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Registered number: 02377214









D H H TIMBER PRODUCTS LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2023

 
D H H TIMBER PRODUCTS LIMITED
 
 
COMPANY INFORMATION


Directors
B Banks 
B J Francis 
D E Francis 
N J Hollington 
A J Thrale 
C A Walker 




Company secretary
D E Francis



Registered number
02377214



Registered office
35 Ballards Lane

London

N3 1XW




Independent auditors
BKL Audit LLP
Chartered Accountants & Statutory Auditor

35 Ballards Lane

London

N3 1XW





 
D H H TIMBER PRODUCTS LIMITED
 

CONTENTS



Page
Strategic report
 
 
1 - 2
Directors' report
 
 
3 - 4
Independent auditors' report
 
 
5 - 8
Statement of income and retained earnings
 
 
9
Statement of financial position
 
 
10
Statement of cash flows
 
 
11
Notes to the financial statements
 
 
12 - 22


 
D H H TIMBER PRODUCTS LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2023

Introduction
 
The principal activity of the company continued to be the importation & distribution of wood based panel products specialising in Birch Plywood & Overlaid products.

Business review
 
During the year we saw the “bull” market conditions for 2021 and 2022 gradually subside leading to reductions in supplier prices and shipping costs. This has impacted on overall turnover. However, we have strongly focused on developing existing and building new customer relationships which has allowed us to considerably improve gross profit margins.
Our strategy of continuing to hold a more comprehensive and diverse stock portfolio has enabled us to offer appropriate solutions to our customer base which, given the erratic nature of global plywood and panel products over this period, has been a valuable benefit.
Despite significant inflationary cost pressure on overheads within the business, we continue to develop our trading approach to mitigate those increases and to ensure their impact on trading performance is limited.
Our cash flow remains healthy without the requirement to fund business activities with high interest rate borrowing. The directors have maintained strong trading relationships with suppliers and the company’s market position and balance sheet remain very strong.
At the time of writing, we do foresee the UK economy slowing as we progress through 2024 with many other market and global uncertainties ahead. Combined with more stable plywood and panel product markets at a lower cost base, we expect both turnover and GP margin to come under further pressure. Given the progress made in recent years the directors remain confident of the company’s ability to meet these challenges.

Principal risks and uncertainties
 
There are a number of potential risks and uncertainties which could have a material impact on the company’s performance and could cause actual results to differ from expected and historical results. The company continues to review such operational risks and they are summarised below:
Strategic
The directors regularly review the company’s strategic progress and uses market information to assist in making the decisions required to meet customer demands and furthermore to ensure the growth of the business is consistent.
Business environment
The company’s customer base consists of a wide range of end users, industries and with a reasonable proportion of construction related activities. Any downturn in the economy will ultimately restrict the growth of the company but the Directors are optimistic for 2024 and beyond.
Financial
Financial risks are primarily the exposure to bad debt but this risk is mitigated by the insurance on the factored debts. The directors review and manage the cash position of the company on a daily basis making all necessary provision through the management of customers scheduling to maintain an adequate cash position at all times.

Page 1

 
D H H TIMBER PRODUCTS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023

Financial key performance indicators
 
The financial key performance indicators are as mentioned above in the business review. Turnover, gross profit, gross margin, operating profit and profit before taxation. 
Turnover in the year ended 31 August 2023 was £24,710,005 (2022: £28,539,286). Gross profit was £5,141,079 (2022: £4,431,365) and the gross margin increased from 15.5% to 20.8%. Operating profit was £2,860,689 (2022: £2,499,316).  The profit before taxation was £2,856,949 (2022: £2,474,269)

Other key performance indicators
 
There are no additional key performance indicators. 


This report was approved by the board and signed on its behalf.



B J Francis
Director

Date: 14 March 2024

Page 2

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2023

The directors present their report and the financial statements for the year ended 31 August 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The profit for the year, after taxation, amounted to £2,253,802 (2022 - £1,995,747).

Dividends of £500,000 (2022: £523,500) were paid in the year.

Directors

The directors who served during the year were:

B Banks 
B J Francis 
D E Francis 
N J Hollington 
A J Thrale 
C A Walker 

Future developments

The company expects to continue to expand and grow in the future.

