Company Registration No. 06760288 (England and Wales)
SPARTAN MOTOR HOLDINGS LIMITED
GROUP ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
SPARTAN MOTOR HOLDINGS LIMITED
COMPANY INFORMATION
Directors
Mr G T Richardson
Mr S H Edwards
Mrs T Edwards
Company number
06760288
Registered office
Units 291 & 296
Hartlebury Trading Estate
Hartlebury
Kidderminster
Worcestershire
United Kingdom
DY10 4JB
Auditor
Ormerod Rutter Limited
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
SPARTAN MOTOR HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group statement of comprehensive income
7
Group balance sheet
8
Company balance sheet
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 35
SPARTAN MOTOR HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -

The directors present the strategic report for the year ended 31 May 2023.

Fair review of the business

The group's turnover increased from £20,210,241 for the year ended 31st May 2022 to £21,028,778 for the year ended 31st May 2023.

 

The group made a profit before tax £4,393,013 in the year ended 31st May 2023, compared to a profit before tax of £4,055,284 in the year ended 31st May 2022.

 

The group's net assets have increased from £10,974,944 as at 31st May 2022 to £13,034,351 as at 31st May 2023.

 

Despite the reduction in transport costs from the Far East and some raw material and currency stability, prices from suppliers were not reflective of this. British manufacturing slowed with the post covid “bounce back” although raw material prices stabilized the Russian/Ukraine conflict impacted, creating supply issues and in some instances an extended delivery situation from all suppliers.

 

TEC again closely scrutinized all non-essential spend coupled with a rationalized and closely monitored stock control. This careful overhead analysis in all areas of the business resulted in a further increased profit and turnover whilst simultaneously being able to hold firm on operational costs.

 

Principal risks and uncertainties

The directors consider that the principal risks and uncertainties of the business are currency instability and foreign exchange rate risk coupled with uncertainty in the financial markets caused by political instability. Both of these risks are monitored regularly by the Board of Directors to ensure that these risks are minimised,

Key performance indicators

The directors measure performance based on revenue and margins, by product, as they consider these to be the key performance indicators of the business.

Future developments

The directors aim to concentrate on the competitive advantage that the Group has in the market in order to at least maintain the business growth as seen in previous years. The directors believe that the Group has responded well in the current climate and will focus their attentions on increasing stock levels and staff numbers whilst introducing new alternative supply lines to ensure future business growth and that customer demands are met.

On behalf of the board

Mr S H Edwards
Director
2 November 2023
SPARTAN MOTOR HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 May 2023.

Principal activities

The principal activity of the group continued to be that of the distribution of industrial products.

 

The principal activity of the company was that of a group holding company.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £686,500. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr G T Richardson
Mr S H Edwards
Mrs T Edwards
Financial instruments
Liquidity risk

The group manages its cash and borrowing requirements to maximise interest income and minimise interest expense, whilst ensuring that the group has sufficient liquid resources to meet the operating needs of the business.

Credit risk

All customers who wish to trade on credit terms are subject to credit verification procedures. Receivable balances are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Disclosure in the strategic report

Information about future developments can be found within the Strategic Report.

Auditor

The auditor, Ormerod Rutter Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

SPARTAN MOTOR HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 3 -
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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 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 auditor of the company 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 auditor of the company 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.

On behalf of the board
Mr S H Edwards
Director
2 November 2023
2023-11-02
2023-11-02
SPARTAN MOTOR HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPARTAN MOTOR HOLDINGS LIMITED
- 4 -
Opinion

We have audited the financial statements of Spartan Motor Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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:

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 and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

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

SPARTAN MOTOR HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPARTAN MOTOR HOLDINGS LIMITED
- 5 -
Matters on which we are required to report by exception

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:

 

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 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company, we identified the principal risks of non-compliance with laws and regulations including those that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, and the extent to which non-compliance might have a material effect on the financial statements.

Audit procedures performed included discussions with management, testing of journals, designing and performing audit procedures and challenging assumptions and judgements made by management in relation to accounting estimates.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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.

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.

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.

