Rudolph & Hellmann Automotive Limited
Registered number: 03881895
Annual report and
financial statements
For the year ended 31 December 2021
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their Strategic Report and the financial statements for the year ended 31 December 2021.
The trading performance of the business for 2021 was exceptional given the challenges presented as the forced Covid lockdowns reduced. During the first half year the business then experienced volume disruption as supply issues in relation to worldwide supply of semi conductors affecting the ability of the Company to utilise its labour when significant shutdown days occurred. During the second half year a shortage of labour from market pressures on wage rates added significant cost as additional overtime was used to fill the resource gap. Nevertheless the business continued to deliver financially through effective leadership and strong operational management.
Principal risks and uncertainties
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Operational risk management - Rudolph and Hellmann Automotive Ltd remain committed to becoming the leading automotive logistics provider within the United Kingdom. The Company is fully aware that the automotive sector remains vulnerable to the ever changing customer demand in new vehicles. We believe that we can continue to react and adjust our business model accordingly to match our customers' demands quickly, thus minimising any risk to our own business. The Company endeavours to maintain adequate insurance levels for all appropriate insurable risks.
Financial risk management - financial risks are managed through strict internal management controls and accurate timely management information. Individual contracts are closely monitored to identify potential issues and ensure that contracts are delivered at a margin that is acceptable to the directors.
Cash flow risk management - cash flow risk is managed through regular cashflow forecasting to ensure the business can proceed with its planned trading operations within its available finance facilities.
Brexit
The Company noticed a change in the demographics of the workforce during 2021 as more European labour moved back to the continent. A shortage of skilled labour at a reasonable price continues to be an operational challenge going into 2022.
The Company has minimal exposure to foreign currency fluctuations.
COVID 19
COVID-19 has continued to give the business challenges during 2021 that have been addressed through strong operational, commercial and financial data and fast effective decision making.
Key risks across workforce resourcing and customer demand are under regular review. Volume risk from customer demand and supply risk from the continued availability of key parts for our customers remain. Demand for cars from our customers for the next 12 months continues to be a risk yet the business is agile in being able to respond accordingly to labour resource to match any changes in car build.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Financial key performance indicators
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Management use a range of performance measures to monitor and manage the business. The performance measures are split into financial and non-financial key performance indicators as set out below.
The business uses a range of operational KPI measures to monitor its overall contractual performance. These measures show continual consistent performance over the period reported.
This report was approved by the board on 15 February 2022 and signed on its behalf.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their report and the financial statements for the year ended 31 December 2021.
Directors' responsibilities statement
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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; and
∙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 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.
The principal activity of the Company is that of a provider of dedicated on-site production and reverse logistics for the automotive sector in the UK.
The profit for the year, after taxation, amounted to £3,154,855 (2020 - £2,581,705).
The dividends for the year amounted to £2,572,000 (2020 - £1,663,000)
The directors who served during the year were:
The directors continue to remain focused on growing the Company's portfolio, whilst ensuring it's current customers continue to receive the highest possible service. Rudolph & Hellmann Automotive Limited, continue to seek opportunities for growth with both existing and new customers.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Engagement with employees
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The Company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information on matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the Group's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the Company's performance.
The Company's policy is to recruit disabled workers for those vacancies that they are able to fill. All necessary assistance with initial training courses is given. Once employed, a career plan is developed so as to ensure suitable opportunities for each disabled person. Arrangements are made, wherever possible, for retraining employees who become disabled, to enable them to perform work identified as appropriate for their aptitudes and abilities.
Qualifying third party indemnity provisions
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The Company maintains insurance policies on behalf of all the directors against liability arising from negligence, breach of duty and breach of trust in relation to the Company.
Matters covered in the strategic report
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Certain information is not shown in the Directors' Report because it is shown in the Strategic Report instead under s414C(11). The Strategic Report includes a business review, information on principal risks & uncertainties as well as information on both financial & non-financial key performance indicators.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors have prepared financial projections which forecast growth and profitability. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis of accounting continues to be appropriate in preparing the financial statements. The directors have considered a period in excess of twelve months from the date of approval of these financial statements in making this assessment.
Brexit and Supply
Despite our customers having executed pre planned contingency measures against supply continuity in 2021, a number of shutdown days during the year relating to the supply of semi conductors meant the Company had to balance its resource accordingly to avoid as a consequence being committed with excessive cost. There may be a risk of supply priorities during the year ahead. Our customers continue to make contingency plans with their strong procurement and transportation abilities to help mitigate any risks as far as they are able.
