Limited Liability Partnership registration number OC334054 (England and Wales)
M & G SOLID FUELS LLP
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
M & G SOLID FUELS LLP
LIMITED LIABILITY PARTNERSHIP INFORMATION
Designated members
Mr W J Mallabar
Mr J Grand
LLP registration number
OC334054
Registered office
Sandgate Industrial Estate
Mainsforth Terrace
Hartlepool
United Kingdom
TS25 1TZ
Auditor
Azets Audit Services
Wynyard Park House
Wynyard Avenue
Wynyard
United Kingdom
TS22 5TB
Bankers
National Westminster Bank PLC
150 York Road
Hartlepool
United Kingdom
TS26 9DZ
M & G SOLID FUELS LLP
CONTENTS
Page
Members' report
1 - 2
Members' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Reconciliation of members' interests
9 - 10
Statement of cash flows
11
Notes to the financial statements
12 - 22
M & G SOLID FUELS LLP
MEMBERS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The members present their annual report and financial statements for the year ended 31 March 2023.

Principal activities

The principal activities of the LLP continued to be that of manufacturing briquettes, solid fuel wholesalers and retailers, handling and storage of solid fuels and plant hire operators.

 

Fair review of the business

The continuation in people staying at home through flexible working brought in after the covid crisis continued demand for our products to record levels. We were also able to obtain new business due to unprecedented levels in the costs of cargoes increasing prices to record levels.

 

The treasury function is managed and closely monitored by the partners. Significant purchases of materials are assessed for risks in terms of exchange rate fluctuations prior to any commitments being made.

 

Cash flow is carefully monitored on a daily basis.

 

Trade debtors are regularly reviewed and outstanding debts are pursued vigorously. Where necessary, provisions are made for doubtful debts. The partners are satisfied that the systems in place to control debtors are effective and that all debtors at the period end are good

Principal risks and uncertainties

The main risks and uncertainties facing the business are smokeless fuel legislation changes that may come into force into the rest of the UK, product availability and price volatility, volatile dollar / sterling exchange rate movements, general competition and trading risks. The members address all risks and uncertainties through reviewing external and internal conditions on a daily basis and, using their knowledge of the markets, customers and other factors to take effective decisions to mitigate risk where possible.

Members' drawings, contributions and repayments

In accordance with the LLP agreement members are permitted to make drawings according to their allocated profit share from the previous accounting period, taking into account the anticipated cash needs of the LLP.

 

All members are required to subscribe a minimum level of capital. This amount, along with any undrawn balance of the member’s profit share, is repayable to them upon leaving the LLP.

 

 

Designated members

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

Mr W J Mallabar
Mr J Grand
Financial instruments
Credit risk

Credit risk is minimised by ensuring, as far as possible, that all new business is vetted in terms of the credit worthiness of the customer involved and, in some cases, by seeking references from their creditors and bankers.

 

Market value of land and buildings

In the opinion of the partners the market value of leasehold land and buildings was not significantly different from book value.

M & G SOLID FUELS LLP
MEMBERS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Future developments

Because of smokeless fuel legislation changes reducing the sulphur content of our products with effect from May 2021 we continually need to source a large quantity of low sulphur material. We are actively involved in doing this and have continued to make good progress so far, whilst also being aware of price volatility.

Statement of disclosure to auditor

Each of the members in office at the date of approval of this annual report confirms that:

 

Approved by the members on 2 November 2023 and signed on behalf by:
02 November 2023
Mr W J Mallabar
Mr J Grand
Designated Member
Designated Member
M & G SOLID FUELS LLP
MEMBERS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members 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 limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members are required to:

 

The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

M & G SOLID FUELS LLP
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF M & G SOLID FUELS LLP
- 4 -
Opinion

We have audited the financial statements of M & G Solid Fuels LLP (the 'limited liability partnership') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the reconciliation of members' interests, 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:

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 limited liability partnership 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 members' 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 limited liability partnership’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 members 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 members 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.

M & G SOLID FUELS LLP
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M & G SOLID FUELS LLP
- 5 -
Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 as applied to limited liability partnerships requires us to report to you if, in our opinion:

 

Responsibilities of members

As explained more fully in the members' responsibilities statement, the members 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 members 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 members are responsible for assessing the limited liability partnership'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 members either intend to liquidate the limited liability partnership 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.

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.

