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Registered number: 06984066









DONGHUA LIMITED









FINANCIAL STATEMENTS

INFORMATION FOR FILING WITH THE REGISTRAR

FOR THE YEAR ENDED 31 DECEMBER 2023

 
DONGHUA LIMITED
REGISTERED NUMBER: 06984066

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets

 4 

326,030
210,105

Current assets
  

Stocks
  
4,309,801
4,225,786

Debtors: amounts falling due within one year
 5 
1,399,029
1,134,221

Cash at bank and in hand
 6 
760,599
309,753

  
6,469,429
5,669,760

Creditors: amounts falling due within one year
 7 
(4,463,084)
(4,273,355)

Net current assets
  
 
 
2,006,345
 
 
1,396,405

Total assets less current liabilities
  
2,332,375
1,606,510

Deferred tax
  
(60,728)
(40,760)

Net assets
  
2,271,647
1,565,750


Capital and reserves
  

Called up share capital 
 8 
1,700,000
1,700,000

Profit and loss account
 9 
571,647
(134,250)

  
2,271,647
1,565,750


The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 27 February 2024.


Mr R G Wellsbury
Director

The notes on pages 2 to 8 form part of these financial statements.

Page 1

 
DONGHUA LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Donghua Limited is a private company, limited by shares, incorporated in England. The address of the registered office is 9 & 10 Sidings Close, Wolverhampton, England, WV11 3DR and the registered number is 06984066. The nature of the company's operations and principal activities are distributors of roller chains.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The following principal accounting policies have been applied:

 
2.2

Going concern

The financial statements have been prepared on the going concern basis, the director considers this to be suitable based on the Company’s current trading levels, future prospects and the continued financial support given by the ultimate parent undertaking.

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP. All amounts have been rounded to the nearest £1.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. 

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'other finance income/expense'.

Page 2

 
DONGHUA LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the lease term.

 
2.6

Finance costs

Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.7

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in other creditors as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 3

 
DONGHUA LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Leasehold improvements
-
20 years over lease term
Plant and machinery
-
15% straight line
Motor vehicles
-
25% reducing balance
Fixtures and fittings
-
15% straight line
Office equipment
-
25% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.

Page 4

 
DONGHUA LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.

 
2.11

Debtors

Short-term debtors are measured at transaction price, less any impairment. 

 
2.12

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

 
2.13

Creditors

Short-term creditors are measured at the transaction price.

  
2.14

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade debtors and other debtors and creditors and loans from related parties.


3.


Employees

The average monthly number of employees, including directors, during the year was 15 (2022 - 15).

Page 5

 
DONGHUA LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Tangible fixed assets





Leasehold improve-ments
Plant and machinery
Motor vehicles
Fixtures and fittings
Office equipment
Total

£
£
£
£
£
£



Cost


At 1 January 2023
28,567
334,583
33,053
256,152
160,852
813,207


Additions
-
95,855
-
61,093
26,974
183,922


Disposals
-
(185,039)
(1,200)
(137,857)
-
(324,096)



At 31 December 2023

28,567
245,399
31,853
179,388
187,826
673,033



Depreciation


At 1 January 2023
9,285
195,235
23,632
233,415
141,535
603,102


Charge for the year
1,428
39,218
2,355
11,229
12,269
66,499


Disposals
-
(184,636)
(1,150)
(136,812)
-
(322,598)



At 31 December 2023

10,713
49,817
24,837
107,832
153,804
347,003



Net book value



At 31 December 2023
17,854
195,582
7,016
71,556
34,022
326,030



At 31 December 2022
19,282
139,348
9,421
22,737
19,317
210,105


5.


Debtors

2023
2022
£
£


Trade debtors
1,281,394
913,007

Amounts owed by group undertakings
-
1,735

Other debtors
26,242
136,982

Prepayments and accrued income
91,393
82,497

1,399,029
1,134,221


Page 6

 
DONGHUA LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
760,599
309,753



7.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
37,819
32,536

Amounts owed to group undertakings
4,312,899
4,146,069

Corporation tax
71,114
54,690

Other taxation and social security
19,222
16,805

Other creditors
4,260
3,180

Accruals and deferred income
17,770
20,075

4,463,084
4,273,355



8.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



1,700,000 (2022 - 1,700,000) Ordinary shares of £1.00 each
1,700,000
1,700,000



9.


Reserves

Profit and loss account

This reserve records all current and prior period retained profits and losses.


10.


Capital commitments


At 31 December 2023 the Company had capital commitments as follows:

2023
2022
£
£


Contracted for but not provided in these financial statements
-
64,805

Page 7

 
DONGHUA LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Pension commitments

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £19,066 (2022 - £17,289). Contributions totaling £3,531 (2022 - £3,180) were payable to the fund at the balance sheet date and included in other creditors.


12.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
222,582
223,355

Later than 1 year and not later than 5 years
780,940
777,841

Later than 5 years
1,418,612
1,603,236

2,422,134
2,604,432


13.


Related party transactions

The company has taken advantage of the exemption in paragraph 33.1A of Financial Reporting Standard 102, from the requirement to disclose transactions with wholly owned members of the group.


14.


Controlling party

The company is controlled by Donghua International Holding B.V, a company registered in Netherlands which owns 100% of the issued share capital of Donghua Limited. The registered office is Parelweg 1, 1812 RS Alkmaar, the Netherlands. This company's financial statements are publicly available and may be obtained from Netherlands Kamer Van Koophandel.
The ultimate holding company is Hangzhou Donghua Chain Group Co. Limited, a company registered in China, which is the parent company of the largest and smallest group into which the company's results are consolidated. This company is controlled by Mr Bihua Xuan, by virtue of his controlling shareholding. The financial statements of the ultimate holding company are not publicly available.


15.


Auditors' information

The auditors' report on the financial statements for the year ended 31 December 2023 was unqualified.

The audit report was signed on 29 February 2024 by Stephen Newman (Senior Statutory Auditor) on behalf of PKF Smith Cooper Audit Limited.

 
Page 8