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TCL Manufacturing Limited

Registered number: 02463775
Annual report and
 financial statements
For the year ended 31 December 2023

 
TCL MANUFACTURING LIMITED
 
 
COMPANY INFORMATION


Directors
E John-Featherby (appointed 30 April 2024)
T R Teter (appointed 30 November 2023)
J D Platt (appointed 13 December 2023)




Company secretary
A M Pla



Registered number
02463775



Registered office
Unit 1 Gateway XIII
Ferry Lane

Rainham

Essex

RM13 9JY




Independent auditor
Forvis Mazars LLP
Chartered Accountants & Statutory Auditor

One St. Peter's Square

Manchester

M2 3DE





 
TCL MANUFACTURING LIMITED
 

CONTENTS



Page
Strategic Report
 
1
Directors' Report
 
2 - 3
Independent Auditor's Report
 
4 - 7
Statement of Comprehensive Income
 
8
Statement of Financial Position
 
9
Statement of Changes in Equity
 
10
Notes to the Financial Statements
 
11 - 30


 
TCL MANUFACTURING LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
TCL Manufacturing Limited designs, manufactures and markets luxury kitchen and bathroom brassware, sanitary ware and accessories. The Company is committed to UK manufacturing and through the benefit of complete vertical integration it is able to control all aspects of the manufacturing process in order to deliver an industry leading level of quality and design.
The Company manufactures high quality products and components for selected third parties alongside its own ranges of Perrin & Rowe branded products. Perrin & Rowe products are sold through Distributors, Retailers and Architects worldwide.
TCL Manufacturing is owned by Fortune Brands Innovations, Inc. (NYSE:FBIN). Fortune Brands is a home and security products company built on industry leading brands and innovative products in the plumbing, outdoor and security markets. TCL Manufacturing forms part of Fortune Brands Water Innovations Group where its Perrin & Rowe brand sits alongside Moen, ROHL, Riobel, Aqualisa and Victoria & Albert Baths.

Business review
 
Sales for the year to 31 December 2023 were £20,275,091 (31 December 2022: £18,570,119) an increase of 9.2%.
During 2023 the Company continued to build its capacity and capability in order to expand into new geographic markets and develop new product ranges in order to leverage the global nature of the group.  
During 2024 TCL Manufacturing will continue to leverage its place within the Water Innovations Group to access new markets and maximise benefits arising from economies of scale, whilst remaining true to its commitment to UK manufacturing, class leading innovation and quality.

Principal risks and uncertainties
 
Aside from the generic risks of exposure to economic, regulatory and political risk in each of our markets, the principal risks facing the Company continue to be exposure to the volatility in foreign exchange rates and the ongoing uncertainties regarding the UK’s exit from the European Union. We attempt to mitigate these risks as best as possible through the use of both currency and commodity forward contracts. The Company’s financial risk strategy remains broadly to make neither a profit nor a loss from exposure to currency and interest rate risks.

Financial key performance indicators
 
Turnover for the year was £20,275,091 (2022: £18,570,119). The gross profit for the year was £5,426,885 (2022: £6,041,564) or 26.8% (2022: 32.5%). The result of the year ended 31 December 2023 was a loss of £4,605,252 (2022: profit of £423,022).


This report was approved by the board and signed on its behalf.



J D Platt
Director

Date: 16 October 2024

- 1 -

 
TCL MANUFACTURING LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £4,605,252 (2022 - profit £423,022).

Directors

The directors who served during the year were:

S J Geary (resigned 13 December 2023)
A E George (resigned 30 November 2023)
B K Crawford (appointed 30 November 2023, resigned 8 March 2024)
T R Teter (appointed 30 November 2023)
J D Platt (appointed 13 December 2023)

Going concern

The Company's business activities, together with factors likely to affect its future development, performance and position are set out in the Strategic Report and Directors' Report. The financial position of the Company, its future developments and the principal risks and uncertainties are also shown in the Strategic Report.
The directors are of the opinion that the Company will have sufficient funds available to finance its operations for a period of at least 12 months following the date of approval of these financial statements.
The directors have relied on the ongoing support of the parent group in making their assessment.

