Company registration number 01399387 (England and Wales)
THUMBS-UP (BURY) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
THUMBS-UP (BURY) LIMITED
COMPANY INFORMATION
Director
Mr R J McGuinness
Secretary
Mrs A A Merotto
Company number
01399387
Registered office
Greenfields
Dumers Lane
Bury
BL9 9UT
Auditor
MHA Moore and Smalley
Richard House
9 Winckley Square
Preston
PR1 3HP
THUMBS-UP (BURY) LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2
Director's responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
THUMBS-UP (BURY) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 1 -
The director presents the strategic report for the year ended 28 February 2023.
Review of the business
The shareholding, control and management of the company was again in the hands of Richard McGuinness as sole director and controlling party. The company continues to manufacture plastic houseware, food storage, gardenware, domestic storage and brushware for sale to retailers.
Principal risks and uncertainties
The company has acquired assets under hire purchase agreements in respect of which interest is charged at fixed rates. Obligations under these loans and hire purchase agreements are met out of working capital. The company maintains good relations with all raw material suppliers and deals with most polypropylene suppliers in order to attempt to mitigate risk. The company is exposed to the usual credit risk, liquidity risk and cash flow associated with selling on credit and manages this through credit control procedures. The company is subject to the volatile nature of the supply and price of its major raw material being polypropylene. Given the size of the company, the director has not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the director are implemented by the company's finance department.
Analysis of development and performance including key performance indicators
The director is pleased with the trading result in light of industry difficulties and surely a one-off energy price spike. Turnover has been relatively static and with no dividend paid or proposed the company is left with a strong balance sheet with net worth standing at over £24.3 million and net current assets increased to over £7 million.
The company’s operations and performance in the year can be split into two sections. We entered the trading period with continued price rises and ever-increasing inflation. Due to contracts, commitments and in-house orders it takes time to recover from aggressive price rises. Profits do suffer as a result of fast price rises; unfortunately, it is a feature of the industry. We regard the performance as outstanding given the passage of price rises inflation and energy costs. However the very difficult conditions appear to be receding as the end of the year approached and the director is optimistic for the forthcoming financial year.
Future developments
The company has developed a relatively new range of food containers and other kitchen utensils and is pleased with the response when these have hit market during the course of the year. The was the latest research and development undertaken.
The last few months of the year and the beginning of the current year means there is much optimism for the future.
Mr R J McGuinness
Director
29 June 2023
THUMBS-UP (BURY) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 2 -
The director presents his annual report and financial statements for the year ended 28 February 2023.
Principal activities
The principal activity of the company continued to be the manufacture and marketing of houseware, food storage, gardenware, domestic storage and brushware.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr R J McGuinness
Auditor
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the business review, financial risk management and future developments.
On behalf of the board
Mr R J McGuinness
Director
29 June 2023
THUMBS-UP (BURY) LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 3 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
THUMBS-UP (BURY) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THUMBS-UP (BURY) LIMITED
- 4 -
Opinion
We have audited the financial statements of Thumbs-Up (Bury) Limited (the 'company') for the year ended 28 February 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 28 February 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.
THUMBS-UP (BURY) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THUMBS-UP (BURY) LIMITED
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below:
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations;
Enquires with management about any known or suspected instances of fraud;
Auditing the risk of fraud in revenue, including through the testing of income cut off at the period end and through sales transaction testing to provide comfort that revenue is completely stated in the financial statements;
Examination of journal entries and other adjustments to test for appropriateness and identify any instances of management override of controls;
Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries.
Because of the field in which the client operates we identified that employment law, health and safety legislation and compliance with the UK Companies are the areas most likely to have a material impact on the financial statements.
