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Company registration number: 01944164







ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MAY 2023


ESPRIT BUSINESS SERVICES LIMITED






































img2294.png                        

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
COMPANY INFORMATION


Directors
I McInnes 
J McInnes 
L L Sigournay 
G Page 
L Holloway 
D Maloney 




Company secretary
A Ward



Registered number
01944164



Registered office
Units 33/34/35 Mitchell Point
Ensign Business Park

Hamble Lane

Hamble

Southampton

SO31 4RF




Independent auditors
Menzies LLP
Chartered Accountants & Statutory Auditor

3000a Parkway

Whiteley

Hampshire

PO15 7FX





 


ESPRIT BUSINESS SERVICES LIMITED
 



CONTENTS



Page
Group strategic report
1 - 2
Directors' report
3 - 4
Independent auditors' report
5 - 8
Consolidated statement of comprehensive income
9
Consolidated statement of financial position
10
Company statement of financial position
11
Consolidated statement of changes in equity
12 - 13
Company statement of changes in equity
14 - 15
Consolidated statement of cash flows
16 - 17
Consolidated analysis of net debt
18
Notes to the financial statements
19 - 40


 


ESPRIT BUSINESS SERVICES LIMITED
 


 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023

Business review
 
The principal activity of the Group continued to be that of manufacturing electronic components and assemblies. The Company continued to be the Group's ultimate parent holding company.
The Group reported a net profit before tax for the year of £1,169,328 (2022 - £543,906). In common with many in the industry, there has been extreme pressure on component supply and pricing following supply disruption post Covid and the impact of US$ exchange rates. The disruption is expected to continue for some time, but customer and supplier relationships have ensured continued business development so that the directors are confident of continued benefits from the marketing and investment activities over recent years with both new customers and a wider spread of manufactured electronic components & assemblies for established customers. This has led to a sales growth of 23.0% (2022 - 34.1%).
The risk of any individual customer dependence by the Group has become more contained. Component availability and stability of pricing, which includes $ exchange rates, and the lead time for that supply is considered to be the biggest risk to the Group as that impacts on the service to its customers on which the Group has built its reputation. Improved productivity will be required to finance continued increases in direct wage costs and the Group, therefore, continually reviews its capital expenditure program. The conclusion of the last major review of equipment led to the purchase of almost £460,000 (2022 - £400,000). This expenditure being primarily funded by asset finance to maintain working capital.
Increased product ranges and current supply issues have expanded stock holding needs but the Group believes its method of working capital finance and good customer relations accommodate most of the pressure that may create. The directors believe the Group is well placed to continue to take advantage of new business.
At the year end, the directors consider the Group remains in a strong financial position with shareholders' funds totaling £5,145,147 (2022 - £4,260,861) and maintaining a good working capital position.

Principal risks and uncertainties
 
The principal threats to the Group, in addition to material availability and the lead time for that supply, is as with most other companies, will always be the loss of major customers and the cost of supply impacted by wages, sourcing of components and stability of material prices which are affected by world supply and the values of the GBP.
The Group’s management with the support of its valued, and loyal customers has so far managed to mitigate the extremes of the global shortage of electronic components and has continued to deliver to its customers meeting deadlines, the Group is confident that there are sufficient available resources to ensure a strong future.

Financial key performance indicators
 
The directors consider the Group's key financial performance indicators to be its operating profit and margins together with stock turn which then has an impact on working capital.  These key performance indicators of the business have all been adequate and at a level to ensure customer development and retention and the long term success of the Group. The reduction in stock turn was consistent with increased stock needs for new products.
The main key financial performance indicators for the Group's principal trading subsidiary, Esprit Electronics Limited, are as follows:


2023
2022
Operating profit

1,187,759

539,404

Gross profit margin

27.25%

26.77%

Stock turn

3.87

4.03

Current ratio

1.84

1.64



Page 1

 


ESPRIT BUSINESS SERVICES LIMITED
 



GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023


This report was approved by the board and signed on its behalf.



A Ward
Secretary

Date: 2 February 2024

Page 2

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023

The directors present their report and the financial statements for the year ended 31 May 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group'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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £959,286 (2022 - £451,399).

The directors' recommend the payment of a dividend of £75,000 (2022 - £75,000).