Page 3

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.



Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditors, Under section 487(2) of the Companies Act 2006, BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.
 





B J Francis
Director

Date: 14 March 2024

Page 4

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF D H H TIMBER PRODUCTS LIMITED
 

Opinion


We have audited the financial statements of D H H Timber Products Limited (the 'Company') for the year ended 31 August 2023, which comprise the Statement of income and retained earnings, the Statement of financial position, the Statement of cash flows and the related notes, including a summary of significant accounting policiesThe 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 August 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.


Basis for opinion


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.


Page 5

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF D H H TIMBER PRODUCTS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the 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 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 directors' 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 set out on page 3, 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.


Page 6

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF D H H TIMBER PRODUCTS LIMITED (CONTINUED)


Auditors' 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 Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

• Enquiring of management around actual and potential litigation and claims;
• Reviewing financial statement disclosures and testing to supporting documentation within applicable laws    and regulations;
• Performing audit work over the risks of management override of controls, including reviews over other    adjustments for appropriateness, evaluating business rationale of significant decisions in the normal    course of business and reviewing accounting estimates for bias.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:


Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Page 7

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF D H H TIMBER PRODUCTS LIMITED (CONTINUED)




We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


Use of our 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 2006Our 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 Auditors' 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.





Michael Wedge FCA (Senior statutory auditor)
  
for and on behalf of
BKL Audit LLP
 
Chartered Accountants
Statutory Auditor
  
London

14 March 2024
Page 8

 
D H H TIMBER PRODUCTS LIMITED
 
 
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 AUGUST 2023

2023
2022
Note
£
£

  

Turnover
 4 
24,710,005
28,539,286

Cost of sales
  
(19,568,926)
(24,107,651)

Gross profit
  
5,141,079
4,431,635

Distribution costs
  
(992,460)
(520,255)

Administrative expenses
  
(1,287,930)
(1,412,064)

Operating profit
 5 
2,860,689
2,499,316

Interest receivable and similar income
  
6,326
(90)

Interest payable and similar expenses
  
(10,066)
(24,957)

Profit before tax
  
2,856,949
2,474,269

Tax on profit
 9 
(603,147)
(478,522)

Profit after tax
  
2,253,802
1,995,747

  

  

Retained earnings at the beginning of the year
  
6,235,307
4,763,060

  
6,235,307
4,763,060

Profit for the year
  
2,253,802
1,995,747

Dividends declared and paid
  
(500,000)
(523,500)

Retained earnings at the end of the year
  
7,989,109
6,235,307
The notes on pages 12 to 22 form part of these financial statements.

Page 9

 
D H H TIMBER PRODUCTS LIMITED
REGISTERED NUMBER: 02377214

STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 11 
21,391
31,004

  
21,391
31,004

Current assets
  

Stocks
 12 
6,705,927
7,814,311

Debtors: amounts falling due within one year
 13 
3,626,219
4,535,899

Cash at bank and in hand
 14 
1,616,197
11,912

  
11,948,343
12,362,122

Creditors: amounts falling due within one year
 15 
(3,870,625)
(6,047,819)

Net current assets
  
 
 
8,077,718
 
 
6,314,303

Total assets less current liabilities
  
8,099,109
6,345,307

  

Net assets
  
8,099,109
6,345,307


Capital and reserves
  

Called up share capital 
 16 
80,000
80,000

Capital redemption reserve
 17 
30,000
30,000

Profit and loss account
 17 
7,989,109
6,235,307

  
8,099,109
6,345,307


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 14 March 2024.




B J Francis
Director

The notes on pages 12 to 22 form part of these financial statements.

