Company registration number 03896797 (England and Wales)
WATER TREATMENT PRODUCTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
WATER TREATMENT PRODUCTS LIMITED
COMPANY INFORMATION
Directors
Mr F Navjord
Mrs S Strom
(Appointed 2 February 2024)
Company number
03896797
Registered office
Bradbury House
Mission Court
Newport
Gwent
NP20 2DW
Auditor
UHY Hacker Young
Bradbury House
Mission Court
Newport
Gwent
United Kingdom
NP20 2DW
Bankers
HSBC
38 Gwent Square
Cwmbran
Newport
NP44 1XL
WATER TREATMENT PRODUCTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
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
WATER TREATMENT PRODUCTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The results for the period and financial position of the company are as shown in the annexed financial statements. Turnover has increased by 5% as the company focused on the core business activity; this is the company's key performance indicator (KPI).
The balance sheet net assets have decreased from £10.7m to £9.5m, due to dividends paid less profits made.
The directors are satisfied with the company's performance in a market that remains challenging.
Principal risks and uncertainties
The water treatment sector remains very competitive, and the directors believe that the market will remain this way in the foreseeable future. The company's activities expose it to a number of financial risks including price risk, credit risk, cash flow risk and liquidity risk. The use of financial instruments is monitored by the directors. The company's principal financial instruments comprise bank balances, trade creditors, trade debtors and loans to the company. The company does not use derivative financial instruments for speculative purposes.
Cash flow risk
Interest bearing assets and liabilities are held at fixed rate to ensure certainty of cash flows.
Credit risk
The company's principal financial assets are bank balances and cash, trade and other receivables. The company's credit risk is primarily attributable to its trade and other receivables. The company manages credit risk in respect of trade debtors by regularly monitoring credit limits and balances outstanding. The company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
Liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company maintains a large amount of cash within its bank accounts. The company manages the liquidity risk by monitoring working capital and ensuring there are sufficient funds to meet payments. The company manages the balance outstanding as part of its overall working capital management. The company obtains the majority of fixed assets through outright direct payments.The board is cognisant of the company's working capital requirements and has concluded the facilities currently in place are appropriate to the size and complexity of operations.
Price risk
The company is exposed to price risk particularly chemical prices but manages this risk by giving due consideration to the chemical market place ensuring they are in contact with various suppliers who can offer the company competitive prices.
Future prospects
The company is focused on maintaining its Industrial Business, while always looking for new opportunities. 2023 has been another exceptional year with controlling costs.
Cost Control challenges have been maintaining our supply lines for raw materials and packaging, while trying to minimise the cost implications. There have been further cost increases although not as many as the previous year. However some raw material costs have continued to increase.
Energy costs have also remained high.
Also with the current inflation situation there has been the added costs of maintaining our work force through wage increases.
Despite all of these hurdles we are confident we will continue to be able to supply our customers through 2024 and beyond.
WATER TREATMENT PRODUCTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Mr F Navjord
Director
25 September 2024
WATER TREATMENT PRODUCTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their report with the financial statements of the company for the year ended 31 December 2023.
Principal activities
The principal activity of the company in the year under review was that of chemical production and technical consultancy.
Results and dividends
The results for the year are set out on page 8. A fair review of the business is set out in the strategic report on page 1.
Ordinary dividends were paid amounting to £4,200,000 (2022: £nil). The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S E W Gilsdorf
(Resigned 2 February 2024)
Mr F Navjord
Mrs S Strom
(Appointed 2 February 2024)
Auditor
UHY Hacker Young have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditor in the absence of an Annual General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr F Navjord
Director
25 September 2024
WATER TREATMENT PRODUCTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
WATER TREATMENT PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WATER TREATMENT PRODUCTS LIMITED
- 5 -
Opinion
We have audited the financial statements of Water Treatment Products Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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 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.
WATER TREATMENT PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF WATER TREATMENT PRODUCTS 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the relevant sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and ISO standards;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
WATER TREATMENT PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF WATER TREATMENT PRODUCTS LIMITED
- 7 -
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 as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
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 for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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.
