Company registration number 01185365 (England and Wales)
CHT UK BRIDGWATER LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CHT UK BRIDGWATER LTD.
COMPANY INFORMATION
Directors
A Thompson
K F Jones
Secretary
K F Jones
Company number
01185365
Registered office
Showground Road
Bridgwater
Somerset
TA6 6AJ
Auditor
Alexander & Co LLP
Centurion House
129 Deansgate
Manchester
M3 3WR
Bankers
National Westminster Bank plc
180 London Road
Hazel Grove
SK7 4DH
CHT UK BRIDGWATER LTD.
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 24
CHT UK BRIDGWATER LTD.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the year and future developments
The performance of the Company during the financial year has provided stable results with turnover of £18,665,220 (2022: £18,901,011) and profit after taxation £1,692,159 (2022: £2,304,660).
The Directors believe that the Company is in a strong position for future growth.
Raw material prices and selling prices have remained stable throughout 2023. Sales turnover decreased 1% and volumes decreased from 2,362T in 2022 to 2,297T in 2023 3%.
Business Field General Industries includes the consumer care, industrial production, and silicone elastomer sectors. Overall BF General Industries sales declined 4% with growth in the consumer care sector being offset by reductions in both industrial production and silicone elastomers. Sales to the automotive sector were particularly hit in 2023 with the post Covid-19 demand spike ending and consumer demand impacted by cost-of-living concerns.
Prospects for 2024 are good with continued focus on highly conductive and thermal products, silicone foam applications, and our sustainable product portfolio. An upturn in the aerospace and military sector is also expected with many European countries expected to increase their expenditure on defence in response to increased global conflict.
Business Field Textiles includes the textile auxiliary and dyestuff market sectors. Despite challenging economic and market conditions BF Textiles showed an increase in sales of 5%. Significant growth in digital printing products and technical textiles offset a decline in dyestuff sales. Further growth is expected in 2024 with continued focus on digital printing products and sustainable textile auxiliaries.
One common theme across our customer base is an increased focus in sustainability.
Sustainability
The CHT Group views sustainable management and activity as an obligation to coming generations and, at the same time, as an opportunity for a successful long-term future. That is why the CHT corporate strategy has long combined economic success with social and ecological responsibility. CHT Group targets include a sustainable product portfolio with a minimum 80% of sales being ECO range products and EcoVadis accreditation. In 2023 CHT Group achieved 82% (FY22 67%) of sales of ECO range products (CHT UK 65% in 2022 and 2023) and a gold (2022 silver) EcoVadis rating.
The CHT Group committed in 2021 to Science Based Targets Initiative (SBTi) and 1.5°C target of Paris agreement with achieving the net zero target by 2045. The 2022 Corporate Carbon Footprint for the CHT Group reduced by 11% in 2022 compared to 2021. The Corporate Carbon Footprint is calculated to the GHG standard.
Future developments
The Company expects to continue its strategy of building a sustainable product portfolio for:
High performance thermally and electrically conductive silicone for the automotive, aviation and aerospace markets.
Speciality silicone products for the specialist moulding, personal care, cosmetics and agrochem sectors
Textile auxiliaries and dyestuffs for the garment dyeing, brand and retail, recycling, digital printing, and nonwoven sectors
The Directors will continue to implement policies to maintain a strong balance sheet to ensure short and long-term liquidity
CHT UK BRIDGWATER LTD.
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks
The key business risks and uncertainties affecting the Company are considered to relate to competition from UK and overseas manufacturers, consumer demand, the price and availability of raw materials.
There are also non-financial risks that may impact the business. Regulatory risk is the risk that arises from breaches of Health and Safety regulations, UK REACH registrations and environmental regulations. The Company is ISO9001 and ISO14001 accredited and engages in regular internal and external audits of procedures, systems, and controls to manage non-financial risk. The Company passed a stage one audit for ISO50001 at the end of 2023 and expects to gain full accreditation during 2024.
K F Jones
Director
22 February 2024
CHT UK BRIDGWATER LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of manufacturers and distributors of chemicals to the textile and associated industries, industrial chemicals, silicone products and sealants.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
A Thompson
F Naumann
(Resigned 28 September 2023)
K F Jones
B J Hettich
(Appointed 6 October 2023 and resigned 20 November 2023)
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £2,000,000 (2022: £1,500,000). The directors do not recommend payment of a further dividend.
Auditor
In accordance with the company's articles, a resolution proposing that Alexander & Co be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the Directors' 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;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- 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.
CHT UK BRIDGWATER LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
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
K F Jones
Director
22 February 2024
CHT UK BRIDGWATER LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CHT UK BRIDGWATER LTD.
- 5 -
Opinion
We have audited the financial statements of CHT UK Bridgwater Ltd. (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 2023 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.
CHT UK BRIDGWATER LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHT UK BRIDGWATER LTD.
