Company registration number 00524814 (England and Wales)
BERWIN RUBBER COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BERWIN RUBBER COMPANY LIMITED
COMPANY INFORMATION
Directors
J E Dowdall
P K Rosen
C Ruter
R Wolkener
Secretary
A Bramwell
Company number
00524814
Registered office
Broadway
Globe Lane Industrial Estate
Dukinfield
Cheshire
United Kingdom
SK16 4UJ
Auditor
Azets Audit Services
Ship Canal House
98 King Street
Manchester
M2 4WU
BERWIN RUBBER COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 22
BERWIN RUBBER COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Business review
The profit from ordinary activities before tax for the year is £1,985,378 (2022: £1,322,312 loss).
This result reflects a positive trading year. Continued investment in equipment provides a solid base for ongoing business as well as providing a platform for potential growth. The gross margin of the business was positively impacted following the closure of the site in Lydney during 2022. Furthermore, the business was able to manage its cost structures and improve its operating profit.
The ongoing crisis in Ukraine has impacted supply chains and economies globally. The industry and markets that the business operates in are no exception to this. This created challenges and changes in cost structures, which the
business continues to monitor and manage. For example, the business continues to identify alternative options within its supply chain and will continue to work closely with all existing stakeholders to mitigate risk.
Financial key performance indicators
2023
2022
Turnover
£44,182,133
£51,317,019
Gross profit %
38.0%
35.3%
Operating profit %
3.9%
2.2%
Principal risks and uncertainties
The principal risks and uncertainties of the company are as follows:
Competition
The market in which the company operates is highly competitive. As a result, there is constant downward pressure on margins. Policies of constant price monitoring and ongoing market research are in place to mitigate such risks.
Fluctuations in commodity prices
The manufacture of our product range relies on materials traded on the commodity market. The price of such materials is therefore susceptible to fluctuations dependent upon market conditions. In order to mitigate the impact of such price movements, management maintains close contact with its suppliers to try and foresee where this could occur.
Fluctuations in currency exchange rates
A signifcant proportion of purchases come from overseas and are denominated in foreign currencies. As the company purchases and sells similar amounts in Euros a natural hedge is created which reduces the company's exposure to currency fluctuations. The company further manages this exposure by continuously reviewing its currency requirements and acquiring balances at the most suitable time to mitigate the exposure risk.
Credit risk
The company's principal financial assets are cash and trade debtors. The credit risk associated with cash is limited as the counterparties have high credit ratings assigned by international credit-rating agencies. The principal credit risk arises therefore from its trade debtors. In order to manage credit risk, the directors set limits for customers. Credit limits are reviewed on a regular basis in conjunction with debt ageing and collection history.
Liquidity risk
The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.
BERWIN RUBBER COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Promoting the success of the company
Section 172 of the Companies Act 2006 requires Directors to consider the interests of stakeholders in their decision-making. This statement outlines how the Directors adhere to the matters set out in Section 172 while fulfilling their roles.
Our responsibilities extend to our shareholders, customers, suppliers, local communities, and the environment. We engage with our stakeholders in various ways, including:
Shareholders: We prioritise transparency and effective communication to ensure shareholders are informed about the company's strategies, performance, and decisions. We regularly report financial and non-financial information to our group team, and we seek to uphold their trust and confidence by delivering long-term value and sustainable growth.
Customers: We are committed to customer satisfaction and therefore producing a quality product consistently. We have a proactive technical team that collaborate closely with our customers, understanding their unique needs and preferences, and endeavouring to provide innovative solutions and exceptional service quality.
Suppliers: We foster collaborative partnerships with our suppliers in order to create shared value and mutual success.
Local Communities: We pride ourselves on being a responsible employer in our local community. Health and safety is therefore of paramount importance and extends to not only our employees but to all visitors and the wider community.
Environment: Environmental responsibility is central to our corporate values. We are committed to reducing our carbon footprint, conserving natural resources, and promoting environmental sustainability throughout our operations.