SPARTAN MOTOR HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPARTAN MOTOR HOLDINGS LIMITED
- 6 -
Peter Ormerod FCA (Senior Statutory Auditor)
For and on behalf of Ormerod Rutter Limited
2 November 2023
Chartered Accountants
Statutory Auditor
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
SPARTAN MOTOR HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
21,028,778
20,210,241
Cost of sales
(14,013,478)
(13,869,081)
Gross profit
7,015,300
6,341,160
Administrative expenses
(2,453,778)
(2,130,687)
Other operating income
5,730
23,435
Operating profit
4
4,567,252
4,233,908
Interest receivable and similar income
8
8
-
0
Interest payable and similar expenses
9
(174,247)
(178,624)
Profit before taxation
4,393,013
4,055,284
Tax on profit
10
(916,011)
(791,796)
Profit for the financial year
28
3,477,002
3,263,488
Profit for the financial year is attributable to:
- Owners of the parent company
3,279,379
3,063,660
- Non-controlling interests
197,623
199,828
3,477,002
3,263,488
Total comprehensive income for the year is attributable to:
- Owners of the parent company
3,279,379
3,063,660
- Non-controlling interests
197,623
199,828
3,477,002
3,263,488

The profit and loss account has been prepared on the basis that all operations are continuing operations.

SPARTAN MOTOR HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
31 MAY 2023
31 May 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
13
1,217,672
1,368,898
Other intangible assets
13
24,660
-
0
Total intangible assets
1,242,332
1,368,898
Tangible assets
14
136,701
144,214
Investments
15
272,322
250,122
1,651,355
1,763,234
Current assets
Stocks
19
11,530,822
7,737,463
Debtors
20
4,444,005
5,154,913
Cash at bank and in hand
2,241,287
436,029
18,216,114
13,328,405
Creditors: amounts falling due within one year
21
(6,766,886)
(4,055,895)
Net current assets
11,449,228
9,272,510
Total assets less current liabilities
13,100,583
11,035,744
Provisions for liabilities
Provisions
23
42,102
44,567
Deferred tax liability
24
24,130
16,233
(66,232)
(60,800)
Net assets
13,034,351
10,974,944
Capital and reserves
Called up share capital
26
1,003
1,003
Share premium account
27
2,297
2,297
Profit and loss reserves
28
12,852,963
10,095,184
Equity attributable to owners of the parent company
12,856,263
10,098,484
Non-controlling interests
178,088
876,460
13,034,351
10,974,944
The financial statements were approved by the board of directors and authorised for issue on 2 November 2023 and are signed on its behalf by:
02 November 2023
Mr S H Edwards
Director
SPARTAN MOTOR HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
15
4,850,821
4,138,200
Current assets
Debtors
20
16,888
1
Cash at bank and in hand
2,836
675
19,724
676
Creditors: amounts falling due within one year
21
(820,225)
(2,887,455)
Net current liabilities
(800,501)
(2,886,779)
Net assets
4,050,320
1,251,421
Capital and reserves
Called up share capital
26
1,003
1,003
Share premium account
27
2,297
2,297
Profit and loss reserves
28
4,047,020
1,248,121
Total equity
4,050,320
1,251,421

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £3,485,399 (2022 - £7,609 loss).