THUMBS-UP (BURY) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THUMBS-UP (BURY) LIMITED
- 6 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Virginia Cooper
Senior Statutory Auditor
For and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Richard House
9 Winckley Square
Preston
PR1 3HP
30 June 2023
THUMBS-UP (BURY) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
30,858,765
31,961,038
Cost of sales
(27,119,112)
(27,570,379)
Gross profit
3,739,653
4,390,659
Distribution costs
(1,192,877)
(1,233,494)
Administrative expenses
(3,099,830)
(3,464,278)
Other operating income
123,049
103,901
Operating loss
4
(430,005)
(203,212)
Interest receivable and similar income
7
33,743
Interest payable and similar expenses
8
(11,301)
(25,260)
Loss before taxation
(407,563)
(228,472)
Tax on loss
9
82,497
73,862
Loss for the financial year
(325,066)
(154,610)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THUMBS-UP (BURY) LIMITED
BALANCE SHEET
AS AT
28 FEBRUARY 2023
28 February 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
17,109,617
18,452,814
Current assets
Stocks
11
2,832,309
6,295,464
Debtors
12
5,326,042
4,754,117
Cash at bank and in hand
6,942,181
2,458,392
15,100,532
13,507,973
Creditors: amounts falling due within one year
13
(7,862,938)
(7,224,615)
Net current assets
7,237,594
6,283,358
Total assets less current liabilities
24,347,211
24,736,172
Creditors: amounts falling due after more than one year
14
(62,899)
Deferred income
18
(32,152)
(33,148)
Net assets
24,315,059
24,640,125
Capital and reserves
Called up share capital
20
90,000
90,000
Revaluation reserve
5,147,111
5,192,998
Capital redemption reserve
10,000
10,000
Profit and loss reserves
19,067,948
19,347,127
Total equity
24,315,059
24,640,125
The financial statements were approved and signed by the director and authorised for issue on 29 June 2023
Mr R J McGuinness
Director
Company Registration No. 01399387
THUMBS-UP (BURY) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 9 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 March 2021
90,000
5,238,885
10,000
19,455,850
24,794,735
Year ended 28 February 2022:
Loss and total comprehensive income for the year
-
-
-
(154,610)
(154,610)
Transfers
-
(45,887)
-
45,887
-
Balance at 28 February 2022
90,000
5,192,998
10,000
19,347,127
24,640,125
Year ended 28 February 2023:
Loss and total comprehensive income for the year
-
-
-
(325,066)
(325,066)
Transfers
-
(45,887)
-
45,887
-
Balance at 28 February 2023
90,000
5,147,111
10,000
19,067,948
24,315,059
THUMBS-UP (BURY) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
5,265,638
(1,242,148)
Interest paid
(11,301)
(25,260)
Income taxes paid
(292,099)
Net cash inflow/(outflow) from operating activities
5,254,337
(1,559,507)
Investing activities
Purchase of tangible fixed assets
(681,710)
(790,189)
Proceeds on disposal of tangible fixed assets
122,053
151,411
Interest received
33,743
Net cash used in investing activities
(525,914)
(638,778)
Financing activities
Proceeds from borrowings
1,692,931
Repayment of bank loans
(144,553)
(210,083)
Payment of finance leases obligations
(100,081)
(239,133)
Net cash (used in)/generated from financing activities
(244,634)
1,243,715
Net increase/(decrease) in cash and cash equivalents
4,483,789
(954,570)
Cash and cash equivalents at beginning of year
2,458,392
3,412,962
Cash and cash equivalents at end of year
6,942,181
2,458,392
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 11 -
1
Accounting policies
Company information
Thumbs-Up (Bury) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Greenfields, Dumers Lane, Bury, BL9 9UT.
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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
1.2
Going concern
At the time of approving the financial statements, the truedirector has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The director is aware of the impact that the current high levels of input costs, and whilst the issues are concerning, they are not just affecting the industry the company operates in and appear almost worldwide. Despite this backdrop the director believes the company has more than sufficient financial strength to mange its way through a sustained period of economic gloom, and management continue to monitor events and take action as required. Thus the director continues 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 provided in the normal course of business, and is shown net of VAT. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Turnover is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, being on despatch of goods.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is provided at rates calculated to write off the cost or valuation less estimated residual value of each asset over its expected useful life, as follows:
Freehold land and buildings
2% straight line on freehold buildings
Plant and machinery
20% - 50% straight line
Motor vehicles
20% - 33% straight line
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Cost is calculated using the first in first out method.