By prioritizing the interests of our stakeholders and engaging with them proactively, we aim to foster trust, create shared value, and drive sustainable growth for the benefit of all.
J E Dowdall
Director
19 July 2024
BERWIN RUBBER COMPANY LIMITED
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 compounding of rubber and other elastomeric alloys.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J E Dowdall
P K Rosen
C Ruter
R Wolkener
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
We present our Greenhouse Gas (GHG) Emissions Statement in line with the Companies Act 2006 and Streamlined Energy and Carbon Reporting (SECR) requirement. The table below discloses our emissions for the reporting period, annualised for comparison with prior year, and separated out into the following scopes as defined by the Environmental Reporting Guidelines. The items within each scope that are analysed are:
Scope 1 – Emissions from the combustion of fuel, namely Diesel consumption
Scope 2 – Indirect emissions from electricity consumption, purchased by the Company.
| | | |
| | | | | | |
| Combustion of gas and use of fuel for transport | | | | | |
| | | | |
| | | | | | |
| | | | | |
| | | | |
| | |
The company constantly review the effectiveness of its energy consumption. In the previous reporting period some of energy efficiency measures which have been implemented include:
Continued phasing out of “traditional” lighting technologies, such as sodium, fluorescent and incandescent lamps by replacing these lamps with high efficiency LED lighting
Ongoing removal of aging plant with more energy efficient replacements.
Review of factory shutdown procedures to prevent unnecessary energy consumption.
BERWIN RUBBER COMPANY LIMITED
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
J E Dowdall
Director
19 July 2024
BERWIN RUBBER COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF BERWIN RUBBER COMPANY LIMITED
- 5 -
Opinion
We have audited the financial statements of Berwin Rubber Company Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet 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.
BERWIN RUBBER COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF BERWIN RUBBER COMPANY LIMITED
- 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.
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.
BERWIN RUBBER COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF BERWIN RUBBER COMPANY LIMITED
- 7 -
Extent to which the audit was 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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Graham Rigby
Senior Statutory Auditor
For and on behalf of Azets Audit Services
19 July 2024
Chartered Accountants
Statutory Auditor
Ship Canal House
98 King Street
Manchester
M2 4WU
BERWIN RUBBER COMPANY LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
44,182,133
51,317,019
Cost of sales
(27,375,627)
(33,196,219)
Gross profit
16,806,506
18,120,800
Administrative expenses
(15,104,157)
(16,983,782)
Operating profit
4
1,702,349
1,137,018
Interest receivable and similar income
8
283,029
71,226
Exceptional item
5
(2,530,556)
Profit/(loss) before taxation
1,985,378
(1,322,312)
Tax on profit/(loss)
9
(564,147)
414,399
Profit/(loss) for the financial year
1,421,231
(907,913)
Retained earnings brought forward
16,245,825
17,153,738
Retained earnings carried forward
17,667,056
16,245,825
The profit and loss account has been prepared on the basis that all operations are continuing operations.
BERWIN RUBBER COMPANY LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
1,572,375
1,834,437
Tangible assets
11
4,608,479
4,128,931
6,180,854
5,963,368
Current assets
Stocks
12
3,972,206
4,148,557
Debtors
13
23,689,096
24,823,674
Cash at bank and in hand
6,161,229
4,005,352
33,822,531
32,977,583
Creditors: amounts falling due within one year
14
(21,703,335)
(22,275,628)
Net current assets
12,119,196
10,701,955
Total assets less current liabilities
18,300,050
16,665,323
Creditors: amounts falling due after more than one year
15
(20,000)
(20,000)
Provisions for liabilities
Deferred tax liability
16
610,994
397,498
(610,994)
(397,498)
Net assets
17,669,056
16,247,825
Capital and reserves
Called up share capital
18
2,000
2,000
Profit and loss reserves
17,667,056
16,245,825
Total equity
17,669,056
16,247,825
The financial statements were approved by the board of directors and authorised for issue on 19 July 2024 and are signed on its behalf by:
J E Dowdall
Director
Company Registration No. 00524814
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
Berwin Rubber Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is Broadway, Globe Lane Industrial Estate, Dukinfield, Cheshire, United Kingdom, SK16 4UJ.