Directors

The directors who served during the year were:

I McInnes 
J McInnes 
L L Sigournay 
G Page 
L Holloway 
D Maloney 

Future developments

The main trading company will continue to focus its efforts on core customers and service lines in order to maintain profit
levels, whilst actively seeking to develop relationships with new customers to increase profit levels.

Financial instruments

The Company uses basic financial instruments such as cash and fixed term deposits.

Page 3

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023

Matters covered in the Group strategic report

The Group has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the group's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 it must be stated in the Directors' Report that it has done so. This includes information that would have been included in the business review and the principal risks and uncertainties.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

Under section 487(2) of the Companies Act 2006Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.
 





A Ward
Secretary

Date: 2 February 2024

Page 4

 


ESPRIT BUSINESS SERVICES LIMITED
 

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ESPRIT BUSINESS SERVICES LIMITED

Opinion


We have audited the financial statements of Esprit Business Services Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 May 2023, which comprise the Consolidated statement of comprehensive income, the Consolidated statement of financial position, the Company statement of financial position, the Consolidated statement of cash flows, the Consolidated statement of changes in equity, the Company statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 May 2023 and of the Group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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.


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 or the 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 Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 5

 


ESPRIT BUSINESS SERVICES LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ESPRIT BUSINESS SERVICES LIMITED (CONTINUED)

Opinion 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 Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, 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 Group's and 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 


ESPRIT BUSINESS SERVICES LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ESPRIT BUSINESS SERVICES LIMITED (CONTINUED)

Auditors' 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 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 Group 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:

The Company is subject to laws and regulations that directly affect the financial statements including The Companies Act 2006, UK taxation legislation, financial reporting legislation and general regulations such as occupational health and safety and General Data Protection. There are no industry specific laws and regulations which would be deemed to have a significant impact on the financial statements. We assessed the extent of compliance with the appropriate laws and regulations as part of our procedures on the related financial statement items.

We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures and the company secretary. We corroborated our inquiries through our review of documentation. 

The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.

We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included: 

°Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
°Understanding how those charged with governance considered and addressed the potential for override of controls orother inappropriate influence over the financial reporting process;
°Challenging assumptions and judgments made by management in its significant accounting estimates;
°Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations; and
°Review of legal and professional expenditure and supporting documentation.

As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation
for fraud and identified the greatest potential for fraud in the following areas:

°Posting of unusual journals and complex transactions;
°Misappropriation of funds through fraudulent supplier ledger activity; and
°Manipulation of amounts subject to significant judgement or estimate.


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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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.


Page 7

 


ESPRIT BUSINESS SERVICES LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ESPRIT BUSINESS SERVICES LIMITED (CONTINUED)

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 2006Our 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.





James Hadfield FCA (Senior statutory auditor)
  
for and on behalf of
Menzies LLP
 
Chartered Accountants
Statutory Auditor
  
3000a Parkway
Whiteley
Hampshire
PO15 7FX

6 February 2024
Page 8

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023

2023
2022
Note
£
£

  

Turnover
 4 
18,822,214
15,303,952

Cost of sales
  
(13,692,527)
(11,207,669)

Gross profit
  
5,129,687
4,096,283

Administrative expenses
  
(3,914,218)
(3,538,603)

Other operating income
 5 
30,103
31,539

Operating profit
 6 
1,245,572
589,219

Share of profit of associates
  
3,826
(8,755)

Total operating profit
  
1,249,398
580,464

Interest receivable and similar income
 10 
4,921
1,840

Interest payable and similar expenses
 11 
(84,991)
(38,398)

Profit before taxation
  
1,169,328
543,906

Tax on profit
 12 
(210,042)
(92,507)

Profit for the financial year
  
959,286
451,399

  

Total comprehensive income for the year
  
959,286
451,399

Profit for the year attributable to:
  

Owners of the parent Company
  
959,286
451,399

  
959,286
451,399

Total comprehensive income for the year attributable to:
  

Owners of the parent Company
  
959,286
451,399

  
959,286
451,399

The notes on pages 19 to 40 form part of these financial statements.

