Company Registration No. 00464919 (England and Wales)
U-POL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
U-POL LIMITED
COMPANY INFORMATION
Directors
J I Blenkinsopp
M H Pentecost
(Appointed 23 March 2023)
Company number
00464919
Registered office
U-Pol Tech Centre Denington Road
Denington Industrial Estate
Wellingborough
Northamptonshire
United Kingdom
NN8 2QH
Auditor
Johnston Carmichael LLP
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
U-POL LIMITED
CONTENTS
Page
Strategic report
1 - 7
Directors' report
8 - 9
Independent auditor's report
10 - 13
Statement of comprehensive income
14
Balance sheet
15
Statement of changes in equity
16
Notes to the financial statements
17 - 29
U-POL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023 in respect of U-POL Limited ("the company").

Principal business objectives and strategies for achieving them

The principal activity of the company in the year under review was as a specialist supplier for the automotive repair industry supplying Bodyshop’s directly and through our Channel Partners and a supplier of protective coatings used in a wide variety of applications through trade and retail outlets. The company has and will continue to invest in the development of its employees.

 

The principal business objective is to maximise longer term shareholder value. Our key strategies for achieving this are i) to be safety focused by conducting our global operations in the safest possible manner ii) by being marketing and technology driven, listening to our customers and delivering solutions for them iii) by investing in new product development to anticipate and exceed our customers’ expectations iv) to be uncompromising on quality and integrity v) by recruiting and retaining employees of the highest calibre enabling them to work in an inclusive and empowered environment and vi) by being performance orientated across the organisation.

 

Markets

Export accounts for 82% of total business (2022: 75%).

 

Results and review of the business

The profit and loss account is set out on page 14 and shows the company generated sales of £105.7 million (2022: 77.8 million ), an increase of 36% and profit before tax of £18.1 million (2022: 17.3 million ), an increase of 5%. At 31 December 2023, net assets were £205.9m (2022: £187.0m).

 

In order to support the directors' role to promote its long term success, the business at every level is operated under prudent and tightly managed controls. All costs and processes are under constant review and we look for efficiencies and savings wherever possible. Costs are analysed and reported monthly to keep overheads under control and protect margins.

 

2023 saw an increase in sales of 36% – mainly due to the increase of sales for the NAM market (Intercompany). Following the investment at the factory to supply the Retail market, external sales in that region increased by 18% in U-POL US. The Middle East and Africa markets also saw significant sales growth. We will continue to invest in our sales structure across the World, with future growth coming in particular from increasing our Market share in Retail Customers in North America. Further investment is planned in new products plus continual investment in our key facilities, equipment and in our employees to support this targeted growth. A new aerosol line was installed during 2022 which enabled us to further increase our sales in that category and continue in to 2023. Our net assets position remains strong year on year with significant working capital and liquidity.

 

Key performance indicators

The key financial performance indicators for the company, considered by the board, are turnover, profit before tax and net assets which have been discussed within the above section.

In addition to key financial performance indicators, the company also monitors a number of key non-financial performance indicators. As health and safety is considered paramount, the number of reported accidents is monitored across the year. During the period there were 21 reported accidents (2022: 15). Management's focus is on reducing health and safety incidents with a focus on staff training whilst also clearly emphasising to stakeholders within the business the importance of health and safety. The company also aims to maintain high service levels to customers. The target remains to achieve 97% on time in full delivery to customers during multiple periods.

Going concern

The financial statements have been prepared on a going concern basis which the directors consider to be appropriate. The directors have prepared forecasts for an appropriate look-forward period. In preparing those forecasts they have considered a plausible downside scenario in which, trading will continue at similar levels to that achieved during the year ended 31 December 2023 and have accordingly not incorporated expected sales growth. The directors also note that the company has positive cash, significant net current assets and net assets position as at the balance sheet date and as at the date of approving these financial statements. Consequently, the directors are confident that the company is in a robust financial position and will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

U-POL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

The directors are of the opinion that the company has adopted a thorough risk management process that involves the formal review off all the risks identified below. The board monitors and reviews on a regular basis, in order to mitigate each risk area.

