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Registration number: 00062473

George Bence & Sons Limited

Consolidated Financial Statements

for the Year Ended 31 December 2021

 

George Bence & Sons Limited

Contents

Company Information

1

Directors' Report

2

Strategic Report

3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 7

Consolidated Profit and Loss Account

8

Consolidated Statement of Comprehensive Income

9

Consolidated Balance Sheet

10

Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Statement of Changes in Equity

13

Consolidated Statement of Cash Flows

14

Notes to the Financial Statements

15 to 26

 

George Bence & Sons Limited

Company Information

Directors

Christopher G Bence

Paul C Bence

Matthew G Bence

Carlwyn J Coombes

Registered office

43 Fairview Road
Cheltenham
Gloucestershire
GL52 2EJ

Bankers

Lloyds Bank Plc
Ley Court
Barnett Way
Gloucester
GL52 2EJ

National Westminster Bank Plc
31 Promenade
Cheltenham
GL50 1LE

Auditors

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

George Bence & Sons Limited

Directors' Report
for the Year Ended 31 December 2021

The directors present their report and the for the year ended 31 December 2021.

Principal activity

The principal activity of the company is that of a parent company of the George Bence group of companies and the group trades as builders and plumbers merchants.

Directors of the company

The directors who held office during the year were as follows:

Christopher G Bence

Paul C Bence

Matthew G Bence

Carlwyn J Coombes

Future developments

The directors continue to closely monitor the external commercial environment and act it the interests of the business accordingly.

Disclosure of information to the auditor

Each director has taken the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

Hazlewoods LLP have expressed their willingness to continue in office.

Approved by the Board on 20 May 2022 and signed on its behalf by:


Paul C Bence
Director

 

George Bence & Sons Limited

Strategic Report
for the Year Ended 31 December 2021

The directors present their strategic report for the year ended 31 December 2021.

Business review

The directors consider that the business has performed well during the year given the market conditions, and consider the financial resources available to the group at the year end to be sufficient.

The results for the year, which are set out in the profit and loss account, show pre-tax profit for the year of £1,221,351 (2020 - £948,840). The group has trade debtors of £2,276,295 (2020 - £1,917,972) and trade creditors of £2,756,215 (2020 - £2,525,863). The group has short term debt of £364,499 (2020 - £332,507) and long term debt of £896,189 (2020 - £1,255,688).

Key performance indicators

Given the straight forward nature of the business, the group's directors are of the opinion that analysis using key performance indicators is not necessary for an understanding of the development, performance, or position of the business.

Principal risks and uncertainties

The management of the group and the execution of the group's strategy are subject to a number of risks. The key business risks and uncertainties affecting the group are considered to relate to the general economic climate, and competition from other national builders merchants.

Financial instruments

The group does not actively use financial instruments as part of its financial risk management. It is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through credit control procedures. The nature of its financial instruments means that they are not subject to price or liquidity risk.

Going concern

in accordance with Financial Reporting Council's 'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2006' the directors of all companies are now required to provide disclosures regarding the adoption of the going concern basis of accounting.

The group continued to trade throughout the year and is currently trading profitably and generating cash. The directors believe that the group has sufficient resources to continue in operational existence for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements.

Approved by the Board on 20 May 2022 and signed on its behalf by:


Paul C Bence
Director

 

George Bence & Sons Limited

Statement of Directors' Responsibilities

The directors are responsible for preparing the Directors' Report, Strategic 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 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; 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 group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

George Bence & Sons Limited

Independent Auditor's Report to the Members of George Bence & Sons Limited

Opinion

We have audited the financial statements of George Bence & Sons Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2021 and of the group's 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 group 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 director's 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 original financial statements were authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

George Bence & Sons Limited

Independent Auditor's Report to the Members of George Bence & Sons Limited

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors’ remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 4, 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 group’s and the parent 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 group or the parent 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:

- We obtained an understanding of the legal and regulatory frameworks applicable to the company financial statements or that had a fundamental effect on the operations of the company. We determined that the most significant laws and regulations included UKGAAP, UK Companies Act 2006, and taxation laws;

- We assessed the susceptibility of the company's financial statements to material misstatement, including how
fraud might occur. Audit procedures performed by the engagement team included challenging assumptions and
judgements made by management in its significant accounting estimates and identifying and testing journal
entries, inparticular any journal entries posted with unusual characteristics.

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

 

George Bence & Sons Limited

Independent Auditor's Report to the Members of George Bence & Sons Limited

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 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.