Page 9

 


ESPRIT BUSINESS SERVICES LIMITED
REGISTERED NUMBER:01944164



CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 16 
2,177,940
2,053,918

Investments
 17 
258,239
254,413

  
2,436,179
2,308,331

Current assets
  

Stocks
 18 
3,381,158
3,689,386

Debtors: amounts falling due within one year
 19 
5,796,353
5,263,078

Cash at bank and in hand
 20 
757,956
723,433

  
9,935,467
9,675,897

Creditors: amounts falling due within one year
 21 
(6,443,125)
(6,947,785)

Net current assets
  
 
 
3,492,342
 
 
2,728,112

Total assets less current liabilities
  
5,928,521
5,036,443

Creditors: amounts falling due after more than one year
 22 
(490,144)
(525,112)

Provisions for liabilities
  

Deferred taxation
 24 
(293,230)
(250,470)

  
 
 
(293,230)
 
 
(250,470)

Net assets
  
5,145,147
4,260,861


Capital and reserves
  

Called up share capital 
 25 
6,060
6,060

Profit and loss account
 26 
5,139,087
4,254,801

Equity attributable to owners of the parent Company
  
5,145,147
4,260,861

  
5,145,147
4,260,861


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




I McInnes
L L Sigournay
Director
Director


Date: 2 February 2024

The notes on pages 19 to 40 form part of these financial statements.

Page 10

 


ESPRIT BUSINESS SERVICES LIMITED
REGISTERED NUMBER:01944164



COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 17 
340,562
340,562

  
340,562
340,562

Current assets
  

Debtors: amounts falling due within one year
 19 
1,672,534
1,672,534

  
1,672,534
1,672,534

Creditors: amounts falling due within one year
 21 
(1,955,632)
(1,955,632)

Net current liabilities
  
 
 
(283,098)
 
 
(283,098)

Total assets less current liabilities
  
57,464
57,464

  

  

Net assets excluding pension asset
  
57,464
57,464

Net assets
  
57,464
57,464


Capital and reserves
  

Called up share capital 
 25 
6,060
6,060

Profit and loss account brought forward
  
51,404
51,404

Profit for the year
  
75,000
75,000

Other changes in the profit and loss account

  

(75,000)
(75,000)

Profit and loss account carried forward
  
51,404
51,404

  
57,464
57,464


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


I McInnes
L L Sigournay
Director
Director


Date: 2 February 2024

The notes on pages 19 to 40 form part of these financial statements.

Page 11

 


ESPRIT BUSINESS SERVICES LIMITED
 



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023


Called up share capital
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£

At 1 June 2022
6,060
4,254,801
4,260,861
4,260,861


Comprehensive income for the year

Profit for the year
-
959,286
959,286
959,286
Total comprehensive income for the year
-
959,286
959,286
959,286


Contributions by and distributions to owners

Dividends: Equity capital
-
(75,000)
(75,000)
(75,000)


Total transactions with owners
-
(75,000)
(75,000)
(75,000)


At 31 May 2023
6,060
5,139,087
5,145,147
5,145,147


The notes on pages 19 to 40 form part of these financial statements.

Page 12

 


ESPRIT BUSINESS SERVICES LIMITED
 



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2022


Called up share capital
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£

At 1 June 2021
6,060
3,878,402
3,884,462
3,884,462


Comprehensive income for the year

Profit for the year
-
451,399
451,399
451,399
Total comprehensive income for the year
-
451,399
451,399
451,399


Contributions by and distributions to owners

Dividends: Equity capital
-
(75,000)
(75,000)
(75,000)


Total transactions with owners
-
(75,000)
(75,000)
(75,000)


At 31 May 2022
6,060
4,254,801
4,260,861
4,260,861


The notes on pages 19 to 40 form part of these financial statements.

Page 13

 


ESPRIT BUSINESS SERVICES LIMITED
 



COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 June 2022
6,060
51,404
57,464


Comprehensive income for the year

Profit for the year
-
75,000
75,000
Total comprehensive income for the year
-
75,000
75,000


Contributions by and distributions to owners

Dividends: Equity capital
-
(75,000)
(75,000)


Total transactions with owners
-
(75,000)
(75,000)


At 31 May 2023
6,060
51,404
57,464


The notes on pages 19 to 40 form part of these financial statements.