Market risk

The company operates in a competitive market where continuing growth is dependent upon consolidating on existing customer relationships and developing new income streams. U-POL has built strong customer relationships with key distributors in the most important markets in which we trade (UK, US, France, Australia, Poland, Middle East & Africa). Our key account management and marketing efforts within these markets ensures that our brands are an important part of our distribution partners offer in the automotive aftermarket space. U-POL’s heritage is in Automotive Body Filler’s but we have continued to deepen our relationships and partnerships with key customers by widening our offer and increasing our share of wallet through innovation. Predominantly this is through growing in the Paint aerosols category, and in Textured Protective Coatings with our RAPTOR brand.

How we grow the business is primarily through two key avenues. U-POL's historical strength is in the breadth of distribution partnerships in the ‘professional automotive aftermarket space’. In recent years, we have grown considerably in the ‘Retail automotive aftermarket’ space and this additional channel penetration will be a continued engine of growth over the next 3 to 4 years. Additionally, with the acquisition of U-POL by Axalta Coating Systems, we are able to leverage Axalta’s end-user (body-shop) relationships to drive more specification of U-POL’s products, which in turn will create more ‘pull’ of our product line through our traditional distribution partners. These are the two key strategic thrusts which will continue to deliver growth to U-POL over the next 3-4 years’

 

Economic downturn

The success of the business is reliant on consumer spending and an economic downturn, resulting in a reduction of consumer spending power, may have a direct impact on the income achieved by the company. In response to this risk, the company supplies into different jurisdictions so as to avoid reliance on any one location as far as possible.

 

Management also monitor economic conditions at national and global levels.

 

Raw material input costs and inflation

Commodity costs forming the company’s raw material inputs into products can fluctuate dependent upon global events. Management continually monitor input costs and seek to minimise the impact by forward purchasing and trading in multiple currencies. Where appropriate, product cost increases will be based onto the company’s customer base. To try and mitigate general inflationary pressures, the company looks to achieve economies of scale as far as possible, as a member of the Axalta Coating Systems Ltd international group through central procurement.

 

COVID-19

While the current financial year has been post-pandemic and largely unaffected, management continued to apply strong working capital practices in order to maximise operational cash flow. The directors continue to be confident in the ability of the company and the management team to navigate the uncertainties created by COVID-19, coupled with the financial strength and support that comes with the company being part of a significant, multi-national group, in Axalta Coating Systems Ltd.

 

Russia and Ukraine conflict

On 24 February 2022 Russian Forces entered Ukraine, resulting in western nation reactions including the announcement of sanctions against Russia and Russian interests worldwide and an economic ripple effect on the global economy. The directors have carried out an assessment of the potential impact on the business, including the risk of breaching any sanctions and have concluded that the greatest impact continues to be from the economic ripple effect on the global economy. Since the sanctions have been implemented, there has been limited activity with the company’s subsidiary investment, U-POL Russia LLC and always in accordance with sanction legislation.

 

Financial risk management objectives and policies

The company’s activities expose it to a number of financial risks including cash flow, credit and liquidity risks. These specific risks, their impact on the company and how these risks are mitigated are dealt with below. The company currently does not use derivatives to manage financial risk.

U-POL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Principal risks and uncertainties
(continued)

Cash flow risk

The company’s activities expose it to the financial risk of changes in foreign currency exchange rates. The company may consider the use foreign exchange forward contracts to hedge its exposures where appropriate, but have not adopted this in either the current or prior year, seeking to naturally hedge through the matching of the same foreign currency receipts and payments.

 

Credit risk

The company’s principal financial assets are bank balances, trade and other debtors and amounts due from group undertakings. Its credit risk is primarily attributable to its trade debtors. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The company maintains strong relationships with its customer base and has no significant concentration of credit risk, with exposure spread over a large number of customers.

