71 false false false true false false false false false false true false false false false false false No description of principal activity 2022-07-01 Sage Accounts Production Advanced 2021 - FRS102_2021 296,454 222,576 1,749,934 1,749,934 3,209 110 3,099 xbrli:pure xbrli:shares iso4217:GBP 05165435 2022-07-01 2023-06-30 05165435 2023-06-30 05165435 2022-06-30 05165435 2021-07-01 2022-06-30 05165435 2022-06-30 05165435 core:LandBuildings core:ShortLeaseholdAssets 2022-07-01 2023-06-30 05165435 core:FurnitureFittings 2022-07-01 2023-06-30 05165435 core:NetGoodwill 2022-07-01 2023-06-30 05165435 bus:RegisteredOffice 2022-07-01 2023-06-30 05165435 bus:OrdinaryShareClass1 2022-07-01 2023-06-30 05165435 bus:LeadAgentIfApplicable 2022-07-01 2023-06-30 05165435 bus:Director3 2022-07-01 2023-06-30 05165435 bus:Director1 2022-07-01 2023-06-30 05165435 bus:Director2 2022-07-01 2023-06-30 05165435 bus:Director4 2022-07-01 2023-06-30 05165435 bus:Director5 2022-07-01 2023-06-30 05165435 bus:Director6 2022-07-01 2023-06-30 05165435 bus:Director6 2023-06-30 05165435 core:WithinOneYear 2023-06-30 05165435 core:WithinOneYear 2022-06-30 05165435 core:NetGoodwill 2023-06-30 05165435 core:LandBuildings core:ShortLeaseholdAssets 2022-06-30 05165435 core:FurnitureFittings 2022-06-30 05165435 core:LandBuildings core:OwnedOrFreeholdAssets 2023-06-30 05165435 core:LandBuildings core:ShortLeaseholdAssets 2023-06-30 05165435 core:FurnitureFittings 2023-06-30 05165435 core:LandBuildings core:OwnedOrFreeholdAssets 2022-07-01 2023-06-30 05165435 core:AfterOneYear 2023-06-30 05165435 core:AfterOneYear 2022-06-30 05165435 core:UKTax 2022-07-01 2023-06-30 05165435 core:UKTax 2021-07-01 2022-06-30 05165435 core:RetainedEarningsAccumulatedLosses 2022-07-01 2023-06-30 05165435 bus:AllOrdinaryShares 2022-07-01 2023-06-30 05165435 core:RetainedEarningsAccumulatedLosses 2022-06-30 05165435 core:RetainedEarningsAccumulatedLosses 2021-06-30 05165435 core:RetainedEarningsAccumulatedLosses 2023-06-30 05165435 core:RetainedEarningsAccumulatedLosses 2022-06-30 05165435 core:ShareCapital 2023-06-30 05165435 core:ShareCapital 2022-06-30 05165435 core:BetweenOneFiveYears 2023-06-30 05165435 core:BetweenOneFiveYears 2022-06-30 05165435 core:MoreThanFiveYears 2023-06-30 05165435 core:MoreThanFiveYears 2022-06-30 05165435 core:DeferredTaxation 2022-07-01 2023-06-30 05165435 core:AcceleratedTaxDepreciationDeferredTax 2023-06-30 05165435 core:AcceleratedTaxDepreciationDeferredTax 2022-06-30 05165435 core:FurnitureFittings 2022-06-30 05165435 core:DeferredTaxation 2022-06-30 05165435 core:DeferredTaxation 2023-06-30 05165435 bus:HighestPaidDirector 2022-07-01 2023-06-30 05165435 bus:HighestPaidDirector 2021-07-01 2022-06-30 05165435 bus:FRS102 2022-07-01 2023-06-30 05165435 bus:Audited 2022-07-01 2023-06-30 05165435 bus:FullAccounts 2022-07-01 2023-06-30 05165435 bus:LargeMedium-sizedCompaniesRegimeForAccounts 2022-07-01 2023-06-30 05165435 bus:PrivateLimitedCompanyLtd 2022-07-01 2023-06-30 05165435 bus:OrdinaryShareClass1 2023-06-30 05165435 bus:OrdinaryShareClass1 2022-06-30
COMPANY REGISTRATION NUMBER: 05165435
G MITCHELL LIMITED
FINANCIAL STATEMENTS
30 June 2023
G MITCHELL LIMITED
FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
Contents
Page
Strategic report
1
Directors' report
3
Independent auditor's report to the members
5
Statement of income and retained earnings
9
Statement of financial position
10
Statement of cash flows
11
Notes to the financial statements
12
G MITCHELL LIMITED
STRATEGIC REPORT
YEAR ENDED 30 JUNE 2023
