The directors present the strategic report for the year ended 31 December 2022.
The results for the year and the financial position of the group are as shown in the annexed financial statements.
The income statement shows turnover for the year of £16,621,113 and loss for the year of £343,673.
The trading period has shown the same level of turnover as 2021. There was however an increase within the Commercial sector of 27% and a reduction in the private sector of 6.4%.
The Commercial sector was relatively buoyant in 2022 and in the first half of 2023 as delayed projects finally went live.
Although an increase in Commercial sales was seen, this was more than offset by inflationary cost increases to shipping and logistics caused by the Russia-Ukraine war, many of these costs the Company did not pass on to clients unless absolutely necessary.
The private sector was adversely affected by several factors outside of the control of the company, namely the start of the Russia Ukraine conflict, the death of Queen Elizabeth II and the 6 week economic uncertainty from the initial policy objectives introduced by Liz Truss.
In view of all of the above factors being taken into account the Directors feel that the trading loss made in 2022 is acceptable and we are continuing to maximise sales and exert rigorous control of all overhead expenditure in order to minimise controllable costs.
In the Spring of 2022, the shareholders who are also directors completed the estate affairs of Miss J. Heap, a close family relative. Miss Heap had loaned to CED Ltd a considerable loan to the value of £573,715 including interest. After some lengthy negotiations with HMRC it was agreed that the loan should be converted into shares in the company. This has resulted in an increase in the net asset position by £573,715.
The market for the supply and distribution of specialised stones, paving, aggregates, and sands for the construction, civil engineering, and landscape industries and other users remains highly competitive in the UK.
The company has considerable expertise and knowledge of materials and their use by its customers. Improving response times in the supply of products, by the prompt and efficient handling of customer enquiries and by maintaining strong relationships and local representation with its customers, it achieves a significant competitive advantage.
Most purchases from mainland Europe and Ireland are made in Euros. From the rest of the world most purchases are made in US dollars. The company is therefore exposed to movements in the Euro and US dollar exchange rates. The Finance Director monitors the exposure of the company to exchange rate risks and takes out forward contracts to fix the exchange rate when this is considered appropriate. Moving forward, due to the increased shipping rates it was decided in late 2021 that imports from China would be significantly reduced which as a direct consequence reduces our exposure to both FX fluctuations and volatile shipping rates.
The company's credit risk is primarily attributable to its trade debtors. It manages credit risk by running credit checks on new customers, reviewing credit extended to existing customers and by monitoring payments against contractual agreements.
The company continues to make significant progress in the development of new products, some of which are already achieving good sales, and some are just entering the market.
These products will have a significantly beneficial effect on the future performance of the company as they will bring increased turnover without significantly increasing fixed costs or reducing the sales of existing products.
Financial Reporting Standard 102 |
The company prepares its accounts in accordance with this accounting standard.
In view of the recent sale of premises the deferred tax provision is deemed commensurate with the value on the balance sheet. It is however anticipated that the future intended purchase of replacement land and buildings will qualify for rollover relief and that this provision will be negated as a result. |
Brexit
Trading with the EU continues to be administratively difficult, however the Company will respond to any changes to the regulations as and when they occur.
The company continues to hedge currency prudently and is well placed to deal with any future negative impacts on exchange rates in the short to mid-term.
Russia Conflict with Ukraine
The ongoing conflict fo 2022 and 2023 with Russia and Ukraine appears to be affecting the UK economy as a whole and general spending by the private sector has temporarily slowed. Although this has stabilised in 2023 the company is active in negating risk in this area should things escalate in the future.
Inflation
Inflation during 2022 and 2023 has been unprecented compared to recent years. The company has had to initially absorb some inflationary supplier and shipping prices, particularly on Commercial projects but has been able to subsequently pass on higher prices to customers, particularly in the private sector.
COVID 19
Although Covid 19 was relatively stable during 2022 this did have a knock on effect within the private sector due to the restrictions on travel being lifted. Many people were able to take postponed 2021 holidays as well as their usual 2022 holidays which reduced their spend on home renovations.
Other factors in 2022
The death of HM Queen Elizabeth II caused a temporary slow down in sales due to the nation mourning the death of our monarch. In addition the 6 week period with Liz Truss in charge of the government caused a large ripple with the financial markets and the economy resulting in poor sales during that period.
2023:
Ethical Trading:
The challenges created by Brexit, Covid 19, inflated shipping rates and world economic events are still having “knock on” effects for workers in our supply chain.
This means there continues to be a greater risk of potential salient human rights abuses across production sites in the natural stone industry. Many of our Ethical Trade work, such as worker interviews, worker training and site inspections are still curtailed and so our visibility of workers is somewhat diminished.