 

The credit risk in liquid funds is limited because the counterparties are banks with credit ratings assigned by international credit ratings agencies.

 

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company monitors the timing of cash flows and aligns this with its strategic planning. Forecasts are produced to assist management in identifying liquidity requirements and maintaining adequate resources. The company’s primary source of finance is the operating cash flow it generates.

Future developments

Given the development of the business during the year and its position within the marketplace, the directors believe the company is in a strong position to further develop its business and customer base, with the support and assistance of the Axalta Coating Systems Ltd group.

 

Environment

The company is committed to reducing the quantity of waste through its production process and has invested in capital equipment and revised processes in order to achieve this.

 

Streamlined Energy and Carbon Report (SECR)

 

UK energy use and associated greenhouse gas emissions

The company is pleased to report its current and historic UK based annual energy usage and associated annual greenhouse gas emissions pursuant to the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (“the 2018 Regulations”).

 

Organisational boundary

In accordance with the 2018 Regulations, the energy use and associated greenhouse gas emissions are for those within the UK only that come under the operational control boundary. Therefore, energy use and emissions are aligned with financial reporting for the UK subsidiaries and exclude the non-UK based subsidiaries that would not qualify under the 2018 Regulations in their own right.

Reporting period

The annual reporting period is 1 January to 31 December each year and the emissions and energy reporting are aligned to this period.

 

Quantification and reporting methodology

This report was compiled independently by energy consultants LG Energy Group. The 2019 UK Government Environmental Reporting Guidelines and the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) were followed to ensure the Streamlined Energy and Carbon Reporting (“SECR”) requirements were met and exceeded where possible.

U-POL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Quantification and reporting methodology (continued)

Electricity and gas consumption were based on invoice records, while mileage was used to calculate energy and emissions from fleet vehicles and grey fleet. Gross calorific values were used except for mileage energy calculations as per Government GHG Conversion Factors.

 

The emissions are divided into mandatory and voluntary emissions according to the 2018 Regulations, then further divided into the direct combustion of fuels and the operation of facilities (scope 1), indirect emissions from purchased electricity (scope 2) and further indirect emissions that occur as a consequence of company activities but occur from sources not owned or controlled by the organisation (scope 3).

 

Estimations

Estimates have been used where landlord and supplier invoices have not been available, but this is not expected to make a material impact. Where we occupy serviced office spaces, benchmarks have been used to estimate energy consumption due to the lack of metering or invoicing.

Breakdown of energy consumption used to calculate emissions (kWh)

Breakdown of energy consumption used to calculate emissions (kWh):

Year ended

31 December 2023

Year ended

31 December 2022

Gas

1,511,060

1,170,992

LPG

299,944

-

Electricity (grid)

2,465,070

1,527,571

Transport fuel

250,947

359,077

Total gross energy consumed

4,527,021

3,057,541

 

Breakdown of emissions associated with the reported energy use (tCO₂e)

Breakdown of emissions associated with the reported energy use (tCO₂e)

Year ended

31 December 2023

Year ended

31 December 2022

Scope 1

 

 

Gas

276.4

223.0

LPG

64.3

-

Company-owned vehicles

45.7

57.8

Total Scope 1

386.4

280.8

Scope 2

 

 

Electricity (grid)

510.5

295.4

Total Scope 2

510.5

295.4

Scope 3

 

 

Employee-owned vehicles where company

purchases the fuel

15.2

30.8

Total Scope 3

15.2

30.8

Total gross emissions

912.0

607.0

 

In comparison to the previous financial period the company's total energy consumption has increased by 1,469.48 MWh or 48.1%, and our total greenhouse gas emissions have increased by 305.0 tCO2e or 50.2%. This is due to additional activity which has increased our turnover . However, the intensity ratio of million pounds of turnover has reduced by 9.6% which indicative good control over energy usage.