- 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.
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.
CHT UK BRIDGWATER LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHT UK BRIDGWATER LTD.
- 7 -
Capability of the audit in detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company, we identified that the principal risks of non-compliance with laws and regulations related to breaches of the legal and regulatory framework that the company operates in. We considered the extent to which non-compliance might have a material effect on the financial statements. The key laws and regulations we considered in this context included UK Companies Act 2006 and health and safety legislation.
We also evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to the posting of inappropriate journal entries to manipulate financial results and potential management bias in accounting estimates.
As a result of the above, our audit procedures performed included:
Discussions with management and those charged with governance in relation to known or suspected instances of non-compliance with laws and regulations and fraud.
Agreeing financial statements disclosures to underlying supporting documentation and assessing compliance with relevant laws and regulations.
Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above. The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned and performed in accordance with ISAs (UK).
We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the directors of CHT UK Bridgwater Limited.
CHT UK BRIDGWATER LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHT UK BRIDGWATER LTD.
- 8 -
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.
Gary Kramrisch (Senior Statutory Auditor)
For and on behalf of Alexander & Co LLP
22 February 2024
Chartered Accountants
Statutory Auditor
Centurion House
129 Deansgate
Manchester
M3 3WR
CHT UK BRIDGWATER LTD.
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
18,665,220
18,901,011
Cost of sales
(11,015,235)
(11,047,611)
Gross profit
7,649,985
7,853,400
Administrative expenses
(5,304,608)
(4,980,803)
Operating profit
4
2,345,377
2,872,597
Interest receivable and similar income
7
1,233
30,214
Profit before taxation
2,346,610
2,902,811
Tax on profit
8
(654,451)
(598,151)
Profit for the financial year
1,692,159
2,304,660
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CHT UK BRIDGWATER LTD.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
1,692,159
2,304,660
Other comprehensive income
-
-
Total comprehensive income for the year
1,692,159
2,304,660
CHT UK BRIDGWATER LTD.
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
1,133,430
1,637,177
Tangible assets
11
2,223,300
1,762,799
3,356,730
3,399,976
Current assets
Stocks
12
2,590,846
3,285,473
Debtors
13
3,344,174
3,436,529
Cash at bank and in hand
2,537,809
2,122,962
8,472,829
8,844,964
Creditors: amounts falling due within one year
14
(1,604,389)
(1,855,981)
Net current assets
6,868,440
6,988,983
Total assets less current liabilities
10,225,170
10,388,959
Provisions for liabilities
Provisions
16
332,700
332,700
Deferred tax liability
15
334,741
190,689
(667,441)
(523,389)
Net assets
9,557,729
9,865,570
Capital and reserves
Called up share capital
18
306,001
306,001
Merger reserve
5,971,659
6,475,405
Profit and loss reserves
3,280,069
3,084,164
Total equity
9,557,729
9,865,570
The financial statements were approved by the board of directors and authorised for issue on 22 February 2024 and are signed on its behalf by:
K F Jones
Director
Company Registration No. 01185365
CHT UK BRIDGWATER LTD.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Merger reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
306,001
6,979,151
1,775,758
9,060,910
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
2,304,660
2,304,660
Dividends
9
-
-
(1,500,000)
(1,500,000)
Transfers
-
(503,746)
503,746
-
Balance at 31 December 2022
306,001
6,475,405
3,084,164
9,865,570
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
1,692,159
1,692,159
Dividends
9
-
-
(2,000,000)
(2,000,000)
Transfers
-
(503,746)
503,746
-
Balance at 31 December 2023
306,001
5,971,659
3,280,069
9,557,729
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
CHT UK Bridgwater Ltd. is a private company limited by shares incorporated in England and Wales. The registered office is Showground Road, Bridgwater, Somerset, TA6 6AJ.
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 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:
CHT UK Bridgwater Ltd. is a wholly owned subsidiary of Vermögensträger Beitlich GmbH and the results are included in the consolidated financial statements of Vermögensträger Beitlich GmbH which are available on Bundesanzeiger.de.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 7 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
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:
Land and buildings freehold
Straight line over 50 years
Land and buildings short leasehold
Over term of lease
Plant, machinery etc
10%-33% 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).
Recoverable amount is the higher of fair value less costs to sell and value in use.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset 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 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 in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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
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 cost less impairment. 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.
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.
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
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.
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.
1.9
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.
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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
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.
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.
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 18 -
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:
Intangible fixed assets
Intangible fixed assets are amortised over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessments consider issues such as future market conditions and the remaining life of the asset.
