Registered number: 03313671
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
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CROWN FLOORING LIMITED
COMPANY INFORMATION
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CROWN FLOORING LIMITED
CONTENTS
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CROWN FLOORING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
The flooring sector in the UK has long been a crucial component of the construction and interior design industries. Our primary objective is to help this ambitious flooring company harness its strengths, leverage its resources, and navigate the challenges of the industry to reach new heights of success. We will explore market insights, identify emerging trends, and define a strategic direction that encompasses employee development, marketing, customer engagement, product innovation, and the adoption of modern technologies. The goal is not only to capture a substantial share of the UK flooring market but also to extend our reach into the facilities maintenance sector, providing a comprehensive solution to our diverse range of clients through our branch network.
In the following sections, we will present a strategic plan that encompasses various facets of business operations. This report will also outline the necessary steps for achieving leadership status within the flooring industry and the expansion of facilities maintenance across the United Kingdom.
The company has continued the bounce back from the dramatic effects of Covid19. Turnover increased c20% on last year. The operating profit margins of 9.0% were comparable to those in 2022 (9.7%). Management information post year end records that the company has sales and operating profits either in-line or ahead of those achieved at the same time in year ended 28th February 2023.
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CROWN FLOORING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1. Supply Chain Disruptions: Ongoing disruptions in the global supply chain, exacerbated by the Ukraine conflict and post-COVID recovery efforts, may result in delays in the procurement of essential materials and components. These delays can lead to project delays, increased costs, and potential damage to the company's reputation.
2. Fluctuating Material Costs: The uncertainties surrounding material prices and rising inflation, pose a significant risk. Sharp price increases in key materials, such as wood, metals, and petroleum-based products, can erode profit margins and make project budgeting and pricing challenging. 3. Labour Shortages: The facilities maintenance industry in the UK has been facing labour shortages even before the pandemic. Post-COVID, this problem has been exacerbated. Difficulty in finding and retaining skilled labour can lead to project delays, increased labour costs, and potential quality issues. 4. Economic Uncertainty: The lingering effects of the COVID-19 pandemic and rising inflation can create economic uncertainty, affecting consumer demand for services. A potential economic downturn could lead to decreased project opportunities. 5. Competitive Pressure: The UK facilities maintenance sector is highly competitive. The company may face intense competition from both established players and new entrants. Price wars and margin pressures can result from aggressive competition. 6. Climate Change and Environmental Impact: Increasing focus on sustainability and environmental concerns may require the company to adopt eco-friendly practices and materials. 7. Client Financial Stability: Economic uncertainty can affect the financial stability of clients and project owners. Delays in payments or project cancellations due to client financial issues can impact the company's cash flow and profitability. To mitigate these principal risks and uncertainties, the company implements a robust risk management strategy. Additionally, maintaining financial flexibility and continuously monitoring market conditions are crucial in navigating the challenges posed by the evolving construction sector in the post-COVID and uncertain geopolitical environment.
The key financial indicators are shown below:
The company continued to grow following the bounce back from Covid19 lockdowns. The growth in turnover was largely translated into growth in operating profits, allowing the company to invest in new systems and vehicles in the year.
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CROWN FLOORING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1.Customer Satisfaction and Loyalty: As the customer base grows, tracking customer satisfaction and loyalty becomes paramount. Utilising customer feedback surveys can help gauge how well the company meets customer expectations and whether it is building strong, lasting relationships.
2. Repeat Business and Referrals: An increasing number of repeat customers and referrals from satisfied clients can be a strong indicator of the company's reputation and service quality. Measuring the percentage of revenue derived from repeat business and referrals can provide insights into customer trust and brand advocacy. 4. Project Pipeline: The size and quality of the project pipeline is a critical indicator of future growth. Analysing the number and value of projects in the pipeline, as well as the company's success rate in winning new contracts, provides insights into its ability to sustain growth. 5. Financial Health: Key financial indicators, such as revenue growth, profit margins, and cash flow, are fundamental in assessing the company's overall financial health and its capacity to invest in technology, staff, and expansion. 6. Environmental Sustainability: The flooring industry is increasingly influenced by sustainability concerns. Tracking the company's efforts to reduce its environmental footprint, such as using eco-friendly materials and implementing green construction practices, can be important in meeting customer expectations. 7. Brand Awareness and Online Presence: Monitoring the growth of the company's online presence, including website traffic, social media engagement, and online reviews, can reflect its brand awareness and digital marketing effectiveness. These key indicators collectively provide a comprehensive view of the company's performance, growth trajectory, and its ability to harness leading-edge technology, capitalize on a growing customer base, and effectively manage its expanding workforce. Regularly tracking and analysing these indicators will enable the company to make data-driven decisions and adjust its strategies to achieve its long-term objectives.