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 the ultimate parent
entity, Hexpol AB. These consolidated financial statements are available from its registered office, Skeppsbron 3, SE-211 Malmo, Sweden (www.hexpol.com).
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.
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives. If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition in a business combination over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. The directors initially estimated that Goodwill had a useful life in excess of 10 years, however in accordance with FRS 102 is amortised on a systematic basis prospectively over a maximum of 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
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:
Leasehold land and buildings
14 to 35 years straight line basis
Plant and equipment
3 to 15 years straight line basis
Assets in the course of construction are not depreciated.
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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. 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.
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, and deposits held at call with banks.
1.10
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. 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.
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.
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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 and loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
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.
1.12
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.
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
1.13
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.
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
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.
1.16
Exceptional items are unusual or non-recurring in nature and are recognised as incurred.
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Useful life of Goodwill
The useful life of Goodwill is determined by using management judgement. This has been determined as 10 years at the time of acquisition as it is expected that the majority of the benefits from acquisition will flow through to the company during this period.
Impairment of Goodwill
Goodwill is reviewed annually using the recognised external and internal indicators of impairment. No indication of impairment was seen as market demand remained stable though the year and in line with management expectations.
3
Turnover
2023
2022
£
£
Turnover analysed by geographical market
UK sales
34,099,133
39,516,019
Rest of Europe
8,918,000
10,622,000
Rest of the world
1,165,000
1,179,000
44,182,133
51,317,019
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
33,895
62,260
Research and development costs
17,687
13,843
Fees payable to the company's auditor for the audit of the company's financial statements
42,600
38,750
Fees payable to the company's auditor for non-audit services
16,550
8,450
Depreciation of owned tangible fixed assets
500,763
508,073
Loss/(profit) on disposal of tangible fixed assets
129,643
(65,450)
Amortisation of intangible assets
262,062
145,406
Operating lease charges
330,662
378,284
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
5
Exceptional item
On 1 March 2022 the company acquired the trade and certain assets of Berwin Industrial Polymers Limited, a fellow group company, for their net book value which the directors deemed to be the fair value. Following the acquisition the directors undertook a review of the business, disposing of surplus assets and closing down the former operating site, incurring redundancies as a result. The total of such exceptional costs amounted to £nil (2022: £2,530,556).
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Office and management
32
33
Production and sales
122
159
Total
154
192
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,989,872
6,570,821
Social security costs
571,655
681,671
Pension costs
245,667
272,080
6,807,194
7,524,572
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
160,699
169,901
Company pension contributions to defined contribution schemes
20,979
17,972
181,678
187,873
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
215
Interest receivable from group companies
283,029
71,011
Total income
283,029
71,226
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
43,065
Adjustments in respect of prior periods
497
(136,632)
Group tax relief
(54,417)
Total current tax
43,562
(191,049)
Deferred tax
Origination and reversal of timing differences
521,162
(158,478)
Changes in tax rates
(52,997)
Adjustment in respect of prior periods
(577)
(11,875)
Total deferred tax
520,585
(223,350)
Total tax charge/(credit)
564,147
(414,399)
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit/(loss) before taxation
1,985,378
(1,322,312)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
466,961
(251,239)
Tax effect of expenses that are not deductible in determining taxable profit
72,909
32,771
Adjustments in respect of prior years
497
(136,632)
Effect of change in corporation tax rate
30,841
(52,997)
Deferred tax adjustments in respect of prior years
(577)
(11,875)
Transfer from fellow group undertaking
5,573
Super-deduction adjustments
(6,484)
Taxation charge/(credit) for the year
564,147
(414,399)
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
2,270,655
Amortisation and impairment
At 1 January 2023
436,218
Amortisation charged for the year
262,062
At 31 December 2023
698,280
Carrying amount
At 31 December 2023
1,572,375
At 31 December 2022
1,834,437
This goodwill is related to the purchase of the trade and assets of Hexpol Compounding (UK) Limited on 1 January 2020. Based on the management's experience and knowledge they have they have assigned a residual useful economic life of 7 years from 1 January 2023, being a total of 10 years from acquisition, after an initial period of 3 years at a lower rate of amortisation. Management have reviewed internal and external indicators of impairment and note that no internal or external indicators are present and have therefore concluded that there is no impairment of Goodwill as of the date of the financial statements.