At each reporting date, an assessment is made for impairment due to obsolescence or slow moving stock. 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.
1.7
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Other financial assets
All of the company's financial assets are basic financial assets.
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, are initially recognised at transaction price. 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. Trade creditors are recognised initially at transaction price.
Other financial liabilities
All of the company's financial liabilities are basic financial liabilities.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 14 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions:
Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged only where the replacement assets are sold.
Deferred tax assets are recognised only to the extent that the director considers that it is more likely than not there will be suitable taxable profits from which the future reversal of the underlying timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
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.
1.12
Retirement benefits
The company operates defined contribution schemes for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 15 -
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
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.
Valuation and life of tangible fixed assets
Determining both the useful economic life and the residual value of tangible fixed assets requires an estimation of both the length of time that the company expects to use the asset for and the future selling price that the company expects to be achieved for the asset at the end of the useful economic life. These are reviewed annually on an asset by asset basis. There is not expected to be a material difference in the value of the assets given the estimations used.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
30,858,765
31,961,038
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
3
Turnover and other revenue
(Continued)
- 16 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
29,877,203
31,504,964
Europe
981,562
456,074
30,858,765
31,961,038
2023
2022
£
£
Other revenue
Interest income
33,743
-
Grants received
996
996
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange losses
3,451
Government grants
(996)
(996)
Fees payable to the company's auditor for the audit of the company's financial statements
22,958
18,675
Depreciation of owned tangible fixed assets
1,942,487
1,930,635
Depreciation of tangible fixed assets held under finance leases
82,420
204,531
Profit on disposal of tangible fixed assets
(122,053)
(102,905)
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Management, Sales and Administration
19
21
Production and Transport
109
133
Total
128
154
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
5
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,171,645
4,119,145
Social security costs
338,977
337,219
Pension costs
86,770
97,192
4,597,392
4,553,556
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
39,838
114,395
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
33,743
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
33,743
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
2,384
9,236
Other finance costs:
Interest on finance leases and hire purchase contracts
7,441
15,773
Other interest
1,476
251
11,301
25,260
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 18 -
9
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
(62,698)
(29,450)
Changes in tax rates
(19,799)
(44,412)
Total deferred tax
(82,497)
(73,862)
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(407,563)
(228,472)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(77,437)
(43,410)
Tax effect of expenses that are not deductible in determining taxable profit
137
1,445
Effect of change in corporation tax rate
(19,799)
(44,411)
Permanent capital allowances in excess of depreciation
(36,757)
(38,845)
Depreciation on assets not qualifying for tax allowances
51,359
51,359
Taxation credit for the year
(82,497)
(73,862)
The Chancellor stated his intention to maintain the main rate of corporation tax at 19%. This change to previously announced policy was substantively enacted on 17 March 2020. The Chancellor subsequently announced his intention to increase the headline rate of corporation tax to 25% from 1 April 2023, this policy was substantively enacted on 25 May 2021.