Impairment for stock
Determining whether stock balances are valued correctly, requires, and is based on, up to date trading information. The directors use their knowledge of the business, the trading environment and future projections to assess whether provision is necessary in these areas.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by geographical market
UK
13,571,596
13,378,281
Europe
3,246,157
4,200,787
Rest of the World
1,847,467
1,321,943
18,665,220
18,901,011
2023
2022
£
£
Other revenue
Interest income
1,233
30,214
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
55,196
(54,400)
Fees payable to the company's auditor for the audit of the company's financial statements
17,750
16,750
Depreciation of owned tangible fixed assets
294,905
255,177
(Profit)/loss on disposal of tangible fixed assets
-
1,844
Amortisation of intangible assets
503,747
503,747
Operating lease charges
332,672
295,295
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
53
51
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,944,798
1,851,544
Social security costs
211,120
213,292
Pension costs
279,171
227,027
2,435,089
2,291,863
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
213,066
243,526
Company pension contributions to defined contribution schemes
83,500
72,872
296,566
316,398
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
122,226
130,743
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
505
Other interest income
728
30,214
Total income
1,233
30,214
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
536,443
522,251
Adjustments in respect of prior periods
(26,044)
(81,417)
Total current tax
510,399
440,834
Deferred tax
Origination and reversal of timing differences
144,052
157,317
Total tax charge
654,451
598,151
The corporation tax rate increased from 19% to 25% in the year. As the current accounting year includes periods of corporation tax rates at both 19% and 25%, a marginal rate has been used.
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:
2023
2022
£
£
Profit before taxation
2,346,610
2,902,811
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
551,936
551,534
Tax effect of expenses that are not deductible in determining taxable profit
118,845
98,643
Adjustments in respect of prior years
(31,242)
(81,417)
Effect of change in corporation tax rate
8,832
45,765
Depreciation on assets not qualifying for tax allowances
12,457
11,844
Other permanent differences
1,712
Enhanced capital allowances
(2,480)
(41,498)
Other tax movements
(3,897)
11,568
Taxation charge for the year
654,451
598,151
9
Dividends
2023
2022
£
£
Final paid
2,000,000
1,500,000
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
3,526,228
Amortisation and impairment
At 1 January 2023
1,889,051
Amortisation charged for the year
503,747
At 31 December 2023
2,392,798
Carrying amount
At 31 December 2023
1,133,430
At 31 December 2022
1,637,177
Intangible assets represent goodwill following the company's acquisition of the trade and assets of ACC Silicones Ltd in 2019. This is being amortised over the directors' estimate of its useful economic life of 7 years.
11
Tangible fixed assets
Land and buildings freehold
Land and buildings short leasehold
Assets under construction
Plant, machinery etc
Total
£
£
£
£
£
Cost
At 1 January 2023
511,504
377,511
125,889
1,927,081
2,941,985
Additions
11,511
25,022
532,028
186,845
755,406
Disposals
(32,750)
(32,750)
Transfers
(105,358)
105,358
At 31 December 2023
523,015
402,533
552,559
2,186,534
3,664,641
Depreciation and impairment
At 1 January 2023
249,372
230,500
699,314
1,179,186
Depreciation charged in the year
9,151
51,291
234,463
294,905
Eliminated in respect of disposals
(32,750)
(32,750)
At 31 December 2023
258,523
281,791
901,027
1,441,341
Carrying amount
At 31 December 2023
264,492
120,742
552,559
1,285,507
2,223,300
At 31 December 2022
262,132
147,011
125,889
1,227,767
1,762,799
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
12
Stocks
2023
2022
£
£
Raw materials and consumables
892,741
1,238,444
Finished goods and goods for resale
1,641,895
2,015,426
Goods in transit
56,210
31,603
2,590,846
3,285,473
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,050,505
3,264,700
Corporation tax recoverable
125,329
Prepayments and accrued income
168,340
171,829
3,344,174
3,436,529
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,128,470
1,233,128
Corporation tax
192,251
Other taxation and social security
154,542
89,181
Accruals and deferred income
321,377
341,421
1,604,389
1,855,981
15
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
430,112
276,834
Provisions
(95,371)
(86,145)
334,741
190,689
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 January 2023
190,689
Charge to profit or loss
144,052
Liability at 31 December 2023
334,741
The deferred tax liability set out above in relation to accelerated capital allowances is expected to reverse within 36 months.
The deferred tax asset set out above relating to dilapidations on the premises is expected to reverse when the company leaves the premises which at present is unknown.
16
Provisions for liabilities
2023
2022
£
£
Dilapidations
332,700
332,700
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
279,171
227,027
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
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
306,001
306,001
306,001
306,001
CHT UK BRIDGWATER LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
19
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:
2023
2022
£
£
Within one year
43,569
186,895
Between two and five years
91,778
100,756
135,347
287,651
20
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
81,486
23,276
21
Ultimate controlling party
The company's ultimate parent undertaking at the balance sheet date was Vermögensträger Beitlich GmbH, a company incorporated in Germany with a registered office of Bismarckstrasse 102, 72072 Tübingen.
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