This report was approved by the board on 23 November 2023 and signed on its behalf.
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CROWN FLOORING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
The directors present their report and the financial statements for the year ended 28 February 2023.
The directors are responsible for preparing the Strategic report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements 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 to 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.
The profit for the year, after taxation, amounted to £1,372,276 (2022 - £1,327,159).
Ordinary dividends were paid amounting to £430,000. The directors do not recommend payment of a final dividend.
The directors who served during the year were:
The company continues to seek new markets and identify new opportunities to enhance the customer base and overall profitability. The company has emerged the Covid-19 pandemic stronger and is looking forward to continued development of the company.
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CROWN FLOORING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
The auditors, Langtons Professional Services Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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CROWN FLOORING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CROWN FLOORING LIMITED
We have audited the financial statements of Crown Flooring Limited (the 'Company') for the year ended 28 February 2023, which comprise the Statement of income and retained earnings, the Balance sheet, the 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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.
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CROWN FLOORING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CROWN FLOORING LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
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.
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CROWN FLOORING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CROWN FLOORING LIMITED (CONTINUED)
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 Auditors' 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:
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud. The objectives of our audit, in respect to fraud, are: • to identify and assess the risks of material misstatement of the financial statements due to fraud; • to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and • to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. Our approach was as follows: We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to the reporting framework (FRS 102 and the Companies Act 2006), the relevant tax compliance regulations in the UK and the EU General Data Protection Regulation (GDPR). We understood how the Company is complying with those frameworks by making enquiries of management. Through consideration of the results of our audit procedures we were able to either corroborate or provide contrary evidence which was then followed up. Based on our understanding we designed our audit procedures to identify non-compliance with laws and regulations. Our procedures involved: • enquiries of management; and • journal entry testing, with a focus on journals indicating large or unusual transactions based on our understanding of the business. We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by meeting with management to understand where it considered there was susceptibility to fraud. We also considered performance targets and their propensity to influence efforts made by management to manage revenue and earnings. Where the risk was considered to be higher, including areas impacting key performance indicators or management remuneration, we performed audit procedures to address each identified fraud risk or other risk of material misstatement. These procedures included those on revenue recognition detailed above, the assessment of items identified by management as non-recurring and testing manual journals and were designed to provide reasonable assurance that the financial statements were free
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CROWN FLOORING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CROWN FLOORING LIMITED (CONTINUED)
from material fraud or error.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditor
The Plaza
100 Old Hall Street
L3 9QJ
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CROWN FLOORING LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 28 FEBRUARY 2023
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CROWN FLOORING LIMITED
REGISTERED NUMBER: 03313671
BALANCE SHEET
AS AT 28 FEBRUARY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 15 to 31 form part of these financial statements.
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CROWN FLOORING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2023
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CROWN FLOORING LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
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CROWN FLOORING LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 28 FEBRUARY 2023
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
Crown Flooring Limited is a private company limited by shares incorporated in England and Wales, registration number 3313671. The registered office is Unit 65, Burtonwood Industrial Centre, Phipps Lane, Burtonwood, Warrington, WA5 4HX. The principal place of business is Unit 65, Burtonwood Industrial Centre, Phipps Lane, Burtonwood, Warrington, WA5 4HX.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Statement of income and retained earnings in the same period as the related expenditure.
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
2.Accounting policies (continued)
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
2.Accounting policies (continued)
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable. When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period. The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
2.Accounting policies (continued)
impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
2.Accounting policies (continued)
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
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
There were no factors that may affect future tax charges.
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
14.Tangible fixed assets (continued)
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
Page 28
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
Net obligations under finance leases and hire purchase contracts are secured on the assets concerned.
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
Profit and loss account
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CROWN FLOORING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
The Company operates a defined contributions pension scheme.
The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £119,577 (2022 - £106,108) . Contributions totalling £42,873 (2022 - £16,148) were payable to the fund at the balance sheet date and are included in creditors.
Dividends totalling £430,000 (2022 - £406,700) were paid in the year in respect of shares held by the company's directors and their wives
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