Page 14

 


ESPRIT BUSINESS SERVICES LIMITED
 



COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2022


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 June 2021
6,060
51,404
57,464


Comprehensive income for the year

Profit for the year
-
75,000
75,000
Total comprehensive income for the year
-
75,000
75,000


Contributions by and distributions to owners

Dividends: Equity capital
-
(75,000)
(75,000)


Total transactions with owners
-
(75,000)
(75,000)


At 31 May 2022
6,060
51,404
57,464


The notes on pages 19 to 40 form part of these financial statements.

Page 15

 


ESPRIT BUSINESS SERVICES LIMITED
 



CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
959,286
451,399

Adjustments for:

Depreciation of tangible assets
562,044
420,911

Loss on disposal of tangible assets
(83,617)
(33,231)

Government grants
(30,103)
(31,539)

Interest paid
84,991
38,428

Interest received
(4,921)
(1,840)

Taxation charge
210,042
92,507

Decrease/(increase) in stocks
308,228
(1,813,783)

(Increase) in debtors
(599,362)
(785,969)

(Decrease)/increase in creditors
(1,239,078)
1,423,432

Share of operating (loss)/profit in associates
(3,826)
8,755

Corporation tax (paid)
(93,700)
(171,283)

Net cash generated from operating activities

69,984
(402,213)


Cash flows from investing activities

Purchase of tangible fixed assets
(699,584)
(548,487)

Sale of tangible fixed assets
97,136
71,879

Government grants received
30,103
31,539

Interest received
4,921
1,840

HP interest paid
(31,869)
(26,403)

Net cash from investing activities

(599,293)
(469,632)
Page 16

 


ESPRIT BUSINESS SERVICES LIMITED
 



CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023


2023
2022

£
£



Cash flows from financing activities

Repayment of loans
(10,000)
(7,500)

Repayment of/new finance leases
(30,819)
88,273

Dividends paid
(75,000)
(75,000)

Interest paid
(53,122)
(12,025)

Net cash used in financing activities
(168,941)
(6,252)

Net (decrease) in cash and cash equivalents
(698,250)
(878,097)

Cash and cash equivalents at beginning of year
(119,905)
758,192

Cash and cash equivalents at the end of year
(818,155)
(119,905)


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
757,956
723,433

Bank overdrafts
(1,576,111)
(843,338)

(818,155)
(119,905)


The notes on pages 19 to 40 form part of these financial statements.

Page 17

 


ESPRIT BUSINESS SERVICES LIMITED
 



CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MAY 2023




At 1 June 2022
Cash flows
At 31 May 2023
£

£

£

Cash at bank and in hand

723,433

34,523

757,956

Bank overdrafts

(843,338)

(732,773)

(1,576,111)

Debt due within 1 year

(43,182)

10,000

(33,182)

Finance leases

(861,909)

30,819

(831,090)


(1,024,996)
(657,431)
(1,682,427)

The notes on pages 19 to 40 form part of these financial statements.

Page 18

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

1.


General information

These financial statements have been prepared in compliance with FRS102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
Esprit Business Services Limited is a private company limited by shares incorporated and domiciled in the United Kingdom.
The address of its registered office, which is also the same as its principal place of business, is disclosed within the Company Information page.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 June 2015.

Page 19

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)

  
2.3

Associates and joint ventures

An entity is treated as a joint venture where the Group is a party to a contractual agreement with one or more parties from outside the Group to undertake an economic activity that is subject to joint control.
An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions.
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated Statement of Comprehensive Income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated Statement of Financial Position, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition.
Any premium on acquisition is dealt with in accordance with the goodwill policy.

 
2.4

Going concern

The directors consider the Group and Company's finances remain strong and having taken that into consideration the expected performance over the foreseeable future, the directors consider that the Group and Company will have sufficient resources to continue operational existence for a period of at least 12 months from the date that these accounts are authorised for approval.
For this reason, the Group and Company continue to adopt the going concern basis of accounting in preparing these annual financial statements.

 
2.5

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 20

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)

 
2.6

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.7

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.8

Leased assets: the Group as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

 
2.9

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.

 
2.10

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.11

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 21

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)

 
2.12

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.13

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.14

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.15

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 22

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)


2.15
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, On both a reducing balance and straight line basis.