 

During this period, we have conducted energy surveys as part of our ESOS compliance with the aim of identifying energy conservation measures to be implemented in future financial periods.

 

U-POL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Intensity ratios

Due to the differing manufacturing processes and mix of products, and the way in which manufacturing throughput is measured, we have chosen an intensity ratio of total gross emissions in metric tonnes CO2e per million pounds of turnover (tCO2e / £m).

 

This year, a secondary intensity ratio of total gross emissions in metric tonnes CO2e per square meter floor area was also included. We believe that these two metrics are considered the most relevant to the Company’s energy consuming activities and provides a good comparison of performance over time and across different organisations and sectors.

 

Intensity ratio

 

Year ended

31 December 2023

Year ended

31 December 2022

Tonnes of CO2e per £m

7.05

7.80

Tonnes of CO2e per square meter floor area

0.10

0.065


Utilities                        

Energy consumption expressed in kilowatt-hours has been taken from suppliers' invoices for electricity and natural gas. Location based kgCO2e/kWh conversion factors for the average UK grid supply have been used to calculate greenhouse gas emissions from electricity and natural gas consumption.                                        

Transport                        

For company vehicles the mileage is recorded along with the engine size and fuel type. Staff also drive personal vehicles and are reimbursed through mileage claims. The engine size and fuel type of personal vehicles is not recorded. The kWh/mile and kgCO2e/mile conversion factors from the category "Cars (by size)" have been used to calculate greenhouse gas emissions and underlying energy use.                                 

Other Fuels & Emissions:                        

LPG has been used in FLT during 2023. Maintenance records did not contain any instances of refrigerant leaks during the reference period. No other fugitive emissions have been identified.

U-POL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Section 172 (1) Companies Act 2006

The directors are aware of their duty under s.172 of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole and, in doing so, to have regard (amongst other matters) to:

 

The directors work to promote the success of the company, by considering the impact that their decisions may have on the company, along with the company’s stakeholders. The issues and factors which have guided the directors’ decisions are outlined in the ‘review of business’ and the ‘principal risks and uncertainties’ sections within this report.

 

Reputation is of key importance to the company and the directors who always consider reputational impact in taking decisions and encourages high standards of business conduct.

 

The company’s key stakeholders include, but are not limited to:

 

The directors of the company promote good governance, which is key to drive the success of the company. The directors also aim to achieve the overall strategic objectives of the U-POL group, as well as continuing good relationships with all key stakeholders who are critical to the long-term success of the company.

 

Having regard to employees’ interests

The board attaches great importance to the skills and experience of the management and employees of the company. Its aim is to retain the best talent and believes that they will benefit from the opportunities within the company. Opportunities for further professional and career development are on offer for employees through relevant training courses and qualifications.

 

The board is committed to consulting, as appropriate, with relevant employees and employee representatives on a regular basis and has worked hard to ensure effective communication with all employees during the year.

U-POL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -

The company has a number of initiatives including a commitment to create a working environment where everyone has the opportunity to learn, develop and contribute to the success of the company, whilst working within a common set of values. Regular updates on business performance KPIs through various channels are provided and an element of employee reviews is linked to the financial success of the company, amongst other appraisal criteria. In addition, appropriate whistleblowing procedures are available that employees are comfortable using.

 

Further information on the company’s employee policies is contained within the directors’ report.

 

Fostering business relationships

The company aims to be to the first choice for customers’ needs, enabling them to enjoy the full value of their relationship with the business. The company builds long term customer relationships by providing unrivalled levels of service and an offering which is unmatched in its flexibility. We maintain strong relationships across our supply chain through regular contact and meetings with our suppliers. We encourage our customers and suppliers to raise any issues or concerns they have over their relationship with the company, incorporating all aspects (legal, commercial, operational etc.) and offering dedicated points of contact within our team to provide the building of long-term business relationships.

