Company Registration No. 04627336 (England and Wales)
TILEMASTER ADHESIVES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
TILEMASTER ADHESIVES LIMITED
COMPANY INFORMATION
Directors
Mr F Iacconi
Mr A Remotti
Mr F Sghedoni
Company number
04627336
Registered office
Unit 4
Tomlinson Road
Leyland
PR25 2DY
Auditor
MHA Moore and Smalley
Richard House
9 Winckley Square
Preston
PR1 3HP
TILEMASTER ADHESIVES LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Directors' responsibilities statement
7
Independent auditor's report
8 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 25
TILEMASTER ADHESIVES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
The company is focused on maintaining and building upon its reputation as one of the leading tile adhesive and grout manufacturers in the UK. As part of the Kerakoll Group of international companies, we manufacture and provide quality products that are backed up by our excellent customer service and technical support. We are committed to developing and training our staff so that the business achieves some of the best performance criteria in the industry and we maintain high standards in everything that we do.
We have a long term objective which is to continue to grow the business, both in our traditional tiling markets as well as the flooring sector and will achieve this by a combination of bringing new and existing products to new and existing customers. This will done with combining the core values of both the Kerakoll group and Tilemaster.
2021 was the second combined year of the two UK businesses following the merger of Kerakoll UK into Tilemaster Adhesives Ltd.
In order to simplify the company structure in the UK, the assets and liabilities of Kerakoll UK were merged into the Tilemaster Adhesives business with effect from 1st January 2020. This change enabled the group to have one company in the UK and Tilemaster to concentrate on the promotion of both Kerakoll and Tilemaster brands going forward.
2021 has been a further transitional year for the UK business and was impacted by Covid-19,and the recovery period afterwards as the UK had to deal with the post Covid economic world.
Turnover continued to rise as in previous years as the company continued to invest in the infrastructure, both in terms of plant and machinery as well as people in all areas of the business.
Material supply issues as well as volatile inflationary prices caused a number of issues within the business leading to tight supply of product leading onto to very large increases in raw material prices.
The pace of change in the business, the strong growth in sales and the ongoing investments in machineries and organisation meant that the business faced some operational issues which affected the result although the operational issues have improved as we move into 2022.
The balance sheet remains strong with good cash balances which have allowed us to hold higher levels of stock to counter any possible future shortages. Investment in plant and machinery has continued, all financed by cash in the business.
The directors wish to thank the employees for continued hard work during the year.
TILEMASTER ADHESIVES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Principal risks and uncertainties
The directors and management of the company manage the company’s risk in conjunction with Kerakoll SPA, our holding company.
The company manages its liquidity and cash flow risk through a positive cash balance held within the UK. This is controlled by a regular monitoring and preparation of cash flow forecast and budget process.
The working capital requirements and cash flow are reviewed on a regular basis at both local and holding company level.
In order to manage trade debtors, one of the principal credit risks, all customers are set credit limits by the senior management and directors. This is based on a combination of payment history and third party credit references. The limits are reviewed on a regular basis. A complex block system within our debtor process automatically flags any overdue issues.
The company looks to mitigate supply chain risk by implementing a rigorous supplier selection process and working closely with a variety of suppliers.
A number of our suppliers are from the European market and the company is exposed to translation and transaction foreign exchange risk. To reduce this risk, the company purchases from our largest group supplier in pounds sterling for goods to be sold in the UK.
The uncertain raw material market remains an issue as we now move into a post pandemic world. This will bring inflationary pressures into the UK, with probable issues with higher energy costs leading to a squeeze on disposable income.
The UK is also seeing higher rates of National Insurance costs both on employers and employees to fund health care in the short and medium term.
This will put a further squeeze on incomes during 2022.
Uncertainty in Ukraine could also add to raw material supply and pricing issues.
Working capital is under control and we continue to hold strong cash balances.
In 2022 projected investments will go ahead as per our business plan.
We feel that with our strong balance sheet and continued support of the parent group, we are well placed to weather any economic storms as it has a strong purchasing strategy as well as maintaining a significant cash reserve.
Key performance indicators
The directors monitor the performance of the company on the following Key Performance Indicators:
2021
2020
Gross profit margin
25.59%
26.90%
Operating profit margin
(2.01)%
(2.77)%
EBITDA (£)
51,324
(170,554)
Fixed assets
Details of the additions and disposals to fixed assets are set out in the notes to the financial statements. During the year the company has spent £597,439 on new manufacturing plant and machinery. All the asset increases have been financed from cash reserves. The directors do not intend to adopt a policy of periodic revaluations for any class of asset as permitted by FRS 102.