Mr John Griffiths (Senior Statutory Auditor)
for and on behalf of UHY Hacker Young
25 September 2024
Chartered Accountants
Newport
Statutory Auditor
Gwent
United Kingdom
WATER TREATMENT PRODUCTS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
12,688,313
12,053,658
Cost of sales
(5,782,770)
(5,713,124)
Gross profit
6,905,543
6,340,534
Administrative expenses
(3,280,843)
(3,039,666)
Other operating income
3,355
Operating profit
4
3,624,700
3,304,223
Interest receivable and similar income
8
264,880
124,487
Interest payable and similar expenses
9
(2,370)
Profit before taxation
3,889,580
3,426,340
Tax on profit
10
(886,309)
(654,474)
Profit for the financial year
3,003,271
2,771,866
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WATER TREATMENT PRODUCTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
3,003,271
2,771,866
Other comprehensive income
-
-
Total comprehensive income for the year
3,003,271
2,771,866
WATER TREATMENT PRODUCTS LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
472,026
291,273
Current assets
Stocks
14
1,044,879
1,650,015
Debtors
15
1,791,248
1,999,745
Cash at bank and in hand
16
8,217,606
8,789,311
11,053,733
12,439,071
Creditors: amounts falling due within one year
17
(1,875,449)
(1,920,189)
Net current assets
9,178,284
10,518,882
Total assets less current liabilities
9,650,310
10,810,155
Provisions for liabilities
18
(109,156)
(72,272)
Net assets
9,541,154
10,737,883
Capital and reserves
Called up share capital
21
2,430
2,430
Capital redemption reserve
1,000
1,000
Profit and loss reserves
9,537,724
10,734,453
Total equity
9,541,154
10,737,883
The financial statements were approved by the board of directors and authorised for issue on 25 September 2024 and are signed on its behalf by:
Mr F Navjord
Director
Company Registration No. 03896797
WATER TREATMENT PRODUCTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
2,430
1,000
7,962,587
7,966,017
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
2,771,866
2,771,866
Balance at 31 December 2022
2,430
1,000
10,734,453
10,737,883
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
3,003,271
3,003,271
Dividends
11
-
-
(4,200,000)
(4,200,000)
Balance at 31 December 2023
2,430
1,000
9,537,724
9,541,154
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Water Treatment Products Limited is a private company limited by shares incorporated in England and Wales. The registered office is Bradbury House, Mission Court, Newport, Gwent, NP20 2DW.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
Sdiptech AB (Publ) is the parent of the largest group of which the company is a member for which consolidated accounts will be prepared. Copies of the Sdiptech AB (Publ) accounts are available from its website at: http://www.sdiptech.se/investor-relations/financial-information.
1.2
Going concern
Despite the difficult climate as a result of high material and energy costs, the company has remained profitable, achieving excellent results in 2023. The board has prepared forecasts and therefore is confident that the company will be able to meet its debts as they fall due for the foreseeable future and hence they are satisfied that it is appropriate to adopt the going concern basis of accounting.true
1.3
Turnover
Turnover represents amounts receivable for goods and services provided in the normal course of business net of VAT. Turnover is recognised as earned when, and to the extent that, the company obtains the right to consideration in exchange for goods provided. Where goods are despatched prior to the year end then turnover is recognised within that financial year.
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.
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and machinery
25% on reducing balance
Fixtures and fittings
20% on cost and 25% on reducing balance
Motor vehicles
25% on 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.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises of direct materials purchased plus any costs to bring the stock item to its present condition and location.
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.
1.7
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.
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.
1.8
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences. Such 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.
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.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.11
Retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the profit and loss account in the period to which they relate.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.
1.13
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
WATER TREATMENT PRODUCTS 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock valuation
At 31 December 2023 the company held stock of £1,044,879 (2022: £1,650,015). Stocks are valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgement to be made.