Fair review of the business The company made a pre-tax profit of £374,403 (2022: £277,783) for the year on a turnover of £14,503,785 (2022: £13,474,908). At 30 June 2023 the company had net assets of £1,696,641 (2022: £1,396,408). The directors are satisfied that the business continues to trade profitably. Both the level of business and the year-end financial position were as expected in light of the current trading conditions and the directors are satisfied with the results. The directors continue to drive forward with digital processing systems to improve our and our customers' efficiency and profitability. The refinish distribution market remains extremely competitive and our first to market approach with new digital technologies will hopefully give us a competitive advantage. Principal risks and uncertainties The principal risks and uncertainties facing the company are as follows; Credit Risk - The company's principal credit risk arises from the company's trade debtors being the primary financial asset. In order to manage credit risk a strong credit control department is in place, who regularly monitor credit terms. Liquidity Risk - The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs. The company's policy throughout the year has been to ensure continuity of funding by using the company's bankers, the banks have been very supportive. Short term flexibility is achieved by invoice discounting facilities. Debt is structured so repayments can be made out of cash generated though operations. Key performance indicators In the opinion of the directors the Key Performance Indicators whose disclosure is necessary for an understanding of the development, performance or position of the business are described above in the review of the business.
This report was approved by the board of directors on 17 October 2023 and signed on behalf of the board by:
Mr B A J Dodson
Director
Registered office:
168 Church Road
Hove
East Sussex
BN32DL
G MITCHELL LIMITED
DIRECTORS' REPORT
YEAR ENDED 30 JUNE 2023
The directors present their report and the financial statements of the company for the year ended 30 June 2023 .
Directors
The directors who served the company during the year were as follows:
Mr P H Newman
Mr G R Sutcliffe
Mr B A J Dodson
Mr R B Richards
Mr A J Thorpe
Mr D R Sutcliffe
(Appointed 1 July 2022)
Dividends
Particulars of recommended dividends are detailed in note 11 to the financial statements.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 17 October 2023 and signed on behalf of the board by:
Mr B A J Dodson
Director
Registered office:
168 Church Road
Hove
East Sussex
BN32DL
G MITCHELL LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF G MITCHELL LIMITED
YEAR ENDED 30 JUNE 2023
Opinion
We have audited the financial statements of G Mitchell Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 30 June 2023 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Based on our understanding of the company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the company which were contrary to applicable laws and regulations including fraud and we considered the extent to which noncompliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to inflated revenue and profit. Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, review of correspondence with and reports to the regulators, review of correspondence with legal advisors, enquiries of management and in so far as they related to the financial statements, and testing of journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. There are inherent limitations in the audit procedures described above and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - 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. 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. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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.
