Company Registration No. 00906135 (England and Wales)
THOMAS SHERRIFF AND COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022
THOMAS SHERRIFF AND COMPANY LIMITED
COMPANY INFORMATION
Directors
W S Hutchison
(Appointed 1 February 2022)
J W Laing
E J Langston
(Appointed 1 February 2022)
R R Lyall
Company number
00906135
Registered office
17 Walkergate
Berwick-upon-Tweed
Northumberland
TD15 1DJ
Auditor
Greaves West & Ayre
17 Walkergate
Berwick-upon-Tweed
Northumberland
TD15 1DJ
THOMAS SHERRIFF AND COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12 - 13
Statement of changes in equity
14
Statement of cash flows
15
Notes to the financial statements
16 - 31
THOMAS SHERRIFF AND COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2022
- 1 -
The directors present the strategic report for the year ended 31 January 2022.
Fair review of the business
Thomas Sherriff and Company Limited are a privately owned and managed business providing a positive environment for its staff and takes a medium/long term view on investment.
Its primary activities are the sale, distribution and servicing of agricultural and turf machinery, with retail/trade parts and hardware sales.
The Company experienced challenging conditions on the turf side of the business during 2021 mainly as a result of the COVID-19 pandemic.
Our Agricultural and Turf machinery sales were flat versus year ended 2021. Parts and Service areas of the business showed promising revenue growth with the biggest growth area seen in Technology Solutions, up 57% on last year.
Principal risks and uncertainties
The management and execution of the strategic plan of the business are subject to a number of risks and uncertainties. The company is an important part of the agricultural community and the directors believe that there are no perceived areas of risk or uncertainty that will have a significant impact on the profitability of the company which have not been addressed.
Key performance indicators
The directors consider that their key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross profit margin and profit before tax.
Turnover has increased by £513,394 to £44,891,501 (2021 £44,378,107) which has lead to an increased gross profit margin by 1.8% to 13.7% (2021 11.9%). Profit before tax has decreased from £1,553,878 to £1,472,590 due to higher administrative expenses.
Statement by the directors in performance of their duties under s172(1) of the Companies Act 2006
The board of directors of Thomas Sherriff and Company Limited consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Act) in the decisions taken during the year ended 31 January 2022. In particular, by reference to the approval of our business plan and regular board meeting discussions which guide the future of the Company.
Our discussions and plans aim to secure the success of the Company in the long term for the benefit of stakeholders, employees and customers.
To achieve this, we have built a board with a great deal of industry experience to allow them to assess the risks facing the Company.
The Company gives full and fair consideration to applications for employment from disabled persons where the candidate’s particular aptitudes and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled employees for training, career development and promotion.
Where existing employees become disabled, it is the Company’s policy to provide continuing employment wherever practicable in the same or an alternative position and to provide appropriate training to achieve this aim.
As the board of directors, our intention is to behave responsibly and ensure that management operate the business in a responsible manner, operating with the highest standards of business conduct and good governance. This contributes to the delivery of our plans for the Company's future. The intention is to continue to grow the Company's reputation and ensure that the actions of management and employees reflect the board's responsible behaviour.
In turn, this allows stakeholders to also benefit from the Company's success.
THOMAS SHERRIFF AND COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 2 -
E J Langston
Director
10 August 2022
THOMAS SHERRIFF AND COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 January 2022.
Principal activities
The principal activity of the company continued to be that of the supply, maintenance and hire of agricultural and ground care equipment.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £73,397. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
W S Hutchison
(Appointed 1 February 2022)
J W Laing
E J Langston
(Appointed 1 February 2022)
R R Lyall
C J Weatherhead
(Resigned 19 November 2021)
Business relationships
The directors are aware of the need to consider fostering the Company’s business relationships with suppliers, customers and others. The directors aim to maintain good relationships with both customers, suppliers and employees to ensure the smooth running of the business and the efficient and effective execution of the board's plans for the business.