Carrying value of fixed assets
The company's fixed assets had a cost of £1,539,783 (2022: £1,337,493) and had a carrying value of £472,026 as at 31 December 2023 (2022: £291,273). The depreciation policy is set out at 1.5 above; depreciation of £115,454 was charged to the profit and loss account during the year (2022: £93,000). The estimation of useful economic life can have a significant impact on the depreciation charge and on the carrying value of assets.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
11,966,724
11,361,952
Europe
656,232
626,980
Rest of the World
65,357
64,726
12,688,313
12,053,658
2023
2022
£
£
Other revenue
Interest income
264,880
124,487
Grants received
-
3,355
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
5,102
13,442
Research and development costs
6,551
4,777
Government grants
-
(3,355)
Depreciation of owned tangible fixed assets
115,454
93,000
Profit on disposal of tangible fixed assets
(13,736)
(3,537)
Operating lease charges
314,941
304,953
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
15,250
14,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
1
1
Management/Supervisors
8
11
Admin/Sales
21
20
Production/Drivers
24
27
Total
54
59
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,771,109
1,632,902
Social security costs
160,176
149,286
Pension costs
35,891
68,330
1,967,176
1,850,518
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
52,169
Company pension contributions to defined contribution schemes
-
1,321
53,490
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
264,880
124,487
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
-
2,370
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
849,729
649,222
Adjustments in respect of prior periods
(304)
(15,734)
Total current tax
849,425
633,488
Deferred tax
Origination and reversal of timing differences
36,884
(10,524)
Changes in tax rates
19,871
Adjustment in respect of prior periods
11,639
Total deferred tax
36,884
20,986
Total tax charge
886,309
654,474
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 18 -
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
2022
£
£
Profit before taxation
3,889,580
3,426,340
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
914,829
651,005
Tax effect of expenses that are not deductible in determining taxable profit
6,258
388
Adjustments in respect of prior years
(304)
(4,095)
Effect of change in corporation tax rate
2,250
17,345
Group relief
(35,582)
Permanent capital allowances in excess of depreciation
(1,142)
(2,691)
Research & development adjustments
(7,478)
Taxation charge for the year
886,309
654,474
11
Dividends
2023
2022
£
£
Final paid
4,200,000
12
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
73,000
Amortisation and impairment
At 1 January 2023 and 31 December 2023
73,000
Carrying amount
At 31 December 2023
At 31 December 2022
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
960,376
246,285
130,832
1,337,493
Additions
111,754
16,594
183,457
311,805
Disposals
(2,919)
(106,596)
(109,515)
At 31 December 2023
1,072,130
259,960
207,693
1,539,783
Depreciation and impairment
At 1 January 2023
715,959
226,672
103,589
1,046,220
Depreciation charged in the year
73,444
6,212
35,798
115,454
Eliminated in respect of disposals
(2,538)
(91,379)
(93,917)
At 31 December 2023
789,403
230,346
48,008
1,067,757
Carrying amount
At 31 December 2023
282,727
29,614
159,685
472,026
At 31 December 2022
244,417
19,613
27,243
291,273
14
Stocks
2023
2022
£
£
Raw materials and consumables
1,044,879
1,650,015
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,594,737
1,690,745
Corporation tax recoverable
40,271
778
Amounts owed by group undertakings
156,085
Other debtors
984
2,894
Prepayments and accrued income
155,256
149,243
1,791,248
1,999,745
16
Cash at bank and in hand
Included within cash at bank and in hand is an amount of £6,601,417 (2022: £7,266,645) where the company has entered into a cash pooling arrangement with its ultimate parent company.
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
17
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
743,156
909,150
Amounts due to parent undertaking
149,506
Other taxation and social security
393,237
343,185
Other creditors
20,022
20,758
Accruals and deferred income
569,528
647,096
1,875,449
1,920,189
18
Provisions for liabilities
2023
2022
£
£
Deferred tax liabilities
19
109,156
72,272
109,156
72,272
19
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
109,156
72,272
2023
Movements in the year:
£
Liability at 1 January 2023
72,272
Charge to profit or loss
36,884
Liability at 31 December 2023
109,156
The deferred tax liability set out above relates to accelerated capital allowances and is expected to reverse over the useful economic lives of the related assets.
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
35,891
68,330
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.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2,430
2,430
2,430
2,430
All ordinary shares rank pari passu.
22
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
302,845
315,718
Between two and five years
781,598
1,064,442
In over five years
20,000
1,084,443
1,400,160
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
51,886
WATER TREATMENT PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
24
Related party transactions
During the year the company made purchases of £73,133 (2022: £91,133) from its parent company Water Treatment Products Holdings Limited.
Also during the year, the company paid dividends of £4,200,000 (2022: £nil) to Water Treatment Products Holdings Limited.
At the end of the year the company owed £149,506 (2022: £156,085 owed by) to its parent company Water Treatment Products Holdings Limited. These amounts were included within creditors due within one year.
During the year the company was charged management fees from its ultimate parent company Sdiptech AB (Publ) of £64,852 (2022: £65,948).
25
Parent company and ultimate controlling party
The company is a 100% subsidiary of Water Treatment Products Holdings Limited.
Water Treatment Products Holdings Limited is 100% owned by Sdip Kimra Limited which is 100% owned by Sdip Holdings AB, a company registered in Sweden, which in turn is owned by Sdiptech AB (Publ) a company registered in Sweden and has shares listed on Nasdaq First North Premier in Stockholm. Therefore the Ultimate Parent Company at 31 December 2023 was Sdiptech AB (Publ).
Sdiptech AB (Publ) is the parent of the smallest and largest group of which the company is a member for which consolidated accounts will be prepared. Copies of the Sdiptech AB (Publ) accounts are available from its website at: http://www.sdiptech.se/investor-relations/financial-information.
There is no ultimate controlling party.
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