Charles Homan
(Senior Statutory Auditor)
For and on behalf of
UHY Hacker Young (S.E.) Limited
Chartered accountants & statutory auditor
168 Church Road
Hove
East Sussex
BN3 2DL
17 October 2023
G MITCHELL LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
YEAR ENDED 30 JUNE 2023
2023
2022
Note
£
£
Turnover
4
14,503,785
13,474,908
Cost of sales
9,949,664
9,304,192
---------------
---------------
Gross profit
4,554,121
4,170,716
Administrative expenses
4,152,812
3,865,505
-------------
-------------
Operating profit
5
401,309
305,211
Interest payable and similar expenses
9
26,906
27,428
-------------
-------------
Profit before taxation
374,403
277,783
Tax on profit
10
77,949
55,207
----------
----------
Profit for the financial year and total comprehensive income
296,454
222,576
----------
----------
Dividends paid and payable
11
( 80,000)
Retained earnings at the start of the year
1,395,408
1,172,832
-------------
-------------
Retained earnings at the end of the year
1,611,862
1,395,408
-------------
-------------
All the activities of the company are from continuing operations.
G MITCHELL LIMITED
STATEMENT OF FINANCIAL POSITION
30 June 2023
2023
2022
Note
£
£
Fixed assets
Tangible assets
13
270,222
20,762
Current assets
Stocks
14
1,744,961
1,696,357
Debtors
15
2,964,288
2,775,154
Cash at bank and in hand
47,737
203,056
-------------
-------------
4,756,986
4,674,567
Creditors: amounts falling due within one year
16
3,311,247
3,195,712
-------------
-------------
Net current assets
1,445,739
1,478,855
-------------
-------------
Total assets less current liabilities
1,715,961
1,499,617
Creditors: amounts falling due after more than one year
17
100,000
100,000
Provisions
18
3,099
3,209
-------------
-------------
Net assets
1,612,862
1,396,408
-------------
-------------
Capital and reserves
Called up share capital
21
1,000
1,000
Profit and loss account
1,611,862
1,395,408
-------------
-------------
Shareholders funds
1,612,862
1,396,408
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 17 October 2023 , and are signed on behalf of the board by:
Mr B A J Dodson
Director
Company registration number: 05165435
G MITCHELL LIMITED
STATEMENT OF CASH FLOWS
YEAR ENDED 30 JUNE 2023
2023
2022
£
£
Cash flows from operating activities
Profit for the financial year
296,454
222,576
Adjustments for:
Depreciation of tangible assets
5,190
7,014
Interest payable and similar expenses
26,906
27,428
Loss on disposal of tangible assets
275
Tax on profit
77,949
55,207
Accrued expenses/(income)
5,694
( 162,191)
Changes in:
Stocks
( 48,604)
( 146,671)
Trade and other debtors
( 189,134)
( 40,085)
Trade and other creditors
184,986
( 444,177)
----------
----------
Cash generated from operations
359,441
( 480,624)
Interest paid
( 26,906)
( 27,428)
Tax paid
( 52,148)
( 93,223)
----------
----------
Net cash from/(used in) operating activities
280,387
( 601,275)
----------
----------
Cash flows from investing activities
Purchase of tangible assets
( 254,650)
( 4,385)
----------
----------
Net cash used in investing activities
( 254,650)
( 4,385)
----------
----------
Cash flows from financing activities
Proceeds from borrowings
( 101,056)
365,148
Dividends paid
( 80,000)
----------
----------
Net cash (used in)/from financing activities
( 181,056)
365,148
----------
----------
Net decrease in cash and cash equivalents
( 155,319)
( 240,512)
Cash and cash equivalents at beginning of year
203,056
443,568
----------
----------
Cash and cash equivalents at end of year
47,737
203,056
----------
----------
G MITCHELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 168 Church Road, Hove, East Sussex, BN32DL.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
No material uncertainties that may cast significant doubt about the ability of the company to continue as a going concern have been identified by the directors. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the forseeable future.