 

These relationships contribute to the company’s competitive advantage. They not only enable us to execute our strategy efficiently, but also help customers and suppliers plan their business, managing cash flow and production. The company also engages actively with suppliers to make sure they fully comply with our code of conduct for suppliers and partners, which includes provisions on human rights and environmental standards.

 

Impact on community and environment

The company values the communities in which it operates, and its aim is for its business activities to have a positive impact on them.

 

The company will continue to promote green technology and initiatives to protect our environment, as well as being a contributor to the economies it operates in. We continue to seek to reduce the environmental impact of our business. The business is committed to delivering a corporate social responsibility strategy that sets the overall aim to be environmentally responsible, a good neighbour and a great place to work

 

Maintaining high standards of business conduct

The directors are committed to operating the company in a responsible manner, operating with high standards of business conduct and good governance.

 

Research and development

The company purses a programme for the development of new products and enhancements of existing products. Costs incurred during the year were £1.5 million (2022: £1.4 million) and have been charged against profits.

On behalf of the board

J I Blenkinsopp
Director
14 August 2024
U-POL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -

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

Results and dividends

The results for the year are set out on page 14.

No ordinary dividends were paid (2022: nil). The directors do not recommend payment of a final dividend (2022: nil).

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

J I Blenkinsopp
G H Williams
(Resigned 23 March 2023)
M H Pentecost
(Appointed 23 March 2023)
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement and engagement

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

 

An element of employee reward is linked to the financial success of the company, amongst other appraisal criteria as a means of further encouraging the involvement of employees in the company's performance.

 

Further information on employee engagement is provided within the strategic report under section 172 (1) of the Companies Act 2006 and it forms part of this report through cross-reference.

Auditor

The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

 

Future developments, research and development activities, engagement with suppliers, customers and others, financial risk management objectives and policies and disclosures concerning energy and carbon

 

The above items have been provided within the strategic report and form part of this report through cross-reference.

 

Overseas branches

The company has a South African branch.

 

U-POL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Statement of directors' responsibilities

The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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.

On behalf of the board
J I Blenkinsopp
Director
14 August 2024
U-POL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF U-POL LIMITED
- 10 -
Opinion

We have audited the financial statements of U-POL Limited ('the company') for the year ended 31 December 2023, which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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:

 

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 Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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:

 

U-POL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF U-POL LIMITED
- 11 -
Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor responsibilities for the audit of the financial statements

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

 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit is considered capable of detecting irregularities, including fraud

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

 

We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

 

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

U-POL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF U-POL LIMITED
- 12 -

Extent to which the audit is considered capable of detecting irregularities, including fraud (continued)

We obtained an understanding of the legal and regulatory frameworks that are applicable to company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

 

 

We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of relevant correspondence with regulatory bodies.

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:

 

 

In addition to the above, the following procedures were performed to provide reasonable assurance that financial statements were free of material fraud or error:

 

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

 

U-POL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF U-POL LIMITED
- 13 -

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 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Stephen McIlwaine (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
16 August 2024
Chartered Accountants
Statutory Auditor
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
U-POL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£'000
£'000
Turnover
3
105,728
77,775
Cost of sales
(64,720)
(56,348)
Gross profit
41,008
21,427
Distribution costs
(1,564)
(1,489)
Administrative expenses
(19,401)
(17,610)
Other operating (expenses)/income
4
(829)
11,690
Operating profit
5
19,214
14,018
Interest receivable and similar income
9
993
3,266
Interest payable and similar expenses
10
(2,140)
(17)
Profit before taxation
18,067
17,267
Tax on profit
11
896
(1,434)
Profit and total comprehensive income for the financial year
18,963
15,833

The profit and loss account has been prepared on the basis that all operations are continuing operations.

 

There are no recognised gains and losses in the current or prior year other than as included in the profit and loss account. Accordingly, no statement of other comprehensive income is presented.