Depreciation is provided on the following basis:

Freehold property
-
2%
straight line
Long-term leasehold property
-
25%
- 50% reducing balance
Plant and machinery
-
20%
- 25% reducing balance
Motor vehicles
-
35%
reducing balance
Fixtures and fittings
-
25%
- 50% reducing balance

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.

 
2.16

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.17

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

  
2.18

Work in progress

Work in progress is valued on the basis of direct costs plus attributable overheads based on normal level of activity. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.

 
2.19

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 23

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)

 
2.20

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.21

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.22

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.

 
2.23

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

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 Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

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 Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies 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.
Page 24

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)


2.23
Financial instruments (continued)


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.

 
2.24

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

  
2.25

Bank factored debts

Factored debt in which recourse lies with the lender is recognised as a liability and is included in creditors falling due within one year. The related receivables continue to be reported separately in trade debtors until the balances are collected.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Fixed asset residual values:
The directors have reviewed the asset lives and associated residual values of all fixed asset classes and have concluded that asset lives and residual values are appropriate.
Slow moving stock provision:
Slow moving stock is defined as stock that cannot be directly allocated to a customer order for a period of between 3 and 18 months. The directors believe this is a reasonable measure based on their experience of the business.

Page 25

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sale of goods
18,822,214
15,303,952

18,822,214
15,303,952


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
18,822,214
15,303,952

18,822,214
15,303,952



5.


Other operating income

2023
2022
£
£

Government grants receivable
30,103
31,539

30,103
31,539



6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Exchange differences
(14,361)
(3,203)

Other operating lease rentals
91,122
95,042


7.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
20,700
14,950

Page 26

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
2,791,393
2,397,923
-
-

Social security costs
282,128
230,183
-
-

Cost of defined contribution scheme
88,521
73,075
-
-

3,162,042
2,701,181
-
-


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Management and production
90
82


9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
378,548
278,819

Group contributions to defined contribution pension schemes
24,888
19,570

403,436
298,389


During the year retirement benefits were accruing to 6 directors (2022 - 6) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £177,318 (2022 - £140,644).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £12,053 (2022 - £9,000).


10.


Interest receivable

2023
2022
£
£


Other interest receivable
4,921
1,840

4,921
1,840

Page 27

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
1,188
705

Finance leases and hire purchase contracts
31,869
26,403

Other interest payable
51,934
11,290

84,991
38,398


12.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
167,282
25,607

Adjustments in respect of previous periods
-
(16,500)


167,282
9,107


Total current tax
167,282
9,107

Deferred tax


Origination and reversal of timing differences
42,760
83,400

Total deferred tax
42,760
83,400


Tax on profit
210,042
92,507
Page 28

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 20% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,169,328
543,906


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 20% (2022 - 19%)
233,866
103,342

Effects of:


Non-tax deductible expenses
2,698
1,589

Capital allowances for year in excess of depreciation
(34,188)
(2,387)

Adjustments to tax charge in respect of prior periods
-
(16,500)

Factors affecting associates leading to a decrease in the tax charge
(765)
1,663

Other differences leading to an increase (decrease) in the tax charge
-
4,800

Marginal relief
(143)
-

Changes in taxation rates
8,574
-

Total tax charge for the year
210,042
92,507


13.


Dividends

2023
2022
£
£


Dividends
75,000
75,000

75,000
75,000


14.


Parent company profit for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was £75,000 (2022 - £75,000).

Page 29

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

15.


Intangible assets

Group and Company





Goodwill

£



Cost


At 1 June 2022
156,821



At 31 May 2023

156,821



Amortisation


At 1 June 2022
156,821



At 31 May 2023

156,821



Net book value



At 31 May 2023
-



At 31 May 2022
-



Page 30


ESPRIT BUSINESS SERVICES LIMITED
  
 
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2023



16.