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 2 November 2023 and are signed on its behalf by:
02 November 2023
Mr S H Edwards
Director
Company registration number 06760288 (England and Wales)
SPARTAN MOTOR HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 10 -
Share capital
Share premium account
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
Balance at 1 June 2021
1,006
4,294
7,780,804
7,786,104
676,632
8,462,736
Year ended 31 May 2022:
Profit and total comprehensive income
-
-
3,063,660
3,063,660
199,828
3,263,488
Dividends
11
-
-
(749,280)
(749,280)
-
(749,280)
Redemption of shares
26
(3)
-
-
(3)
-
(3)
Reduction of shares
26
-
(1,997)
-
(1,997)
-
(1,997)
Balance at 31 May 2022
1,003
2,297
10,095,184
10,098,484
876,460
10,974,944
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
3,279,379
3,279,379
197,623
3,477,002
Issue of share capital
26
48
-
0
-
48
-
48
Dividends
11
-
-
(686,501)
(686,501)
(18,473)
(704,974)
Conversion of loan to shares
26
(48)
-
0
-
(48)
-
(48)
Purchase of shares in subsidiary from non-controlling interest
-
-
164,901
164,901
(877,522)
(712,621)
Balance at 31 May 2023
1,003
2,297
12,852,963
12,856,263
178,088
13,034,351
SPARTAN MOTOR HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 June 2021
1,006
4,294
2,005,010
2,010,310
Year ended 31 May 2022:
Loss and total comprehensive income for the year
-
-
(7,609)
(7,609)
Dividends
11
-
-
(749,280)
(749,280)
Redemption of shares
26
(3)
-
-
(3)
Reduction of shares
26
-
(1,997)
-
(1,997)
Balance at 31 May 2022
1,003
2,297
1,248,121
1,251,421
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
3,485,399
3,485,399
Issue of share capital
26
48
-
0
-
48
Dividends
11
-
-
(686,500)
(686,500)
Conversion of loan to shares
26
(48)
-
0
-
(48)
Balance at 31 May 2023
1,003
2,297
4,047,020
4,050,320
SPARTAN MOTOR HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
34
5,232,797
1,679,088
Interest paid
(174,247)
(178,624)
Income taxes paid
(975,245)
(429,051)
Net cash inflow from operating activities
4,083,305
1,071,413
Investing activities
Purchase of intangible assets
(27,400)
-
Purchase of tangible fixed assets
(38,398)
(9,901)
Proceeds on disposal of tangible fixed assets
14,000
26,200
Receipts from associates
(22,200)
8,208
Receipts arising from loans made
(16,887)
13,498
Interest received
8
-
0
Net cash (used in)/generated from investing activities
(90,877)
38,005
Financing activities
Redemption of shares
-
0
(2,000)
Bank loans received
(750,000)
(750,000)
Payment of finance leases obligations
(19,575)
(35,794)
Purchase of shares in subsidiary from non-controlling interest
(712,622)
-
Dividends paid to equity shareholders
(686,500)
(749,280)
Dividends paid to non-controlling interests
(18,473)
-
Net cash used in financing activities
(2,187,170)
(1,537,074)
Net increase/(decrease) in cash and cash equivalents
1,805,258
(427,656)
Cash and cash equivalents at beginning of year
436,029
863,685
Cash and cash equivalents at end of year
2,241,287
436,029
SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 13 -
1
Accounting policies
Company information

Spartan Motor Holdings Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is Units 291 & 296, Hartlebury Trading Estate, Hartlebury, Kidderminster, Worcestershire, United Kingdom, DY10 4JB.

 

The group consists of Spartan Motor Holdings Limited and all of its subsidiaries.

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
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated financial statements incorporate those of Spartan Motor Holdings Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

 

All financial statements are made up to 31 May 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 14 -

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.

1.5
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.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is twenty years.

1.7
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
10% straight line
1.8
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.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -

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:

Leasehold improvements
10% on reducing balance
Plant and equipment
25% on reducing balance
Fixtures and fittings
25% on reducing balance
Computers
20% 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 recognised in the profit and loss account.

1.9
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.10
Impairment of fixed assets

At each reporting period end date, the group 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 16 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.11
Stocks

Stocks are valued at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell, after making due allowance for obsolete and slow moving items. Cost comprises the purchase price of goods for resale and spare parts.

At each reporting date, stocks are assessed for impairment. If stock is 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.

1.12
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.13
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

Invoice discounting

The group has entered into an invoice discounting arrangement. Amounts due from customers are shown in full in trade debtors, with amounts due from the finance company in other debtors.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 17 -
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 group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 18 -
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 group's contractual obligations expire or are discharged or cancelled.

1.14
Equity instruments

Equity instruments issued by the group 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 group.

1.15
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.16
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 19 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.17
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.18
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.19
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.20
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 leased asset are consumed.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 20 -
1.21
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.

 

In respect of loans received under the Coronavirus Business Interruption Loan scheme, interest paid by the government for the first twelve months of the loan is recognised as government grant income and a corresponding interest cost is recognised in interest payable.

1.22
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
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 21 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Depreciation

The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful lives and residual values are reassessed annually. They are amended, when necessary, to reflect current estimates.

Trade debtors

The carrying value of trade debtors is subject to judgements and estimates regarding the level of provision for bad and doubtful debts. The provision is based on the directors' estimates of the likelihood of recovery of amounts due from trade debtors. The recoverability of each balance is reassessed at the year end and specific provisions are made for each balance where recoverability is considered doubtful.