Auditor
Greaves West & Ayre were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Energy and carbon report
As the company has consumed more than 40,000 kWh of energy in this reporting period, it is considered a high energy user under these regulations and is required to report on its emissions, energy consumption and energy efficiency activities.
2022
Energy consumption
kWh
Aggregate of energy consumption in the year
- Gas combustion
390,778
- Electricity purchased
294,422
685,200
THOMAS SHERRIFF AND COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 4 -
2022
Emissions of CO2 equivalent
metric tonnes
Scope 1 - direct emissions
- Gas combustion
220.65
- Biofuel useage
2.46
- Fuel consumed for owned transport
393.21
616.32
Scope 2 - indirect emissions
- Electricity purchased
62.51
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
38.00
Total gross emissions
716.83
Intensity ratio
Tonnes CO2e per full-time employee
5.78
Quantification and reporting methodology
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per full time equivalent (FTE) source, a recommended ratio.
Measures taken to improve energy efficiency
The Company has made efforts to improve their operational energy efficiency and reduce carbon emissions in recent years.
Biomass Boiler
A biomass boiler was installed in 2017 at the newly built head office site in Haddington and provides all hot water and heating. This is fed with wood pellets sourced locally, less than 30 miles away.
LED lighting upgrades
The Company has a policy of replacing all failed lighting with LED fittings. Investment has already been made at Head Office and will continue to be implemented across all outlets over the coming year.
Electric vehicle use
The Company first purchased a hybrid vehicle in January 2020 and took the decision to increase the hybrid/electric fleet in January 2022 purchasing 2 more vehicles. Since the year end, we have introduced a policy to replace vehicles with electric and hybrid vehicles where practical. Charging points have also been installed since the year end at all owned outlets.
THOMAS SHERRIFF AND COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 5 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the fair review of the business, principal risks and uncertainties facing the company as well as trading performance and future developments, please see the Strategic Report on page 1.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
E J Langston
Director
10 August 2022
THOMAS SHERRIFF AND COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THOMAS SHERRIFF AND COMPANY LIMITED
- 6 -
Opinion
We have audited the financial statements of Thomas Sherriff and Company Limited (the 'company') for the year ended 31 January 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 January 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.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
THOMAS SHERRIFF AND COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THOMAS SHERRIFF AND COMPANY LIMITED
- 7 -
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 and the directors' report.
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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
THOMAS SHERRIFF AND COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THOMAS SHERRIFF AND COMPANY LIMITED
- 8 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the agricultural sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including legislation such as the Companies Act 2006, taxation legislation, employment legislation and data protection;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, contacting the entity’s solicitor for any details of non-compliance and inspecting current year legal expenditure; and
identified laws and regulations of particular relevance were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, including any fraud associated with revenue recognition, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;
traced a sample of sales transactions from source documentation to nominal ledgers;
traced a sample of sales around the year-end from source documentation to invoice to ensure cut-off is operating correctly;
evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims against the company; and
reviewing correspondence with HMRC and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
The laws and regulations which are considered to be significant to the entity relate to health and safety. Discussions are held with management to determine whether any breaches have occurred as well as legal expenditure being scrutinised for any evidence on non-compliance.
