Company registration number 05319594 (England and Wales)
ODL EUROPE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ODL EUROPE LIMITED
COMPANY INFORMATION
Directors
Mr B Bultema
Mr T A Parsley
Mr R Woznick
Company number
05319594
Registered office
1 Brook Road
Bootle
Merseyside
L20 4XP
Auditor
MHA
Exchange Station
Tithebarn Street
Liverpool
L2 2QP
ODL EUROPE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 25
ODL EUROPE 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
ODL Europe Limited supplies products to the window and door market, primarily catering to fabricators who manufacture door sets and bi-fold doors. We also serve small to medium-sized customers by providing door blanks prepped for locks, hinges, and hardware, with a range of colours and glazing options available.
In 2023, the company benefited from enhanced cost initiatives and control measures, which contributed to significant financial and internal control improvements. Gross profit increased from 9.74% to 19.10% year on year. The 2022 figures were heavily influenced by stock adjustments necessitated by the implementation of the Oracle system. By 2023, inventory control, cost management, and system familiarity had stabilised, leading to improved financial performance.
Administration expenses decreased from £5 million to £3.9 million, driven by various factors, including notable year-on-year movements. In 2022, a significant foreign exchange loss of £0.5 million was recorded, while in 2023, FX losses were limited to £1,000. Additionally, 2022 saw a one-off stock write-off of £0.9 million.
In Q4 2023, we adjusted our purchasing strategy in response to extended lead times from our door supplier in China. To counteract the delays in shipping caused by regional political tensions and to support the growth of our customer base, we increased our Goods in Transit liability. This change resulted in a year-on-year impact of £1.5 million on our balance sheet.
Our parent company, ODL Inc., headquartered in Michigan, USA, continues to support our UK operations and is committed to our success as we strive to become the leading door supplier in the UK market.
Employee engagement is of utmost importance at ODL. As part of our commitment to fostering a positive work environment, we conduct confidential annual surveys using the "Great Place to Work" platform. We are pleased to announce that ODL has once again been certified as a "Great Place to Work."
In 2024, we extended our business plan horizon from three to five years. The Senior Leadership Team at ODL Europe Ltd has updated its five-year business plan, setting clear strategic objectives that will guide the company's growth and development.
To achieve our goals, the company's directors have carefully reviewed and refined our financial and non-financial key performance indicators (KPIs). These KPIs will be crucial in monitoring and assessing the company's progress toward its targets. In addition to financial goals such as EBITDA, turnover, and operating profit, the new business plan prioritizes non-financial measures, including quality and health and safety. This focus is intended to enhance customer satisfaction and ensure a safe and productive work environment.
Principal risks and uncertainties
The management of the business and execution of the company's strategy are subject to several risks, including:
Market trends and the cost-of-living crisis;
Economic and political uncertainty;
Supply chain pricing and reliability;
Labour availability; and,
Competitor activities.
ODL Europe Limited benefits from strong commercial relationships with several key customers and suppliers. The loss of these relationships could materially impact our trading results. We mitigate these risks through an ethos of open communication, trust, and collaboration with suppliers, customers, and employees.
ODL EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future developments
ODL Europe Limited is committed to staying at the forefront of the industry by proactively adapting to customer needs, market dynamics, and technological advancements. Our dedication to excellence drives us to invest in innovative projects that foster continuous improvement across our product range and customer service.
Key performance indicators
The companies key performance indicators are Turnover, Gross Profit and EBITDA.
Mr B Bultema
Director
30 September 2024
ODL EUROPE 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 procurement and distribution of doorslabs, and the manufacture and distribution of frames for doorglass and the manufacture of built in blinds.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr B Bultema
Mr T A Parsley
Mr R Woznick
Auditor
Following the merger of MHA Moore & Smalley with MHA, the company's independent auditor has now become MHA. A resolution to reappoint MHA as independent auditor will be proposed at the next Annual General Meeting.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and principal risks and uncertainties.
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
Mr B Bultema
Director
30 September 2024
ODL EUROPE 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.
ODL EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ODL EUROPE LIMITED
- 5 -
We have audited the financial statements of ODL Europe Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the possible effects of the matter described in the Basis for qualified opinion section of our report, 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 loss 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.
Basis for qualified opinion
Owing to limitations in the company's records following a change in accounting systems in the prior year, the predecessor auditor was unable to obtain sufficient appropriate audit evidence in respect of the cost of sales value of £13,897,849. Consequently, they were unable to conclude whether cost of sales were materially misstated or determine whether any adjustments to cost of sales, or any related balances, were necessary.