Tangible fixed assets


Group







Freehold property
Long-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Total

£
£
£
£
£
£



Cost or valuation


At 1 June 2022
821,576
188,264
3,246,717
330,020
531,807
5,118,384


Additions
-
66,811
462,129
149,493
21,151
699,584


Disposals
-
-
(70,106)
(91,619)
(32,510)
(194,235)



At 31 May 2023

821,576
255,075
3,638,740
387,894
520,448
5,623,733



Depreciation


At 1 June 2022
167,603
165,843
2,098,974
153,631
478,415
3,064,466


Charge for the year on owned assets
9,859
13,783
422,093
85,726
30,583
562,044


Disposals
-
-
(70,106)
(78,101)
(32,510)
(180,717)



At 31 May 2023

177,462
179,626
2,450,961
161,256
476,488
3,445,793



Net book value



At 31 May 2023
644,114
75,449
1,187,779
226,638
43,960
2,177,940



At 31 May 2022
653,973
22,421
1,147,743
176,389
53,392
2,053,918

Page 31

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

           16.Tangible fixed assets (continued)




The net book value of land and buildings may be further analysed as follows:


2023
2022
£
£

Freehold
644,114
653,973

Long leasehold
75,449
22,421

719,563
676,394


The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2023
2022
£
£



Plant and machinery
976,306
967,044

Motor vehicles
96,750
138,215

1,073,056
1,105,259

The depreciation charge in respect of assets held under finance leases or hire purchase contracts amounted to £375,698 (2022 - £275,403).


17.


Fixed asset investments

Group





Investments in associates

£



Cost or valuation


At 1 June 2022
254,413


Share of profit/(loss)
3,826



At 31 May 2023
258,239




Page 32

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Company





Investments in subsidiary companies

£



Cost or valuation


At 1 June 2022
340,562



At 31 May 2023
340,562





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Esprit Electronics Limited
Ordinary
100%
Wavelegnth Properties Limited
Ordinary
100%
AEF Solutions Limited
Ordinary
100%
Stablemast Limited
Ordinary
100%

All subsidiaries are registered at the address shown on the Company information page.


Associates


The following were associates of the Company:


Name

Class of shares

Holding

Niche Holdings Limited
Ordinary
100%
Niche Holdings Limited
Preference
45%
NGL Limited
Ordinary
90%

All associates are registered at the address shown on the Company information page.

Aggregate of share capital and reserves
Profit/(loss)
        £
        £

Niche Holdings Limited

426,763

8,597

NGL Limited

107,386

-


Page 33

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

18.


Stocks

Group
Group
2023
2022
£
£

Raw materials and consumables
2,360,881
2,247,143

Work in progress (goods to be sold)
1,020,277
1,442,243

3,381,158
3,689,386


The difference between purchase price or production cost of stocks and their replacement cost is not material.


19.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
3,631,266
2,834,086
-
-

Amounts owed by group undertakings
-
-
283,658
283,658

Amounts owed by joint ventures and associated undertakings
-
-
140,904
140,904

Other debtors
1,915,372
1,832,466
1,216,646
1,216,646

Prepayments and accrued income
218,290
565,101
-
-

Tax recoverable
31,425
31,425
31,326
31,326

5,796,353
5,263,078
1,672,534
1,672,534


Included within Trade debtors are debts of £3,631,266 (2022 -  £2,834,086) which are under a factoring agreement where recourse lies with the lender.


20.


Cash and cash equivalents

Group
Group
2023
2022
£
£

Cash at bank and in hand
757,956
723,433

Less: bank overdrafts
(1,576,111)
(843,338)

(818,155)
(119,905)


Page 34

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

21.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank overdrafts
1,576,111
843,338
-
-

Bank loans
32,500
42,500
-
-

Trade creditors
2,196,210
3,820,913
-
-

Amounts owed to group undertakings
-
-
895,980
895,980

Amounts owed to other participating interests
118,596
118,596
-
-

Corporation tax
18,834
11,338
-
-

Other taxation and social security
530,133
86,171
-
-

Obligations under finance lease and hire purchase contracts
340,946
336,797
-
-

Other creditors
1,207,330
1,207,331
1,059,652
1,059,652

Accruals and deferred income
422,465
480,801
-
-

6,443,125
6,947,785
1,955,632
1,955,632



The following liabilities were secured:
Group
Group
2023
2022
£
£

Proceeds from factored debts
1,576,111
843,338

HP liabilities and finance leases
340,946
336,797

1,917,057
1,180,135

Details of security provided:

Bank borrowing is secured by charges over assets held by the Group's trading subsidiaries.
In addition to this security, there are two third party guarantees in place dated 25 May 2005 and 19 June 2009 limited to £100,000 and £165,000 respectively in relation of the available overdraft facility for two of the Group's trading subsidiaries.
Hire purchase creditors are secured by a charge over the related asset.