TILEMASTER ADHESIVES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
Mr F Iacconi
Director
21 April 2022
TILEMASTER ADHESIVES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be that of manufacturing and selling of tile adhesive, grout and other tiling products.
Results and dividends
The results for the year are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr F Iacconi
Mr A Remotti
Mr F Sghedoni
Auditor
MHA Moore and Smalley were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed 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 to be contained in the directors' report. It has done so in respect of financial risk management.
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.
TILEMASTER ADHESIVES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 5 -
Colleagues
Details of the number of employees and related costs are included within the notes to the financial statements.
All appointments to the business are made solely based on a person's suitability for a particular post and without reference to age, gender, sexual orientation, ethnic origin, disability or religion (excluding where a situation provides a genuine occupational requirement). Furthermore, our commitment to ED&I extends to career development and training opportunities throughout our business.
As we move toward a further growth period, as a company we look to attract and retain the most suitable individuals to drive our business forward. We continue to observe best practice in relation to employment policies & procedures through a continued commitment to the:
Career progression and development of disabled people is considered on merit with regard only to the ability of the applicant to carry out the function required. Arrangements to enable disabled people to carry out the role required will be made if it is reasonable to do so. A colleague becoming disabled would, where applicable, be offered retraining and support to continue in their role where possible. It is the policy of the company that the training, career development and promotion of disabled people should, as far as possible, be identical with that of other colleagues.
As a company we are committed to maintaining clear and open communication paths with our colleagues. We regularly communicate with them on matters concerning the business, wider global group, and any other matters that may impact and/or affect them in their professional life. Individual achievement is recognised publicly and privately to reinforce behaviours. Collaboration is essential, particularly in our current state of growth. In order to develop a successful team it is essential that we maintain open communication at every stage of our growth strategy. As a company we utilise many formal and informal channels to achieve this. For example, our communications platform, newsletters, team update meetings, one on one line manager, colleague meetings, digital wider communication meetings both locally and on a more global level. These updates, meetings and interactions strive to reinforce the our values and contribute to further growing and cementing our culture.
Our whistleblowing policy and process, provides an opportunity for colleagues to, in confidence, report any concerns where the interests of the company (and wider Group) or others are at risk. Colleagues are encouraged to discuss their concerns with their line manager, a member of the HR department or a senior manager. All reports received are treated in the strictest confidence and are typically investigated by the HR department. The output of the investigations are reviewed by the Head of HR, Managing Director and other senior management colleagues as appropriate, dependent upon the nature of the complaint.
TILEMASTER ADHESIVES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 6 -
Colleagues (continued)
We have an anti-corruption and bribery policy which sets out the standards that are expected of colleagues and the procedures in place to minimise the opportunity for corrupt behaviours. The policy applies to all colleagues and includes guidance on the giving, receiving, and recording of business gifts and hospitality.
Preventing Modern Slavery Modern slavery is a crime and a violation of fundamental human rights. It takes various forms, such as slavery, servitude, forced and compulsory labour and human trafficking, all of which have in common the deprivation of a person's liberty by another in order to exploit them for personal or commercial gain. As a company we apply a zero-tolerance approach to modern slavery and we are committed to acting ethically and with integrity in all our business dealings and relationships. We work with our stakeholders to implement and enforce effective systems and controls to ensure modern slavery is not taking place anywhere in our own business or in our supply chains.
Environmental
The company recognises the importance of its environmental responsibilities, monitors its impact on the environment and designs and implements policies to reduce any damage that might be caused by the company's activities. Such initiatives include the recycling of as much packaging material and other items as practically possible and reducing energy consumption.
On behalf of the board
Mr F Iacconi
Director
21 April 2022
TILEMASTER ADHESIVES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
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.
TILEMASTER ADHESIVES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TILEMASTER ADHESIVES LIMITED
- 8 -
Opinion
We have audited the financial statements of Tilemaster Adhesives Limited (the 'company') for the year ended 31 December 2021 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 FRS 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 2021 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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.
TILEMASTER ADHESIVES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TILEMASTER ADHESIVES LIMITED
- 9 -
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.
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 and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below:
TILEMASTER ADHESIVES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TILEMASTER ADHESIVES LIMITED
- 10 -
Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and Safety; employment law; data protection and GDPR, industry specific regulations and quality standards (The Tile Association, BSI and Contract Flooring Association) and compliance with the UK Companies Act.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
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.