COVID-19
As a consequence of the COVID-19 pandemic, the next 12 month time horizon poses several challenges to the industry in which the company operates. Despite Forecast GDP growth in the UK currently looking good against other G7 countries, the current cost of living crisis with inflationary pressures as well as imminent tax rises may well have consequences for discretionary spend. Unemployment did not rise as much as expected in the UK with many vacancies continuing to be unfilled. The key risks the directors see in the coming months and how they are being addressed are listed below:
Demand for cars and flexed resources
Given inflationary pressures times within the context of the UK and European automobile industry, a view could be taken of the risk of households curbing discretionary spending, of which car purchases may be included. If that were to be the case, then the Company would be able to balance the revised resource requirements to match against the reduced revenue expectation. This would be well planned to allow the Company to flex its temporary labour quota to align with customers' demand requirements. Alternatively, for those households with more security of finance the outlook to reduce household carbon footprint is creating demand for electric vehicles of which our customers are ensuring production capacity is available. As international travel reopens more fully, the short-term demand for more vehicles in the UK market may ease. However, given the time delays of new vehicle availability in the market in general in 2021 the result may be to more of a normalised level of demand. As labour cost forms most of the Company’s expenditure the ability of temporary labour has always continued to provide protection of flexibility to the main RHA workforce. In 2021 even this security gave issues for availability led out of competing rates per hour for that resource. In addition, the Company has been in intense negotiations with unions regarding pay awards for 2022 where pressure for large increases in pay continue to be negotiated. This adds risk to cost pressures in 2022 across the backdrop of continued volume unpredictability for the year where the company will take resource action as required.
Resource supply and availability
In the current COVID-19 surroundings the business is fully aware of the responsibilities to its workforce in terms of keeping its people safe as well as secure as possible in tenure of employment. The Company strives to keep its employees safe in their working environment and will to continue to do so as the current situation around the virus is continually assessed. The business knows it is vital to secure its workforce and ensure staff retention to required levels to meet its customers' current and flexible future needs.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Liquidity and Balance Sheet strength
The business recognises the uncertain times ahead within the COVID-19 challenge. By ensuring the business takes the appropriate steps above to secure its resources against its cost base and by minimising working capital by effective credit and supplier management, the Company can have a reasonable expectation of future cash flows. It would also consider potential contingencies around changing its dividend profile should profitability be more challenging to achieve. This could require the consideration of increased retained earnings to weather any potential downturns in the future. The Company has a good relationship with its banking partner who works together with the business to manage any short term need for available funds if circumstances require. This is a particular strength that can be relied on over the next 12-month time horizon with banking facilities already secured.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The auditor, Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 15 February 2022 and signed on its behalf.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
Opinion
We have audited the financial statements of Rudolph & Hellmann Automotive Limited (the ‘Company’) for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows 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 2021 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 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.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RUDOLPH & HELLMANN AUTOMOTIVE 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.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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, anti-money laundering regulation, non-compliance with implementation of government support schemes relating to COVID-19.
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.
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance and fraud related to revenue recognition (which we pinpointed to the completeness assertion), and significant one-off or unusual transactions.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
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.
Christopher Hudson (Senior statutory auditor)
for and on behalf of
Mazars LLP
Chartered Accountants and Statutory Auditor
5th Floor
3 Wellington Place
Leeds
LS1 4AP
15 February 2022
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
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Interest receivable and similar income
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Interest payable and expenses
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Profit for the financial year
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There were no recognised gains and losses for 2021 or 2020 other than those included in the statement of comprehensive income.
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There was no other comprehensive income for 2021 (2020:£NIL).
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The notes on pages 15 to 31 form part of these financial statements.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
REGISTERED NUMBER: 03881895
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 15 February 2022.
The notes on pages 15 to 31 form part of these financial statements.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
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Comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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The notes on pages 15 to 31 form part of these financial statements.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
Cash flows from operating activities
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Profit for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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(Increase)/decrease in debtors
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Increase/(decrease) in creditors
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Net cash (used in)/generated from operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Net cash used in investing activities
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Cash flows from financing activities
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Net cash used in financing activities
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Net (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Rudolph & Hellmann Automotive Limited ("the Company") is a private company limited by share capital incorporated in England and Wales, its registered number is 03881895. The address of its registered office and principal place of business is Charter House, Sandford Street, Lichfield, Staffordshire, WS13 6QA.
The principal activity of the Company is that of a provider of dedicated on-site production and reverse logistics for the automotive sector in the UK
2.Accounting policies
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Basis of preparation of financial statements
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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).