Jon Cartwright (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

20 May 2022

 

George Bence & Sons Limited

Consolidated Profit and Loss Account
for the Year Ended 31 December 2021

Note

2021
 £

2020
 £

Turnover

3

18,897,582

15,218,920

Cost of sales

 

(13,454,320)

(10,556,083)

Gross profit

 

5,443,262

4,662,837

Distribution costs

 

(1,096,726)

(1,099,141)

Administrative expenses

 

(3,437,230)

(3,304,558)

Other operating income

4

337,882

710,535

Operating profit

5

1,247,188

969,673

Interest receivable and similar income

2,116

2,957

Interest payable and similar charges

6

(27,953)

(23,790)

Profit before tax

 

1,221,351

948,840

Taxation

10

(428,409)

(199,520)

Profit for the financial year

 

792,942

749,320

The above results were derived from continuing operations.

 

George Bence & Sons Limited

Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2021

2021
£

2020
£

Profit for the year

792,942

749,320

Surplus/(deficit) on property, plant and equipment revaluation

485,000

-

Total comprehensive income for the year

1,277,942

749,320

Total comprehensive income attributable to:

Owners of the company

1,277,942

749,320

 

George Bence & Sons Limited

(Registration number: 00062473)
Consolidated Balance Sheet
as at 31 December 2021

Note

2021
 £

2020
 £

Fixed assets

 

Tangible assets

11

3,735,844

3,537,882

Investment properties

12

2,985,000

2,500,000

Other financial assets

14

100

100

 

6,720,944

6,037,982

Current assets

 

Stocks

15

1,406,308

996,582

Debtors

16

2,809,517

2,575,247

Cash at bank and in hand

2,869,029

2,399,434

 

7,084,854

5,971,263

Creditors: Amounts falling due within one year

17

(5,033,011)

(4,443,097)

Net current assets

 

2,051,843

1,528,166

Total assets less current liabilities

 

8,772,787

7,566,148

Creditors: Amounts falling due after more than one year

17

(896,189)

(1,255,688)

Provisions for liabilities

10

(467,405)

(179,209)

Net assets

 

7,409,193

6,131,251

Capital and reserves

 

Called up share capital

19

120,750

120,750

Capital redemption reserve

129,250

129,250

Revaluation reserve

3,748,386

3,274,936

Retained earnings

3,410,807

2,606,315

Total equity

 

7,409,193

6,131,251

Approved and authorised by the Board on 20 May 2022 and signed on its behalf by:
 

Paul C Bence
Director

 

George Bence & Sons Limited

(Registration number: 00062473)
Balance Sheet
as at 31 December 2021

Note

2021
 £

2020
 £

Fixed assets

 

Tangible assets

11

3,735,844

3,537,882

Investment property

12

2,985,000

2,500,000

Investments

13

101,100

101,100

Other financial assets

14

100

100

 

6,822,044

6,139,082

Current assets

 

Debtors

16

1,083,330

356,701

Cash at bank and in hand

141,488

52,786

 

1,224,818

409,487

Creditors: Amounts falling due within one year

17

(658,319)

(581,594)

Net current assets/(liabilities)

 

566,499

(172,107)

Total assets less current liabilities

 

7,388,543

5,966,975

Creditors: Amounts falling due after more than one year

17

(144,522)

(289,021)

Provisions for liabilities

10

(477,670)

(189,545)

Net assets

 

6,766,351

5,488,409

Capital and reserves

 

Called up share capital

19

120,750

120,750

Capital redemption reserve

129,250

129,250

Revaluation reserve

3,748,386

3,274,936

Retained earnings

2,767,965

1,963,473

Total equity

 

6,766,351

5,488,409

The company made a profit after tax for the financial year of £792,942 (2020 - profit of £749,320).

Approved and authorised by the Board on 20 May 2022 and signed on its behalf by:
 

Paul C Bence
Director

 

George Bence & Sons Limited

Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2021

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Retained earnings
£

Total
£

At 1 January 2020

120,750

129,250

3,286,486

1,845,445

5,381,931

Profit for the year

-

-

-

749,320

749,320

Transfer to revaluation reserve

-

-

(11,550)

11,550

-

At 31 December 2020

120,750

129,250

3,274,936

2,606,315

6,131,251

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Retained earnings
£

Total
£

At 1 January 2021

120,750

129,250

3,274,936

2,606,315

6,131,251

Profit for the year

-

-

-

792,942

792,942

Other comprehensive income

-

-

485,000

-

485,000

Transfer to revaluation reserve

-

-

(11,550)

11,550

-

At 31 December 2021

120,750

129,250

3,748,386

3,410,807

7,409,193

 