THOMAS SHERRIFF AND COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THOMAS SHERRIFF AND COMPANY LIMITED
- 9 -
The audit was considered capable of identifying irregularities only to the extent of the substantive testing performed and from discussions with management.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
Roseanne Bennett FCA (Senior Statutory Auditor)
For and on behalf of Greaves West & Ayre
11 August 2022
Chartered Accountants
Statutory Auditor
17 Walkergate
Berwick-upon-Tweed
Northumberland
TD15 1DJ
THOMAS SHERRIFF AND COMPANY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JANUARY 2022
- 10 -
2022
2021
as restated
Notes
£
£
Turnover
3
44,891,501
44,378,107
Cost of sales
(38,751,536)
(39,083,330)
Gross profit
6,139,965
5,294,777
Administrative expenses
(4,647,245)
(3,831,124)
Other operating income
59,955
192,981
Operating profit
4
1,552,675
1,656,634
Interest payable and similar expenses
8
(80,085)
(102,756)
Profit before taxation
1,472,590
1,553,878
Tax on profit
9
(379,887)
(236,292)
Profit for the financial year
1,092,703
1,317,586
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THOMAS SHERRIFF AND COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2022
- 11 -
2022
2021
as restated
£
£
Profit for the year
1,092,703
1,317,586
Other comprehensive income
-
-
Total comprehensive income for the year
1,092,703
1,317,586
THOMAS SHERRIFF AND COMPANY LIMITED
BALANCE SHEET
AS AT
31 JANUARY 2022
31 January 2022
- 12 -
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
11
170,240
206,720
Other intangible assets
11
6,289
Total intangible assets
176,529
206,720
Tangible assets
12
4,466,645
4,294,405
Investments
13
100
4,643,274
4,501,125
Current assets
Stocks
15
12,211,501
11,031,295
Debtors
16
4,082,882
2,597,198
Cash at bank and in hand
4,848
657,011
16,299,231
14,285,504
Creditors: amounts falling due within one year
17
(11,244,520)
(9,777,766)
Net current assets
5,054,711
4,507,738
Total assets less current liabilities
9,697,985
9,008,863
Creditors: amounts falling due after more than one year
18
(1,070,452)
(435,276)
Provisions for liabilities
Deferred tax liability
20
(305,996)
(240,170)
Net assets
8,321,537
8,333,417
Capital and reserves
Called up share capital
22
887
6,016
Share premium account
79,938
Capital redemption reserve
22,298
17,107
Other reserves
279,092
Profit and loss reserves
8,218,414
8,031,202
Total equity
8,321,537
8,333,417
THOMAS SHERRIFF AND COMPANY LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 JANUARY 2022
31 January 2022
- 13 -
The financial statements were approved by the board of directors and authorised for issue on 10 August 2022 and are signed on its behalf by:
E J Langston
R R Lyall
Director
Director
Company Registration No. 00906135
THOMAS SHERRIFF AND COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022
- 14 -
Share capital
Share premium account
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
As restated for the period ended 31 January 2021:
Balance at 1 February 2020
6,016
17,107
279,092
8,111,186
8,413,401
Year ended 31 January 2021:
Profit and total comprehensive income for the year
-
-
-
-
1,317,586
1,317,586
Dividends
10
-
-
-
-
(93,760)
(93,760)
Share buy back from reserves
-
-
-
-
(1,303,810)
(1,303,810)
Balance at 31 January 2021
6,016
17,107
279,092
8,031,202
8,333,417
Year ended 31 January 2022:
Profit and total comprehensive income for the year
-
-
-
-
1,092,703
1,092,703
Issue of share capital
22
62
79,938
-
-
-
80,000
Dividends
10
-
-
-
-
(73,397)
(73,397)
Reduction of shares
22
(5,191)
5,191
-
-
-
Share buy back from reserves
-
-
-
-
(1,111,186)
(1,111,186)
Other movements
-
-
(279,092)
279,092
-
Balance at 31 January 2022
887
79,938
22,298
8,218,414
8,321,537
THOMAS SHERRIFF AND COMPANY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2022
- 15 -
2022
2021
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
1,261,266
2,827,781
Interest paid
(80,085)
(102,756)
Income taxes paid
(221,896)
(199,423)
Net cash inflow from operating activities
959,285
2,525,602
Investing activities
Purchase of intangible assets
(7,367)
Purchase of tangible fixed assets
(524,168)
(371,304)
Proceeds on disposal of tangible fixed assets
67,119
552,500
Purchase of subsidiaries
(100)
Net cash (used in)/generated from investing activities
(464,516)
181,196
Financing activities
Share buyback
(1,111,186)
(1,303,810)
Bonus share issue
40,000
Repayment of borrowings
(585,772)
(409,946)
Proceeds of new bank loans
1,250,000
Repayment of bank loans
(879,719)
(244,133)
Dividends paid
(73,397)
(93,760)
Net cash used in financing activities
(1,360,074)
(2,051,649)
Net (decrease)/increase in cash and cash equivalents
(865,305)
655,149
Cash and cash equivalents at beginning of year
657,011
1,862
Cash and cash equivalents at end of year
(208,294)
657,011
Relating to:
Cash at bank and in hand
4,848
657,011
Bank overdrafts included in creditors payable within one year
(213,142)
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022
- 16 -
1
Accounting policies
Company information
Thomas Sherriff and Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is 17 Walkergate, Berwick-upon-Tweed, Northumberland, TD15 1DJ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 402 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company continued to perform well throughout the Covid pandemic and thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
1
Accounting policies
(Continued)
- 17 -
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
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1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% straight line
Leasehold land and buildings
Over the term of the lease
Plant and equipment
10% & 20% straight line
Computers
25% straight line
Motor vehicles
20% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
1
Accounting policies
(Continued)
- 18 -
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Stocks
Stocks and work in progress are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
1
Accounting policies
(Continued)
- 19 -
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
1
Accounting policies
(Continued)
- 20 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
1
Accounting policies
(Continued)
- 21 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 22 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock Provision
Stock has been valued at the lower cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks.