Whilst we have been able to obtain sufficient appropriate evidence that the cost of sales figure for the year ended 31 December 2023 is free from material misstatement, our opinion for the current period financial statements is also modified, due to the limitations imposed upon the prior year audit surrounding cost of sales as we are unable to quantify any material misstatement to related balances which may impact the current year. Our audit opinion on the current period's financial statements is also modified because of the possible effects of this matter on the comparability of the current period's figures and the corresponding figures.
In addition, were any adjustment to the cost of sales balances or related balances in the prior year to be required, the strategic report would also need to be amended.
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 qualified 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.
ODL EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ODL EUROPE LIMITED (CONTINUED)
- 6 -
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.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the cost of sales value of £13,897,849 in the prior year and its subsequent impact in the current year on related balances. We have concluded that where the other information refers to the cost of sales balance or related balances, it may be materially misstated for the same reason.
Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the 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.
Except for the matter described in the basis for qualified opinion section of our report, 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.
Matters on which we are required to report by exception
In respect solely of the limitation on the audit work relating to cost of sales in the prior year, as described within the basis for qualified opinion above:
we have not obtained all the information and explanations that we considered necessary for the purpose of our audit relating to the prior year; and
we were unable to determine whether adequate accounting records had been kept in the prior year.
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:
returns adequate for our audit have not been received from branches not visited by us in the current year; 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 in the current year.
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.
ODL EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ODL EUROPE LIMITED (CONTINUED)
- 7 -
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations;
Enquiries with management about any known or suspected instances of fraud within the business;
Challenging assumptions and judgements made by management in their significant accounting estimates;
Auditing the risk of management override of controls, including thorough testing of journal entries and other adjustments for appropriateness;
Reviewing minutes of meetings of those charged with governance and legal and professional expenditure to identify any evidence of ongoing litigation or enquiries; and,
Auditing risk of fraud in revenue, including through the testing of sales transactions and revenue cut off to ensure revenue is complete in the financial statements and recognised in the correct accounting period.
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
ODL EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ODL EUROPE LIMITED (CONTINUED)
- 8 -
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.
Andrew Matthews BFP ACA FCCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Liverpool, United Kingdom
1 October 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
ODL EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
16,017,400
15,397,475
Cost of sales
(12,957,586)
(13,897,849)
Gross profit
3,059,814
1,499,626
Administrative expenses
(3,839,905)
(4,977,108)
Operating loss
5
(780,091)
(3,477,482)
Interest payable and similar expenses
8
(173,720)
(92,651)
Loss before taxation
(953,811)
(3,570,133)
Tax on loss
9
(83,702)
27,517
Loss for the financial year
(1,037,513)
(3,542,616)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 12 to 25 form part of these financial statements.
ODL EUROPE LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
28,858
Tangible assets
11
981,141
653,952
981,141
682,810
Current assets
Stocks
12
4,396,900
4,573,420
Debtors
13
2,702,088
2,381,907
Cash at bank and in hand
1,422,819
1,208,355
8,521,807
8,163,682
Creditors: amounts falling due within one year
14
(9,401,771)
(7,792,726)
Net current (liabilities)/assets
(879,964)
370,956
Total assets less current liabilities
101,177
1,053,766
Provisions for liabilities
Deferred tax liability
16
217,363
132,439
(217,363)
(132,439)
Net (liabilities)/assets
(116,186)
921,327
Capital and reserves
Called up share capital
18
1,131,751
1,131,751
Profit and loss reserves
(1,247,937)
(210,424)
Total equity
(116,186)
921,327
The notes on pages 12 to 25 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 30 September 2024 and are signed on its behalf by:
Mr B Bultema
Director
Company registration number 05319594 (England and Wales)
ODL EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1,131,751
3,332,192
4,463,943
Year ended 31 December 2022:
Loss and total comprehensive income
-
(3,542,616)
(3,542,616)
Balance at 31 December 2022
1,131,751
(210,424)
921,327
Year ended 31 December 2023:
Loss and total comprehensive income
-
(1,037,513)
(1,037,513)
Balance at 31 December 2023
1,131,751
(1,247,937)
(116,186)
The notes on pages 12 to 25 form part of these financial statements.
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
ODL Europe Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1 Brook Road, Bootle, L20 4XP.
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; and,
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of ODL Holdings Limited. These consolidated financial statements are available from its registered office, 1 Brook Road, Bootle, Merseyside, L20 4XP.
1.2
Going concern
The Dtrueirectors have considered current trading performance and forecasts for a period of at least twelve months from the date of signing the 2023 financial statements.
The Directors have carried out a thorough review of the businesses trade activities, profitability and cashflows. In addition, ODL Inc, the ultimate parent undertaking, has provided a letter of support for at least 12 months from the signing of these financial statements. The Directors have received sufficient evidence to show that ODL Inc have the means to support the company if necessary. After making detailed enquiries and forecasting, the directors have formed a judgment, at the time of approving the financial statements, that there is a strong expectation that the company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the directors continue to adopt the going concern basis of accounting in preparing the annual financial statements.