George Bence & Sons Limited

Statement of Changes in Equity
for the Year Ended 31 December 2021

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Retained earnings
£

Total
£

At 1 January 2020

120,750

129,250

3,286,486

1,202,603

4,739,089

Profit for the year

-

-

-

749,320

749,320

Transfer to revaluation reserve

-

-

(11,550)

11,550

-

At 31 December 2020

120,750

129,250

3,274,936

1,963,473

5,488,409

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Retained earnings
£

Total
£

At 1 January 2021

120,750

129,250

3,274,936

1,963,473

5,488,409

Profit for the year

-

-

-

792,942

792,942

Other comprehensive income

-

-

485,000

-

485,000

Total comprehensive income

-

-

485,000

792,942

1,277,942

Transfer to revaluation reserve

-

-

(11,550)

11,550

-

At 31 December 2021

120,750

129,250

3,748,386

2,767,965

6,766,351

 

George Bence & Sons Limited

Consolidated Statement of Cash Flows
for the Year Ended 31 December 2021

Note

2021
 £

2020
 £

Cash flows from operating activities

Profit for the year

 

792,942

749,320

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

266,268

314,715

Loss on disposal of tangible assets

-

167

Finance income

(2,116)

(2,957)

Finance costs

6

27,953

23,790

Corporation tax expense

10

428,409

199,520

 

1,513,456

1,284,555

Working capital adjustments

 

(Increase)/decrease in stocks

15

(409,726)

77,809

Increase in trade debtors

16

(234,270)

(38,991)

Increase in trade creditors

17

594,125

719,923

Cash generated from operations

 

1,463,585

2,043,296

Income taxes paid

10

(176,416)

(87,501)

Net cash flow from operating activities

 

1,287,169

1,955,795

Cash flows from investing activities

 

Interest received

2,116

2,957

Acquisitions of tangible assets

(464,230)

(35,179)

Proceeds from sale of tangible assets

 

-

6,583

Proceeds from sale of unlisted investments

 

-

10,000

Net cash flows used in investing activities

 

(462,114)

(15,639)

Cash flows from financing activities

 

Interest paid

 

(27,953)

(23,790)

Proceeds from bank borrowing draw downs

 

-

1,100,000

Repayment of bank borrowing

 

(138,359)

(82,404)

Repayment of other borrowing

 

-

(41,575)

Payments to finance lease creditors

 

(189,148)

(267,971)

Net cash flows used in financing activities

 

(355,460)

684,260

Net increase in cash and cash equivalents

 

469,595

2,624,416

Cash and cash equivalents at 1 January

 

2,399,434

(224,982)

Cash and cash equivalents at 31 December

 

2,869,029

2,399,434

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

 

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
43 Fairview Road
Cheltenham
Gloucestershire
GL52 2EJ

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2021.

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Going concern

In making the current year’s assessment the Directors have considered the available cash reserves and other facilities at the point of approving the financial statements.

Although there are inherent uncertainties regarding forecasts, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its financial statements.

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

Judgements and estimation uncertainty

No significant judgements have been made by management in preparing these financial statements.

Key sources of estimation uncertainty

No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company.

The group recognises revenue when:
- The amount of revenue can be reliably measured;
- It is probable that future economic benefits will flow to the entity; and
- specific criteria have been met for each of the group's activities.

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants relating to revenue are recognised in income over the period in which the related costs are recognised.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit or loss account, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current corporation 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 group operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible Assets

Tangible assets is stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold land

nil

Freehold buildings

1% per annum

Plant and machinery

5% - 25% per annum

Fixtures, fittings and equipment

15% - 20% per annum

Motor vehicles

25% per annum

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by external valuers. The valuers use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade receivables

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade payables

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial Instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.
 

 

3

Revenue

The group's revenue for the year comprises of the sale of goods in the United Kingdom which are all continuing operations.

 

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

2021
 £

2020
 £

Rental income

137,533

131,477

Government grants

200,349

579,058

337,882

710,535

Within government grants is £176,163 (2020 - £554,058) received in relation to the Coronavirus Job Retention Scheme, and £24,186 (2020 - £25,000) received in relation to local council grants.