U-POL LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 15 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Fixed assets
Tangible assets
12
10,284
9,613
Current assets
Stocks
15
6,649
9,930
Debtors
16
230,986
206,107
Cash at bank and in hand
12,749
12,223
250,384
228,260
Creditors: amounts falling due within one year
17
(53,634)
(49,946)
Net current assets
196,750
178,314
Total assets less current liabilities
207,034
187,927
Provisions for liabilities
Deferred tax liability
18
1,121
977
(1,121)
(977)
Net assets
205,913
186,950
Capital and reserves
Called up share capital
20
15
15
Foreign exchange reserve
20
7
7
Other reserve
21
407
407
Profit and loss reserves
20
205,484
186,521
Total equity
205,913
186,950
The financial statements were approved by the board of directors and authorised for issue on 14 August 2024 and are signed on its behalf by:
J I Blenkinsopp
Director
Company Registration No. 00464919
U-POL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
As restated
Share capital
Foreign exchange reserve
Other reserve
Profit and loss reserves
Total
£'000
£'000
£'000
£'000
£'000
Balance at 1 January 2022
15
7
407
170,688
171,117
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
15,833
15,833
Balance at 31 December 2022
15
7
407
186,521
186,950
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
18,963
18,963
Balance at 31 December 2023
15
7
407
205,484
205,913
U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
1
Accounting policies
Company information

U-POL Limited ("the company") is a private company limited by shares incorporated in England and Wales. The registered office is U-Pol Tech Centre Denington Road, Denington Industrial Estate, Wellingborough, Northamptonshire, United Kingdom, NN8 2QH. The principal activities of the company and the nature of its operations are set out in the strategic report on page 1.

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 £'000.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

As a qualifying entity. the company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

 

The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

The details of the ultimate parent undertaking in which the company is consolidated are provided in note 26.

1.2
Going concern

The financial statements have been prepared on a going concern basis which the directors consider to be appropriate. trueThe directors have prepared forecasts for an appropriate look-forward period. In preparing those forecasts they have considered a plausible downside scenario in which, trading will continue at similar levels to that achieved during the year ended 31 December 2023 and have accordingly not incorporated expected sales growth. The directors also note that the company has positive cash, significant net current assets and net assets position as at the balance sheet date and as at the date of approving these financial statements. Consequently, the directors are confident that the company is in a robust financial position and will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

1.3
Turnover

Turnover is measured at the fair value of the consideration receivable which generally equates to the invoiced amount, excluding value added tax. Turnover for sales of goods is recognised at the point at which the entity has transferred to the buyer the significant risks and rewards of ownership of the goods in accordance with the Incoterms. Depending on the terms of each sale this will either be at the point that goods have been dispatched from the warehouse or alternatively loaded onto the vessel at the port of departure. Incoterms are in accordance with ICC 2010.

U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred.

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:

Freehold property
2% to 10% straight line basis
Leasehold improvements
2% to 10% straight line basis
Plant, equipment and fittings
4% to 33% straight line basis
Motor vehicles
40% for 1st year then 20% straight line basis

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. Land is not depreciated.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, 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. Stock is valued on the First in First Out method.

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.

U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
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.

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 trade and other debtors, amounts owed by group undertakings and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, 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.

U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Basic financial liabilities

Basic financial liabilities, including trade and other creditors and amounts owed to group undertakings, 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. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs.

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.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.13
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss, under interest and similar income or expenses.

1.15

Interest receivable

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

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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:

Depreciation of tangible fixed assets

Management estimation is required to determine the appropriate asset lives over which to depreciate the company’s tangible fixed assets, in light of ongoing technological development and the company’s strategic plans. The depreciation policy is detailed in note 1.5, and the depreciation charged in the year is shown in note 12.

 

There are no other key judgements or sources of estimation in these financial statements.

U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
3
Turnover and other revenue
2023
2022
£'000
£'000
Turnover analysed by geographical market
United Kingdom
19,530
19,479
Europe
17,263
15,494
Rest of the world
68,935
42,802
105,728
77,775

The turnover of the company for the year has been achieved from its principal activity and single class of turnover, being product sales.

