Sovereign Design Play Systems Limited |
Notes to the Accounts |
for the year ended 31 March 2023 |
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1 |
Accounting policies |
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Company Information |
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Sovereign Design Play Systems Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 40 Towerfield Road, Shoeburyness, Southend on Sea, Essex, SS3 9QT |
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1.1 |
Accounting Convention |
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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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view. |
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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 £. |
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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. |
1.2 |
Going concern |
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The accounts have been prepared on a going concern basis as the directors believe that the company will continue to have sufficient support from the directors, shareholders and bank in order to meet its liabilities as they fall due. |
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1.3 |
Turnover |
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Turnover represents net invoiced sales of playground equipment, excluding value added tax. |
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Revenue from 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. |
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1.4 |
Tangible fixed assets |
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Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. |
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Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter. |
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Buildings freehold |
4% to 6% on cost |
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Plant and machinery |
33% on reducing balance and 5 years straight line |
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Fixtures, fittings & equipment |
20% on reducing balance |
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Leasehold property |
15% on reducing balance |
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Motor vehicles |
33% on reducing balance |
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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 the profit or loss. |
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1.5 |
Impairment of fixed assets |
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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. |
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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. |
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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 impairment loss is treated as a revaluation decrease. |
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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. |
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1.6 |
Stocks |
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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. |
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Stocks held for distribution at no or nominal consideration are measured at cost, adjusted where applicable for any loss of service potential. |
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At each reporting date, as 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. |
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1.7 |
Cash and cash equivalents |
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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. |
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1.8 |
Taxation |
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The tax expense represents the sum of the tax currently payable and deferred tax. |
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Current tax |
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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. |
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Deferred tax |
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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. |
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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 where the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit or 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. |
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1.9 |
Employee benefits |
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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. |
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The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received. |
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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. |
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1.10 |
Retirement benefits |
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Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. |
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1.11 |
Leases |
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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. |
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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 the profit or loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability. |
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Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term. |
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Rentals payable under operating leases, including any lease incentives received, are charged to income 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 lease asset are consumed. |
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1.12 |
Foreign exchange |
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Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the profit and loss account. |
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2 |
Employees |
2023 |
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2022 |
Number |
Number |
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Average number of persons employed by the company |
46 |
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47 |
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3 |
Tangible fixed assets |
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Land and buildings |
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Plant and machinery etc |
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Motor vehicles |
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Total |
£ |
£ |
£ |
£ |
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Cost |
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At 1 April 2022 |
560,526 |
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632,923 |
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450,164 |
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1,643,613 |
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Additions |
- |
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67,372 |
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71,150 |
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138,522 |
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Disposals |
- |
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- |
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(13,650) |
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(13,650) |
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At 31 March 2023 |
560,526 |
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700,295 |
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507,664 |
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1,768,485 |
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Depreciation |
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At 1 April 2022 |
241,278 |
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462,398 |
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340,155 |
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1,043,831 |
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Charge for the year |
31,259 |
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58,628 |
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34,059 |
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123,946 |
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On disposals |
- |
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- |
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(3,206) |
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(3,206) |
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At 31 March 2023 |
272,537 |
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521,026 |
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371,008 |
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1,164,571 |
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Net book value |
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At 31 March 2023 |
287,989 |
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179,269 |
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136,656 |
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603,914 |
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At 31 March 2022 |
319,248 |
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170,525 |
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110,009 |
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599,782 |
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The land and buildings were last revalued to their current market value by the directors in 2019 based on discussions with Dedman Gray Commercial, Chartered Surveyors & Commercial Property Consultants. |
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At the year end the value of Freehold land included within Freehold land and buildings amounted to £6,900 (2020: £6,900). |
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4 |
Debtors |
2023 |
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2022 |
£ |
£ |
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Trade debtors |
1,661,785 |
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1,799,958 |
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Amounts owed by group undertakings and undertakings in which the company has a participating interest |
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2,182 |
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4,922 |
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Other debtors |
393,624 |
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640,191 |
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2,057,591 |
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2,445,071 |
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5 |
Creditors: amounts falling due within one year |
2023 |
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2022 |
£ |
£ |
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Bank loans and overdrafts |
6,210 |
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6,210 |
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Trade creditors |
2,296,293 |
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2,810,923 |
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Obligations under finance lease and hire purchase contracts |
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86,830 |
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48,143 |
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Amounts due to group undertakings and undertakings in which the company has a participating interest |
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39,364 |
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129,463 |
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Other taxes and social security costs |
335,915 |
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616,298 |
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Other creditors |
118,684 |
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151,306 |
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2,883,296 |
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3,762,343 |
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6 |
Creditors: amounts falling due after one year |
2023 |
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2022 |
£ |
£ |
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Bank loans |
34,928 |
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40,039 |
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Obligations under finance lease and hire purchase contracts |
36,307 |
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81,980 |
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Other creditors |
907,379 |
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907,379 |
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978,614 |
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1,029,398 |
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7 |
Revaluation reserve |
2023 |
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2022 |
£ |
£ |
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At 1 April 2022 |
174,218 |
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190,667 |
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Deferred taxation arising on the revaluation of land and buildings |
(16,449) |
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(16,449) |
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At 31 March 2023 |
157,769 |
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174,218 |
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8 |
Provisions for liabilities |
2023 |
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2022 |
£ |
£ |
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Deferred tax liabilities |
95,542 |
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38,963 |
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95,542 |
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38,963 |
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9 |
Called up share capital |
2023 |
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2022 |
£ |
£ |
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Ordinary share capital issued |
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and fully paid |
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100 Ordinary shares of £1 each |
100 |
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100 |
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8 |
Related party transactions |
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All related party transactions were carried out on commercial terms. |