Parts stock is depreciated on a reducing balance method over 3 years and whole goods are considered on an individual basis based on a number of different factors. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Sale of agricultural and ground care equipment
40,638,588
40,265,851
Servicing of agricultural and ground care equipment
4,252,913
4,112,256
44,891,501
44,378,107
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
44,344,947
43,873,534
Europe
381,594
486,754
United States of America
116,712
-
Rest of World
48,248
17,819
44,891,501
44,378,107
2022
2021
£
£
Other significant revenue
Commissions received
17,497
22,393
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 23 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
315,709
305,109
Profit on disposal of tangible fixed assets
(30,900)
(418,876)
Amortisation of intangible assets
37,558
36,480
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
15,000
11,000
For other services
All other non-audit services
2,500
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Production
60
63
Selling and Distribution
46
36
Administration
18
21
Total
124
120
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
4,336,925
4,098,933
Social security costs
405,282
426,302
Pension costs
138,202
102,709
4,880,409
4,627,944
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 24 -
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
201,708
230,106
Company pension contributions to defined contribution schemes
56,000
24,000
257,708
254,106
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2021 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
74,952
79,986
Company pension contributions to defined contribution schemes
6,000
6,000
8
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
80,085
102,756
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
314,061
221,956
Deferred tax
Origination and reversal of timing differences
65,826
14,336
Total tax charge
379,887
236,292
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
9
Taxation
(Continued)
- 25 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
1,472,590
1,553,878
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
279,792
295,237
Tax effect of expenses that are not deductible in determining taxable profit
14,249
3,190
Gains not taxable
(5,871)
(77,130)
Permanent capital allowances in excess of depreciation
25,891
14,995
Deferred tax movement
65,826
Taxation charge for the year
379,887
236,292
10
Dividends
2022
2021
£
£
Interim paid
73,397
93,760
11
Intangible fixed assets
Goodwill
Website
Total
£
£
£
Cost
At 1 February 2021
364,751
364,751
Additions
7,367
7,367
At 31 January 2022
364,751
7,367
372,118
Amortisation and impairment
At 1 February 2021
158,031
158,031
Amortisation charged for the year
36,480
1,078
37,558
At 31 January 2022
194,511
1,078
195,589
Carrying amount
At 31 January 2022
170,240
6,289
176,529
At 31 January 2021
206,720
206,720
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 26 -
12
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Plant and equipment
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 February 2021
2,664,222
1,201,669
303,630
24,285
1,158,293
5,352,099
Additions
271,594
38,815
5,387
208,372
524,168
Disposals
(144,389)
(144,389)
At 31 January 2022
2,935,816
1,201,669
342,445
29,672
1,222,276
5,731,878
Depreciation and impairment
At 1 February 2021
315,181
98,645
110,524
1,210
532,134
1,057,694
Depreciation charged in the year
40,595
10,272
50,865
6,906
207,071
315,709
Eliminated in respect of disposals
(108,170)
(108,170)
At 31 January 2022
355,776
108,917
161,389
8,116
631,035
1,265,233
Carrying amount
At 31 January 2022
2,580,040
1,092,752
181,056
21,556
591,241
4,466,645
At 31 January 2021
2,349,041
1,103,024
193,106
23,075
626,159
4,294,405
13
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
14
100
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 February 2021
-
Additions
100
At 31 January 2022
100
Carrying amount
At 31 January 2022
100