M & G SOLID FUELS LLP
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M & G SOLID FUELS LLP
- 6 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

This report is made solely to the limited liability partnership's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008. Our audit work has been undertaken so that we might state to the limited liability partnership'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 limited liability partnership and the limited liability partnership's members as a body, for our audit work, for this report, or for the opinions we have formed.

Angela Ingham FCA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
7 November 2023
Chartered Accountants
Statutory Auditor
Wynyard Park House
Wynyard Avenue
Wynyard
United Kingdom
TS22 5TB
M & G SOLID FUELS LLP
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
44,109,721
22,776,736
Cost of sales
(31,976,408)
(17,875,459)
Gross profit
12,133,313
4,901,277
Administrative expenses
(939,751)
(772,057)
Other operating income
10,023
9,099
Operating profit
4
11,203,585
4,138,319
Interest receivable and similar income
6
35,542
27,730
Interest payable and similar expenses
7
(204,420)
(122,926)
Profit for the financial year before members' remuneration and profit shares available for discretionary division among members
11,034,707
4,043,123

The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.

M & G SOLID FUELS LLP
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
3,243,377
2,948,837
Current assets
Stocks
10
15,433,837
9,090,182
Debtors
11
5,735,456
5,905,257
Cash at bank and in hand
13,594,579
9,089,141
34,763,872
24,084,580
Creditors: amounts falling due within one year
13
(9,141,026)
(7,349,574)
Net current assets
25,622,846
16,735,006
Total assets less current liabilities and net assets attributable to members
28,866,223
19,683,843
Represented by:
Loans and other debts due to members within one year
Amounts due in respect of profits
18,131,516
15,940,720
Members' other interests
Other reserves classified as equity
10,734,707
3,743,123
28,866,223
19,683,843
The financial statements were approved by the members and authorised for issue on 2 November 2023 and are signed on their behalf by:
02 November 2023
Mr J Grand
Designated member
Limited Liability Partnership Registration No. OC334054
M & G SOLID FUELS LLP
RECONCILIATION OF MEMBERS' INTERESTS
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
Current financial year
EQUITY
DEBT
TOTAL
Members' other interests
Loans and other debts due to members less any amounts due from members in debtors
MEMBERS'
INTERESTS
Other reserves
Other amounts
Total
Total
2023
£
£
£
£
Members' interests at 1 April 2022
3,743,123
15,940,720
15,940,720
19,683,843
Profit for the financial year available for discretionary division among members
11,034,707
-
-
11,034,707
Members' interests after profit for the year
14,777,830
15,940,720
15,940,720
30,718,550
Other divisions of profits
(300,000)
300,000
300,000
-
Drawings on account and distributions of profit
-
(1,852,327)
(1,852,327)
(1,852,327)
Other movements
(3,743,123)
3,743,123
3,743,123
-
Members' interests at 31 March 2023
10,734,707
18,131,516
18,131,516
28,866,223
M & G SOLID FUELS LLP
RECONCILIATION OF MEMBERS' INTERESTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
Prior financial year
EQUITY
DEBT
TOTAL
Members' other interests
Loans and other debts due to members less any amounts due from members in debtors
MEMBERS'
INTERESTS
Other reserves
Other amounts
Total
Total
2022
£
£
£
£
Members' interests at 1 April 2021
6,164,858
13,325,840
13,325,840
19,490,698
Profit for the financial year available for discretionary division among members
4,043,123
-
-
4,043,123
Members' interests after profit for the year
10,207,981
13,325,840
13,325,840
23,533,821
Other divisions of profits
(300,000)
300,000
300,000
-
Drawings on account and distributions of profit
-
(3,849,978)
(3,849,978)
(3,849,978)
Other movements
(6,164,858)
6,164,858
6,164,858
-
Members' interests at 31 March 2022
3,743,123
15,940,720
15,940,720
19,683,843
M & G SOLID FUELS LLP
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
18
7,106,457
(2,546,370)
Interest paid
(204,420)
(122,926)
Net cash inflow/(outflow) from operating activities
6,902,037
(2,669,296)
Investing activities
Purchase of tangible fixed assets
(656,318)
(580,710)
Proceeds from disposal of tangible fixed assets
76,504
108,041
Interest received
35,542
27,730
Net cash used in investing activities
(544,272)
(444,939)
Financing activities
Capital introduced by members (classified as debt or equity)
3,743,123
6,164,858
Payments to members
(5,595,450)
(10,014,836)
Net cash used in financing activities
(1,852,327)
(3,849,978)
Net increase/(decrease) in cash and cash equivalents
4,505,438
(6,964,213)
Cash and cash equivalents at beginning of year
9,089,141
16,053,354
Cash and cash equivalents at end of year
13,594,579
9,089,141
M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Limited liability partnership information

M & G Solid Fuels LLP is a limited liability partnership incorporated in England and Wales. The registered office is Sandgate Industrial Estate, Mainsforth Terrace, Hartlepool, United Kingdom, TS25 1TZ.