1.3
Turnover
Turnover is the revenue arising from the sale of goods. It is stated at the fair value of the consideration receivable, net of value added tax, rebates and discounts. Turnover is recognised at the point that the goods are dispatched.
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
3 years straight line
Development costs
3 years straight line
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Gifts of tangible fixed assets from parent companies are recognised at cost, where this can be reliably measured. Where cost cannot be reliably measured, the assets are brought in at £nil cost.
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:
Plant and equipment
3-7 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
All of the Company's assets are considered basic financial assets.
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future 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
All of the Company's liabilities are considered basic financial liabilities.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
Stock provision
Stock is valued at the lower of cost and net realisable value. Where necessary, provisions for slow moving and obsolete stock are made. Calculation of these provisions requires judgements to be made. The provisions are based on both the age and use of the stock.
Provision for irrecoverable trade debtors
At each balance sheet date, management undertake a review of the outstanding trade debtor balances and estimate the balance that should either be impaired or provided against. This calculation is based on the financial position of the customers, the historical speed of payment and any ongoing discussions.
Useful economic life of fixed assets
The useful economic life of tangible fixed assets is judged at the point of purchase and reviewed at each financial reporting date. The company depreciates its tangible assets over their estimated useful lives. The estimates of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied.
Provision for warranty claims
Anticipated costs for repairs and refunds for a specific line of products are provided for. The calculation is based on an analysis of historic data and costs incurred after the balance sheet date to develop an expectation for future costs.
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Frames
7,121,599
7,537,802
Blinds
727,834
963,323
Doors
8,167,967
6,896,350
16,017,400
15,397,475
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover
(Continued)
- 18 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
15,780,706
15,108,305
Europe
236,694
289,170
16,017,400
15,397,475
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional item - Cost of sales
-
854,289
Exceptional items relate to adjustments to reconcile stock count differences following the implementation of a new ERP system.
5
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange losses
1,139
477,861
Fees payable to the company's auditor for the audit of the company's financial statements
49,750
72,500
Depreciation of owned tangible fixed assets
208,623
236,544
Profit on disposal of tangible fixed assets
(6,000)
-
Amortisation of intangible assets
28,858
29,005
Operating lease charges
288,879
511,354
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administation
7
17
Sales
7
4
Customer Service
3
2
Warehouse
9
4
Production
31
32
Total
57
59
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 19 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,302,741
2,066,740
Social security costs
232,695
188,937
Pension costs
48,155
33,763
2,583,591
2,289,440
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
349,301
93,225
Company pension contributions to defined contribution schemes
4,805
837
354,106
94,062
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
349,301
93,225
Company pension contributions to defined contribution schemes
4,805
837
8
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
173,720
92,651
9
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(1,222)
(23,642)
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
2023
2022
£
£
(Continued)
- 20 -
Deferred tax
Origination and reversal of timing differences
92,302
(1,696)
Changes in tax rates
5,807
Adjustment in respect of previous periods
(13,185)
(2,179)
Total deferred tax
84,924
(3,875)
Total tax charge/(credit)
83,702
(27,517)
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(953,811)
(3,570,133)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(224,336)
(678,325)
Tax effect of expenses that are not deductible in determining taxable profit
583
14,251
Tax effect of income not taxable in determining taxable profit
(932)
Adjustments in respect of prior years
(14,407)
(23,642)
Deferred tax adjustments in respect of prior years
5,802
(2,179)
Fixed asset differences
(4,130)
Deferred tax not recognised
316,992
666,508
Taxation charge/(credit) for the year
83,702
(27,517)
From 1 April 2023 the government have enacted changes to the corporation tax rate, increasing the main tax rate to 25%. For companies where financial year ends straddle two tax years, pre and post the increase of corporation tax to 25%, profits are apportioned in the ratio to account for the number of months under 19% taxation rate and 25% rate. The effective tax rate for the period ended 31 December 2023 is therefore 23.52%.