These financial statements have been presented in pound sterling which is the functional currency of
the Company, and rounded to the nearest £.
The following principal accounting policies have been applied:
The directors have prepared financial projections which forecast growth and profitability. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis of accounting continues to be appropriate in preparing the financial statements. The directors have considered a period in excess of twelve months from the date of approval of these financial statements in making this assessment.
Brexit and Supply
Despite our customers having executed pre planned contingency measures against supply continuity in 2021, a number of shutdown days during the year relating to the supply of semi conductors meant the Company had to balance its resource accordingly to avoid as a consequence being committed with excessive cost. There may be a risk of supply priorities during the year ahead. Our customers continue to make contingency plans with their strong procurement and transportation abilities to help mitigate any risks as far as they are able.
COVID-19
As a consequence of the COVID-19 pandemic, the next 12 month time horizon poses several challenges to the industry in which the company operates. Despite Forecast GDP growth in the UK currently looking good against other G7 countries, the current cost of living crisis with inflationary pressures as well as imminent tax rises may well have consequences for discretionary spend. Unemployment did not rise as much as expected in the UK with many vacancies continuing to be unfilled. The key risks the directors see in the coming months and how they are being addressed are listed below:
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Going concern (continued)
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Demand for cars and flexed resources
Given inflationary pressures times within the context of the UK and European automobile industry, a view could be taken of the risk of households curbing discretionary spending, of which car purchases may be included. If that were to be the case, then the Company would be able to balance the revised resource requirements to match against the reduced revenue expectation. This would be well planned to allow the Company to flex its temporary labour quota to align with customers' demand requirements. Alternatively, for those households with more security of finance the outlook to reduce household carbon footprint is creating demand for electric vehicles of which our customers are ensuring production capacity is available. As international travel reopens more fully. the short-term demand for more vehicles in the UK market may ease. However, given the time delays of new vehicle availability in the market in general in 2021 the result may be to more of a normalised level of demand. As labour cost forms most of the Company’s expenditure the ability of temporary labour has always continued to provide protection of flexibility to the main RHA workforce. In 2021 even this security gave issues for availability led out of competing rates per hour for that resource. In addition, the Company has been in intense negotiations with unions regarding pay awards for 2022 where pressure for large increases in pay continue to be negotiated. This adds risk to cost pressures in 2022 across the backdrop of continued volume unpredictability for the year where the company will take resource action as required.
Resource supply and availability
In the current COVID-19 surroundings the business is fully aware of the responsibilities to its workforce in terms of keeping its people safe as well as secure as possible in tenure of employment. The Company strives to keep its employees safe in their working environment and will to continue to do so as the current situation around the virus is continually assessed. The business knows it is vital to secure its workforce and ensure staff retention to required levels to meet its customers' current and flexible future needs.
Liquidity and Balance Sheet strength
The business recognises the uncertain times ahead within the COVID-19 challenge. By ensuring the business takes the appropriate steps above to secure its resources against its cost base and by minimising working capital by effective credit and supplier management, the Company can have a reasonable expectation of future cash flows. It would also consider potential contingencies around changing its dividend profile should profitability be more challenging to achieve. This could require the consideration of increased retained earnings to whether any potential downturns in the future. The Company has a good relationship with its banking partner who works together with the business to manage any short term need for available funds if circumstances require. This is a particular strength that can be relied on over the next 12-month time horizon with banking facilities already secured.
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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 when all of the following conditions are satisfied:
• the amount of revenue can be measured reliably; and
• it is probable that the Company will receive the consideration due under the contract.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
The UK government has offered a range of financial support packages to help companies, including government backed financing arrangements and furlough schemes. 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.
Interest income is recognised in profit or loss using the effective interest method.
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.
- 17 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. 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.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Consortium relief is not accrued at the year-end on the basis its availability is not certain and it cannot be measured reliably at the year end
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.
Capitalised computer software costs are not amortised when the software is not yet ready for use.
Amortisation is provided on the following bases:
- 18 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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, using the straight-line method.
Depreciation is provided on the following basis:
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.
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.
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Cash and cash equivalents
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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.
In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
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.
- 19 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Provisions for liabilities
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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 Statement of Financial Position 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.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.
Equity dividends are recognised when they are declared.
- 20 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In applying the Company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
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, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
Critical judgements in applying the accounting policies
The directors have considered whether they have had to make any critical judgements in the process of applying the Company's accounting policies that have had a significant effect on the amounts recognised in the financial statements. The directors do not consider any judgements made to be of such significance that they would be deemed critical.