We continue ethical focus on the following:
Engagement with suppliers to help them meet World Health Organisation guidelines on key issues such as H&S, PPE and Social distancing.
Distribution of PPE to Chinese factories we deal with in the Shandong and Hebei provinces.
Ensuring with suppliers that our price and production time agreements are fair and do not negatively impact Workers.
Transparency – as part of ETI (Ethical Trading Initiative) Corporate Transparency Framework requirements, we now share a lot more information in the public domain. This includes: Geographical spread of our overseas supply chain, supplier factory locations and salient labour rights issues and risks. A good portion of our work in this area is now used by ETI as guidance for other Commercials to follow.
New Policies on Website include:
Corporate Governance and Accountability Structure.
FOA (Freedom Of Association) and Collective Bargaining Policy.
Ethical initiatives and collaborations:
Working with ETI and ITF (International Transport Workers' Federation) – a hidden part of our supply chain was always Seafarers working on the ships that carry our containerised goods from Asia. We now make sure that the ships we use, have a current ITF labour rights agreements in place. This guarantees Seafarers trade union consultation, negotiation, ongoing engagement, and monitoring in both implementation and grievances, essential for HRDD compliance.
Working with the General Merchandising Group and ETI, we are analysing and improving Purchasing Practices. The aim is to improve working conditions at manufacturing sites by trialling and implementing more Responsible Purchasing Practices.
QUALITY ASSURANCE:
ISO 9001: 2015 Quality accreditation:
Annual audit successfully completed and certified. We have continued to develop our Commercial quality systems and work procedures, to induce improvements in both supplier and staff performance. Our aim is to continually improve levels of customer service and satisfaction.
ENVIRONMENTAL:
ISO 14001: 2015 Certification for Environmental Management:
Once again successfully audited for environmental management at our Head Office yard and offices in West Thurrock.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of CED Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
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 group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Use of our report
This report is made solely to the 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £277,688 (2021 - £83,270 profit).
CED Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 728 London Road, West Thurrock, Grays, Essex, RM20 3LU.
The group consists of CED Limited and all of its subsidiaries.
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 at fair value. The principal accounting policies adopted are set out below.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
At the time of approving the financial statements, the directors note that trading conditions remain challenging but due to the sale and short-term leaseback of their head office to enable the company to expand onto a new site at a price well in excess of the balance sheet valuation the company is now unencumbered and has substantial working capital to continue in operational existence for the foreseeable future.
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
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.
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.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The 2021 balance is inflated as includes the impact of under provisions in previous periods totalling £8,000.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Land and buildings with a carrying amount of £6,218,229 were revalued in November 2022 by Lambert Smith Hampton, being independent valuers not connected with the company 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 revaluation surplus is disclosed in note 25.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Details of the company's subsidiaries at 31 December 2022 are as follows:
Derivative financial instruments - Forward contract and options
The Company enters into forward foreign currency contracts and options to mitigate the exchange rate risk for certain foreign currency payables. At 31 December 2022 and 2021, the outstanding contracts all mature within 12 months from the period end.
The forward currency contract and options are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key inputs in valuing the derivative are the forward exchange rates for GBP:USD and GBP:EUR. The fair value of the forward-foreign currency contracts and options are £nil (2021 - CR £21,275).
Obligations held under hire purchase and finance lease contracts are secured on the assets concerned.
The company entered into a new finance agreement with Leumi as part of a group re-organisation in December 2020, As well as loans provided, this included an invoice discounting facility.
The bank loans and facilities are secured by way of both fixed and floating charges over the assets of the company and its subsidiary undertakings.
The company obtained a short term loan in November 2022 of £250,000. As at 31st December 2022, £171,331 is outstanind, and is due to be reparid wtihin 1 year.
There is a cross guarantee in placed between CED Limited and its subsidiary companies on all borrowings outstanding within the group as at the balance sheet date.
Finance lease payments represent rentals payable by the company for certain items of plant and machinery and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The rights of the ordinary redeemable shares are as detailed in the memorandum and articles of association of the company.
In 2022 a share issue was carried out, to reflect the conversion of a previously held loan from Miss Heap of the value of £573,715 including interest. After negotiations with HMRC it was agreed that the loan should be converted into shares in the company. This process was completed on 19th April 2022.
In August 2023, the company completed the sale and subsequent short-term lease back of their West Thurrock Head Office premises to enable expansion onto a new site. All secured and invoice financing with Leumi was discharged leaving the company unencumbered and with significant cash reserves after bringing creditors up to date in full.