Company registration number 00992692 (England and Wales)
CONDALE PLASTICS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CONDALE PLASTICS LTD
COMPANY INFORMATION
Directors
M Stewart
P Chadwick
M Linder
I Vincent
Secretary
P Chadwick
Company number
00992692
Registered office
Independent Business Park
Imberhorne Lane
Felbridge
East Grinstead
West Sussex
RH19 1TU
Auditor
Jacob Cavenagh & Skeet
5 Robin Hood Lane
Sutton
Surrey
SM1 2SW
CONDALE PLASTICS LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
CONDALE PLASTICS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The company was acquired by Condale Holdings Limited, whose ultimate parent Company is Lifco AB on 1st September 2022. In that year the Company’s period end was shortened from 31 May 2023 to 31 December 2022. The comparative figures show results for the seven month period to 31 December 2022.
The directors are satisfied with the performance of the business and have continued to invest in new equipment. The directors consider the company is well placed to build on its success and continue to seek out new markets and opportunities.
The company’s key financial and other performance indicators during the period were as follows: -
12 months to 7 months to
31 December 2023 31 December 2022
Turnover £15,808,267 £10,668,433
Gross profit £3,713,923 £3,710,799
Gross profit % 23.49% 34.78%
Operating profit £2,213,636 £2,568,158
Operating profit % 14.00% 24.07%
Turnover for the twelve months to 31 December 2023 declined by over 11% compared to the same twelve month period to 31 December 2022. The Company operates in a variety of business sectors with orders and turnover being affected by the decline in the National and Global economies.
The company is a high energy user due to its processes and has continued to see a significant increase in energy costs, the company does try to limit these increases by fixing costs where it can but this only shelters the company for a defined period but some contracts which had been fixed throughout 2022 came to an end in 2023 and resulted in an increase in costs. Inflationary pressures, increases in the minimum/living wage and a general shortage of skilled employees are continuing to add to labour costs.
The company monitors daily, weekly and monthly order intake and the outstanding order book as one of its key indicators.
Principal risks and uncertainties
The management of the business and the nature of the company's strategy are subject to a number of risks. The business risks and uncertainties are managed by the use of various key performance indicators. The success of the business is also affected by economic cycles. We mitigate this risk by supplying all areas of industry and because of the diverse business activities of our customers. The company has no significant reliance on any individual customers. Shortages of key skills and a general shortage of suitable employees is also a significant concern.
The company's business can be affected by changes in prices of raw materials and availability of supply and the company seeks to mitigate these risks by means of its purchasing policy and relationship with key suppliers.
CONDALE PLASTICS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Promoting the success of the company
The board of Directors of Condale Plastics Limited believe that they have acted individually and collectively to promote the long-term success of the business throughout the period ending 31st December 2023. They consider that they have acted with due consideration of the interests of all stakeholders of the business including the customers, employees, suppliers, local community and the Companies new owner, Lifco AB.
Lifco’s Code of Conduct sets out its commitment to the highest level of ethical business conduct and integrity. It applies to both Directors and employees alike. It defines the nature of the relationships between the Company and its stakeholders. Furthermore it requires the Company to ensure that its supply chain meets the same standards of conduct.
The long-term business strategy for the business has been in place for a number of years and is reviewed annually to assess its relevance and to outline areas for development activity.
Condale Plastics works closely with its customers to ensure that it meets their needs. Regular communication takes place to understand customer’s strategic and short term requirements and to gain customer feedback. The Company uses its recognised Quality Management system to underpin the quality of its products and its level of service to its customers.
The Company uses an approved supplier list. Regular open dialogue takes place with key suppliers to discuss performance, compliance, service and technical development.
Employee attraction and retention is a key consideration for management and the Board. The health and safety of employees is critically important. In the recent period, the Company has introduced new systems to manage health and safety and committed to regular external audits of health and safety activity. In the last year, a number of steps have been taken to make working at Condale Plastics more attractive encompassing both the terms offered and opportunities for development. All employee policies have been reviewed and reissued.
The environment is a key concern for the Directors. Condale Plastics has always taken all practical steps to ensure that waste is minimised and that waste materials are recycled. The business has started to assess its carbon footprint and has completed an upgrade of its lighting and continues to expand its fleet of electric vehicles.
The Board of Directors of Condale Plastics includes members from the Lifco Business. They specifically ensure that the interests of the owners are fully considered and that the culture of the Company reflects the values of the Group.
P Chadwick
Director
14 March 2024
CONDALE PLASTICS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the manufacture of extrusions in a variety of plastic materials.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £5,000,000.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M Stewart
P Chadwick
M Linder
I Vincent
Business relationships
The Company has published its Code of Conduct which sets the minimum standards of behaviour and performance that it expects from all of the stakeholders of the business. This covers relationships with customers, suppliers, employees and its local community. The company requires all suppliers, directors and employees to sign up to its code of conduct. Performance against the code of conduct is formally assessed quarterly and reviewed at regular board meetings.