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 19 -
10
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 March 2022
17,015,560
34,067,684
2,833,165
53,916,409
Additions
209,816
471,894
681,710
Disposals
(382,440)
(248,708)
(631,148)
At 28 February 2023
17,015,560
33,895,060
3,056,351
53,966,971
Depreciation and impairment
At 1 March 2022
2,072,060
31,044,539
2,346,996
35,463,595
Depreciation charged in the year
272,133
1,392,762
360,012
2,024,907
Eliminated in respect of disposals
(382,440)
(248,708)
(631,148)
At 28 February 2023
2,344,193
32,054,861
2,458,300
36,857,354
Carrying amount
At 28 February 2023
14,671,367
1,840,199
598,051
17,109,617
At 28 February 2022
14,943,500
3,023,145
486,169
18,452,814
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Motor vehicles
50,453
149,481
On transition to FRS 102, a previous valuation of land and buildings was used as deemed cost. This valuation was completed in May 2014 by Messrs. Salisbury Hamer, independent Chartered Surveyors not connected with the company, for a carrying amount of £13,905,000 and was conducted on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Freehold land and buildings
2023
2022
£
£
Cost
13,064,700
13,064,700
Accumulated depreciation
(3,540,442)
(3,314,196)
Carrying value
9,524,258
9,750,504
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 20 -
11
Stocks
2023
2022
£
£
Raw materials and consumables
1,499,001
4,380,108
Finished goods and goods for resale
1,333,308
1,915,356
2,832,309
6,295,464
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,025,894
4,201,842
Prepayments and accrued income
32,604
367,228
5,058,498
4,569,070
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 17)
267,544
185,047
Total debtors
5,326,042
4,754,117
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
15
144,553
Obligations under finance leases
16
62,899
100,081
Trade creditors
5,828,219
3,825,645
Taxation and social security
379,683
800,788
Other creditors
1,332,928
1,827,582
Accruals and deferred income
259,209
525,966
7,862,938
7,224,615
Finance lease balances are secured over the assets to which they relate.
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 21 -
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
16
62,899
Finance lease balances are secured over the assets to which they relate.
15
Loans and overdrafts
2023
2022
£
£
Bank loans
144,553
Payable within one year
144,553
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
67,537
107,522
In two to five years
67,537
67,537
175,059
Less: future finance charges
(4,638)
(12,079)
62,899
162,980
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 22 -
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Assets
Assets
2023
2022
Balances:
£
£
Decelerated capital allowances
257,207
183,173
Tax losses
9,554
149
Short term timing differences
783
1,725
267,544
185,047
2023
Movements in the year:
£
Asset at 1 March 2022
(185,047)
Credit to profit or loss
(62,698)
Effect of change in tax rate - profit or loss
(19,799)
Asset at 28 February 2023
(267,544)
As the company has not finalised its capital expenditure plans for the next financial year, it is not possible to clarify the unwinding of the net deferred tax liability over the next 12 months.
18
Deferred income
2023
2022
£
£
Arising from government grants
32,152
33,148
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
86,770
97,192
The company operates a defined contribution pension scheme in respect of its director, the Greenfields (2007) Pension Fund. The company continues to operate a defined contribution scheme, a stakeholder pension scheme and an auto enrolment pension scheme in respect of its employees. The assets of these schemes are held separately from those of the company in independently administered funds.
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 23 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
90,000
90,000
90,000
90,000
21
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
210,406
135,485
22
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
43,950
128,355
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Category
Description of
Income
Expenditure
transaction
2023
2022
2023
2022
£
£
£
£
Entities over which the entity has control, joint control or significant influence
Sales
40,844
Balances with related parties
The following amounts were outstanding at the reporting end date:
Category
Amounts owed by
Amounts owed to
related parties
related parties
2023
2022
2023
2022
£
£
£
£
Entities over which the entity has control, joint control or significant influence
78,917
107,051
Key management personnel
1,254,011
1,720,531
THUMBS-UP (BURY) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 24 -
23
Cash generated from operations
2023
2022
£
£
Loss for the year after tax
(325,066)
(154,610)
Adjustments for:
Taxation credited
(82,497)
(73,862)
Finance costs
11,301
25,260
Investment income
(33,743)
Gain on disposal of tangible fixed assets
(122,053)
(102,905)
Depreciation and impairment of tangible fixed assets
2,024,907
2,135,166
(Decrease) in deferred income
(996)
(996)
Movements in working capital:
Decrease/(increase) in stocks
3,463,155
(4,426,096)
(Increase)/decrease in debtors
(489,428)
552,247
Increase in creditors
820,058
803,648
Cash generated from/(absorbed by) operations
5,265,638
(1,242,148)
24
Analysis of changes in net funds
1 March 2022
Cash flows
28 February 2023
£
£
£
Cash at bank and in hand
2,458,392
4,483,789
6,942,181
Borrowings excluding overdrafts
(144,553)
144,553
-
Obligations under finance leases
(162,980)
100,081
(62,899)
2,150,859
4,728,423
6,879,282
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