Paul Spencer (Senior Statutory Auditor)
For and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Richard House
9 Winckley Square
Preston
PR1 3HP
TILEMASTER ADHESIVES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
2021
2020
as restated
Notes
£
£
Turnover
3
31,714,873
26,635,307
Cost of sales
(23,597,972)
(19,470,790)
Gross profit
8,116,901
7,164,517
Administrative expenses
(8,758,097)
(8,002,961)
Other operating income
4,950
100,853
Operating loss
4
(636,246)
(737,591)
Interest receivable and similar income
7
5
1,642
Loss before taxation
(636,241)
(735,949)
Tax on loss
8
158,711
117,463
Loss for the financial year
(477,530)
(618,486)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
TILEMASTER ADHESIVES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 12 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
9
6,302,176
6,342,872
Current assets
Stocks
10
3,386,500
3,066,178
Debtors
11
5,947,550
6,019,465
Cash at bank and in hand
2,574,905
2,987,896
11,908,955
12,073,539
Creditors: amounts falling due within one year
12
(9,139,185)
(8,708,224)
Net current assets
2,769,770
3,365,315
Total assets less current liabilities
9,071,946
9,708,187
Provisions for liabilities
Deferred tax liability
13
12,811
171,522
(12,811)
(171,522)
Net assets
9,059,135
9,536,665
Capital and reserves
Called up share capital
15
4,800,100
4,800,100
Profit and loss reserves
4,259,035
4,736,565
Total equity
9,059,135
9,536,665
The financial statements were approved by the board of directors and authorised for issue on 21 April 2022 and are signed on its behalf by:
Mr F Iacconi
Director
Company Registration No. 04627336
TILEMASTER ADHESIVES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2020
2,800,100
5,355,051
8,155,151
Year ended 31 December 2020:
Loss and total comprehensive income for the year
-
(618,486)
(618,486)
Issue of share capital
15
2,000,000
-
2,000,000
Balance at 31 December 2020
4,800,100
4,736,565
9,536,665
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
(477,530)
(477,530)
Balance at 31 December 2021
4,800,100
4,259,035
9,059,135
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 14 -
1
Accounting policies
Company information
Tilemaster Adhesives Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 4, Tomlinson Road, Leyland, PR25 2DY.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Fin-Firel S.p.a. These consolidated financial statements are available from its registered office, Camera di Modena, Via Canaletto 80, 41100 Modena, Italy.
1.2
Going concern
The directors have considered the company's financial position and performance alongside the impact of truerising cost pressures and recent events in Europe being where much of the company's supply originates. The directors believe the company has sufficient reserves of £4,259,035 at 31 December 2021 to support the business in addition to written confirmation from its parent company that it will provide adequate financial support for at least 12 monthss from signing, should the company require it.
Therefore at the time of approving the financial statements, the directors have reasonable expectation that the company has adequate resources to continue in operational existence for at least the 12 months following approval of the financial statements. Thus the directors continue to adopt the going concern basis of accounting in preparing these accounts.
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.
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Freehold property
10% on cost
Integral fixtures
10% on cost
Plant and machinery
10% on cost
Fixtures and fittings
10% on cost
Computer equipment
25% on cost
Motor vehicles
20% on cost
Freehold land and assets in construction are not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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.
Impairment of financial assets
Financial assets, 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.
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities
Basic financial liabilities, including creditors, loans from fellow group companies, 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
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.
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 18 -
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
1.14
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.
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.
1.16
Within the profit and loss account, volume rebates have been reclassified from distribution costs to turnover. The directors believe this provides a more accurate reflection of turnover and costs. This has not had any impact on net profit or reserves.
In addition operating lease commitment disclosures have been restated to include land and buildings occupied under lease.
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
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.
There were no significant areas of judgement or estimation uncertainty.