Page 10

 
D H H TIMBER PRODUCTS LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
2,253,802
1,995,747

Adjustments for:

Depreciation of tangible assets
14,638
19,855

Loss on disposal of tangible assets
698
-

Interest paid
10,066
90

Interest received
(6,326)
24,957

Taxation charge
603,147
478,522

Decrease/(increase) in stocks
1,108,384
(2,106,762)

Decrease in debtors
909,680
937,675

(Decrease) in creditors
(2,177,194)
(303,052)

Corporation tax (paid)
(603,147)
(478,522)

Net cash generated from operating activities

2,113,748
568,510


Cash flows from investing activities

Purchase of tangible fixed assets
(5,723)
(18,954)

Interest received
6,326
(90)

Net cash from investing activities

603
(19,044)

Cash flows from financing activities

Dividends paid
(500,000)
(523,500)

Interest paid
(10,066)
(24,957)

Net cash used in financing activities
(510,066)
(548,457)

Net increase in cash and cash equivalents
1,604,285
1,009

Cash and cash equivalents at beginning of year
11,912
10,903

Cash and cash equivalents at the end of year
1,616,197
11,912


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,616,197
11,912

1,616,197
11,912


The notes on pages 12 to 22 form part of these financial statements.

Page 11

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

1.


General information

The principal activity of D H H Timber Products Limited, "the Company", continued to be the importation and distribution of wood based sheet materials, specialising in Birch Plywood products.
The Company is a private company limited by shares and is incorporated in England and Wales.
The principal place of business is Unit 4-6, Milehams Industrial Estate, Tank Hill Road, Purfleet, RM19 1SX.

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 Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

 
2.2

Going concern

At 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.
Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 
2.3

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.

Page 12

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.4

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.5

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.6

Finance costs

Finance costs are charged to profit or loss 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 profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.8

Taxation

Tax is recognised in profit or loss 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 reporting date in the countries where the Company operates and generates income.

 
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.

The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Page 13

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)


2.9
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Plant and machinery
-
25%
Motor vehicles
-
25%
Fixtures and fittings
-
25%

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 profit or loss.

 
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. Work in progress and finished goods include labour and attributable overheads.

At each reporting 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 profit or loss.

 
2.11

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. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.12

Financial instruments

The Company only enters into basic financial instruments that result in the recognition of financial
assets and liabilities.
(i) Financial assets
Basic financial assets, including trade and other debtors, and, are initially recognised at transaction
price, 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. Such assets are
subsequently carried at amortised cost using the effective interest method.


 
Page 14

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)


2.12
Financial instruments (continued)


At the end of each reporting period financial assets measured at amortised cost are assessed for
objective evidence of impairment. 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 the Statement of Income
and Retained Earnings.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset
expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are
transferred to another party or (c) control of the asset has been transferred to another party who has
the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional
restrictions.
(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors and accruals, 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 receipts discounted at a market rate of
interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Trade creditors 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual
obligation is discharged, cancelled or expires.
(iii) Offsetting
Financial assets and liabilities are offset and 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.

 
2.13

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 15

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that believed to be reasonable under the circumstances.
No judgments (apart from those involving estimates) have been made in the process of applying the
above accounting policies.
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year include:
(i) Stock provision
When calculating the stock provision, management considers the nature and condition of the stock, as
well as applying assumptions around anticipated saleability of stock. See note 14 for the net carrying
amount of the stock. 
(ii) Debtor provision
The company makes an estimate of the recoverable value of trade and other debtors. When assessing
impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 15 for the net carrying amount of the debtors.


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sales of timber products
24,710,005
28,539,286

24,710,005
28,539,286


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
24,710,005
28,493,097

Rest of the world
-
46,189

24,710,005
28,539,286


Page 16

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation of tangible fixed assets
14,638
19,855

Defined contribution pension costs
301,669
223,746

Other operating lease rentals
130,000
128,333


6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
23,000
25,000

7.


Employees

Staff costs were as follows:


As restated
2023
2022
£
£

Wages and salaries
1,102,052
941,559

Social security costs
128,056
96,625

Cost of defined contribution scheme
301,669
223,746

1,531,777
1,261,930


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Employees
21
24

Page 17

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

8.


Directors' remuneration



During the year retirement benefits were accruing to 3 directors (2022 - 4) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £380,740 (2022 - £96,011).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £119,497 (2022 - £NIL).


9.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
603,147
478,522


603,147
478,522


Total current tax
603,147
478,522

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - the same as) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
2,856,949
2,474,269


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
614,675
470,111

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
8,878
5,374

Fixed asset differences
(109)
-

Remeasurement of deferred tax for changes in tax rates
3,288
-

Other differences leading to an increase (decrease) in the tax charge
-
3,091

Movement in deferred tax not recognised
(23,585)
(54)

Total tax charge for the year
603,147
478,522

Page 18

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
 
9.Taxation (continued)


Factors that may affect future tax charges

The UK Government announced its intention to increase the rate of UK corporation tax from 19% to 25% with effect from 1 April 2023. The increase in the rate of UK corporation tax was enacted in the Finance Act 2021 which received Royal Assent on 10 June 2021.