 

The limited liability partnership's principal activities are disclosed in the Members' Report.

1.1
Accounting convention

These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together 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 limited liability partnership. 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

At the time of approving the financial statements, the members have a reasonable expectation that the limited liability partnership has adequate resources to continue in operational existence for the foreseeable future. Thus the members continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

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

1.4
Members' participating interests

Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).

 

Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.

 

All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.

 

Amounts subscribed or otherwise contributed by members, for example members' capital, are classed as equity if the LLP has an unconditional right to refuse payment to members. If the LLP does not have such an unconditional right, such amounts are classified as liabilities.

M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -

All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.

Where profits are automatically divided as they arise, so the LLP does not have an unconditional right to refuse payment and the amounts arising that are due to members are in the nature of liabilities. They are therefore treated as an expense in the profit and loss account in the relevant year. To the extent that they remain unpaid at the period end, they are shown as liabilities in the balance sheet.

 

Conversely, where profits are divided only after a decision by the LLP or its representatives, so that the LLP has an unconditional right to refuse payment, such profits are classed as an appropriation of equity rather than as an expense. They are therefore shown as a residual amount available discretionary division among members in the profit and loss account and are equity appropriations in the balance sheet.

Other amounts applied to members, for example remuneration paid under an employment contract and interest on capital balances, are treated in the same way as all other divisions of profits, as described above, according to whether the LLP has, in each case, an unconditional right to refuse payment.

1.5
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:

Leasehold land and buildings
2% per annum reducing balance
Leasehold improvements
4% per annum reducing balance
Plant and equipment
15% per annum reducing balance
Fixtures and fittings
20% per annum reducing balance
Motor vehicles
25% per annum 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.

1.6
Impairment of fixed assets

At each reporting period end date, the limited liability partnership 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 limited liability partnership estimates the recoverable amount of the cash-generating unit to which the asset belongs.

M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -

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.

1.7
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.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
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.

1.9
Financial instruments

The limited liability partnership 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 limited liability partnership's statement of financial position when the limited liability partnership 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.

M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
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 limited liability partnership 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 limited liability partnership 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.

 

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.

1.10
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 limited liability partnership is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
1.11
Retirement benefits and post retirement payments to members

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

1.12
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.13
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.

1.14
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 limited liability partnership’s accounting policies, the members are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

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

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Stock provision

The LLP makes an estimate of the inventory provision after considering the nature and condition of the inventory as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials. This includes information in relation to inventory counts, screening processes and environmental factors.

3
Turnover

An analysis of the limited liability partnership's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Sale of goods
44,109,721
22,776,736
M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
3
Turnover
(Continued)
- 17 -
2023
2022
£
£
Turnover analysed by geographical market
UK
44,109,721
22,776,736
2023
2022
£
£
Other significant revenue
Interest income
35,542
27,730
Grants received
-
9,099
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
92,980
(100,537)
Government grants
-
(9,099)
Fees payable to the LLP's auditor for the audit of the LLP's financial statements
18,500
13,000
Depreciation of owned tangible fixed assets
344,834
338,371
Profit on disposal of tangible fixed assets
(59,560)
(49,866)
Operating lease charges
11,500
11,500
5
Employees

The average number of persons (excluding members) employed by the partnership during the year was:

2023
2022
Number
Number
Production
20
17
Administration
4
4
Total
24
21

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,220,367
995,155
Social security costs
144,097
141,552
Pension costs
23,371
23,693
1,387,835
1,160,400
M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
35,542
27,730
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
35,542
27,730
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest
204,420
122,926
8
Information in relation to members
2023
2022
Number
Number
Average number of members during the year
7
7
2023
2022
£
£
Profit attributable to the member with the highest entitlement
2,683,678
940,521

The share of profit to the members with the largest entitlement relates to Mr D Grand. The previous year's entitlement relates to Mr D Grand. The remaining profit is split at the designated members discretion between the other members.