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

 

5

Operating profit

Arrived at after charging/(crediting)

2021
 £

2020
 £

Depreciation expense

266,268

314,715

Operating lease expense - plant and machinery

46,691

42,438

Loss on disposal of property, plant and equipment

-

167

 

6

Interest payable and similar charges

2021
 £

2020
 £

Interest on bank overdrafts and borrowings

114

3,255

Interest on obligations under finance leases and hire purchase contracts

14,149

19,057

Interest expense on other finance liabilities

13,690

1,478

27,953

23,790

 

7

Staff costs

Group
The aggregate payroll costs (including directors' remuneration) were as follows:

2021
 £

2020
 £

Wages and salaries

2,817,069

2,802,005

Social security costs

283,897

265,705

Pension costs, defined contribution scheme

123,711

79,745

3,224,677

3,147,455

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

2021
 No.

2020
 No.

Administration and support

63

69

Distribution

28

31

91

100

Company
The aggregate payroll costs (including directors' remuneration) were as follows:

2021
 £

2020
 £

Wages and salaries

50,000

50,000

Social security costs

5,680

5,687

55,680

55,687

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

 

7

Staff costs (continued)

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2021
 No.

2020
 No.

Administration and support

4

4

 

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2021
 £

2020
 £

Remuneration

504,912

508,127

Contributions paid to money purchase schemes

20,045

20,062

524,957

528,189

During the year the number of directors who were receiving benefits and share incentives was as follows:

2021
No.

2020
No.

Accruing benefits under money purchase pension scheme

1

1

In respect of the highest paid director:

2021
 £

2020
 £

Remuneration

186,475

178,341

 

9

Auditors' remuneration

2021
 £

2020
 £

Audit of these financial statements

10,300

10,000


 

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

 

10

Corporation tax

Tax charged in the profit and loss account

2021
 £

2020
 £

Current taxation

UK corporation tax

172,183

191,489

UK corporation tax adjustment to prior periods

(31,970)

457

140,213

191,946

Deferred taxation

Arising from origination and reversal of timing differences

137,342

17,263

Arising from changes in tax rates and laws

112,177

-

Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods

38,677

(9,689)

Total deferred taxation

288,196

7,574

Tax expense in the profit and loss account

428,409

199,520

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2020 - higher than the standard rate of corporation tax in the UK) of 19% (2020 - 19%).

The differences are reconciled below:

2021
 £

2020
 £

Profit before tax

1,221,351

948,840

Corporation tax at standard rate

232,057

180,280

Effect of expense not deductible in determining taxable profit

5,463

4,185

UK deferred tax expense relating to changes in tax rates or laws

112,177

19,052

Deferred tax expense (credit) from unrecognised temporary difference from a prior period

38,677

(9,689)

Tax increase from effect of capital allowances and depreciation

(20,145)

5,235

Deferred tax increase from effect of revaluation of investment property

92,150

-

Decrease in current tax from adjustment for prior periods

(31,970)

457

Total tax charge

428,409

199,520

Deferred tax

Group

Deferred tax

2021
 £

2020
 £

On revaluation of property

389,479

203,855

Accelerated capital allowances

162,974

67,361

Tax losses available

-

(7,962)

Other

(85,048)

(84,045)

Deferred tax liability

467,405

179,209

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021


Company
Deferred tax

2021
 £

2020
 £

On revaluation of property

389,479

203,855

Accelerated capital allowances

162,974

67,361

Tax losses available

-

(7,962)

Other

(74,783)

(73,709)

Deferred tax liability

477,670

189,545

 

11

Tangible Assets

Group and company

Freehold land and buildings
£

Plant and machinery
 £

Total
£

Cost or valuation

At 1 January 2021

3,255,000

2,634,462

5,889,462

Additions

-

464,230

464,230

At 31 December 2021

3,255,000

3,098,692

6,353,692

Depreciation

At 1 January 2021

192,850

2,158,730

2,351,580

Charge for the year

27,550

238,718

266,268

At 31 December 2021

220,400

2,397,448

2,617,848

Carrying amount

At 31 December 2021

3,034,600

701,244

3,735,844

At 31 December 2020

3,062,150

475,732

3,537,882

Revaluation

The fair value of the group's freehold land and buildings was revalued on 31 December 2016 by an independent valuer.

Had this class of asset been measured on a historical cost basis, their carrying amount would have been £1,442,579 (2020 - £1,458,579).
 

At the year end, assets held under finance leases or hire purchase agreements had a net book value of £185,713 (2020 - £404,098) and depreciation in the year of £171,228 (2020 - £247,946).

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

 

12

Investment properties

Group and company

£

At 1 January 2021

2,500,000

Fair value adjustments

485,000

At 31 December 2021

2,985,000

The investment properties were revalued using the market value for residential property investment.

The valuation was carried out by an independent valuer who is external to the company.