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Tiling adhesives and grout
31,714,873
26,635,307
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
30,459,386
25,825,651
ROI
1,255,487
809,656
31,714,873
26,635,307
4
Operating loss
2021
2020
Operating loss for the year is stated after charging/(crediting):
£
£
Government grants
(83,332)
Fees payable to the company's auditor for the audit of the company's financial statements
12,800
7,000
Depreciation of owned tangible fixed assets
687,570
568,862
Profit on disposal of tangible fixed assets
(1,825)
Operating lease charges
876,016
857,666
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Sales
33
33
Production
64
66
Administration
19
13
Total
116
112
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
4,316,992
3,893,487
Social security costs
429,724
355,666
Pension costs
82,668
73,013
4,829,384
4,322,166
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
256,156
177,088
Company pension contributions to defined contribution schemes
1,319
219
257,475
177,307
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
256,156
177,088
Company pension contributions to defined contribution schemes
1,319
219
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
5
1,642
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
8
Taxation
2021
2020
£
£
Deferred tax
Origination and reversal of timing differences
(158,711)
(117,463)
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Loss before taxation
(636,241)
(735,949)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
(120,886)
(139,830)
Tax effect of expenses that are not deductible in determining taxable profit
3,748
2,123
Tax effect of utilisation of tax losses not previously recognised
(48,773)
Adjustments in respect of prior years
2,917
Group relief
(23,466)
Permanent capital allowances in excess of depreciation
(8,471)
Depreciation on assets not qualifying for tax allowances
9,679
7,220
Effect of change in deferred tax rate
3,075
33,995
Other
2,495
Taxation credit for the year
(158,711)
(117,463)
Factors affecting future tax and charges
In the March 2021 budget the Chancellor confirmed an increase in the main rate of corporation tax from 19% to 25% with effect from 1 April 2023. The Finance Bill 2021 had its third reading on 24 May 2021 and was considered substantively enacted on this date. The deferred tax timing differences expected to reverse on or after 1 April 2023 have therefore been accounted for at 25%.
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
9
Tangible fixed assets
Freehold property
Integral fixtures
Assets under construction
Plant and machinery
Fixtures and fittings
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
£
Cost
At 1 January 2021
2,393,519
36,007
1,178,012
4,348,240
248,334
205,959
157,443
8,567,514
Additions
12,022
10,641
373,293
224,146
26,772
646,874
Transfers
(1,139,068)
1,139,068
At 31 December 2021
2,405,541
46,648
412,237
5,711,454
248,334
232,731
157,443
9,214,388
Depreciation and impairment
At 1 January 2021
194,235
21,642
1,746,089
94,709
88,038
79,929
2,224,642
Depreciation charged in the year
81,844
6,433
497,320
33,057
41,620
27,296
687,570
At 31 December 2021
276,079
28,075
2,243,409
127,766
129,658
107,225
2,912,212
Carrying amount
At 31 December 2021
2,129,462
18,573
412,237
3,468,045
120,568
103,073
50,218
6,302,176
At 31 December 2020
2,199,284
14,365
1,178,012
2,602,151
153,625
117,921
77,514
6,342,872
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
10
Stocks
2021
2020
£
£
Raw materials and consumables
1,662,421
1,602,095
Finished goods and goods for resale
1,724,079
1,464,083
3,386,500
3,066,178
11
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
5,253,630
5,268,992
Corporation tax recoverable
114,473
234,473
Prepayments and accrued income
579,447
516,000
5,947,550
6,019,465
12
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
4,594,105
4,208,478
Amounts owed to group undertakings
2,620,731
2,313,082
Taxation and social security
760,588
1,007,026
Other creditors
25,094
64,766
Accruals and deferred income
1,138,667
1,114,872
9,139,185
8,708,224
13
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
669,578
483,372
Tax losses
(653,846)
(312,708)
Other timing differences
(2,921)
858
12,811
171,522
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
13
Deferred taxation
(Continued)
- 24 -
2021
Movements in the year:
£
Liability at 1 January 2021
171,522
Credit to profit or loss
(158,711)
Liability at 31 December 2021
12,811
Deferred tax has been provided for at a rate of 25% (2020: 19%).
Deferred tax is not recognised in respect of tax losses of £1,758,672 and tax credits of £439,668 as it is not probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits.
14
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
82,668
73,013
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.
15
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4,800,000
4,800,000
4,800,000
4,800,000
Ordinary "A" shares of £1 each
40
40
40
40
Ordinary "B" shares of £1 each
40
40
40
40
Ordinary "C" shares of £1 each
20
20
20
20
4,800,100
4,800,100
4,800,100
4,800,100
TILEMASTER ADHESIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 25 -
16
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:
2021
2020
as restated
£
£
Within one year
779,092
720,661
Between two and five years
1,410,954
1,764,840
In over five years
230,000
2,190,046
2,715,501
17
Events after the reporting date
On 19 April 2022 the parent undertaking subscribed for a further 6,000,000 £1 ordinary shares.
18
Related party transactions
The company has taken advantage of the exemption permitted under Section 33.1A from disclosing transactions with the parent and fellow wholly owned group subsidiary companies.