Future developments
The Company continues to explore new and emerging markets where plastic extrusions can be utilised. The Company works proactively with its customers and suppliers to develop new products and processes that will generate a competitive advantage in the future.
Auditor
Jacob Cavenagh & Skeet have agreed to offer themselves for re-appointment as auditors of the company.
Energy and carbon report
The company has not produced a Energy and Carbon report as the information has been included in the accounts of its ultimate parent.
CONDALE PLASTICS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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
P Chadwick
Director
14 March 2024
CONDALE PLASTICS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CONDALE PLASTICS LTD
- 5 -
Opinion
We have audited the financial statements of Condale Plastics Ltd (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CONDALE PLASTICS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CONDALE PLASTICS LTD
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company, we identified that the principal risks of non-compliance with laws and regulations related to employment and financial reporting legislation and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management, considering the internal controls in place and discussion amongst the engagement team.
We determined that the principal risks were related to management bias in accounting estimates, presentation of separately disclosed items and management override of controls.
In response to the risks identified we designed procedures which included, but were not limited to reviewing Board minutes, challenging significant accounting estimates, evaluating the internal controls, agreeing financial statement disclosures to underlying supporting documentation and identifying and testing journal entries.
There are inherent limitations in the audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
CONDALE PLASTICS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CONDALE PLASTICS LTD
- 7 -
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.
Paul Newton FCA
Senior Statutory Auditor
For and on behalf of Jacob Cavenagh & Skeet
15 March 2024
Chartered Accountants
Statutory Auditor
5 Robin Hood Lane
Sutton
Surrey
SM1 2SW
CONDALE PLASTICS LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Year
Period
ended
ended
2023
31 December 2022
Notes
£
£
Turnover
3
15,808,267
10,668,433
Cost of sales
(12,094,344)
(6,957,634)
Gross profit
3,713,923
3,710,799
Distribution costs
(383,435)
(348,876)
Administrative expenses
(1,116,852)
(793,765)
Operating profit
4
2,213,636
2,568,158
Interest receivable and similar income
7
6,924
Interest payable and similar expenses
8
(4,000)
Profit before taxation
2,216,560
2,568,158
Tax on profit
9
(515,118)
(548,967)
Profit for the financial year
1,701,442
2,019,191
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CONDALE PLASTICS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Year
Period
ended
ended
2023
31 December 2022
£
£
Profit for the year
1,701,442
2,019,191
Other comprehensive income
-
-
Total comprehensive income for the year
1,701,442
2,019,191
CONDALE PLASTICS LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,384,823
1,216,471
Investments
12
2
1,384,823
1,216,473
Current assets
Stocks
13
1,351,375
1,619,840
Debtors
14
1,995,284
2,698,412
Cash at bank and in hand
2,654,060
5,578,184
6,000,719
9,896,436
Creditors: amounts falling due within one year
15
(1,761,371)
(2,202,040)
Net current assets
4,239,348
7,694,396
Total assets less current liabilities
5,624,171
8,910,869
Provisions for liabilities
Deferred tax liability
16
229,149
217,289
(229,149)
(217,289)
Net assets
5,395,022
8,693,580
Capital and reserves
Called up share capital
18
1,000
1,000
Other reserves
123,342
123,342
Profit and loss reserves
5,270,680
8,569,238
Total equity
5,395,022
8,693,580
The financial statements were approved by the board of directors and authorised for issue on 14 March 2024 and are signed on its behalf by:
M Stewart
P Chadwick
Director
Director
Company Registration No. 00992692
CONDALE PLASTICS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Revaluation reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 June 2022
1,000
364,587
123,342
10,192,138
10,681,067
Period ended 31 December 2022:
Profit and total comprehensive income for the period
-
-
-
2,019,191
2,019,191
Dividends
10
-
-
-
(4,006,678)
(4,006,678)
Transfers
-
(364,587)
-
364,587
-
Balance at 31 December 2022
1,000
123,342
8,569,238
8,693,580
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
1,701,442
1,701,442
Dividends
10
-
-
-
(5,000,000)
(5,000,000)
Balance at 31 December 2023
1,000
123,342
5,270,680
5,395,022
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Condale Plastics Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Independent Business Park, Imberhorne Lane, Felbridge, East Grinstead, West Sussex, RH19 1TU.
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 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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 financial statements of the company are consolidated in the financial statements of Lifco AB, a company registered in Sweden. These consolidated financial statements are available from its registered office, Verkmastaregatan 1 745 39, Enkoping, Uppsala, Sweden.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.4
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 of fixed assets is calculated to write off their cost or valuation less any residual value over their estimated useful lives as follows:
Short leasehold improvements
straight line over the lease term
Plant and machinery
20% reducing balance
Fixtures, fittings & equipment
12.5% reducing balance
Computer equipment
33.3% straight line
Motor vehicles
25% reducing balance
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.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
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.
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
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.
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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 receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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 taxation is provided on the full provisioning method in respect of the taxation effect of all timing differences to the extent that tax liabilities are likely to crystallise in the foreseeable future.
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 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.