11
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Total
£
£
£
Cost
At 1 January 2023
2,140,139
15,036,325
17,176,464
Additions
28,222
1,111,807
1,140,029
Disposals
(31,985)
(3,191,677)
(3,223,662)
At 31 December 2023
2,136,376
12,956,455
15,092,831
Depreciation and impairment
At 1 January 2023
2,012,404
11,035,129
13,047,533
Depreciation charged in the year
12,625
488,138
500,763
Eliminated in respect of disposals
(31,985)
(3,031,959)
(3,063,944)
At 31 December 2023
1,993,044
8,491,308
10,484,352
Carrying amount
At 31 December 2023
143,332
4,465,147
4,608,479
At 31 December 2022
127,735
4,001,196
4,128,931
During the year the company undertook a review for both existence and potential impairment of plant and equipment, with the result that a number of assets (with negligible net book value) have been removed from the fixed asset register.
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Stocks
2023
2022
£
£
Raw materials and consumables
3,372,433
3,433,609
Work in progress
453,387
569,838
Finished goods and goods for resale
146,386
145,110
3,972,206
4,148,557
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
8,102,737
12,041,411
Corporation tax recoverable
109,637
203,067
Amounts owed by group undertakings
15,143,326
11,673,539
Prepayments and accrued income
333,396
598,568
23,689,096
24,516,585
Deferred tax asset (note 16)
307,089
23,689,096
24,823,674
Amounts owed by group undertakings is comprised of short term intercompany balances of £7,930,965 (2022: £8,244,213) owed by wholly owned subsidiaries of the ultimate parent undertaking and a loan of £7,212,361 (2022: £3,429,326) owed by the ultimate parent undertaking.
Short term intercompany balances are interest free, unsecured and repayable on demand.
Amounts due from the ultimate parent company are unsecured, repayable on demand and interest accrues at a relevant IBOR rate less a service charge of 0.125%.
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
6,995,436
7,557,935
Amounts owed to group undertakings
11,946,850
12,040,571
Taxation and social security
482,930
467,056
Other creditors
263,488
340,943
Accruals and deferred income
2,014,631
1,869,123
21,703,335
22,275,628
Amounts owed to group undertakings are interest free, unsecured, and repayable on demand.
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
15
Creditors: amounts falling due after more than one year
2023
2022
£
£
Preference shares classed as a liability
20,000
20,000
Non-equity deferred shares classed as financial liability relate to shares which have no right to dividends or capital.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
635,231
412,331
-
-
Tax losses
-
-
-
307,089
Short term timing differences
(24,237)
(14,833)
-
-
610,994
397,498
-
307,089
2023
Movements in the year:
£
Liability at 1 January 2023
90,409
Charge to profit or loss
520,585
Liability at 31 December 2023
610,994
The deferred tax liability set out above is expected to reverse after 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
245,667
272,080
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. The balance at the year end was £33,050 (2022: £40,984).
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
100
100
100
100
B Ordinary shares of £1 each
1,900
1,900
1,900
1,900
2,000
2,000
2,000
2,000
The A Ordinary and B Ordinary shares rank pari passu in all material aspects.
These shares hold no rights to a fixed income.
