Dudleys Aluminium Limited - Limited company accounts 23.1

Dudleys Aluminium Limited

Strategic Report, Report of the Directors and

Audited Financial Statements for the Year Ended 31 August 2022

DIRECTORS:

R H Cope

C C Shorney

SECRETARY:

R H Cope

REGISTERED OFFICE:

Lamby Way Industrial Estate

Mardy Road

Cardiff

CF3 2EX

REGISTERED NUMBER:

05354013 (England and Wales)

SENIOR STATUTORY AUDITOR:

Nicholas Matthew Toye FCA

AUDITORS:

BPU Limited

Chartered Accountants

Statutory Auditor

Radnor House

Greenwood Close

Cardiff Gate Business Park

Cardiff

CF23 8AA

BANKERS:

Santander UK plc

5-9 Queen Street

Cardiff

CF10 2UD

The directors present their strategic report for the year ended 31 August 2022.

BUSINESS REVIEW & FUTURE DEVELOPMENTS

As we exited the Coronavirus outbreak its legacy continued to have an effect during the year on both procurement of materials and supply chain difficulties. This coupled with continued cost and labour price inflation combined to make difficult trading conditions during the year. Nevertheless, the directors are pleased with the trading position of the business resulting in a further strengthening of the Balance Sheet.

As some of these challenges begin to abate the company are pleased to report strong enquiry levels going forward and look forward to another successful trading period during the year ahead.

PRINCIPAL RISKS AND UNCERTAINTIES

Operating within the construction sector there are risks and uncertainties that the company faces on both a daily and an on-going basis. The directors believe these risks can be principally grouped as: Health and Safety risk, Operational risk and Financial risk.

Health and safety risk

The Board recognises its employees and subcontractors work within an industry that faces many potential Health and Safety hazards. In order to mitigate these risks to the fullest possible extent the company makes every effort to ensure that its Health and Safety policies and procedures are of the highest industry leading standard.

Operational risk

As the projects undertaken by the company are often over the medium to long term, contracts may progress in a way that was not anticipated. To mitigate any risks associated with such a scenario, therefore, the company has internal checks and balances throughout each department associated with a projects progression. This ensures that any changes are identified at the earliest possible stage thus enabling effective control and risk management to be maintained.

Financial risk

All work is subject to a formal tendering process. Within this process many criteria are taken into account, including but not exclusively, financial, technical, capability and workload.

The risks associated with each of these stages is assessed and monitored. Close relationships are maintained with all interested parties and there is inter departmental liaison at all stages through a project's duration in order to identify variances at the earliest possible opportunity.

The company has detailed and established financial controls to monitor all major financial indicators including, weekly and annual cash flows, monthly internal management accounts and full individual cost tracking for all projects.

Brexit

The directors have considered the effect of Brexit on the business, but believe it to be minimal. No effect is expected in terms of the UK based customer base and the supply chain has been assessed and is sufficiently robust so as to cause no issues in terms of production.

KEY PERFORMANCE INDICATORS

The directors use a number of key performance indicators, both financial and non-financial, to monitor the company's position.

THIS REPORT WAS APPROVED BY THE BOARD:

C C Shorney - Director

17 April 2023

The directors present their report with the financial statements of the company for the year ended 31 August 2022.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of fabrication and installation of architectural aluminium.

DIVIDENDS

The total distribution of dividends for the year ended 31 August 2022 was £125,000 (2021 - £550,000).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 September 2021 to the date of this report.

R H Cope

C C Shorney

Other changes in directors holding office are as follows:

R A Rice - resigned 28 February 2022

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

THIS REPORT WAS APPROVED BY THE BOARD:

C C Shorney - Director

17 April 2023

Opinion

We have audited the financial statements of Dudleys Aluminium Limited (the 'company') for the year ended 31 August 2022 which comprise the Profit & Loss Account, Balance Sheet, 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 August 2022 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

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 Auditors' 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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.

Auditors' 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 a Report of the Auditors 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:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risks of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment.