Judgements and key sources of estimation uncertainty
In preparation of the financial statements the directors undertake a number of accounting estimates and assessments, and make assumptions which provide the basis for the recognition and measurements of the asset, liabilities, revenue and expenses of the company. These estimates, assessments and assumptions are based on historical experience and other factors which management consider reasonable under the circumstances. In the opinion of management the following accounting estimates and assessment are significant in the preparation of the annual financial statements: Impairment of debtors The company makes an estimate of the recoverable amount of trade debtors. The bad debt provision included in trade debtors is £49,087 (2022 £21,480). Intangible Asset Amortisation is provided at rates calculated to write off the cost of goodwill over its estimated useful economic life. Inventory provisions Stocks are valued at the lower of cost and net realisable value includes, where necessary, provisions for slow moving stocks. Calculations of these provisions require judgements to be made, which include forecasting consumer demand and looking at the ageing of the stock. The total provision included within stock is £146,533 (2022 £133,530).
Research and development
Research expenditure is written off in the period in which it is incurred.
Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met:
- It is technically feasible to complete the intangible asset so that it will be available for use or sale;
- There is the intention to complete the intangible asset and use or sell it;
- There is the ability to use or sell the intangible asset;
- The use or sale of the intangible asset will generate probable future economic benefits;
- There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and
- The expenditure attributable to the intangible asset during its development can be measured reliably.
Expenditure that does not meet the above criteria is expensed as incurred.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
Acquired goodwill is written off over its estimated useful economic life.
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Short leasehold property
-
10% straight line
Fixtures and fittings
-
25% reducing balance
No depreciation has been provided on the company's freehold property on the basis that it will be maintained in a state of good repair and, as a result, the directors consider that it's market value is not expected to decrease.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2023
2022
£
£
Sale of goods
14,503,785
13,474,908
---------------
---------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Operating profit
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Depreciation of tangible assets
5,190
7,014
Loss on disposal of tangible assets
275
Impairment of trade debtors
45,188
(26,558)
Operating lease rentals
256,832
237,069
----------
----------
6. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023
2022
No.
No.
Number of drivers
18
19
Number of admin & sales staff
25
27
Number of warehouse staff
28
28
----
----
71
74
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
2,249,193
2,041,637
Social security costs
196,514
195,713
Other pension costs
65,788
108,416
-------------
-------------
2,511,495
2,345,766
-------------
-------------
7. Research and development
The company incurred expenses in regards to research and development expenditure in the year. See note 3 for the research and development accounting policies.
8. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
461,733
346,219
Company contributions to defined contribution pension plans
25,127
57,843
----------
----------
486,860
404,062
----------
----------
Remuneration of the highest paid director in respect of qualifying services:
2023
2022
£
£
Aggregate remuneration
112,633
92,764
Company contributions to defined contribution pension plans
10,000
50,207
----------
----------
122,633
142,971
----------
----------
9. Interest payable and similar expenses
2023
2022
£
£
Interest on banks loans and overdrafts
25,675
11,945
Other interest payable and similar charges
1,231
15,483
---------
---------
26,906
27,428
---------
---------
10. Tax on profit
Major components of tax expense
2023
2022
£
£
Current tax:
UK current tax expense
83,779
55,597
Adjustments in respect of prior periods
( 5,720)
---------
---------
Total current tax
78,059
55,597
---------
---------
Deferred tax:
Origination and reversal of timing differences
( 110)
( 390)
---------
---------
Tax on profit
77,949
55,207
---------
---------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 20.50 % (2022: 19 %).
