Company registration number 04339370 (England and Wales)
C.J. KNIGHT & SON LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
C.J. KNIGHT & SON LIMITED
COMPANY INFORMATION
Directors
R E Knight
D O Knight
A J Knight
C McCready
Secretary
D O Knight
Company number
04339370
Registered office
Oxted Road
Godstone
Surrey
RH9 8DB
Auditor
Clarkson Hyde LLP
3rd Floor
Chancery House
St Nicholas Way
Sutton
Surrey
SM1 1JB
C.J. KNIGHT & SON LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 20
C.J. KNIGHT & SON LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2023
- 1 -
The directors present the strategic report for the year ended 31 January 2023.
Review of the Business
The directors consider the profit achieved on ordinary activities before tax to be particularly satisfactory given the challenging trading conditions caused by the war in Ukraine. The directors consider the company's solvency and liquidity to be satisfactory and are confident of an expansion of trade in the forthcoming year. The directors are not aware, at the date of this report, of any likely change in the company's activities in the forthcoming year.
As shown in the profit and loss account, the company's sales have increased by 13.05% from the prior year. The company's key measure of effectiveness of its operations is gross margin. The company achieved a gross margin of 48.25% in the period to 31 January 2023 (2022: 43.68%). This has been achieved from preferential buying terms as a part of an industry buying group together with a more profitable product mix.
The balance sheet shows the company's financial position at the period end including an increase in net assets from £5,399,991 to £5,647,196.
Principal Risks and Uncertainties
The company operates in a highly competitive market, which is a continuing risk to the company and could result in losing sales to its key competitors. The risk is managed by providing value added services to its customers, focussing on quality brands and maintaining strong relationships with both its customers and suppliers.
The results for the period and the financial position at the period end were in line with the expectations of the directors and the financial reports show strong performance in a market that is still affect by post Covid-19 stresses and difficult trading conditions along with cost and inflationary pressures caused by the war in Ukraine.
Other Matters
The company recognises its statutory obligations to maintain standards of safety which will protect its employees, contractors and members of the public.
The directors have continued their policy of informing employees of matters affecting them and of the financial performance of the company.
D O Knight
Director
10 October 2023
C.J. KNIGHT & SON LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 January 2023.
Principal activities
The principal activity of the company continued to be that of a garden centre, nursery and leisure retailer.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £218,200. 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:
B J Knight
(Deceased 17 September 2022)
R E Knight
D O Knight
A J Knight
C McCready
Auditor
The auditor, Clarkson Hyde LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement 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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
C.J. KNIGHT & SON LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
- 3 -
On behalf of the board
D O Knight
Director
10 October 2023
C.J. KNIGHT & SON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF C.J. KNIGHT & SON LIMITED
- 4 -
Opinion
We have audited the financial statements of C.J. Knight & Son Limited (the 'company') for the year ended 31 January 2023 which comprise 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 January 2023 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.
C.J. KNIGHT & SON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF C.J. KNIGHT & SON LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations which could give rise to material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all of our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
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.
C.J. KNIGHT & SON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF C.J. KNIGHT & SON LIMITED
- 6 -
Andrew Seton
Senior Statutory Auditor
For and on behalf of Clarkson Hyde LLP
13 October 2023
Chartered Accountants
Statutory Auditor
3rd Floor
Chancery House
St Nicholas Way
Sutton
Surrey
SM1 1JB
C.J. KNIGHT & SON LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2023
- 7 -
Year
Period
ended
ended
31 January
31 January
2023
2022
Notes
£
£
Turnover
2
6,367,828
7,323,924
Cost of sales
(3,295,179)
(4,124,926)
Gross profit
3,072,649
3,198,998
Administrative expenses
(2,474,740)
(2,388,719)
Other operating income
21,918
66,642
Operating profit
3
619,827
876,921
Interest payable and similar expenses
6
(45,898)
(26,837)
Profit before taxation
573,929
850,084
Tax on profit
7
(111,276)
(177,207)
Profit for the financial year
462,653
672,877
The profit and loss account has been prepared on the basis that all operations are continuing operations.