Stock

The carrying value of stock is subject to judgements and estimates regarding the level of provision for slow-moving stock. On an annual basis, the directors review the entire stockholding to identify stock lines for which sales have been slower than expected and might indicate an impairment in the carrying value of the stock. The directors then use their judgement to estimate the degree of impairment and any required adjustment to the provision.

Provisions for liabilities

Provisions for liabilities include the deferred tax provision and the warranty and rectification provision. The warranty and rectification provision is in respect of the estimated future costs of repairing faulty goods previously sold to customers and still within the warranty period; and the estimates future cost of rectification of machines currently held in stock which are expected to require some degree of repair before they can be sold. The estimated future costs are sensitive to changes in sales volumes and the length of time machines are held before sale. The provision is reassessed annually to reflect current estimates.

3
Turnover

An analysis of the group's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Sale of goods
21,028,778
20,210,241
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
19,535,639
18,993,949
Europe
1,459,221
1,210,544
Rest of world
33,918
5,748
21,028,778
20,210,241
SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 22 -
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange gains
(5,201)
(6,394)
Government grants
-
(9,536)
Depreciation of owned tangible fixed assets
37,149
31,777
Depreciation of tangible fixed assets held under finance leases
-
7,994
Profit on disposal of tangible fixed assets
(5,238)
(8,009)
Amortisation of intangible assets
153,966
151,226
Stocks impairment losses recognised or reversed
-
0
373,003
Operating lease charges
312,803
316,371

Government grants relates to £Nil (2022: £9,536) received in respect of the Coronavirus Job Retention Scheme.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 23 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
4,500
4,300
Audit of the financial statements of the company's subsidiaries
15,510
11,055
20,010
15,355
For other services
Taxation compliance services
750
1,725
All other non-audit services
8,120
8,006
8,870
9,731
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Management
6
3
3
3
Operational and clerical
35
33
-
-
Total
41
36
3
3

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
1,109,976
1,032,598
-
0
-
0
Social security costs
106,972
97,975
-
-
Pension costs
33,715
38,926
-
0
-
0
1,250,663
1,169,499
-
0
-
0
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
41,896
33,967
SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
7
Directors' remuneration
(Continued)
- 24 -

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2022 - 0).

8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
8
-
0
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
22,348
42,826
Interest on invoice finance arrangements
148,748
130,546
Interest on finance leases and hire purchase contracts
337
1,571
Other interest
2,814
3,681
Total finance costs
174,247
178,624
SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
909,646
806,203
Adjustments in respect of prior periods
(1,532)
(11,238)
Total current tax
908,114
794,965
Deferred tax
Origination and reversal of timing differences
7,897
(3,169)
Total tax charge
916,011
791,796

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
4,393,013
4,055,284
Expected tax charge based on the standard rate of corporation tax in the UK of 19.96% (2022: 19.00%)
876,845
770,504
Tax effect of expenses that are not deductible in determining taxable profit
11,566
3,618
Gains not taxable
(1,046)
(1,522)
Adjustments in respect of prior years
(1,532)
(11,238)
Effect of change in corporation tax rate
5,791
-
Other non-reversing timing differences
6,750
-
0
Amortisation of goodwill on consolidation
26,843
25,564
Interest in profits of associates not taxable
(9,206)
4,870
Taxation charge for the year
916,011
791,796

 

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 26 -
11
Dividends
2023
2022
2023
2022
Recognised as distributions to equity holders:
Per share
Per share
Total
Total
£
£
£
£
Ordinary A shares
Interim paid
660.83
606.06
622,500
600,000
Ordinary B shares
Interim paid
21,333.33
24,880.00
64,000
149,280
Total dividends
Interim dividends paid
686,500
749,280

Dividends waived

 

The owners of 10 Ordinary A shares waived their rights to dividends in respect of the interim dividends paid in 2023 and 2022.