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Intangible fixed assets
Software
Development costs
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
63,476
4,234
67,710
Amortisation and impairment
At 1 January 2023
34,618
4,234
38,852
Amortisation charged for the year
28,858
28,858
At 31 December 2023
63,476
4,234
67,710
Carrying amount
At 31 December 2023
At 31 December 2022
28,858
28,858
11
Tangible fixed assets
Assets under construction
Plant and equipment
Total
£
£
£
Cost
At 1 January 2023
2,814,251
2,814,251
Additions
482,262
53,550
535,812
At 31 December 2023
482,262
2,867,801
3,350,063
Depreciation and impairment
At 1 January 2023
2,160,299
2,160,299
Depreciation charged in the year
208,623
208,623
At 31 December 2023
2,368,922
2,368,922
Carrying amount
At 31 December 2023
482,262
498,879
981,141
At 31 December 2022
653,952
653,952
During the year, the ultimate worldwide Parent Company, ODL Incorporated gifted plant and machinery to the company. The assets are bespoke machines, designed by ODL Incorporated between 15 August 2009 - 15 December 2012 with a historical manufactured cost of $1,316,084 which had been fully depreciated before being transferred.
There is no active market for the resale of these assets and as such their fair value can not be reliably measured; in line with the accounting policy at note 1.5 of the financial statements, these assets have been transferred in at £nil net book value.
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
12
Stocks
2023
2022
£
£
Raw materials and consumables
138,021
112,047
Finished goods and goods for resale
4,258,879
4,461,373
4,396,900
4,573,420
At the year end, provisions for stock were £464,970 (2022: £842,838). Furthermore, there were stock write offs to the amount of £Nil (2022: £854,289) in the year. See note 4 for further detail.
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,353,207
2,065,493
Corporation tax recoverable
81,507
Other debtors
24,409
Prepayments and accrued income
348,881
210,498
2,702,088
2,381,907
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other borrowings
15
2,261,148
3,266,849
Trade creditors
1,344,034
899,701
Amounts owed to group undertakings
3,017,295
2,582,809
Taxation and social security
348,269
74,349
Accruals and deferred income
2,431,025
969,018
9,401,771
7,792,726
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
15
Loans and overdrafts
2023
2022
£
£
Loans from group undertakings
2,261,148
3,266,849
Payable within one year
2,261,148
3,266,849
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Loans and overdrafts
(Continued)
- 23 -
On 4th March 2022 the company received a loan from ODL Incorporated for the sum of $3,350,000. At the year end the outstanding balance was £2,261,148 (2022 - £3,266,849) the loan is unsecured and repayable on demand. There is no set repayment date and interest is charged on the first date of each applicable period and adjusted monthly on the first business date of each period hereafter at LIBOR plus 1% per annum.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Fixed asset timing differences
218,550
149,816
Short term timing differences
(1,187)
(17,377)
217,363
132,439
2023
Movements in the year:
£
Liability at 1 January 2023
132,439
Charge to profit or loss
84,924
Liability at 31 December 2023
217,363
The deferred tax asset is in relation to losses and other deductions in the year and are expected to reverse within the foreseeable future. The deferred tax liability set out above relates to accelerated capital allowances and are expected to reverse over the same period as the assets it relates to are depreciated.
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
48,155
33,763
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.
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
1,131,751
1,131,751
1,131,751
1,131,751
The company's ordinary shares, which carry no right to fixed income, each carry the right to vote at the general meeting of the company.
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
120,950
182,100
Between two and five years
59,800
91,050
180,750
273,150
20
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
199,324
-
ODL EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
21
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchase of goods from ODL Building Materials Manufacturing Corp of Suzhou amounting to £513,342 (2022: £504,072). At the year end £53,621 (2022: £Nil) was owed to ODL Building Materials Manufacturing Corp of Suzhou. This can be found within creditors due within one year of the financial statements, note 14 of the financial statements.
Purchase of goods from ODL Incorporated amounting to £222,718 (2022: £19,685) respectively. At the year end £Nil (2022: £Nil) was owed to ODL Incorporated regarding trade balances.
On 4 March 2022 the company received a loan from ODL Incorporated of $3,350,000. The balance is repayable on demand and interest is charged at LIBOR plus 1% per annum. Interest payable to ODL Inc amounted to £173,720 (2022: £92,651). At the year end £2,261,148 (2022: £3,266,846) was owed to ODL Incorporated regarding this loan. This can be found within other borrowings, notes 14 and 15 of the financial statements.
The company has taken advantage of the exemption conferred by paragraph 33.1A regarding the disclosure of transactions with wholly owned UK group companies.
22
Ultimate controlling party
The ultimate worldwide parent company is ODL Incorporated, a company incorporated in Michigan in the United States of America.
The immediate and ultimate UK parent company is ODL Holdings Limited a company incorporated in England and Wales.
ODL Holdings Limited is the parent of the largest and smallest group for which group accounts are drawn up, in which this Company is included, and can be obtained from:
ODL Holdings Limited
1 Brooke Road
Bootle
Merseyside
L20 4XP
The Ultimate Controlling Party is considered to be Mr J Mulder by virtue of his majority shareholding in the ultimate worldwide Parent Company.
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