10.


Dividends

2023
2022
£
£


Dividends paid
500,000
523,500

500,000
523,500


11.


Tangible fixed assets





Plant and machinery
Motor vehicles
Fixtures and fittings
Total

£
£
£
£



Cost or valuation


At 1 September 2022
17,576
35,688
28,453
81,717


Additions
-
-
5,723
5,723


Disposals
-
-
(4,548)
(4,548)



At 31 August 2023

17,576
35,688
29,628
82,892



Depreciation


At 1 September 2022
3,588
31,225
15,900
50,713


Charge for the year on owned assets
4,394
4,463
5,781
14,638


Disposals
-
-
(3,850)
(3,850)



At 31 August 2023

7,982
35,688
17,831
61,501



Net book value



At 31 August 2023
9,594
-
11,797
21,391



At 31 August 2022
13,988
4,463
12,553
31,004

Page 19

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

12.


Stocks

2023
2022
£
£

Raw materials and consumables
6,705,927
7,814,311

6,705,927
7,814,311


Stock recognised in cost of sales during the year as an expense was £17,028,051 (2022: £24,140,188).
An impairment loss of £365,058 (2022: £124,028) was recognised in cost of sales against stock during the year due to slow-moving and obsolete stock.


13.


Debtors

2023
2022
£
£


Trade debtors
3,583,891
4,456,677

Other debtors
17,215
61,912

Prepayments and accrued income
25,113
17,310

3,626,219
4,535,899


Book debts are assigned to HSBC Invoice Finance Limited. HSBC hold a fixed charge over the book debts and a floating charge over all other assets in respect of liabilities due to them. At the year end a sum of £1,521,645 was due to the Company from HSBC (2022: £1,072,911 due from the company to HSBC), and is included within Cash and cash equivalents (2022: included within other creditors). There is a cross guarantee with an entity under common control in respect of this.
A guarantee dated 17 January 1995 in favour of HM Revenue & Customs is held for £250,000. There is a further guarantee of £500,000 held with HSBC Bank Plc in respect of this.


14.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
1,616,197
11,912

1,616,197
11,912




Page 20

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

15.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
2,378,067
3,599,750

Other taxation and social security
592,201
793,418

Other creditors
229,093
1,332,921

Accruals and deferred income
671,264
321,730

3,870,625
6,047,819





16.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



30,000 (2022 - 30,000) Ordinary shares of £1.00 each
30,000
30,000
50,000 (2022 - 50,000) 15% Preference shares of £1.00 each
50,000
50,000

80,000

80,000

Ordinary shares have full dividends and voting rights.
The 15% preference shares have no voting rights, dividends are payable on agreement of the ordinary shareholders, they are not redeemable and the par value of the shares will be received by the shareholders in the event of a winding up.



17.


Reserves

Capital redemption reserve

Relates to the cancellation of shares in prior years.

Profit and loss account

Includes all current period retained profits and losses.

Page 21

 
D H H TIMBER PRODUCTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

18.


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 £301,669 (2022: £223,746).
At the year end contributions totalling £226,000 (2022: £171,728) are outstanding as at the year end.


19.


Commitments under operating leases

At 31 August 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
166,680
154,028

Later than 1 year and not later than 5 years
386,892
358,721

553,572
512,749


20.


Related party transactions

IIncluded within trade debtors is a balance of £282,176 (2022: £262,330) owed by other related parties under common control. The Company made sales of £1,453,343 (2022: £1,760,018) to this related party during the year. 
Included within trade creditors is a balance of £40,241 (2022: £85,569) owed to other related parties under common control. The Company made purchases totalling £374,161 (2022: £236,756) from this related party during the year.
Included within other debtors is a balance of £Nil (2022: £41,974) owed by other related parties under common control. This balance is unsecured and interest free, with no fixed repayment terms.
Key management compensation in the year totalled £380,740 (2022: £289,024).

 
Page 22