Company registration number 09301505 (England and Wales)
THOMAS DUDLEY FOUNDRY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
THOMAS DUDLEY FOUNDRY LIMITED
COMPANY INFORMATION
Directors
Mr M J Dudley
Mr R Holden
Mr J Parker
Mr R Chalmers
Secretary
Mr J Parker
Company number
09301505
Registered office
295 Birmingham New Road
Dudley
West Midlands
DY1 4SJ
Auditor
Bache Brown & Co Limited
Swinford House
Albion Street
Brierley Hill
DY5 3EE
Business address
295 Birmingham New Road
Dudley
West Midlands
DY1 4SJ
THOMAS DUDLEY FOUNDRY LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
THOMAS DUDLEY FOUNDRY LIMITED
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 business
Principal Activities
The principal activity of the company is manufacturing and the area of specialism is Iron founders.
The Foundry division supplies the Builders Merchant, Public Utility, OEM, Engineering and Automotive markets.
There have been no significant changes in principle activities in the year under review
Business Review and Future Developments
We consider the key performance indicators which best communicate the financial performance and strength of the business are turnover, return on capital employed and with our growth plans, continued investment and liquidity
Turnover on a like for like basis was up 33% on the prior period. Increases were principally due to significant penetration into new markets with re-engineered castings which outperform the competition. In addition the ongoing reshoring of manufacturing following Brexit and the Covid supply issues continues to help boost turnover and the foundry supplies into some fast growth infrastructure markets.
The company recorded an operating profit of £1.2m against a £965K loss last year mainly as a result of the significant turnover growth. Margins were also improved through operational efficiencies.
The operating loss meant there was again no return on the capital employed in 2022.
The liquidity ratio remained relatively steady at 1.0 compared to 1.1 in 2022 with cash in the bank of £665K and the continued support of the Group to draw on if necessary.
The improved performance in the year meant an increase of £243K in shareholders funds within the year.
Principal risks and uncertainties
The main risks to the company going forward is the maintenance of high interest rates following the high inflation of the last two years. This dampened consumer demand into Q4 of 2023 and has continued into the current year. Other risks include, significant mandatory wage increases, energy costs and skills shortages.
Skilled labour continues to be in short supply so we have recruited a number of apprentices. Our exposure to the UK construction industry means that elements of the business are subject to the monetary policy adopted by the banking industry and government policy. Competition within our market continues to be fierce both from imports and UK competitors.
In summary, given these risks and uncertainties, we are aware that the future development of the business may be influenced by unforeseen future events outside our control but feel that the current strategy of investment in acquisitions, plant and equipment, training and educating our workforce, increasing awareness of manufacturing in education, developing new innovative products and factoring risk into our decision making is correct for the long term success of the business.
Mr M J Dudley
Director
18 July 2024
THOMAS DUDLEY FOUNDRY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is that of iron founders.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr M J Dudley
Mr R Holden
Mr J Parker
Mr R Chalmers
Auditor
The auditor, Bache Brown & Co Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
THOMAS DUDLEY FOUNDRY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
Mr M J Dudley
Director
18 July 2024
THOMAS DUDLEY FOUNDRY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THOMAS DUDLEY FOUNDRY LIMITED
- 4 -
Opinion
We have audited the financial statements of Thomas Dudley Foundry Limited (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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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.
THOMAS DUDLEY FOUNDRY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THOMAS DUDLEY FOUNDRY LIMITED
- 5 -
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.
THOMAS DUDLEY FOUNDRY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THOMAS DUDLEY FOUNDRY LIMITED
- 6 -
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. |
|
Approach to assessing the risks of misstatement due to irregularities, including fraud |
We assessed the risk of material misstatement in respect of fraud by meeting with management to understand where it considered there was susceptibility to fraud. |
|
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant reporting frameworks which are likely to affect the company include FRS102 , the Companies Act 2006 and the relevant tax laws. In addition we determined that there were no significant laws and regulations which have a direct effect on the amounts and disclosures in the financial statements. |
|
Audit response to risks identified |
We considered the risk of fraud through management override of controls. We also considered how management bias may impact upon performance targets. In response we performed audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of any significant transactions outside the normal course of business, reviewing accounting estimates for management bias. |
Based on the results of our risk assessment we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved enquires with management around actual and potential claims. Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations. |
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.