The laws and regulations that we determined were most significant to the company were the Companies Act, UK corporate tax laws, Health and Safety at Work Act and the Environmental Protection Act.

We obtained an understanding of how the company is complying with those laws and regulations by making enquiries to the management, and corroborated these enquiries through our review of board minutes.

We assessed the susceptibility of the companys financial statements to material misstatement, including how fraud might occur, and did not identify any key audit matters relating to irregularities, including fraud. We assessed the effectiveness of internal controls that management has in place to prevent and detect fraud, including testing of manual journals and evaluating the assumptions and judgements made by management in its significant accounting estimates.

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 Report of the Auditors.

Use of our 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 a Report of the Auditors 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.

Nicholas Matthew Toye FCA (Senior Statutory Auditor)

for and on behalf of BPU Limited

Chartered Accountants

Statutory Auditor

26 April 2023

TURNOVER

9,841,717

12,295,119

Cost of sales

(7,206,901

)

(9,285,088

)

GROSS PROFIT

2,634,816

3,010,031

Distribution costs

(5,076

)

(5,313

)

Administrative expenses

(2,060,386

)

(2,002,999

)

569,354

1,001,719

Other operating income

2

-

21,170

OPERATING PROFIT

4

569,354

1,022,889

Interest receivable & similar income

5

6,437

2,130

575,791

1,025,019

Interest payable and similar expenses

6

(4,240

)

(933

)

PROFIT BEFORE TAXATION

571,551

1,024,086

Tax on profit

7

(123,854

)

(203,181

)

PROFIT FOR THE FINANCIAL YEAR

447,697

820,905

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

447,697

820,905

FIXED ASSETS

Intangible assets

9

827,009

905,789

Tangible assets

10

282,133

284,089

Investments

11

53,892

42,892

1,163,034

1,232,770

CURRENT ASSETS

Stocks

12

577,651

640,685

Debtors

13

1,925,363

2,715,592

Cash at bank and in hand

1,440,458

1,102,281

3,943,472

4,458,558

CREDITORS

Amounts falling due within one year

14

1,150,192

1,932,139

NET CURRENT ASSETS

2,793,280

2,526,419

TOTAL ASSETS LESS CURRENT LIABILITIES

3,956,314

3,759,189

CREDITORS

Amounts falling due after more than one year

15

(56,912

)

(175,275

)

DEFERRED TAXATION

18

(23,033

)

(30,242

)

NET ASSETS

3,876,369

3,553,672

CAPITAL AND RESERVES

Called up share capital

19

5

5

Retained earnings

3,876,364

3,553,667

SHAREHOLDERS' FUNDS

3,876,369

3,553,672

The financial statements were approved by the Board of Directors and authorised for issue on 17 April 2023 and were signed on its behalf by:

C C Shorney - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 September 2020

5

3,282,762

3,282,767

Changes in equity

Dividends

-

(550,000

)

(550,000

)

Total comprehensive income

-

820,905

820,905

Balance at 31 August 2021

5

3,553,667

3,553,672

Changes in equity

Dividends

-

(125,000

)

(125,000

)

Total comprehensive income

-

447,697

447,697

Balance at 31 August 2022

5

3,876,364

3,876,369

1.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

This is on the basis that this will be included within the consolidated accounts of AL13 Holdings Limited, the ultimate controlling parent.

Turnover

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:

Rendering of Services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:-

-

the amount of revenue can be measured reliably;

-

it is probable that the Company will receive the consideration due under the contract;

-

the stage of completion of the contract at the end of the reporting period can be measured reliably;

-

the costs incurred and the costs to complete the contract can be measured reliably.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2013, is being amortised evenly over its estimated useful life of twenty years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to property

-

10% straight line

Plant and machinery

-

25% reducing balance

Fixtures and fittings

-

15% reducing balance

Motor vehicles

-

25% reducing balance

Computer equipment

-

25% reducing balance

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit & Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Assets held under finance leases and hire purchase contracts, which are those where substantially all the risks and rewards of ownership of the asset have passed to the company, are capitalised in the balance sheet and depreciated over their useful lives.