4
Other operating (expenses)/income

Other operating expenses of £829k (2022: Other operating income of £11,690k) relate to intercompany management service expenses/income.

5
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£'000
£'000
Research and development costs
1,506
1,183
Depreciation of owned tangible fixed assets
1,467
1,283
(Profit)/loss on disposal of tangible fixed assets
(39)
60
Operating lease charges
156
151
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
75
87
For other services
Taxation compliance services
24
21
All other non-audit services
-
0
7
24
28

The company pays the audit fees for all companies within the U-POL group as well as itself.

U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
7
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Manufacturing
232
221
Distribution and sales
42
42
Administration and management
37
43
Total
311
306

Their aggregate remuneration comprised:

2023
2022
£'000
£'000
Wages and salaries
12,619
12,414
Social security costs
1,510
1,589
Pension costs
532
530
14,661
14,533
8
Directors' remuneration
2023
2022
£'000
£'000
Remuneration for qualifying services
389
309
Company pension contributions to defined contribution schemes
37
12
426
321

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022: 1).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£'000
£'000
Remuneration for qualifying services
296
309
Company pension contributions to defined contribution schemes
17
12
U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
9
Interest receivable and similar income
2023
2022
£'000
£'000
Interest on bank deposits
191
19
Interest receivable from group companies
593
234
Net exchange (loss)/gain
-
0
3,013
Total interest revenue
784
3,266
Income from fixed asset investments
Income from shares in group undertakings
209
-
0
Total income
993
3,266
10
Interest payable and similar expenses
2023
2022
£'000
£'000
Interest on bank overdrafts and loans
6
-
Interest payable to group undertakings
17
17
Net exchange loss
2,117
-
0
2,140
17
11
Taxation
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current period
21
1,590
Adjustments in respect of prior periods
(1,061)
(467)
Total current tax
(1,040)
1,123
Deferred tax
Origination and reversal of timing differences
(36)
215
Changes in tax rates
-
0
68
Adjustment in respect of prior periods
180
28
Total deferred tax
144
311
Total tax (credit)/charge
(896)
1,434
U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Taxation
(Continued)
- 25 -

The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£'000
£'000
Profit before taxation
18,067
17,267
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
4,249
3,281
Tax effect of expenses that are not deductible in determining taxable profit
80
85
Adjustments in respect of prior years
(1,061)
(467)
Group relief
(4,316)
(1,487)
Deferred tax adjustments in respect of prior years
180
28
Other
21
(6)
Exempt ABGH distributions
(49)
-
0
Taxation (credit)/charge for the year
(896)
1,434
12
Tangible fixed assets
Freehold property
Leasehold improvements
Plant, equipment and fittings
Motor vehicles
Total
£'000
£'000
£'000
£'000
£'000
Cost
At 1 January 2023
2,295
296
16,171
480
19,242
Additions
-
0
-
0
2,017
123
2,140
Disposals
-
0
-
0
(69)
(141)
(210)
At 31 December 2023
2,295
296
18,119
462
21,172
Depreciation and impairment
At 1 January 2023
193
59
8,988
389
9,629
Depreciation charged in the year
44
30
1,328
65
1,467
Eliminated in respect of disposals
-
0
-
0
(67)
(141)
(208)
At 31 December 2023
237
89
10,249
313
10,888
Carrying amount
At 31 December 2023
2,058
207
7,870
149
10,284
At 31 December 2022
2,102
237
7,183
91
9,613

For information on the prior year restatement please see note 2.