At 31 January 2021
-
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 27 -
14
Subsidiaries
Details of the company's subsidiaries at 31 January 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Sherriff (Farmsight) Limited
17 Walkergate, Berwick Upon Tweed, TD15 1DJ
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Sherriff (Farmsight) Limited
100
15
Stocks
2022
2021
£
£
Work in progress
108,414
70,682
Finished goods and goods for resale
12,103,087
10,960,613
12,211,501
11,031,295
16
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
2,638,434
1,926,492
Unpaid share capital
40,000
Other debtors
165,529
326,881
Prepayments and accrued income
1,238,919
343,825
4,082,882
2,597,198
17
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans and overdrafts
19
364,854
416,607
Other borrowings
19
1,402,232
1,988,004
Trade creditors
7,910,410
5,603,040
Corporation tax
314,061
221,896
Other taxation and social security
466,107
652,923
Other creditors
136,237
100,276
Accruals and deferred income
650,619
795,020
11,244,520
9,777,766
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 28 -
18
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
19
1,070,452
435,276
19
Loans and overdrafts
2022
2021
£
£
Bank loans
1,222,164
851,883
Bank overdrafts
213,142
Other loans
1,402,232
1,988,004
2,837,538
2,839,887
Payable within one year
1,767,086
2,404,611
Payable after one year
1,070,452
435,276
The bank loans are secured by way of a fixed charge over land and buildings and a debenture.
Interest on the loans are charged at 2% and 2.25% over the bank's sterling base rate.
The other loan is a stocking loan which is secured over the assets attributable to the loan.
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
305,996
240,170
2022
Movements in the year:
£
Liability at 1 February 2021
240,170
Charge to profit or loss
65,826
Liability at 31 January 2022
305,996
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
20
Deferred taxation
(Continued)
- 29 -
The deferred tax liability set out above is in relation to accelerated capital allowances the effect is expected to reverse over the life of the assets.
Following the enactment of the Finance Act 2021 the deferred tax provision at the year end has been calculated using a rate of 25% (2021 19%)
21
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
138,202
102,709
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
22
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.1p each
824,799
6,016
825
6,016
A shares of 0.1p each
30,984
-
31
-
855,783
6,016
856
6,016
Issued and not fully paid
Ordinary shares of 0.1p each
30,984
-
31
-
886,767
6,016
887
6,016
Total equity share capital
887
6,016
During the year a resolution was passed to sub-divide the shares, changing the nominal value from £1 to £0.001. 61,968 new 'A' shares were also issued during the year with a nominal value of £0.001. As at 31 January 2022, 30,984 of these shares were unpaid.
500,000 shares are currently being repurchased by the company over a period of 25 months. As at 31 January 2022, 347,221 shares were repurchased at nominal value of £0.001. 4,844 treasury shares were also cancelled during the year which had a nominal value of £1. This has lead to a total increase of £5,191 to the capital redemption reserve.
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 30 -
23
Operating lease commitments
Operating lease payments represent rentals payable by the company for a vehicle and IT equipment. Leases are negotiated for an average term of 3 years with an option to extend at the prevailing market rate.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
10,311
18,308
Between two and five years
10,845
23,096
21,156
41,404
24
Capital commitments
Amounts contracted for but not provided in the financial statements:
2022
2021
£
£
Acquisition of tangible fixed assets
249,862
-
25
Directors' transactions
Dividends totalling £73,397 (2021 - £93,760) were paid in the year in respect of shares held by the company's directors.