19
Ultimate controlling party
The parent company is Kerakoll S.p.a, and the ultimate parent company is Fin-Firel S.p.a, both incorporated in Italy.
Fin-Firel S.p.a is owned and controlled by Fabio and Emilia Sghedoni, who are considered to be the ultimate controlling party.
The parent undertaking of the largest and smallest group for which Group accounts are prepared is Fin-Firel S.p.a and are available from Camera di Modena, Via Canaletto 80, 41100 Modena, Italy.
2021-12-312021-01-01falseCCH SoftwareCCH Accounts Production 2022.200Mr F IacconiMr A RemottiMr F Sghedoni046273362021-01-012021-12-3104627336bus:Director12021-01-012021-12-3104627336bus:Director22021-01-012021-12-3104627336bus:Director32021-01-012021-12-3104627336bus:RegisteredOffice2021-01-012021-12-31046273362021-12-31046273362020-01-012020-12-3104627336core:RetainedEarningsAccumulatedLosses2020-01-012020-12-3104627336core:RetainedEarningsAccumulatedLosses2021-01-012021-12-31046273362020-12-3104627336core:LandBuildingscore:OwnedOrFreeholdAssets2021-12-3104627336core:LeaseholdImprovements2021-12-3104627336core:ConstructionInProgressAssetsUnderConstruction2021-12-3104627336core:PlantMachinery2021-12-3104627336core:FurnitureFittings2021-12-3104627336core:ComputerEquipment2021-12-3104627336core:MotorVehicles2021-12-3104627336core:LandBuildingscore:OwnedOrFreeholdAssets2020-12-3104627336core:LeaseholdImprovements2020-12-3104627336core:ConstructionInProgressAssetsUnderConstruction2020-12-3104627336core:PlantMachinery2020-12-3104627336core:FurnitureFittings2020-12-3104627336core:ComputerEquipment2020-12-3104627336core:MotorVehicles2020-12-3104627336core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3104627336core:CurrentFinancialInstrumentscore:WithinOneYear2020-12-3104627336core:CurrentFinancialInstruments2021-12-3104627336core:CurrentFinancialInstruments2020-12-3104627336core:ShareCapital2021-12-3104627336core:ShareCapital2020-12-3104627336core:RetainedEarningsAccumulatedLosses2021-12-3104627336core:RetainedEarningsAccumulatedLosses2020-12-3104627336core:ShareCapital2019-12-3104627336core:RetainedEarningsAccumulatedLosses2019-12-31046273362019-12-3104627336core:ShareCapitalOrdinaryShares2021-12-3104627336core:ShareCapitalOrdinaryShares2020-12-3104627336core:ShareCapital2020-01-012020-12-3104627336core:LandBuildingscore:OwnedOrFreeholdAssets2021-01-012021-12-3104627336core:LeaseholdImprovements2021-01-012021-12-3104627336core:PlantMachinery2021-01-012021-12-3104627336core:FurnitureFittings2021-01-012021-12-3104627336core:ComputerEquipment2021-01-012021-12-3104627336core:MotorVehicles2021-01-012021-12-3104627336core:UKTax2021-01-012021-12-3104627336core:UKTax2020-01-012020-12-310462733612021-01-012021-12-310462733612020-01-012020-12-310462733622021-01-012021-12-310462733622020-01-012020-12-310462733632021-01-012021-12-310462733632020-01-012020-12-3104627336core:LandBuildingscore:OwnedOrFreeholdAssets2020-12-3104627336core:LeaseholdImprovements2020-12-3104627336core:ConstructionInProgressAssetsUnderConstruction2020-12-3104627336core:PlantMachinery2020-12-3104627336core:FurnitureFittings2020-12-3104627336core:ComputerEquipment2020-12-3104627336core:MotorVehicles2020-12-31046273362020-12-3104627336core:ConstructionInProgressAssetsUnderConstruction2021-01-012021-12-3104627336core:WithinOneYear2021-12-3104627336core:WithinOneYear2020-12-3104627336core:BetweenTwoFiveYears2021-12-3104627336core:BetweenTwoFiveYears2020-12-3104627336core:MoreThanFiveYears2021-12-3104627336core:MoreThanFiveYears2020-12-3104627336bus:PrivateLimitedCompanyLtd2021-01-012021-12-3104627336bus:FRS1022021-01-012021-12-3104627336bus:Audited2021-01-012021-12-3104627336bus:FullAccounts2021-01-012021-12-31xbrli:purexbrli:sharesiso4217:GBP