U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
14
222
222
222
222
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Country
Nature of business
Class of
% Held
shares held
Direct
U-POL Canada Limited
Canada
Distribution of automotive refinish products
Ordinary
100.00
U-POL Netherlands B.V.
Netherlands
Distribution of automotive refinish products
Ordinary
100.00
U-POL Russia LLC
Russia
Distribution of automotive refinish products
Ordinary
100.00

Registered office addresses:

Canada
1212-1175 Douglas Street, Victoria, BC, V8W 2E1, Canada
Netherlands
Hoogoorddreef 15, Amsterdam, 1101BA
Russia
Office 11 and 12b, Building 1, 14 Nizhniaya Street, Moscow, 125040, Russia
15
Stocks
2023
2022
£'000
£'000
Raw materials and consumables
3,877
4,977
Finished goods and goods for resale
2,772
4,953
6,649
9,930
16
Debtors
2023
2022
Amounts falling due within one year:
£'000
£'000
Trade debtors
16,027
13,279
Amounts owed by group undertakings
213,684
191,692
Other debtors
1,275
1,136
230,986
206,107
U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Debtors
(Continued)
- 27 -

Amounts due from group undertakings include a loan of £8,000,000 (2022: £8,000,000) on which accrues interest at 5.75% per annum. This loan is repayable on demand and unsecured.

The remaining amounts due from group undertakings are unsecured, interest free and repayable on demand.

17
Creditors: amounts falling due within one year
2023
2022
£'000
£'000
Trade creditors
12,623
12,457
Amounts owed to group undertakings
36,471
33,774
Corporation tax
324
427
Other taxation and social security
316
346
Accruals and deferred income
3,900
2,942
53,634
49,946

Amounts owed to group undertakings include a loan of £300,000 (2022: £300,000) on which interest accrues at a rate of 5.7%. This loan is repayable on demand and unsecured.

The remaining amounts owed to group undertakings are unsecured, interest free and repayable on demand.

18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£'000
£'000
Fixed asset timing differences
1,151
1,004
Short term timing differences
(30)
(27)
1,121
977
2023
Movements in the year:
£'000
Liability at 1 January 2023
977
Charge to profit or loss
144
Liability at 31 December 2023
1,121
U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
532
530

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. At 31 December 2023 there was no amounts outstanding in respect of this (2022: nil).

20
Share capital and reserves
2023
2022
2023
2022
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary shares of £1 each
15,000
15,000
15
15

Profit and loss reserves

Profit and loss reserves represent cumulated retained profits and losses less cumulative dividends.

 

Foreign exchange reserve

The foreign exchange reserve represents cumulative translation differences in respect of aggregating the company's South Africa branch.

21
Other reserve
2023
2022
£'000
£'000
At the beginning and end of the year
407
407

The other reserve represents the residual revaluation reserve on freehold property, crystallised on the company's transition to FRS 102. This reserve will be realised on disposal of the freehold property.

22
Financial commitments, guarantees and contingent liabilities

The company forms part of the UK group security arrangement under its intermediate parent company, Axalta Coating Systems UK Holding Limited, whereby the company's share capital and assets are secured in respect of UK financing from HSBC Bank PLC and Barclays Bank PLC.

U-POL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
23
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
£'000
£'000
Within one year
146
146
Between two and five years
393
539
539
685
24
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£'000
£'000
Acquisition of tangible fixed assets
428
-
25
Related party transactions

The company has taken advantage of the exemption available in accordance with Section 33 of FRS 102 ‘Related party disclosures’ not to disclose transactions entered into between two or more members of the group, as the company is a wholly owned subsidiary undertaking of the group which is party to the transaction.

26
Ultimate controlling party

The company is a wholly owned subsidiary of U-POL Products Limited, a company registered at U-Pol Tech Centre Denington Road, Denington Industrial Estate, Wellingborough, Northamptonshire, NN8 2QH.

 

The ultimate parent undertaking and controlling party is Axalta Coating Systems Ltd, incorporated in Bermuda, which is the parent undertaking of the largest and smallest group to consolidate these financial statements.

 

Copies of these group financial statements can be obtained from either C/O Codan Services Limited, Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda or the Axalta Coating Systems Ltd website at https://ir.axalta.com/investors/sec-filings/annual-reports/default.aspx.

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