26
Cash generated from operations
2022
2021
£
£
as restated
Profit for the year after tax
1,092,703
1,317,586
Adjustments for:
Taxation charged
379,887
236,292
Finance costs
80,085
102,756
Gain on disposal of tangible fixed assets
(30,900)
(418,876)
Amortisation and impairment of intangible assets
37,558
36,480
Depreciation and impairment of tangible fixed assets
315,709
305,109
Movements in working capital:
(Increase)/decrease in stocks
(1,180,206)
410,381
(Increase)/decrease in debtors
(1,445,684)
983,658
Increase/(decrease) in creditors
2,012,114
(145,605)
Cash generated from operations
1,261,266
2,827,781
THOMAS SHERRIFF AND COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 31 -
27
Analysis of changes in net debt
1 February 2021
Cash flows
31 January 2022
£
£
£
as restated
Cash at bank and in hand
657,011
(652,163)
4,848
Bank overdrafts
(213,142)
(213,142)
657,011
(865,305)
(208,294)
Borrowings excluding overdrafts
(2,839,887)
215,491
(2,624,396)
(2,182,876)
(649,814)
(2,832,690)
28
Prior period adjustment
The prior period adjustment shown is in relation to a change in the calculation of internal revenue. This adjustment only affects the profit and loss account.
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 January 2021
£
£
£
Turnover
45,785,408
(1,407,301)
44,378,107
Cost of sales
(40,529,218)
1,445,888
(39,083,330)
Administrative expenses
(3,792,537)
(38,587)
(3,831,124)
Profit for the financial period
1,317,586
-
1,317,586
THOMAS SHERRIFF AND COMPANY LIMITED
DETAILED TRADING AND PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JANUARY 2022
- 32 -
2022
2021
£
£
£
£
Turnover
Sales
44,891,501
44,378,107
Cost of sales
Purchases
(36,614,167)
(36,976,541)
Direct Costs
Workshop wages
1,860,567
1,849,687
Employer's N.I. contributions
155,333
164,123
Staff training
84,982
55,703
Staff pension scheme costs
36,487
37,276
(2,137,369)
(2,106,789)
Gross Profit
6,139,965
5,294,777
Administrative Expenses
Administration wages
2,257,830
2,044,778
Social security costs
226,969
237,425
Other payments to staff
40,000
-
Staff pension costs
45,715
41,433
Rent and rates
80,482
108,162
Heat and light
64,191
87,524
Repairs and renewals
23,916
54,495
Computer maintenance and supplies
143,608
144,834
Motor and equipment expenses
431,959
332,598
Travelling expenses
14,063
4,958
Postage, stationery, advertising and telephone
137,565
138,340
Subscriptions
35,721
34,850
Professional fees
102,924
82,837
Audit fees
15,000
11,000
Bank charges
67,174
60,434
Bad and doubtful debts
53,602
3,169
Stamp duty
-
6,295
Insurance
144,490
141,631
General administration expenses
182,161
120,426
(4,067,370)
(3,655,189)
Balance Carried Forward
2,072,595
1,639,588
THOMAS SHERRIFF AND COMPANY LIMITED
DETAILED TRADING AND PROFIT AND LOSS ACCOUNT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 33 -
2022
2021
£
£
£
£
Balance Brought Forward
2,072,595
1,639,588
Depreciation
Depreciation of intangible asset
37,558
36,480
Freehold property
40,597
41,364
Amortisation on long leasehold
10,272
10,265
Plant and machinery
50,863
62,877
Office equipment
6,906
1,210
Motor vehicles
207,071
189,393
(353,267)
(341,589)
Directors Remuneration
Directors' salaries
178,528
204,468
N.I. on directors salaries
22,980
24,754
Directors' pension costs - defined contribution scheme
56,000
24,000
(257,508)
(253,222)
Other Operating Income
Commissions received
17,497
22,393
Sundry income
42,458
170,588
Profit on sale of fixed assets
30,900
418,876
90,855
611,857
Operating Profit
1,552,675
1,656,634
Interest Payable
Bank interest paid
(80,085)
(102,756)
Net Profit for the Year
1,472,590
1,553,878
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