Mr Ian Baker (Senior Statutory Auditor)
for and on behalf of Bache Brown & Co Limited
18 July 2024
Chartered Certified Accountants
Statutory Auditor
Swinford House
Albion Street
Brierley Hill
DY5 3EE
THOMAS DUDLEY FOUNDRY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
32,761,353
24,650,443
Cost of sales
(26,635,560)
(21,566,868)
Gross profit
6,125,793
3,083,575
Distribution costs
(1,617,492)
(1,142,619)
Administrative expenses
(3,330,843)
(2,934,674)
Other operating income
27,975
27,975
Operating profit/(loss)
4
1,205,433
(965,743)
Interest payable and similar expenses
7
(756,005)
(231,110)
Amounts written off investments
8
-
510,000
Profit/(loss) before taxation
449,428
(686,853)
Tax on profit/(loss)
9
(205,656)
293,359
Profit/(loss) for the financial year
243,772
(393,494)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THOMAS DUDLEY FOUNDRY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
Profit/(loss) for the year
243,772
(393,494)
Other comprehensive income
-
-
Total comprehensive income for the year
243,772
(393,494)
THOMAS DUDLEY FOUNDRY LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
8,585,862
7,441,902
Current assets
Stocks
12
5,461,935
4,574,223
Debtors
13
5,065,472
3,773,815
Cash at bank and in hand
664,975
996,747
11,192,382
9,344,785
Creditors: amounts falling due within one year
14
(11,138,930)
(8,819,629)
Net current assets
53,452
525,156
Total assets less current liabilities
8,639,314
7,967,058
Creditors: amounts falling due after more than one year
15
(7,618,893)
(7,646,868)
Provisions for liabilities
Deferred tax liability
17
770,294
313,835
(770,294)
(313,835)
Net assets
250,127
6,355
Capital and reserves
Called up share capital
20
50,000
50,000
Profit and loss reserves
200,127
(43,645)
Total equity
250,127
6,355
The notes on pages 11 to 24 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 18 July 2024 and are signed on its behalf by:
Mr M J Dudley
Director
Company registration number 09301505 (England and Wales)
THOMAS DUDLEY FOUNDRY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
50,000
349,849
399,849
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(393,494)
(393,494)
Balance at 31 December 2022
50,000
(43,645)
6,355
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
243,772
243,772
Balance at 31 December 2023
50,000
200,127
250,127
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Thomas Dudley Foundry Limited is a private company limited by shares incorporated in England and Wales. The registered office is 295 Birmingham New Road, Dudley, West Midlands, DY1 4SJ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
The financial statements of the company are consolidated in the financial statements of Thomas Dudley Group Limited. These consolidated financial statements are available from the registrar of companies.
1.2
Going concern
The company meets its day to day working capital truethrough the support of the immediate and ultimate parent company. The immediate and ultimate parent company have confirmed that they are willing to continue to support the company.
As a result of the above, in the opinion of the directors, there is reasonable expectation that the company will have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.4
Intangible fixed assets - goodwill
Negative goodwill is attributable to future reorganisation costs and losses that do not represent identifiable liabilities at the acquisition date and is being written off in equal annual instalments over the period in which reorganisation costs and losses are expected to occur.
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 Leasehold
10, 15 or 50 years straight line
Plant and machinery
10% straight line
Fixtures, fittings & equipment
5 or 15 years
Motor vehicles
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
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.
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to the profit and loss account 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 lease asset are consumed.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
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.
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Useful economic lives of non current assets
The useful economic lives of non-current assets have been derived from the judgement of the Directors, using their best estimate of write-down period.
Inventory
Inventories are valued at the lower cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.
Bad debt provision
A bad debt provision is set up when the likelihood of recovering the debt is diminished. The level of provision will be based on any current repayment plan entered into and which is being adhered to by the debtor, together with an estimate of the likelihood of the amounts due being fully recovered.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
32,761,353
24,650,443
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
29,923,389
22,995,878
Europe
1,879,702
891,529
Rest of World
958,262
763,036
32,761,353
24,650,443
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 18 -
2023
2022
£
£
Other revenue
Grants received
27,975
27,975
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Government grants
(27,975)
(27,975)
Fees payable to the company's auditor for the audit of the company's financial statements
9,800
9,255
Depreciation of owned tangible fixed assets
1,095,134
701,008
Profit on disposal of tangible fixed assets
(4,153)
-
Operating lease charges
68,970
72,117
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
5
2
Sales and distribution
12
18
Works
133
137
Total
150
157
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
6,321,695
5,327,579
Social security costs
653,461
548,754
Pension costs
315,542
299,323
7,290,698
6,175,656
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
139,910
102,419
Company pension contributions to defined contribution schemes
11,193
10,429
151,103
112,848
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
7
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
756,005
231,110
8
Amounts written off investments
2023
2022
£
£
Amounts written back to current loans
-
510,000
9
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(61,385)
Group tax relief
(250,802)
(289,337)
Total current tax
(250,802)
(350,722)
Deferred tax
Origination and reversal of timing differences
456,458
57,363
Total tax charge/(credit)
205,656
(293,359)
A hybrid tax rate (of 23.54%) is used in the year to accommodate the movement to a corporation tax rate of 25% from 1st April 2023. As a result, the last 9 months of the accounting period use this newly established rate of 25% rather than 19% (previously applied).