- 2 -

 
TCL MANUFACTURING LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Matters covered in the Strategic Report

Certain information not shown in the Directors’ Report is shown in the Strategic Report on page 1 instead in accordance with Section 414C (11) of the Companies Act 2006. This includes a business review and principal risks and uncertainties.

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved have confirmed that:
 
so far as the directorss are aware, there is no relevant audit information of which the Company's auditor is unaware, and

the directors have taken all the steps that ought to have been taken as directors in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditor

The auditor, Forvis Mazars LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





J D Platt
Director

Date: 16 October 2024

- 3 -

 
TCL MANUFACTURING LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TCL MANUFACTURING LIMITED
 

Opinion

We have audited the financial statements of TCL Manufacturing Limited (the ‘Company’) for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. 
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 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 opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
- 4 -

 
TCL MANUFACTURING LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TCL MANUFACTURING LIMITED
 

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 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.

Matters on which we are required to report by exception

In 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

- 5 -

 
TCL MANUFACTURING LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TCL MANUFACTURING LIMITED
 

Responsibilities of Directors

As explained more fully in the Directors' Responsibilities Statement set out on page 2, 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 intend either to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation and anti-money laundering regulation. 

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.  

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006. 
- 6 -

 
TCL MANUFACTURING LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TCL MANUFACTURING LIMITED
 

In addition, we evaluated the directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of override of controls, and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition (which we pinpointed to the cut off assertion), and significant one-off or unusual transactions.

Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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

Use of the audit report

This report is made solely to the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body for our audit work, for this report, or for the opinions we have formed.




John Daly (Senior Statutory Auditor)

  
for and on behalf of

Forvis Mazars LLP
Chartered Accountants and Statutory Auditor 
One St. Peter's Square
Manchester
M2 3DE

17 October 2024
- 7 -

 
TCL MANUFACTURING LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
 £
£

  

Turnover
 4 
20,275,091
18,570,119

Cost of sales
  
(14,848,206)
(12,543,738)

Gross profit
  
5,426,885
6,026,381

Administrative expenses
  
(9,306,143)
(7,414,117)

Exceptional administrative expenses
 5 
(1,605,890)
-

Other operating income
 6 
1,365,751
1,936,658

Operating (loss)/profit
 7 
(4,119,397)
548,922

Interest payable and similar expenses
 11 
(489,028)
(125,900)

(Loss)/profit before tax
  
(4,608,425)
423,022

Tax on (loss)/profit
 12 
3,173
-

(Loss)/profit for the financial year
  
(4,605,252)
423,022

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2023 (2022: £NIL).

The notes on pages 11 to 30 form part of these financial statements.

- 8 -

 
TCL MANUFACTURING LIMITED
REGISTERED NUMBER: 02463775

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
1,158,241
1,387,561

Tangible assets
 14 
2,737,952
2,989,468

Investments
 15 
1,000
1,000

  
3,897,193
4,378,029

Current assets
  

Stocks
 16 
8,496,692
6,644,201

Debtors: amounts falling due within one year
 17 
7,003,089
4,257,383

Cash at bank and in hand
 18 
462,856
1,064,957

  
15,962,637
11,966,541

Creditors: amounts falling due within one year
 19 
(13,807,902)
(6,539,051)

Net current assets
  
 
 
2,154,735
 
 
5,427,490

Total assets less current liabilities
  
6,051,928
9,805,519

Provisions for liabilities
  

Other provisions
 20 
(1,100,575)
(248,914)

Net assets
  
4,951,353
9,556,605


Capital and reserves
  

Called up share capital 
 21 
3,683,171
3,683,171

Share premium account
 22 
82,663
82,663

Revaluation reserve
 22 
345,179
345,179

Other reserves
 22 
2,338,279
2,338,279

Profit and loss account
 22 
(1,497,939)
3,107,313

  
4,951,353
9,556,605


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 16 October 2024.



J D Platt
Director

The notes on pages 11 to 30 form part of these financial statements.