12
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Stocks
19
-
373,003
Recognised in:
Cost of sales
-
373,003
SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 27 -
13
Intangible fixed assets
Group
Goodwill
Software
Total
£
£
£
Cost
At 1 June 2022
3,024,525
-
0
3,024,525
Additions
-
0
27,400
27,400
At 31 May 2023
3,024,525
27,400
3,051,925
Amortisation and impairment
At 1 June 2022
1,655,627
-
0
1,655,627
Amortisation charged for the year
151,226
2,740
153,966
At 31 May 2023
1,806,853
2,740
1,809,593
Carrying amount
At 31 May 2023
1,217,672
24,660
1,242,332
At 31 May 2022
1,368,898
-
0
1,368,898
14
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 June 2022
41,674
21,408
231,385
86,311
133,350
514,128
Additions
-
0
5,921
15,389
17,088
-
0
38,398
Disposals
-
0
-
0
-
0
-
0
(27,692)
(27,692)
At 31 May 2023
41,674
27,329
246,774
103,399
105,658
524,834
Depreciation and impairment
At 1 June 2022
12,760
14,789
192,939
63,448
85,978
369,914
Depreciation charged in the year
2,892
3,135
13,478
7,991
9,653
37,149
Eliminated in respect of disposals
-
0
-
0
-
0
-
0
(18,930)
(18,930)
At 31 May 2023
15,652
17,924
206,417
71,439
76,701
388,133
Carrying amount
At 31 May 2023
26,022
9,405
40,357
31,960
28,957
136,701
At 31 May 2022
28,914
6,619
38,446
22,863
47,372
144,214
SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
14
Tangible fixed assets
(Continued)
- 28 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Motor vehicles
-
0
23,977
-
0
-
0
15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
4,850,821
4,138,200
Investments in associates
17
272,322
250,122
-
0
-
0
272,322
250,122
4,850,821
4,138,200
Movements in fixed asset investments
Group
Shares in associates
£
Cost or valuation
At 1 June 2022
250,122
Capital introduced
22,200
At 31 May 2023
272,322
Carrying amount
At 31 May 2023
272,322
At 31 May 2022
250,122
SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
15
Fixed asset investments
(Continued)
- 29 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 June 2022
4,138,200
Additions
712,621
At 31 May 2023
4,850,821
Carrying amount
At 31 May 2023
4,850,821
At 31 May 2022
4,138,200

On 20 April 2023, 5 ordinary A shares in T.E.C Electric Motors Limited were acquired.

16
Subsidiaries

Details of the company's subsidiaries at 31 May 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
T.E.C. Electric Motors Limited
See below
Ordinary A shares
99.00
T.E.C. Electric Motors Limited
See below
Ordinary B shares
100.00
T.E.C. Electric Motors Limited
See below
Ordinary C shares
100.00

The address of the registered office of the subsidiary undertaking is Units 291 & 296, Hartlebury Trading Estate, Hartlebury, Kidderminster, Worcestershire, DY10 4JB

17
Associates

Details of associates at 31 May 2023 are as follows:

Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
Dynamic Trio LLP
See below
Consultancy and property rental
Member
-
25.00

The address of the registered office of the associates is Units 291 & 296, Hartlebury Trading Estate, Hartlebury, Kidderminster, Worcestershire, DY10 4JB.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 30 -
18
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
4,401,999
5,114,395
n/a
n/a
Carrying amount of financial liabilities
Measured at amortised cost
5,838,652
3,312,248
n/a
n/a
19
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Goods for resale
11,530,822
7,737,463
-
0
-
0

The impairment loss of £373,003 in 2022 was reversed in 2023 and was recognised in cost of sales against stock during the year.

20
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,385,111
4,887,151
-
0
-
0
Unpaid share capital
1
1
1
1
Other debtors
16,887
227,243
16,887
-
0
Prepayments and accrued income
42,006
40,518
-
0
-
0
4,444,005
5,154,913
16,888
1
21
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
-
0
750,000
-
0
-
0
Obligations under finance leases
22
-
0
19,575
-
0
-
0
Trade creditors
4,854,448
1,908,057
6,900
139
Amounts owed to group undertakings
-
0
-
0
77,213
2,653,182
Corporation tax payable
462,131
529,262
-
0
-
0
Other taxation and social security
466,103
214,385
-
-
Other creditors
808,189
306,893
736,112
234,134
Accruals and deferred income
176,015
327,723
-
0
-
0
6,766,886
4,055,895
820,225
2,887,455
SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
21
Creditors: amounts falling due within one year
(Continued)
- 31 -

Obligations under finance leases are secured against the assets to which they relate.

 

A group company has an invoice discounting arrangement with HSBC Invoice Finance Limited. HSBC holds a fixed charge and legal assignment over trade debtors, as well as fixed and floating charges over all the assets and undertakings of the company, as security over amounts advanced. The group's liability in respect of these charges as at 31 May 2023 was £nil (2022: £nil).