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 20 -
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit/(loss) before taxation
449,428
(686,853)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 23.54% (2022: 19.00%)
105,795
(130,502)
Tax effect of expenses that are not deductible in determining taxable profit
(726)
(1,075)
Adjustments in respect of prior years
(61,385)
Research and development tax credit
(60,769)
(74,100)
Other tax adjustments
115,776
51,773
Group loan write off
(96,900)
Deferred tax reserved at 25%
45,580
18,830
Taxation charge/(credit) for the year
205,656
(293,359)
10
Intangible fixed assets
Negative goodwill
£
Cost
At 1 January 2023 and 31 December 2023
(1,765,190)
Amortisation and impairment
At 1 January 2023 and 31 December 2023
(1,765,190)
Carrying amount
At 31 December 2023
At 31 December 2022
On 8th December 2014 the Company acquired the assets of BCC Foundry Limited which have been included at fair value at £1,921,500 freehold property, £978,500 plant and machinery and £(1,765,190) negative goodwill.
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
11
Tangible fixed assets
Land and buildings Leasehold
Assets under construction
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
76,329
3,730,961
6,576,095
39,327
274,127
10,696,839
Additions
1,953,694
200,118
89,795
2,243,607
Disposals
(40,000)
(2,000)
(1)
(42,001)
Transfers
888,018
2,839,642
3,727,660
Other changes
(3,727,660)
(3,727,660)
At 31 December 2023
964,347
1,956,995
9,575,855
37,327
363,921
12,898,445
Depreciation and impairment
At 1 January 2023
31,670
3,058,538
21,408
143,321
3,254,937
Depreciation charged in the year
4,224
1,038,611
2,042
50,257
1,095,134
Eliminated in respect of disposals
(36,333)
(1,155)
(37,488)
At 31 December 2023
35,894
4,060,816
22,295
193,578
4,312,583
Carrying amount
At 31 December 2023
928,453
1,956,995
5,515,039
15,032
170,343
8,585,862
At 31 December 2022
44,659
3,730,961
3,517,557
17,919
130,806
7,441,902
12
Stocks
2023
2022
£
£
Raw materials and consumables
2,974,507
2,399,879
Work in progress
550,529
727,322
Finished goods and goods for resale
1,936,899
1,447,022
5,461,935
4,574,223
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,456,628
3,530,407
Corporation tax recoverable
295,000
Amounts owed by group undertakings
19,175
Prepayments and accrued income
313,844
224,233
5,065,472
3,773,815
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Trade creditors
631,154
1,109,010
Amounts owed to group undertakings
9,745,959
6,940,926
Taxation and social security
301,281
551,383
Government grants
18
27,975
27,975
Other creditors
97,566
21,810
Accruals and deferred income
334,995
168,525
11,138,930
8,819,629
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Other borrowings
16
7,500,000
7,500,000
Government grants
18
118,893
146,868
7,618,893
7,646,868
16
Loans and overdrafts
2023
2022
£
£
Loans from group undertakings
7,500,000
7,500,000
Payable after one year
7,500,000
7,500,000
17
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
770,294
313,835
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 January 2023
313,835
Charge to profit or loss
456,459
Liability at 31 December 2023
770,294
18
Government grants
2023
2022
£
£
Arising from government grants
146,868
174,843
Included in the financial statements as follows:
Current liabilities
27,975
27,975
Non-current liabilities
118,893
146,868
146,868
174,843
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
248,196
213,406
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.
Defined benefit scheme
The parent company also operates a pension scheme providing benefits based on final pensionable pay. The assets of the scheme are held separately from those of the company, being invested with insurance companies. Contributions to the scheme are charged to the profit and loss account so as to spread the cost of pensions over employees' working lives with the company. The regular cost is attributed to the individual years using the projected unit credit method. Variations in cost which are identified as a result of actuarial valuations, are amortised over the average expected remaining working lives of employees in proportion to their expected payroll costs.
Due to the nature of the group scheme the company cannot identify its share of the underlying assets and liabilities of the scheme, nor can it identify any surplus or deficit and the implications of that surplus or deficit to the company.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
ordinary shares of £1 each
50,000
50,000
50,000
50,000
THOMAS DUDLEY FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
21
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
67,310
72,310
Between two and five years
14,691
60,258
82,001
132,568
22
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
691,443
-
23
Ultimate controlling party
The ultimate parent company is Thomas Dudley Group Limited, a company registered in England and Wales.
Thomas Dudley Group Limited prepares group financial statements and copies can be obtained from its registered office.
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