- 9 -

 
TCL MANUFACTURING LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Revaluation reserve
Other reserves
Profit and loss account
Total equity

£
£
£
£
£
£


At 1 January 2022
3,683,171
82,663
345,179
2,420,182
2,684,291
9,215,486


Comprehensive income for the year

Profit for the year
-
-
-
-
423,022
423,022
Total comprehensive income for the year
-
-
-
-
423,022
423,022


Contributions by and distributions to owners

Capital contributions from ultimate parent
-
-
-
(81,903)
-
(81,903)


Total transactions with owners
-
-
-
(81,903)
-
(81,903)



At 1 January 2023
3,683,171
82,663
345,179
2,338,279
3,107,313
9,556,605


Comprehensive income for the year

Loss for the year
-
-
-
-
(4,605,252)
(4,605,252)
Total comprehensive income for the year
-
-
-
-
(4,605,252)
(4,605,252)


At 31 December 2023
3,683,171
82,663
345,179
2,338,279
(1,497,939)
4,951,353


The notes on pages 11 to 30 form part of these financial statements.

- 10 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

TCL Manufacturing Limited (the 'Company') is a private company limited by shares, and is incorporated in England and Wales. The address of its registered office is Unit 1 Gateway XIII, Ferry Lane, Rainham, Essex, RM13 9JY.
The financial statements have been prepared in Pound Sterling as this is the currency of the primary economic environment in which the Company operates.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied: 

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).

This information is included in the consolidated financial statements of Fortune Brands Home & Security Inc as at 31 December 2023 and these financial statements may be obtained from 520 Lake Cook Road, Deerfield, IL 60015-5611.

 
2.3

Going concern

The Company's business activities, together with factors likely to affect its future development, performance and position are set out in the Strategic Report and Directors' Report. The financial position of the Company, its future developments and the principal risks and uncertainties are also shown in the Strategic Report.
The directors are of the opinion that the Company will have sufficient funds available to finance its operations for a period of at least 12 months following the date of approval of these financial statements.
The directors have relied on the ongoing support of the parent group in making their assessment.

- 11 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.6

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

- 12 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.7

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

  
2.8

Government grants

The UK government has offered a range of financial support packages to help companies, including government backed financing arrangements, furlough schemes, deferment of VAT payments and, for some sectors, business rates holidays. Of the offered schemes, the company used the furlough scheme. The income from the furlough scheme has been recognised within 'Other operating income'. They are recognised when the entity has reasonable assurance that they will comply with the conditions attaching the grant, and that the grant will be received.

 
2.9

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.10

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.11

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

- 13 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.12

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

 
2.13

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

 
2.14

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Patents and Trademarks
-
20
years
Development expenditure
-
5
years
Software
-
5
years

- 14 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.15

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.

Depreciation is provided on the following basis:

Freehold property
-
40 years
Leasehold improvements
-
15 years
Plant & machinery
-
10 years
Motor vehicles
-
4 years
Fixtures & fittings
-
7 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.16

Revaluation of tangible fixed assets

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 
2.17

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

- 15 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.18

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.19

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.20

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.21

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.22

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.23

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

- 16 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.24

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
 
- 17 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.24
Financial instruments (continued)


Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

- 18 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Critical judgements in applying the Company's accounting policies
The critical judgements that the directors have made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
(i) Recoverability of debt
Bad debt provisions are deemed to be an area of judgement as it is at management's discretion whether debts are provided against.
(ii) Useful lives of fixed assets
The valuation of depreciation is determined by management based on the estimated useful economic lives of tangible assets and any residual value of those assets.
(iii) Stock provision
The valuation of stock is deemed to be an area of judgement due to management deciding upon the value of any provisions against stock at the year end.


4.


Turnover

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
6,843,814
6,086,847

United States of America
10,959,198
9,323,201

Rest of the world
2,472,079
3,160,071

20,275,091
18,570,119



5.


Exceptional items

2023
2022
£
£


Exceptional items
1,605,890
-

During the year exceptional costs of £1,605,890 were incurred in respect of a group reorganisation.

- 19 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Other operating income

2023
2022
£
£

Other operating income
1,365,751
1,936,658


Other operating income consists of management fee income from group entities.