Key sources of estimation uncertainty
The directors have considered whether they have had to make any accounting estimates that carry a significant risk of having a material impact on the financial statements for the financial year ending 31 December 2022. The directors do not believe these financial statements contain any accounting estimates that are of such significance that they meet that criteria.
- 21 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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An analysis of turnover by class of business is as follows:
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Provision of logistics services
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All turnover arose within the United Kingdom.
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Government grants receivable
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The operating profit is stated after charging:
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Depreciation of tangible fixed assets
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Amortisation of intangible assets
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Fees payable to the Company's auditor for the audit of the Company's annual financial statements
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Other operating lease rentals
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Operating lease rentals - plant and machinery
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Defined contribution pension cost
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- 22 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Fees payable to the Company's auditor for the audit of the Company's annual financial statements
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Fees payable to the Company's auditor in respect of:
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Taxation compliance services
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Staff costs were as follows:
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Cost of defined contribution scheme
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Directors were remunerated via other companies. There was no directors remuneration paid by the Company during the year (2020: £NIL).
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The average monthly number of employees, including the directors, during the year was as follows:
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The directors of the business are also considered to be the key management personnel for the purposes of the FRS 102 required disclosure.
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- 23 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Other interest receivable
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Interest payable and similar expenses
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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Effect of tax rate change on opening balance
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Taxation on profit on ordinary activities
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- 24 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2020 - lower than) the standard rate of corporation tax in the UK of 19% (2020 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)
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Expenses not deductible for tax purposes
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Adjustments to tax charge in respect of prior periods
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Adjustment to deferred tax charge in respect of prior periods
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Remeasurement of deferred tax for changes in tax rates
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Total tax charge for the year
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Factors that may affect future tax charges
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The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in
the United Kingdom will increase 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.
The prior year adjustments to the corporation tax charge noted above relate to the receipt of Consortium relief which the company has historically benefitted from. Consortium relief is accounted for in the period it is received and not accrued for at the year end. At the year-end the availability of consortium relief is not certain and cannot be measured reliably.
- 25 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Charge for the year on owned assets
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- 26 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Charge for the year on owned assets
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- 27 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Prepayments and accrued income
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Cash and cash equivalents
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The Company has an overdraft facility with Clydesdale Bank Plc which is secured by a fixed & floating charge over the assets of the business. As at 31 December 2021 the overdraft balance was £NIL (2020: £NIL).
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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- 28 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Fixed asset timing differences
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Unpaid pension contributions
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Authorised, allotted, called up and fully paid
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25,000 (2020 - 25,000) Ordinary A shares of £1.00 each
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25,000 (2020 - 25,000) Ordinary B shares of £1.00 each
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2 (2020 - 2) Ordinary C shares of £1.00 each
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2 (2020 - 2) Ordinary D shares of £1.00 each
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The A shares and B shares have equal voting rights and can participate in any distributions declared on that particular class of share.
The C shares and D shares carry no voting rights and can participate in any distributions declared on that particular class of share.
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Profit & loss account
This reserve represents historic cumulative profits and losses less historic cumulative dividend declarations.
- 29 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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 £381,079 (2020: £391,255). Contribtutions totalling £122,044 (2020: £108,556) were payable to the fund at the reporting date.
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Commitments under operating leases
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At 31 December 2021 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The shareholders of the Company are Rudolph Holdings GmbH, a company incorporated in Germany and Hellmann Worldwide Logistics Limited, a company incorporated in England. These companies are both shareholders of the Company and each own 50% of the voting rights of the Company.
Hellmann Worldwide Logistics Limited and Rudolph Holdings GmBH collectively charged the Company management fees of £125,000 (2020: £100,000) during the financial year ended 31 December 2021.
Support costs from Rudolph Holdings GmBH totalling £Nil (2020: £22,861) were recharged to the Company during the financial year ended 31 December 2021. Support costs recharged back to Rudolph Holdings GmBH by the Company totalled £Nil (2020: £Nil).
As at 31 December 2021, the Company owed to Hellmann Worldwide Logistics Limited £2,500
(2020: £2,000) and owed to Rudolph Holdings GmBH £8,333 (2020: £5,250).
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- 30 -
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RUDOLPH & HELLMANN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
In the opinion of the directors there is no controlling party.
The shareholders of the Company are Rudolph Holdings GmbH, a company incorporated in Germany and Hellmann Worlwide Logistics Limited, a company incorporated in England and Wales. These companies are both shareholders of the Company and each own 50% of the voting rights of the Company.
- 31 -
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