C.J. KNIGHT & SON LIMITED
BALANCE SHEET
AS AT
31 JANUARY 2023
31 January 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
4,819,181
4,803,016
Current assets
Stocks
10
1,285,310
1,206,217
Debtors
11
12,703
11,448
Cash at bank and in hand
909,181
1,564,048
2,207,194
2,781,713
Creditors: amounts falling due within one year
12
(650,748)
(1,256,495)
Net current assets
1,556,446
1,525,218
Total assets less current liabilities
6,375,627
6,328,234
Creditors: amounts falling due after more than one year
13
(653,099)
(861,041)
Provisions for liabilities
Deferred tax liability
16
78,084
67,202
(78,084)
(67,202)
Net assets
5,644,444
5,399,991
Capital and reserves
Called up share capital
18
1,000
1,000
Share premium account
3,249,200
3,249,200
Profit and loss reserves
2,394,244
2,149,791
Total equity
5,644,444
5,399,991
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 10 October 2023 and are signed on its behalf by:
R E Knight
Director
Company registration number 04339370 (England and Wales)
C.J. KNIGHT & SON LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023
- 9 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
1,000
3,249,200
1,695,354
4,945,554
Period ended 31 January 2022:
Profit and total comprehensive income
-
-
672,877
672,877
Dividends
8
-
-
(218,440)
(218,440)
Balance at 31 January 2022
1,000
3,249,200
2,149,791
5,399,991
Year ended 31 January 2023:
Profit and total comprehensive income
-
-
462,653
462,653
Dividends
8
-
-
(218,200)
(218,200)
Balance at 31 January 2023
1,000
3,249,200
2,394,244
5,644,444
C.J. KNIGHT & SON LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
119,303
1,005,931
Interest paid
(45,898)
(26,837)
Income taxes paid
(157,455)
(106,542)
Net cash (outflow)/inflow from operating activities
(84,050)
872,552
Investing activities
Purchase of tangible fixed assets
(158,542)
(278,555)
Proceeds from disposal of tangible fixed assets
2,557
Net cash used in investing activities
(155,985)
(278,555)
Financing activities
Repayment of bank loans
(193,659)
(108,371)
Payment of finance leases obligations
(2,973)
(5,206)
Dividends paid
(218,200)
(218,440)
Net cash used in financing activities
(414,832)
(332,017)
Net (decrease)/increase in cash and cash equivalents
(654,867)
261,980
Cash and cash equivalents at beginning of year
1,564,048
1,302,068
Cash and cash equivalents at end of year
909,181
1,564,048
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
- 11 -
1
Accounting policies
Company information
C.J. Knight & Son Limited is a private company limited by shares incorporated in England and Wales. The registered office is Oxted Road, Godstone, Surrey, RH9 8DB.
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. The principal accounting policies adopted are set out below.
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. 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).
1.4
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
1% on straight line basis (excl land)
Plant and equipment
20% on reducing balance
Fixtures and fittings
20% on reducing balance
Computers
25% on reducing balance
Motor vehicles
25% on reducing balance
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.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
1
Accounting policies
(Continued)
- 12 -
1.6
Stocks
Stocks 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.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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.
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
1
Accounting policies
(Continued)
- 13 -
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.
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.
1.9
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.
1.10
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.
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.
1.11
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.
No liability is recognised in respect of holiday pay as employees are unable to carry forward holiday into future periods.
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
1
Accounting policies
(Continued)
- 14 -
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
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.
2
Turnover and other revenue
The turnover is wholly attributable to the operation of the company's garden centres and has arisen solely in the United Kingdom.