7.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2023
2022
£
£

Exchange differences
406,691
(868,937)

Other operating lease rentals
891,514
522,356

Depreciation of tangible fixed assets
294,115
250,488

Amortisation of intangible assets
229,320
165,223


8.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor:


2023
2022
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements

42,575
32,450

- 20 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
8,695,474
7,582,898

Social security costs
836,881
859,074

Cost of defined contribution scheme
219,065
222,058

9,751,420
8,664,030


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Selling and distribution
16
18



Administration
13
18



Production
170
163

199
199


10.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
259,222
300,225

Company contributions to defined contribution pension schemes
20,474
33,746

279,696
333,971


During the year retirement benefits were accruing to 1 director (2022 - 2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £259,222 (2022 - £254,337).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £20,474 (2022 - £28,130).

- 21 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Interest payable and similar expenses

2023
2022
£
£


Group interest payable
489,028
125,900


12.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
(3,173)
-


(3,173)
-


Total current tax
(3,173)
-

Deferred tax

Total deferred tax
-
-


Taxation on (loss)/profit on ordinary activities
(3,173)
-
- 22 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


(Loss)/profit on ordinary activities before tax
(4,608,425)
423,022


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
(1,083,902)
80,374

Effects of:


Expenses not deductible for tax purposes
17,213
47,947

Capital allowances for year in excess of depreciation
166,963
6,423

Other permanent differences
2,822
2,391

Adjustments to tax charge in respect of previous periods
(3,173)
-

Remeasurement of deferred tax for changes in tax rates
(56,416)
-

Movement in deferred tax
953,320
(137,135)

Total tax charge for the year
(3,173)
-


Factors that may affect future tax charges

At the year end the Company has a potential deferred tax asset of approximately £2.28m because of losses carried forward (2022 - £1.98m). A deferred taxation asset of £nil has been recognised in respect of these losses.
The rate of corporation tax in the United Kingdom has increased from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.

- 23 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Intangible assets




Patents and Trademarks
Development expenditure
Software
Total

£
£
£
£



Cost


At 1 January 2023
2,711,520
289,751
66,895
3,068,166



At 31 December 2023

2,711,520
289,751
66,895
3,068,166



Amortisation


At 1 January 2023
1,335,579
289,751
55,275
1,680,605


Charge for the year
217,700
-
11,620
229,320



At 31 December 2023

1,553,279
289,751
66,895
1,909,925



Net book value



At 31 December 2023
1,158,241
-
-
1,158,241



At 31 December 2022
1,375,941
-
11,620
1,387,561



- 24 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Tangible fixed assets





Freehold property
Leasehold improvements
Plant & machinery
Motor vehicles
Fixtures & fittings
CIP
Total

£
£
£
£
£
£
£



Cost


At 1 January 2023
1,400,000
638,407
5,218,227
41,493
977,608
-
8,275,735


Additions
-
114,131
247,968
-
99,836
381,072
843,007


Disposals
-
-
-
(667)
-
-
(667)



At 31 December 2023

1,400,000
752,538
5,466,195
40,826
1,077,444
381,072
9,118,075



Depreciation


At 1 January 2023
95,439
443,440
3,868,983
35,727
842,678
-
5,286,267


Charge for the year
19,036
23,820
213,354
2,611
35,294
-
294,115


Disposals
-
-
-
(667)
-
-
(667)


Impairment charge
-
154,572
510,963
2,938
131,935
-
800,408



At 31 December 2023

114,475
621,832
4,593,300
40,609
1,009,907
-
6,380,123



Net book value



At 31 December 2023
1,285,525
130,706
872,895
217
67,537
381,072
2,737,952



At 31 December 2022
1,304,561
194,967
1,349,244
5,766
134,930
-
2,989,468

- 25 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

           14.Tangible fixed assets (continued)

During the year there has been an impairment charge as a result of a group reorganisation.
The freehold property was last revalued in May 2018 on an open market value basis by Towler Shaw Roberts LLP, Chartered Surveyors. The directors do not consider the value at the balance sheet date to be materially different from the net book value.
Included in land and buildings is freehold land at valuation £617,534 (2022: £617,534), (cost £472,151) which is not depreciated.

