
Liability at 1 January 2022
6,120
Credit to profit or loss
(12,026)
Asset at 31 December 2022
(5,906)
Of the deferred tax assets set out above, £4,375 is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature in the same period.
17
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
48,849
49,230
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.
18
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
159,575
159,575
159,575
159,575
The shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption.
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
19
Financial commitments, guarantees and contingent liabilities
The banking facilities are secured under a cross guarantee and debenture between UK Thermos Limited and UK Thermos Holdings Limited dated 18 June 2010. The maximum exposure as at 31 December 2021 amounted to £nil (2021: £3,623,982).
20
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
144,120
229,962
Between two and five years
6,832
150,952
150,952
380,914
UK THERMOS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
21
Related party transactions
During the year, purchases amounting to £nil (2021: £981) were made from Alfi GmbH Isoliergefaesse, Metall - Und Haushaltswaren (Alfi GmbH), a company under common control. At the year end £nil (2021: £nil) was owed to Alfi GmbH and is included in creditors. The balances are unsecured, interest free and repayable on demand.
During the year, purchases amounting to £1,901,572 (2021: £6,350,688) were made from Thermos (China) Housewares Co Ltd, a company under common control. At the year end £827,288 (2021: £598,346) was owed to Thermos (China) Housewares Co Ltd and is included in creditors. The balances are on normal trading terms.
During the year, purchases amounting to £143,836 (2021: £180,514) were made from Thermos LLC, a company under common control. At the year end £nil (2021: £nil) was owed to Thermos LLC. The balances are on normal trading terms.
During the year, purchases amounting to £523,061 (2021: £113,955) were made from Vacuum Tech Manufacturing (Malaysia) Sdn,Bhd, a company under common control. At the year end £nil (2021: £39,749) was owed to Vacuum Tech Manufacturing (Malaysia) Sdn,Bhd and is included in creditors. The balances are on normal trading terms.
During the year, purchases amounting to £27,605 (2021: £394,278) were made from Top Thermo Manufacturing (Malaysia) Sdn,Bhd, a company under common control. At the year end £nil (2021: £106,448) was owed to Top Thermo Manufacturing (Malaysia) Sdn,Bhd and is included in creditors. The balances are on normal trading terms.
During the year, purchases amounting to £4,949 (2021: £1,214) were made from Thermos (Jiansu) Housewares Co. Ltd, a company under common control. At the year end £4,072 (2021: £693) was owed to Thermos (Jiansu) Housewares Co. Ltd. The balances are on normal trading terms.
King Warm Investments Limited, a company incorporated in Hong Kong, has significant influence over UK Thermos Limited and over Thermos International Trading Limited. During the year, purchases amounting to £2,968,243 (2021: £5,792,821) were made from Thermos International Trading Limited. At the year end £757,108 (2021: £737,316) was owed to Thermos International Trading Limited and is included in creditors. The balances are on normal trading terms.
22
Ultimate controlling party
The immediate parent company is UK Thermos Holdings Limited and is the smallest company for which consolidated accounts including UK Thermos Limited are prepared.
King Warm Investments Limited, a company incorporated in Hong Kong, is the parent of UK Thermos Holdings Limited, and is the largest company for which consolidated accounts including UK Thermos Limited are prepared. It's office address is 8 On Ping Street, Unit 5, 7/F, Grantech Centre, Shek Mun Shatin, Hong Kong.
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