2023
2022
£
£
Other revenue
Grants received
-
63,546
3
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
16,112
14,859
Depreciation of owned tangible fixed assets
130,159
124,217
Loss on disposal of tangible fixed assets
9,661
-
Operating lease charges
-
3,894
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
- 15 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales and support
111
106
Landscape
2
2
Administration
6
6
Total
119
114
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,521,093
1,454,580
Social security costs
97,114
84,494
Pension costs
87,985
86,840
1,706,192
1,625,914
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
57,080
50,495
Company pension contributions to defined contribution schemes
67,550
69,518
124,630
120,013
6
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
45,827
24,943
Other finance costs:
Interest on finance leases and hire purchase contracts
71
1,894
45,898
26,837
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
- 16 -
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
105,736
157,455
Adjustments in respect of prior periods
(5,342)
(2,873)
Total current tax
100,394
154,582
Deferred tax
Origination and reversal of timing differences
10,882
22,625
Total tax charge
111,276
177,207
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:
2023
2022
£
£
Profit before taxation
573,929
850,084
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
109,047
161,516
Tax effect of expenses that are not deductible in determining taxable profit
5,359
10,169
Adjustments in respect of prior years
(5,344)
(2,873)
Permanent capital allowances in excess of depreciation
(33,920)
(37,832)
Depreciation on assets not qualifying for tax allowances
24,730
23,602
Movement in deferred tax provision
10,882
22,625
Taxation charge for the year
110,754
177,207
Taxation charge in the financial statements
111,276
177,207
Reconciliation - the current year tax charge does not reconcile to the above analysis. Please review figures in the database.
(522)
-
8
Dividends
2023
2022
£
£
Interim paid
218,200
218,440
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
- 17 -
9
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 February 2022
4,809,750
714,791
481,319
52,114
139,188
6,197,162
Additions
30,458
2,408
104,873
20,803
158,542
Disposals
(52,790)
(46,345)
(3,510)
(22,840)
(125,485)
At 31 January 2023
4,840,208
664,409
539,847
48,604
137,151
6,230,219
Depreciation and impairment
At 1 February 2022
445,273
461,012
346,569
39,836
101,456
1,394,146
Depreciation charged in the year
29,812
51,042
35,041
3,070
11,194
130,159
Eliminated in respect of disposals
(50,402)
(37,657)
(2,507)
(22,701)
(113,267)
At 31 January 2023
475,085
461,652
343,953
40,399
89,949
1,411,038
Carrying amount
At 31 January 2023
4,365,123
202,757
195,894
8,205
47,202
4,819,181
At 31 January 2022
4,364,477
253,779
134,750
12,278
37,732
4,803,016
2023
2022
£
£
10
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,285,310
1,206,217
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,767
3,683
Other debtors
1,063
601
Prepayments and accrued income
9,873
7,164
12,703
11,448
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
- 18 -
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
14
194,871
180,588
Obligations under finance leases
15
2,973
Trade creditors
229,406
736,831
Corporation tax
100,392
157,453
Other taxation and social security
46,363
77,151
Other creditors
74,316
96,099
Accruals and deferred income
5,400
5,400
650,748
1,256,495
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
653,099
861,041
14
Loans and overdrafts
2023
2022
£
£
Bank loans
847,970
1,041,629
Payable within one year
194,871
180,588
Payable after one year
653,099
861,041
The long-term loans are secured by fixed charges over the company's freehold properties.
The bank loan is denominated in Sterling with a nominal interest rate of 1.3% above the Bank's Sterling Base Rate, and the final instalment is due in October 2028.
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
2,973
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
- 19 -
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
78,084
67,202
2023
Movements in the year:
£
Liability at 1 February 2022
67,202
Charge to profit or loss
10,882
Liability at 31 January 2023
78,084
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
87,985
86,840
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.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
19
Operating lease commitments
Lessee
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:
2023
2022
£
£
Within one year
3,245
C.J. KNIGHT & SON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
- 20 -
20
Directors' transactions
Dividends totalling £218,200 (2022 - £218,440) were paid in the year in respect of shares held by the company's directors.
The company owed £72,232 (2022: £86,565) to the directors at the reporting date.
21
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
462,653
672,877
Adjustments for:
Taxation charged
111,276
177,207
Finance costs
45,898
26,837
Loss on disposal of tangible fixed assets
9,661
-
Depreciation and impairment of tangible fixed assets
130,159
124,217
Movements in working capital:
Increase in stocks
(79,093)
(420,326)
Increase in debtors
(1,255)
(242)
(Decrease)/increase in creditors
(559,996)
425,361
Cash generated from operations
119,303
1,005,931
22
Analysis of changes in net funds
1 February 2022
Cash flows
31 January 2023
£
£
£
Cash at bank and in hand
1,564,048
(654,867)
909,181
Borrowings excluding overdrafts
(1,041,629)
193,659
(847,970)
Obligations under finance leases
(2,973)
2,973
-
519,446
(458,235)
61,211
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