The interest element of the rental obligations is charged to the profit and loss account over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding.

Rentals paid under operating leases are charged to income on a straight line basis over the lease term.

Pension costs

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Valuation of investments

Investments are measured at cost less accumulated impairment.

Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each Statement of Financial Position date. Gains and losses on remeasurement are recognised in profit or loss for the period.

2.	OTHER OPERATING INCOME

2022

2021

£

£

Grant income

-

21,170

3.	EMPLOYEES AND DIRECTORS

2022

2021

£

£

Wages and salaries

1,671,771

1,893,557

Social security costs

158,531

173,990

Other pension costs

158,839

49,206

1,989,141

2,116,753

The average number of employees during the year was as follows:

2022

2021

Administration

26

25

Production

26

29

52

54

2022

2021

£

£

Directors' remuneration

110,989

216,173

Directors' pension contributions to money purchase schemes

1,200

2,400

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

Total compensation paid to key management personnel during the year was £301,833 (2021: £262,652).

4.	OPERATING PROFIT

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

2022

2021

£

£

Hire of plant & machinery

110,038

230,699

Depreciation - owned assets

63,601

57,017

Profit on disposal of fixed assets

(889

)

-

Goodwill amortisation

78,780

78,780

Audit fees

10,500

10,500

Other operating lease rentals

194,114

185,364

5.

INTEREST RECEIVABLE & SIMILAR INCOME

2022

2021

£

£

Interest receivable

6,437

2,130

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2022

2021

£

£

Bank loan interest

4,240

933

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2022

2021

£

£

Current tax:

UK corporation tax

131,063

190,449

Deferred tax

(7,209

)

12,732

Tax on profit

123,854

203,181

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2022

2021

£

£

Profit before tax

571,551

1,024,086

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)

108,595

194,576

Effects of:

Expenses not deductible for tax purposes

400

15,305

Capital allowances in excess of depreciation

-

(13,665

)

Depreciation in excess of capital allowances

22,068

-

Adjustments to tax charge in respect of previous periods

-

(5,767

)

Deferred taxation

(7,209

)

12,732

Total tax charge

123,854

203,181

8.

DIVIDENDS

2022

2021

£

£

Ordinary share of £1

Paid

125,000

550,000

9.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 September 2021

and 31 August 2022

1,575,415

AMORTISATION

At 1 September 2021

669,626

Amortisation for year

78,780

At 31 August 2022

748,406

NET BOOK VALUE

At 31 August 2022

827,009

At 31 August 2021

905,789

10.	TANGIBLE FIXED ASSETS

Improvements

Fixtures

to

Plant and

and

property

machinery

fittings

£

£

£

COST

At 1 September 2021

37,587

423,293

19,472

Additions

1,644

4,750

3,132

Disposals

-

-

-

At 31 August 2022

39,231

428,043

22,604

DEPRECIATION

At 1 September 2021

16,286

273,268

3,972

Charge for year

3,923

33,494

3,328

Eliminated on disposal

-

-

-

At 31 August 2022

20,209

306,762

7,300

NET BOOK VALUE

At 31 August 2022

19,022

121,281

15,304

At 31 August 2021

21,301

150,025

15,500

Motor

Computer

vehicles

equipment

Totals

£

£

£

COST

At 1 September 2021

149,250

24,755

654,357

Additions

71,500

-

81,026

Disposals

(66,579

)

-

(66,579

)

At 31 August 2022

154,171

24,755

668,804

DEPRECIATION

At 1 September 2021

69,684

7,058

370,268

Charge for year

21,202

1,654

63,601

Eliminated on disposal

(47,198

)

-

(47,198

)

At 31 August 2022

43,688

8,712

386,671

NET BOOK VALUE

At 31 August 2022

110,483

16,043

282,133

At 31 August 2021

79,566

17,697

284,089

The net book value of assets held under finance leases or hire purchase contracts are £126,775 (2021 £131,111).