Page 35

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

22.


Creditors: Amounts falling due after more than one year

Group
Group
2023
2022
£
£

Net obligations under finance leases and hire purchase contracts
490,144
525,112

490,144
525,112



The following liabilities were secured:
Group
Group
2023
2022
£
£


HP liabilities and finance leases
490,144
525,112

490,144
525,112

Details of security provided:

Hire purchase creditors are secured by a charge over the related asset.




23.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
Group
2023
2022
£
£

Within one year
340,946
336,797

Between 1-5 years
490,144
525,112

831,090
861,909

Hire purchase creditors are secured by a charge over the related asset.

Page 36

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

24.


Deferred taxation


Group



2023


£






At beginning of year
250,470


Charged to profit or loss
(42,760)



At end of year
293,230

Group
Group
2023
2022
£
£

Accelerated capital allowances
293,230
250,470

293,230
250,470


25.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



6,060 (2022 - 6,060) Ordinary shares of £1.00 each
6,060
6,060

Each Ordinary share has equal voting and dividend rights.



26.


Reserves

Profit and loss account

This reserve includes all current and prior period retained profit and losses.


27.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £88,521 (2022 - £73,075) . Contributions totalling £16,834 (2022 - £120) were payable to the fund at the reporting date and are included in creditors.

Page 37

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

28.


Commitments under operating leases

At 31 May 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2023
2022
£
£

Land and Buildings

Not later than 1 year
74,850
18,713

Later than 1 year and not later than 5 years
206,045
-

280,895
18,713
Group
Group
2023
2022
£
£

Other

Not later than 1 year
9,498
4,249

Later than 1 year and not later than 5 years
4,957
6,997

14,455
11,246


29.


Transactions with directors

The following is a summary of the directors' transactions with the Group during the year:

I McInnes
        £

Balance due to the Group at 1 June 2022

5,805

Payments made on behalf of the director

-

Repayments made on behalf of the director

-

Balance due to the Group at 31 May 2023

5,805


Page 38

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

30.


Related party transactions

The following transactions occurred with companies related to the Group by virtue of Mr I McInnes' controlling interest.
Group
During the year, the Group sold goods and recharged expenses to:

2023
2022
        £
        £

Open System Solutions Limited

551,069

302,330

Icon Electronics Limited

2,122

44,098

Wavelength Holdings Limited

59,312

59,520


The Group made purchases from:

2023
2022
        £
        £

Open System Solutions Limited

1,492

6,964

Icon Electronics Limited

-

20,636

Wavelength Holdings Limited

826,712

845,871


The Group also paid management charges to Wavelength Holdings Limited of £471,000 (2022 -  £471,000).
At the balance sheet date, the Group was owed the following amounts included within other debtors:

2023
2022
        £
        £

Revival Powerboats LLP

769,600

769,600

Revival Yachts LLP

164,000

164,000

Wavelength Holdings Limited

572,737

518,271

Wavelength Property Services LLP

11,940

11,940


Included in creditors falling due within one year are the following amounts provided against the above balances in case of non-recovery:

2023
2022
        £
        £

Revival Powerboats LLP

769,600

769,600

Revival Yachts LLP

164,000

164,000


Page 39

 


ESPRIT BUSINESS SERVICES LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

30.


Related parties (continued)

At the balance sheet date, the Group owed the following amounts to other participating interests:

2023
2022
        £
        £

Niche Holdings Limited

9,924

9,924

NGL Limited

108,672

108,672


Included within the trade debtors were the following amounts:

2023
2022
        £
        £

Open System Solutions Limited

221,688

114,595

Icon Electronics Limited

-

14,496


Included within the trade creditors were the following amounts:

2023
2022
        £
        £

Wavelength Holdings Limited

23,969

23,950


Company
The Company has taken advantage of the exemption in Financial Reporting Standard 102 Section 33 from the requirement to disclose transactions with Group companies on the grounds that they are wholly owned within the Group.


31.


Controlling party

The Company was under the control of Mr I McInnes throughout the current and previous year.

Page 40