22
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
-
0
19,575
-
0
-
0

Finance lease payments represent rentals payable by the company or group 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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

Finance lease obligations are secured over the tangible fixed assets to which they relate.

23
Provisions for liabilities
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Warranty and rectification provision
42,102
44,567
-
-
Deferred tax liabilities
24
24,130
16,233
-
0
-
0
66,232
60,800
-
0
-
0
Movements on provisions apart from deferred tax liabilities:
Warranty and rectification provision
Group
£
At 1 June 2022
44,567
Additional provisions in the year
42,102
Reversal of provision
(44,567)
At 31 May 2023
42,102
SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
23
Provisions for liabilities
(Continued)
- 32 -

The warranty and rectification provision is in respect of the estimated future costs of repairing faulty goods previously sold to customers and still within the warranty period; and the estimated future cost of rectification of machines currently held in stock.

 

Payments in respect of warranty claims are expected to be made within two years of the date of sale. The exact amount and timing of any such payments is uncertain.

24
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
24,130
16,233
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 June 2022
16,233
-
Charge to profit or loss
2,106
-
Effect of change in tax rate - profit or loss
5,791
-
Liability at 31 May 2023
24,130
-

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

25
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
33,715
38,926

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. At the year end, the balance due to the pension scheme was £4,850 (2022: £4,150).

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 33 -
26
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and not fully paid
Ordinary A shares of £1 each
952
1,000
952
1,000
Ordinary B shares of £1 each
3
3
3
3
Ordinary C shares of £1 each
48
-
48
-
1,003
1,003
1,003
1,003

On 16 March 2023 the company converted 48 Ordinary A shares in 48 Ordinary C shares.

 

The A, and B shares shares rank pari passu in all respects but shall constitute separate classes of shares.

 

The holders of A and B shares shall:

 

The holders of C shares shall:

The A, and B shares shares rank pari passu in all respects but shall constitute separate classes of shares.

 

The holders of A and B shares shall:

27
Share premium account

The share premium account represents the excess consideration received for shares issued by the company above the shares' nominal value.

28
Profit and loss reserves

The profit and loss reserve represents cumulative profits and losses, net of distributions of profits to members.

29
Financial commitments, guarantees and contingent liabilities

The group is party to an unlimited multilateral guarantee Dynamic Trio LLP, an associated undertaking.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 34 -
30
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
196,387
285,780
-
-
Between two and five years
27,867
224,253
-
-
224,254
510,033
-
-
31
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Purchase of goods
2023
2022
£
£
Group
Entities over which the group has control, joint control or significant influence
72,963
8,208
Payments by related parties on behalf of the company
2023
2022
£
£
Company
Entities over which the entity has control, joint control or significant influence
920,481
531,787
32
Directors' transactions

Dividends totalling £622,500 (2022 - £600,000) were paid in the year in respect of shares held by the company directors.

 

During the year, the group paid £5,400 (2022 - £5,400) to directors in respect of property rent.

At the year end, the amounts owed by the directors of the company totalled £16,877 (2022: £207,094 owed to) and is included within other debtors (2022: other creditors).

33
Controlling party

The ultimate controlling party is considered to be Mr S Edwards and Mrs T Edwards by virtue of their joint shareholding in the company.

SPARTAN MOTOR HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 35 -
34
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
3,477,002
3,263,488
Adjustments for:
Taxation charged
916,011
791,796
Finance costs
174,247
178,624
Investment income
(8)
-
0
Gain on disposal of tangible fixed assets
(5,238)
(8,009)
Amortisation and impairment of intangible assets
153,966
151,226
Depreciation and impairment of tangible fixed assets
37,149
39,771
(Decrease)/increase in provisions
(2,465)
13,518
Movements in working capital:
Increase in stocks
(3,793,359)
(2,972,441)
Decrease/(increase) in debtors
727,795
(1,197,314)
Increase in creditors
3,547,697
1,418,429
Cash generated from operations
5,232,797
1,679,088
35
Analysis of changes in net funds/(debt) - group
1 June 2022
Cash flows
31 May 2023
£
£
£
Cash at bank and in hand
436,029
1,805,258
2,241,287
Borrowings excluding overdrafts
(750,000)
750,000
-
Obligations under finance leases
(19,575)
19,575
-
(333,546)
2,574,833
2,241,287
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