 

13

Investments

Company

Subsidiaries
£

Cost and carrying amount

At 1 January 2021 and 31 December 2021

101,100

Details of the investments in which the group holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Country of incorporation

Holding

Proportion of voting rights and shares held

     

2021

2020

Subsidiary undertakings

George Bence & Sons (Cheltenham) Limited*

 

Ordinary

100%

100%

 

England and Wales

     

George Bence & Sons (Tewkesbury) Limited*

 

Ordinary

100%

100%

 

England and Wales

     

George Bence & Sons (Properties) Limited*

 

Ordinary

100%

100%

 

England and Wales

     

* indicates direct investment of the company

Subsidiary undertakings

George Bence & Sons (Cheltenham) Limited

The principal activity of this company is that of a builders and plumbers merchant.

George Bence & Sons (Tewkesbury) Limited

The principal activity of this company is that of a dormant company.

George Bence & Sons (Properties) Limited

The principal activity of this company is that of a dormant company.

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

 

14

Other financial assets

 

Group

Company

2021
 £

2020
 £

2021
 £

2020
 £

Non-current financial assets

Unlisted investments

100

100

100

100

 

15

Stocks

 

Group

Company

2021
 £

2020
 £

2021
 £

2020
 £

Goods for resale

1,406,308

996,582

-

-

 

16

Debtors

 

Group

Company

2021
 £

2020
 £

2021
 £

2020
 £

Trade debtors

2,276,295

1,917,972

-

-

Receivables from related parties

-

-

1,058,554

273,266

Other debtors

73,607

134,762

22,351

81,010

Prepayments

459,615

522,513

2,425

2,425

2,809,517

2,575,247

1,083,330

356,701

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

 

17

Creditors

 

Group

Company

2021
 £

2020
 £

2021
 £

2020
 £

Due within one year

Loans and borrowings

364,499

332,507

144,499

189,148

Trade creditors

2,756,215

2,525,863

-

-

Social security and other taxes

370,920

362,367

-

-

Outstanding pension costs

18,327

15,237

-

-

Other payables

321,332

300,740

-

-

Accrued expenses

1,046,432

714,894

513,820

392,446

Corporation tax liability

155,286

191,489

-

-

5,033,011

4,443,097

658,319

581,594

Due after one year

Loans and borrowings

896,189

1,255,688

144,522

289,021

 

18

Loans and borrowings

Group

 

Group

Company

2021
 £

2020
 £

2021
 £

2020
 £

Current loans and borrowings

Bank borrowings

220,000

143,359

-

-

HP and finance lease liabilities

144,499

189,148

144,499

189,148

364,499

332,507

144,499

189,148

 

Group

Company

2021
 £

2020
 £

2021
 £

2020
 £

Non-current loans and borrowings

Bank borrowings

751,667

966,667

-

-

HP and finance lease liabilities

144,522

289,021

144,522

289,021

896,189

1,255,688

144,522

289,021

Bank borrowings

The bank borrowings are denominated in £ sterling with a nominal interest rate of 4.67%, and the final instalment is due on 20 May 2021. The carrying amount at year end is £nil (2020 - £10,026).

The carrying amount of CBILS loan at year end is £971,667 (2020 - £1,100,000). Interest is charged at a base rate plus 1.72%. Repayments began in May 2021, with the final instalment due on 19 October 2026.

The bank loans are secured by an unlimited debenture over the Group's assets.

 

George Bence & Sons Limited

Notes to the Financial Statements
for the Year Ended 31 December 2021

 

19

Share capital

Allotted, called up and fully paid shares

 

2021

2020

 

No.

£

No.

£

Ordinary shares of £1 each

120,750

120,750

120,750

120,750

         
 

20

Obligations under leases

Group

Operating leases

The total of future minimum lease payments is as follows:

2021
 £

2020
 £

Not later than one year

34,435

14,161

Later than one year and not later than five years

122,414

2,020

Later than five years

40,000

-

196,849

16,181

The amount of non-cancellable operating lease payments recognised as an expense during the year was £21,575 (2020 - £33,842).

 

21

Pension and other schemes

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £123,711 (2020 - £79,745).

Contributions totalling £18,327 (2020 - £15,237) were payable to the scheme at the end of the year and are included in creditors.

 

22

Parent and ultimate parent undertaking

The ultimate controlling party is Mr C G Bence.

 

23

Related party transactions

Group

Summary of transactions with related parties

Bence Roofing Supplies Limited - a company with common ownership.

 During the year the Group entered into the following transactions with Bence Roofing Supplies Limited: sales of £67,573 (2020 - £96,525); and expenditure of £238,093 (2020 - £135,817). The Group also rented equipment to Bence Roofing Supplies Limited to the value of £31,114 (2020 - £34,419). At the balance sheet date the Group was owed £45,670 (2020 - £55,707).