 

M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
9
Tangible fixed assets
Leasehold land and buildings
Leasehold improve-ments
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2022
885,465
293,703
4,310,646
113,691
220,829
5,824,334
Additions
-
-
653,229
3,089
-
656,318
Disposals
-
-
(158,000)
-
(38,295)
(196,295)
At 31 March 2023
885,465
293,703
4,805,875
116,780
182,534
6,284,357
Depreciation and impairment
At 1 April 2022
98,835
73,606
2,530,256
74,699
98,101
2,875,497
Depreciation charged in the year
10,842
8,804
287,042
8,417
29,729
344,834
Eliminated in respect of disposals
-
-
(146,574)
-
(32,777)
(179,351)
At 31 March 2023
109,677
82,410
2,670,724
83,116
95,053
3,040,980
Carrying amount
At 31 March 2023
775,788
211,293
2,135,151
33,664
87,481
3,243,377
At 31 March 2022
786,630
220,097
1,780,390
38,992
122,728
2,948,837
10
Stocks
2023
2022
£
£
Raw materials and consumables
9,340,395
7,084,912
Work in progress
-
100,567
Finished goods and goods for resale
6,093,442
1,904,703
15,433,837
9,090,182
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,671,912
5,842,711
Prepayments and accrued income
63,544
62,546
5,735,456
5,905,257
M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
12
Loans and overdrafts
2023
2022
£
£
Other loans
3,850,000
3,850,000
Payable within one year
3,850,000
3,850,000

The pension loans are disclosed as creditors due within one year as the lender has the right to seek repayment on demand.

13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other borrowings
12
3,850,000
3,850,000
Trade creditors
3,369,227
1,406,915
Other taxation and social security
1,240,119
1,209,826
Accruals and deferred income
681,680
882,833
9,141,026
7,349,574
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
23,371
23,693

The limited liability partnership operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the limited liability partnership in an independently administered fund.

15
Loans and other debts due to members
2023
2022
£
£
Analysis of loans
Amounts falling due within one year
18,131,516
15,940,720

There are no restrictions or limitations on the ability of the members to reduce the amount of members other interests.

 

In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.

M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
16
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
11,500
11,500
Between two and five years
46,000
46,000
In over five years
586,500
598,000
644,000
655,500

The operating lease represents the lease of property from a third party over a 99 year lease period. At 31 March 2023 there are 56 years remaining and minimum lease payments of £11,500 per annum are expected, subject to any amendments as a result of rent reviews which take place every 5 years. The next rent review is expected to take place on 15 March 2024.

 

The LLP also has a long term commitment in relation to another property. The lease is for a period of 99 years from 4 November 2013, with a peppercorn rental due.

17
Related party transactions

The total remuneration of the members of the LLP, who are considered to be the key management personnel of the LLP is disclosed in the reconciliation of members interests on page 9.

 

The LLP paid interest of £204,420 (2022 - £122,926) on a loan of £3,850,000 (2022 - £3,850,000) from the members' Funded Unapproved Retirement Benefit Scheme. No interest was outstanding at the year end.

18
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year
11,034,707
4,043,123
Adjustments for:
Finance costs recognised in profit or loss
204,420
122,926
Investment income recognised in profit or loss
(35,542)
(27,730)
Gain on disposal of tangible fixed assets
(59,560)
(49,866)
Depreciation and impairment of tangible fixed assets
344,834
338,371
Movements in working capital:
Increase in stocks
(6,343,655)
(3,637,292)
Decrease/(increase) in debtors
169,801
(4,279,983)
Increase in creditors
1,791,452
944,081
Cash generated from/(absorbed by) operations
7,106,457
(2,546,370)
M & G SOLID FUELS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
19
Analysis of changes in net funds
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
9,089,141
4,505,438
13,594,579
Borrowings excluding overdrafts
(3,850,000)
-
(3,850,000)
Balances before members' debt
5,239,141
4,505,438
9,744,579
Loans and other debts due to members:
- Other amounts due to members
(15,940,720)
(2,190,796)
(18,131,516)
Balances including members' debt
(10,701,579)
2,314,642
(8,386,937)
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