The freehold property valuation as at 31 December 2023 of £1.4million can be analysed as cost (£1,101,875) and fair value movements (£298,125).

If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:

2023
2022
£
£



Cost
1,101,875
1,101,875

Accumulated depreciation
(106,669)
(94,433)

Net book value
995,206
1,007,442

- 26 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Fixed asset investments





Investments in subsidiary companies

£



Cost and net book value


At 1 January 2023
1,000



At 31 December 2023
1,000





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Avilion Limited
Ordinary
100%
Perrin & Rowe Limited
Ordinary
100%

The registered office of both subsidiary companies listed above is Unit 1 Gateway XIII, Ferry Lane, Rainham, Essex, RM13 9JY.


16.


Stocks

2023
2022
£
£

Raw materials and consumables
3,609,955
2,846,636

Work in progress (goods to be sold)
3,580,043
2,810,352

Finished goods and goods for resale
1,306,694
987,213

8,496,692
6,644,201


- 27 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Debtors

2023
2022
£
£


Trade debtors
1,754,310
898,274

Amounts owed by group undertakings
4,919,466
2,664,110

Other debtors
135,578
359,761

Prepayments and accrued income
190,562
335,238

Tax recoverable
3,173
-

7,003,089
4,257,383


Amounts owed by group undertakings are repayable on demand.


18.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
462,856
1,064,957

Less: bank overdrafts
-
(4,130)

462,856
1,060,827



19.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank overdrafts
-
4,130

Trade creditors
1,689,865
1,278,331

Amounts owed to group undertakings
10,386,719
4,326,080

Other taxation and social security
92,460
234,923

Obligations under finance lease and hire purchase contracts
144
144

Other creditors
197,534
88,440

Accruals and deferred income
1,441,180
607,003

13,807,902
6,539,051


Obligations under finance lease and hire purchase contracts are secured over the assets to which they relate.
Amounts owed to group undertakings are repayable on demand.

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TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Provisions





Warranty reserve
Dilapidations
Group reorganisation costs
Total

£
£
£
£





At 1 January 2023
187,039
61,875
-
248,914


Charged to profit or loss
42,428
3,750
805,483
851,661



At 31 December 2023
229,467
65,625
805,483
1,100,575


21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



4,185,422 (2022 - 4,185,422) Ordinary shares of £0.88 each
3,683,171
3,683,171



22.


Reserves

Share premium account

The share premium account comprises amounts paid in excess of the nominal value of issued share capital.

Revaluation reserve

The revaluation reserve comprises movements relating to the revaluation of fixed assets to fair value net of deferred tax.

Other reserves

This comprises capital contributions made by the parent company.

Profit & loss account

The profit and loss account comprises accumulated profits and losses of the Company, less dividends paid.


23.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £219,065 (2022 - £222,058). Contributions totalling £45,962 (2022 - £85,562) were payable to the fund at the balance sheet date.

- 29 -

 
TCL MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
443,285
431,344

Later than 1 year and not later than 5 years
1,011,510
1,356,000

1,454,795
1,787,344


25.


Related party transactions

The Company is a 100% subsidiary of Fortune Brands Innovations, Inc. (formerly Fortune Brands Home & Security Inc.) a company incorporated in the United States of America. The Company has taken advantage of the exemption under FRS 102 Section 33 not to disclose transactions with other group companies. This is on the grounds that 100% of the voting rights in the Company are controlled within the Group, the Company's results are controlled within that Group and the Company's results are included within the consolidated financial statements.


26.


Controlling party

The Company's immediate parent company is Fortune Brands Global Plumbing International S.a.r.l., a company incorporated in Luxembourg. 
The Company's ultimate parent company and controlling party is Fortune Brands Innovations, Inc. (formerly Fortune Brands Home & Security Inc.) a company incorporated in the United States of America. Copies of Fortune Brands Innovations Inc.'s consolidated financial statements can be obtained from 520 Lake Cook Road, Suite 300, Deerfield, Illinois, USA, IL60015.

 
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