2023
2022
£
£
Profit on ordinary activities before taxation
374,403
277,783
----------
----------
Profit on ordinary activities by rate of tax
76,735
52,779
Adjustment to tax charge in respect of prior periods
( 5,720)
Effect of expenses not deductible for tax purposes
6,084
2,678
Effect of capital allowances and depreciation
960
140
Adjustment to decrease deferred tax provision
( 110)
( 390)
----------
----------
Tax on profit
77,949
55,207
----------
----------
11. Dividends
2023
2022
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
80,000
---------
----
12. Intangible assets
Goodwill
£
Cost
At 1 July 2022 and 30 June 2023
1,749,934
-------------
Amortisation
At 1 July 2022 and 30 June 2023
1,749,934
-------------
Carrying amount
At 30 June 2023
-------------
At 30 June 2022
-------------
13. Tangible assets
Freehold property
Short leasehold property
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 July 2022
38,123
167,284
205,407
Additions
254,650
254,650
----------
---------
----------
----------
At 30 June 2023
254,650
38,123
167,284
460,057
----------
---------
----------
----------
Depreciation
At 1 July 2022
38,123
146,522
184,645
Charge for the year
5,190
5,190
----------
---------
----------
----------
At 30 June 2023
38,123
151,712
189,835
----------
---------
----------
----------
Carrying amount
At 30 June 2023
254,650
15,572
270,222
----------
---------
----------
----------
At 30 June 2022
20,762
20,762
----------
---------
----------
----------
14. Stocks
2023
2022
£
£
Finished goods and goods for resale
1,744,961
1,696,357
-------------
-------------
15. Debtors
2023
2022
£
£
Trade debtors
2,662,578
2,368,774
Prepayments and accrued income
131,936
139,510
Other debtors
169,774
266,870
-------------
-------------
2,964,288
2,775,154
-------------
-------------
16. Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
567,408
668,464
Trade creditors
2,004,875
1,752,194
Accruals and deferred income
95,183
89,489
Corporation tax
85,082
59,171
Social security and other taxes
215,668
223,457
Other creditors
343,031
402,937
-------------
-------------
3,311,247
3,195,712
-------------
-------------
The bank loans and overdrafts are secured by fixed and floating charges over the company's assets.
17. Creditors: amounts falling due after more than one year
2023
2022
£
£
Director loan accounts
100,000
100,000
----------
----------
18. Provisions
Deferred tax (note 19)
£
At 1 July 2022
3,209
Charge against provision
( 110)
-------
At 30 June 2023
3,099
-------
19. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
£
£
Included in provisions (note 18)
3,099
3,209
-------
-------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
£
£
Accelerated capital allowances
3,099
3,209
-------
-------
20. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 65,788 (2022: £ 108,416 ).
21. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
1,000
1,000
1,000
1,000
-------
-------
-------
-------
22. Analysis of changes in net debt
At 1 Jul 2022
Cash flows
At 30 Jun 2023
£
£
£
Cash at bank and in hand
203,056
(155,319)
47,737
Debt due within one year
(668,464)
101,056
(567,408)
Debt due after one year
(100,000)
(100,000)
----------
----------
----------
( 565,408)
( 54,263)
( 619,671)
----------
----------
----------
23. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2023
2022
£
£
Not later than 1 year
441,089
436,011
Later than 1 year and not later than 5 years
602,245
842,372
Later than 5 years
124,000
62,000
-------------
-------------
1,167,334
1,340,383
-------------
-------------
G MITCHELL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
YEAR ENDED 30 JUNE 2023
23. Operating leases (continued)
Rentals under operating leases are charged to the statement of Comprehensive Income on a straight-line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the period until the date the rent is expected to be adjusted to the prevailing market rate. Within non-cancellable operating lease commitments is an amount relating to Land and buildings, less than 1 year £196,544 (2022 £229,044), between 1 and 5 years £389,968 (2022 £557,012) and over 5 years £124,000 (2022 £62,000). Relating to Motor vehicles & Other, less than 1 year £244,545 (2022 £206,967) between 1 and 5 years £212,277 (2022 £285,360).
24. Related party transactions
During the year the company paid rent totalling £62,000 to it's director, Mr G Sutcliffe, on an arm's length basis (2022: £48,000). The director, Mr A Thorpe, owed the company £48,195 at the year end (2022: £60,195). At the year end, the company owed £100,000 to the director, Mr R Richards (2022: £100,000). No loan interest was paid to Mr R Richards during the year (2022: £21,000).