1.15
Foreign exchange
Transactions in foreign currencies are translated into sterling and recorded at the rates of exchange ruling at the date of the transaction. Monetary assets and liabilities are translated at rates ruling at the balance sheet date. All differences are taken to the profit and loss account.
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.
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Turnover and other revenue
Turnover analysed by geographical market
2023
31 December 2022
£
£
UK
14,283,135
8,364,481
European Union
885,926
445,629
Rest of the World
639,206
1,858,323
15,808,267
10,668,433
4
Operating profit
2023
31 December 2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
48
(187)
Fees payable to the company's auditor for the audit of the company's financial statements
11,200
11,950
Depreciation of owned tangible fixed assets
267,671
179,838
Loss/(profit) on disposal of tangible fixed assets
18,249
(1,411)
Operating lease charges
438,010
154,638
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
31 December 2022
Number
Number
Production
84
79
Administration
12
13
Total
96
92
Their aggregate remuneration comprised:
2023
31 December 2022
£
£
Wages and salaries
3,848,174
2,080,535
Social security costs
426,783
236,560
Pension costs
107,975
56,356
4,382,932
2,373,451
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
Directors' remuneration
2023
31 December 2022
£
£
Remuneration for qualifying services
207,229
192,720
Company pension contributions to defined contribution schemes
10,178
5,083
217,407
197,803
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (31 December 2022 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
31 December 2022
£
£
Remuneration for qualifying services
122,743
65,206
7
Interest receivable and similar income
2023
31 December 2022
£
£
Interest income
Interest on bank deposits
2,448
Other interest income
4,476
Total income
6,924
8
Interest payable and similar expenses
2023
31 December 2022
£
£
Other interest
4,000
9
Taxation
2023
31 December 2022
£
£
Current tax
UK corporation tax on profits for the current period
503,258
528,208
Adjustments in respect of prior periods
(4,059)
Total current tax
503,258
524,149
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
2023
31 December 2022
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
11,860
(27,331)
Changes in tax rates
52,149
Total deferred tax
11,860
24,818
Total tax charge
515,118
548,967
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
31 December 2022
£
£
Profit before taxation
2,216,560
2,568,158
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (31 December 2022: 19.00%)
554,140
487,950
Tax effect of expenses that are not deductible in determining taxable profit
(599)
15,596
Adjustments in respect of prior years
(4,059)
Effect of change in corporation tax rate
(38,423)
52,149
Deferred tax adjustments in respect of prior years
(2,669)
Taxation charge for the year
515,118
548,967
10
Dividends
2023
31 December 2022
£
£
Interim paid
5,000,000
4,006,678
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Tangible fixed assets
Short leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2023
7,785,614
358,315
268,680
8,412,609
Additions
38,391
167,648
194,750
67,630
468,419
Disposals
(2,200,197)
(182,560)
(44,140)
(2,426,897)
At 31 December 2023
38,391
5,753,065
370,505
292,170
6,454,131
Depreciation and impairment
At 1 January 2023
6,738,370
341,621
116,147
7,196,138
Depreciation charged in the year
1,572
221,068
6,803
38,228
267,671
Eliminated in respect of disposals
(2,175,142)
(182,542)
(36,817)
(2,394,501)
At 31 December 2023
1,572
4,784,296
165,882
117,558
5,069,308
Carrying amount
At 31 December 2023
36,819
968,769
204,623
174,612
1,384,823
At 31 December 2022
1,047,244
16,694
152,533
1,216,471
12
Fixed asset investments
2023
31 December 2022
Notes
£
£
Investments in subsidiaries
2
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
2
Disposals
(2)
At 31 December 2023
-
Carrying amount
At 31 December 2023
-
At 31 December 2022
2
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Stocks
2023
2022
£
£
Raw materials and consumables
1,149,356
1,301,782
Finished goods and goods for resale
202,019
318,058
1,351,375
1,619,840
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,745,615
2,489,170
Corporation tax recoverable
51,038
Other debtors
7,900
21,304
Prepayments and accrued income
190,731
187,938
1,995,284
2,698,412
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,145,310
793,723
Amounts owed to group undertakings
5,728
2
Corporation tax
326,048
Other taxation and social security
461,748
771,118
Other creditors
64,386
60,691
Accruals and deferred income
84,199
250,458
1,761,371
2,202,040
16
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
229,149
217,289
CONDALE PLASTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Deferred taxation
(Continued)
- 22 -
2023
Movements in the year:
£
Liability at 1 January 2023
217,289
Charge to profit or loss
11,860
Liability at 31 December 2023
229,149
£45,000 of the deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
17
Retirement benefit schemes
2023
31 December 2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
107,975
56,356
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
31 December 2022
£
£
Within one year
450,000
450,000
Between two and five years
1,800,000
1,800,000
In over five years
3,900,000
4,347,000
6,150,000
6,597,000
20
Ultimate controlling party
Lifco AB is the ultimate controlling party. Its registered office is: Verkmastaregatan 1 745 39, Enkoping, Uppsala, Sweden.
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