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
2022
£
£
Within one year
226,646
198,816
Between two and five years
574,497
97,060
In over five years
8,539
809,682
295,876
20
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
356,632
21
Related party transactions
The company has taken advantage of the exemption available in FRS 102 section 33.1a "Related party disclosures" whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
BERWIN RUBBER COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
22
Controlling party
The ultimate parent company is Hexpol AB, a company registered in Sweden.
Berwin Group Limited is the immediate controlling party and is under the control of Hexpol AB. Copies of the consolidated financial statements of Hexpol AB can be obtained from Skeppsbron 3, SE-211 20 Malmo, Sweden (www.hexpol.com).
At the date these financial statements were approved, the immediate parent was Berwin Group Limited, a company incorporated in England. Berwin Group Limited and Berwin Rubber Company share the same registered office.
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.100J E DowdallP K RosenC RuterR WolkenerA Bramwellfalsefalse005248142023-01-012023-12-3100524814bus:Director12023-01-012023-12-3100524814bus:Director22023-01-012023-12-3100524814bus:Director32023-01-012023-12-3100524814bus:Director42023-01-012023-12-3100524814bus:CompanySecretary12023-01-012023-12-3100524814bus:RegisteredOffice2023-01-012023-12-31005248142023-12-31005248142022-01-012022-12-3100524814core:RetainedEarningsAccumulatedLosses2022-12-3100524814core:RetainedEarningsAccumulatedLosses2021-12-3100524814core:RetainedEarningsAccumulatedLosses2023-12-3100524814core:RetainedEarningsAccumulatedLosses2022-12-3100524814core:ShareCapital2023-12-3100524814core:ShareCapital2022-12-31005248142022-12-3100524814core:ShareCapitalOrdinaryShares2023-12-3100524814core:ShareCapitalOrdinaryShares2022-12-3100524814core:Goodwill2023-12-3100524814core:Goodwill2022-12-3100524814core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-12-3100524814core:PlantMachinery2023-12-3100524814core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3100524814core:PlantMachinery2022-12-3100524814core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3100524814core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3100524814core:Non-currentFinancialInstrumentscore:AfterOneYear2023-12-3100524814core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3100524814core:CurrentFinancialInstruments2023-12-3100524814core:CurrentFinancialInstruments2022-12-3100524814core:Goodwill2023-01-012023-12-3100524814core:LandBuildingscore:LongLeaseholdAssets2023-01-012023-12-3100524814core:PlantMachinery2023-01-012023-12-3100524814core:ConstructionInProgressAssetsUnderConstruction2023-01-012023-12-3100524814countries:UnitedKingdom2023-01-012023-12-3100524814countries:UnitedKingdom2022-01-012022-12-3100524814countries:RestEuropeOutsideUK2023-01-012023-12-3100524814countries:RestEuropeOutsideUK2022-01-012022-12-3100524814countries:RestWorldOutsideEurope2023-01-012023-12-3100524814countries:RestWorldOutsideEurope2022-01-012022-12-3100524814core:UKTax2023-01-012023-12-3100524814core:UKTax2022-01-012022-12-310052481412023-01-012023-12-310052481412022-01-012022-12-310052481422023-01-012023-12-310052481422022-01-012022-12-3100524814core:Goodwill2022-12-3100524814core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3100524814core:PlantMachinery2022-12-31005248142022-12-3100524814core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-01-012023-12-3100524814core:Non-currentFinancialInstruments12023-12-3100524814core:Non-currentFinancialInstruments12022-12-3100524814core:WithinOneYear2023-12-3100524814core:WithinOneYear2022-12-3100524814core:BetweenTwoFiveYears2023-12-3100524814core:BetweenTwoFiveYears2022-12-3100524814core:MoreThanFiveYears2023-12-3100524814core:MoreThanFiveYears2022-12-3100524814bus:PrivateLimitedCompanyLtd2023-01-012023-12-3100524814bus:FRS1022023-01-012023-12-3100524814bus:Audited2023-01-012023-12-3100524814bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP