Company registration number 09058109 (England and Wales)
SEJ ASSETS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
SEJ ASSETS LIMITED
COMPANY INFORMATION
Directors
Anish Kumar Aggarwal
Sejal Mahesh Aggarwal
Company number
09058109
Registered office
Unit 5a Caxton Trading Estate
Printing House Lane
Hayes
Middlesex
UB3 1BE
Auditor
KLSA LLP
Kalamu House
11 Coldbath Square
London
EC1R 5HL
Bankers
Barclays Bank Plc
1 Churchill Place
London
E14 5HP
SEJ ASSETS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 34
SEJ ASSETS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -

The directors present their strategic report of the group for year ended 31 May 2023.

Review of the business

The directors are satisfied with the group’s overall revenue and profitability in the year ended 31 May 2023. Whilst the group’s turnover decreased, gross margins were generally preserved, with a good level of net profitability.

 

The drop in revenue was largely attributable to the downturn experienced within its principal trading subsidiary, SEJ Distribution Ltd., arising from increased competition in e-commerce market, because of continual increases in prices of raw materials and goods since the end of pandemic.

 

Triplast Ltd continued its activities in development and production of environmentally sustainable plastic packaging products.

 

SEJ Midlands Ltd performed strongly, continuing its growth curve, and producing a strong set of financial results. During the year, the company acquired business with registered trademark “Packaging Now” and has continued to expand its market share in the Midlands.

 

The group’s property investments have had some long spells of vacant properties and associated costs, but the overall results have been satisfactory.

 

The group has expanded and diversified its activities to include pharmacy services, via a new subsidiary company, SEJ Pharmaceutical Ltd, added to the group in September 2022. This company is now successfully operating three pharmacy shops.

Principal risks and uncertainties

During this challenging time, the principal risk of the group is in maintaining its market share and customer base as well as preservation of margins within its trading subsidiary companies.

 

Regarding its property investment portfolio, the year ahead is likely to present risks associated with impact of economy on financial positions of tenants.

 

The following could potentially materially affect the results of the company and the group:

 

To mitigate the above, the group has implemented the following measures:

 

Key performance indicators

The group closely monitors overall revenue levels, gross margin levels and overhead/operational costs, to ensure the group is operating effectively and efficiently. The directors are comfortable that the group will continue to operate at similar levels of profitability in the financial year ahead.

SEJ ASSETS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -

On behalf of the board

Anish Kumar Aggarwal
Director
23 February 2024
SEJ ASSETS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -

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

Principal activities

The principal activity of the group is the sale and distribution of packaging materials. The group also owns and manages a portfolio of investment properties.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £500,000. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Anish Kumar Aggarwal
Sejal Mahesh Aggarwal
Post reporting date events

SEJ Pharmaceutical Limited acquired the goodwill and assets of three established pharmacy businesses specialising in community pharmacy services. The total investment in these businesses amounted to £1.2 million.

Auditor

KLSA LLP were appointed auditors to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Anish Kumar Aggarwal
Director
23 February 2024
SEJ ASSETS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2023
- 4 -

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

SEJ ASSETS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SEJ ASSETS LIMITED
- 5 -
Opinion

We have audited the financial statements of SEJ Assets Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2023 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 and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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:

SEJ ASSETS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SEJ ASSETS LIMITED
- 6 -
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 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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We also considered potential fraud drivers: including financial or other pressures, opportunity, override of controls and personal or corporate motivations. We considered the programmes and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included testing journals, evaluating the business rationale of significant transactions outside the normal course of business and validating the appropriateness of internal controls and significant accounting estimations based on our fraud risk criteria;

 

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

SEJ ASSETS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SEJ ASSETS LIMITED
- 7 -

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

We obtained understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those related to the financial reporting framework, tax regulations in the jurisdictions in which the company operates.

 

Based on this understanding we designed our audit procedures to identify non-compliance with laws and regulations. Our procedures involved: making enquiries of management, those responsible for legal and compliance procedures and reviewing other correspondence.

 

We communicated identified fraud risks and non-compliance with laws and regulations with those charged with governance, throughout the audit team and remained alert to any indications throughout the audit.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion.

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.

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.

Harsheel Dodhia (Senior Statutory Auditor)
For and on behalf of KLSA LLP
23 February 2024
Chartered Accountants
Statutory Auditor
Kalamu House
11 Coldbath Square
London
EC1R 5HL
SEJ ASSETS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
27,383,332
29,644,744
Cost of sales
(17,893,282)
(19,411,013)
Gross profit
9,490,050
10,233,731
Distribution costs
(2,092,332)
(1,870,605)
Administrative expenses
(2,493,178)
(2,091,624)
Other operating income
5,716
-
Operating profit
4
4,910,256
6,271,502
Interest receivable and similar income
8
205,354
24,245
Interest payable and similar expenses
9
(122,956)
(144,110)
Fair value gains and losses on investment properties
14
(120,589)
478,081
Profit before taxation
4,872,065
6,629,718
Tax on profit
10
(1,139,494)
(1,252,335)
Profit for the financial year
3,732,571
5,377,383
Profit for the financial year is attributable to:
- Owners of the parent company
3,787,443
5,358,974
- Non-controlling interests
(54,872)
18,409
3,732,571
5,377,383
SEJ ASSETS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 9 -
2023
2022
£
£
Profit for the year
3,732,571
5,377,383
Other comprehensive income
-
-
Total comprehensive income for the year
3,732,571
5,377,383
Total comprehensive income for the year is attributable to:
- Owners of the parent company
3,787,443
5,358,974
- Non-controlling interests
(54,872)
18,409
3,732,571
5,377,383
SEJ ASSETS LIMITED
GROUP BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
12
463,538
728,778
Tangible assets
13
4,740,756
5,429,393
Investment properties
14
6,999,436
6,477,647
12,203,730
12,635,818
Current assets
Stocks
18
2,008,820
1,906,502
Debtors
19
5,063,269
4,125,019
Cash at bank and in hand
15,997,475
15,712,658
23,069,564
21,744,179
Creditors: amounts falling due within one year
20
(5,531,098)
(7,146,728)
Net current assets
17,538,466
14,597,451
Total assets less current liabilities
29,742,196
27,233,269
Creditors: amounts falling due after more than one year
21
(553,773)
(1,222,511)
Provisions for liabilities
Deferred tax liability
24
475,757
530,712
(475,757)
(530,712)
Net assets
28,712,666
25,480,046
Capital and reserves
Called up share capital
26
4,900,002
4,900,002
Profit and loss reserves
23,806,619
20,519,176
Equity attributable to owners of the parent company
28,706,621
25,419,178
Non-controlling interests
6,045
60,868
28,712,666
25,480,046

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 23 February 2024 and are signed on its behalf by:
23 February 2024
Anish Kumar Aggarwal
Director
Company registration number 09058109 (England and Wales)
SEJ ASSETS LIMITED
COMPANY BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
4,353,957
4,870,366
Investment properties
14
6,999,436
6,477,647
Investments
15
4,900,781
4,900,730
16,254,174
16,248,743
Current assets
Debtors
19
2,462,784
1,908,306
Cash at bank and in hand
12,099,385
8,675,479
14,562,169
10,583,785
Creditors: amounts falling due within one year
20
(4,284,010)
(1,403,966)
Net current assets
10,278,159
9,179,819
Total assets less current liabilities
26,532,333
25,428,562
Creditors: amounts falling due after more than one year
21
(493,868)
(1,188,334)
Provisions for liabilities
Deferred tax liability
24
386,840
431,405
(386,840)
(431,405)
Net assets
25,651,625
23,808,823
Capital and reserves
Called up share capital
26
4,900,002
4,900,002
Profit and loss reserves
20,751,623
18,908,821
Total equity
25,651,625
23,808,823

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,342,802 (2022 - £5,315,286 profit).

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 23 February 2024 and are signed on its behalf by:
23 February 2024
Anish Kumar Aggarwal
Director
Company registration number 09058109 (England and Wales)
SEJ ASSETS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
Share capital
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
Balance at 1 June 2021
4,900,002
15,660,202
20,560,204
42,459
20,602,663
Year ended 31 May 2022:
Profit and total comprehensive income
-
5,358,974
5,358,974
18,409
5,377,383
Dividends
11
-
(500,000)
(500,000)
-
(500,000)
Balance at 31 May 2022
4,900,002
20,519,176
25,419,178
60,868
25,480,046
Year ended 31 May 2023:
Profit and total comprehensive income
-
3,787,443
3,787,443
(54,872)
3,732,571
Dividends
11
-
(500,000)
(500,000)
-
(500,000)
Issue of shares in subsidiary to non-controlling interest
-
-
-
49
49
Balance at 31 May 2023
4,900,002
23,806,619
28,706,621
6,045
28,712,666
SEJ ASSETS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 June 2021
4,900,002
14,093,535
18,993,537
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
5,315,286
5,315,286
Dividends
11
-
(500,000)
(500,000)
Balance at 31 May 2022
4,900,002
18,908,821
23,808,823
Year ended 31 May 2023:
Profit and total comprehensive income
-
2,342,802
2,342,802
Dividends
11
-
(500,000)
(500,000)
Balance at 31 May 2023
4,900,002
20,751,623
25,651,625
SEJ ASSETS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
33
4,192,085
5,245,403
Interest paid
(122,956)
(144,110)
Income taxes paid
(1,992,301)
(1,403,528)
Net cash inflow from operating activities
2,076,828
3,697,765
Investing activities
Purchase of intangible assets
(106,611)
-
Purchase of tangible fixed assets
(587,384)
(88,026)
Proceeds from disposal of tangible fixed assets
-
3,355
Purchase of investment property
(804,436)
(1,160,660)
Proceeds from disposal of investment property
1,075,000
-
Interest received
205,354
24,245
Net cash used in investing activities
(218,077)
(1,221,086)
Financing activities
Repayment of bank loans
(1,112,420)
(181,039)
Increase in finance leases obligations
38,486
8,004
Dividends paid to equity shareholders
(500,000)
(500,000)
Net cash used in financing activities
(1,573,934)
(673,035)
Net increase in cash and cash equivalents
284,817
1,803,644
Cash and cash equivalents at beginning of year
15,712,658
13,909,014
Cash and cash equivalents at end of year
15,997,475
15,712,658
SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 15 -
1
Accounting policies
Company information

SEJ Assets Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 5a Caxton Trading Estate, Printing House Lane, Hayes, Middlesex, UB3 1BE.

 

The group consists of SEJ Assets Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

 

The parent company has taken advantage of disclosure exemptions provided by FRS 102, due to which no cash flow statement has been prepared for the parent company.

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company SEJ Assets Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 May 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.3
Going concern

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.

1.4
Turnover

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.

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 16 -

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.

Turnover represents rent receivable, net of VAT.

1.5
Intangible fixed assets - goodwill and intellectual property

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

 

Intellectual property is initially measured at cost and subsequently measured at cost, net of amortization and any impairment losses. Intellectual property is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
50 years using the straight-line method
Plant and equipment
25% reducing balance basis or over 4 or 12 years using the straight-line method
Fixtures and fittings
25% reducing balance basis or over 4 or 12 years using the straight-line method
Computers
25% straight-line method
Motor vehicles
25% straight-line method

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.

1.7
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 17 -
1.8
Fixed asset investments

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.

1.9
Impairment of fixed assets

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.

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 18 -

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.

1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial instruments

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

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

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.

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 19 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the 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.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial 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.

Other financial liabilities

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.

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 20 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

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.

1.14
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 21 -
1.17
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

1.18
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the 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.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales of goods
26,970,445
29,227,091
Rent and service charges
412,887
417,653
27,383,332
29,644,744
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
27,363,806
29,460,903
Rest of the world
19,526
183,841
27,383,332
29,644,744
SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
3
Turnover and other revenue
(Continued)
- 22 -
2023
2022
£
£
Other revenue
Interest income
205,354
24,245
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging:
Exchange losses
11,336
3,059
Depreciation of owned tangible fixed assets
113,312
152,752
Loss on disposal of tangible fixed assets
231,650
5,060
Loss on disposal of investment property
18,117
-
0
Amortisation of intangible assets
371,851
364,389
Operating lease charges
104,473
12,031
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,500
4,400
Audit of the financial statements of the company's subsidiaries
27,000
18,600
32,500
23,000
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Sales and customer support
16
17
-
-
Packing, distribution and logistics
35
33
-
-
Production and product development
9
17
-
-
Management and adminstration
5
5
2
2
Total
65
72
2
2
SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
6
Employees
(Continued)
- 23 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
1,807,138
1,862,352
-
0
-
0
Social security costs
178,845
176,585
-
-
Pension costs
59,658
17,162
-
0
-
0
2,045,641
2,056,099
-
0
-
0
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
208,639
144,891
Company pension contributions to defined contribution schemes
40,200
-
248,839
144,891
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
124,952
6,977
Other interest income
80,402
17,268
Total income
205,354
24,245
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
124,952
6,977
SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 24 -
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
70,996
52,640
Other finance costs:
Interest on finance leases and hire purchase contracts
913
1,910
Other interest
51,047
89,560
Total finance costs
122,956
144,110
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,194,449
1,224,399
Adjustments in respect of prior periods
-
0
(64,624)
Total current tax
1,194,449
1,159,775
Deferred tax
Origination and reversal of timing differences
(54,955)
92,560
Total tax charge
1,139,494
1,252,335

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
4,872,065
6,629,718
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
974,413
1,259,646
Tax effect of expenses that are not deductible in determining taxable profit
82,347
32,525
Tax effect of income not taxable in determining taxable profit
(450)
-
0
Unutilised tax losses carried forward
21,084
(90,835)
Adjustments in respect of prior years
-
0
(87,857)
Effect of change in corporation tax rate
158
-
Permanent capital allowances in excess of depreciation
(34,819)
(21,648)
Amortisation on assets not qualifying for tax allowances
73,582
67,944
Deferred tax
(54,955)
92,560
Capital gains tax
78,134
-
0
Taxation charge
1,139,494
1,252,335
SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Dividends paid
500,000
500,000
12
Intangible fixed assets
Group
Goodwill and Intellectual Property
£
Cost
At 1 June 2022
3,643,890
Additions
106,611
At 31 May 2023
3,750,501
Amortisation and impairment
At 1 June 2022
2,915,112
Amortisation charged for the year
371,851
At 31 May 2023
3,286,963
Carrying amount
At 31 May 2023
463,538
At 31 May 2022
728,778
The company had no intangible fixed assets at 31 May 2023 or 31 May 2022.
SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 26 -
13
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 June 2022
5,076,874
966,780
68,775
3,568
93,262
6,209,259
Additions
438,508
38,410
363
4,189
105,914
587,384
Disposals
-
0
(367,722)
-
0
-
0
-
0
(367,722)
Transfer to investment property
(931,059)
-
0
-
0
-
0
-
0
(931,059)
At 31 May 2023
4,584,323
637,468
69,138
7,757
199,176
5,497,862
Depreciation and impairment
At 1 June 2022
211,517
461,318
55,977
2,452
48,602
779,866
Depreciation charged in the year
21,556
60,233
2,761
421
28,341
113,312
Eliminated in respect of disposals
-
0
(136,072)
-
0
-
0
-
0
(136,072)
At 31 May 2023
233,073
385,479
58,738
2,873
76,943
757,106
Carrying amount
At 31 May 2023
4,351,250
251,989
10,400
4,884
122,233
4,740,756
At 31 May 2022
4,865,357
505,462
12,798
1,116
44,660
5,429,393
Company
Freehold land and buildings
Plant and equipment
Total
£
£
£
Cost
At 1 June 2022
5,077,279
9,208
5,086,487
Additions
438,508
-
0
438,508
Transfer to investment property
(931,059)
-
0
(931,059)
At 31 May 2023
4,584,728
9,208
4,593,936
Depreciation and impairment
At 1 June 2022
211,517
4,604
216,121
Depreciation charged in the year
21,556
2,302
23,858
At 31 May 2023
233,073
6,906
239,979
Carrying amount
At 31 May 2023
4,351,655
2,302
4,353,957
At 31 May 2022
4,865,762
4,604
4,870,366
SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 27 -
14
Investment properties
Group
Company
2023
2023
£
£
Fair value
At 1 June 2022
6,477,647
6,477,647
Additions through external acquisition
804,436
804,436
Transfers from owner-occupied property
931,059
931,059
Disposals
(1,093,117)
(1,093,117)
Net gains or losses through fair value adjustments
(120,589)
(120,589)
At 31 May 2023
6,999,436
6,999,436

The fair value of investment properties have been based on the directors' estimate of the fair value.

 

On a historical cost basis the investment properties would have been included at an original cost of £5,308,936 (2022: £4,213,997).

15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
4,900,781
4,900,730
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 June 2022
4,900,730
Additions
51
At 31 May 2023
4,900,781
Carrying amount
At 31 May 2023
4,900,781
At 31 May 2022
4,900,730
16
Subsidiaries

Details of the company's subsidiaries at 31 May 2023 are as follows:

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
16
Subsidiaries
(Continued)
- 28 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
SEJ Distribution Ltd
United Kingdom
Ordinary shares
100.00
SEJ Midlands Limited
United Kingdom
Ordinary shares
100.00
Triplast Limited
United Kingdom
Ordinary shares
81.00
SEJ Pharmaceuitcal Limited
United Kingdom
Ordinary shares
51.00
17
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
15,997,475
13,909,014
12,099,385
8,675,480

Financial assets measured at fair value through profit or loss comprise cash at bank and in hand.

18
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
51,321
78,269
-
-
Finished goods and goods for resale
1,957,499
1,828,233
-
0
-
0
2,008,820
1,906,502
-
-
19
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,238,602
1,236,267
908
11,753
Corporation tax recoverable
321,734
321,734
-
0
-
0
Amounts owed by group undertakings
-
-
530,374
791,331
Other debtors
3,294,847
2,419,754
1,924,163
1,063,334
Prepayments and accrued income
208,086
147,264
7,339
41,888
5,063,269
4,125,019
2,462,784
1,908,306
SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 29 -
20
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
22
202,537
610,491
193,370
601,324
Obligations under finance leases
23
10,762
8,004
-
0
-
0
Trade creditors
2,359,713
3,159,172
18,698
4,482
Amounts owed to group undertakings
-
0
-
0
3,509,458
442,448
Corporation tax payable
1,296,689
2,094,541
192,813
222,845
Other taxation and social security
783,896
525,802
242,299
-
Other creditors
795,499
563,155
101,383
37,383
Accruals and deferred income
82,002
185,563
25,989
95,484
5,531,098
7,146,728
4,284,010
1,403,966
21
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
22
518,045
1,222,511
493,868
1,188,334
Obligations under finance leases
23
35,728
-
0
-
0
-
0
553,773
1,222,511
493,868
1,188,334
22
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
720,582
1,833,002
687,238
1,789,658
Payable within one year
202,537
610,491
193,370
601,324
Payable after one year
518,045
1,222,511
493,868
1,188,334

The bank loan is repayable by means of instalments comprising capital and interest, over a period of 20 years expiring in October 2034. Commercial rates of interest are charged on the bank loans.

 

The group's bank facility is secured by the Bank's standard legal charge over freehold property and a debenture containing a fixed and floating charge over the assets of the parent company and it's subsidiary, SEJ Distribution Limited.

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 30 -
23
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
10,761
8,004
-
0
-
0
In two to five years
35,729
-
0
-
0
-
0
46,490
8,004
-
-
24
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
53,132
100,619
Investment properties
422,625
430,093
475,757
530,712
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
(35,785)
1,312
Investment properties
422,625
430,093
386,840
431,405
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 June 2022
530,712
431,405
Credit to profit or loss
(54,955)
(44,565)
Liability at 31 May 2023
475,757
386,840
SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 31 -
25
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
59,658
17,162

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.

26
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4,900,002
4,900,002
4,900,002
4,900,002
27
Financial commitments, guarantees and contingent liabilities

The group's bank facility is secured by the bank's standard legal charge over freehold property and a debenture containing a fixed and floating charge over the assets of the parent company and it's subsidiary, SEJ Distribution Limited.

28
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
543,694
503,318
-
-
Between two and five years
48,859
52,036
-
-
592,553
555,354
-
-
29
Post balance sheet events

SEJ Pharmaceutical Limited acquired the goodwill and assets of three established pharmacy businesses specialising in community pharmacy services. The total investment in these businesses amounted to £1.2 million.

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 32 -
30
Related party transactions
Remuneration of key management personnel

Key management personnel compensation for the group in the year totalled £611,327 (2022: £645,922).

 

Transactions with related parties

The company has taken advantage of the exemption available in FRS 102 (Section 33 "Related Party Disclosures") that disclosures need not be given of transactions that have taken place between two or more members of group, provided that any subsidiary which is party to the transaction is wholly owned by such a member.

 

During the year, the company and the group entered into the following transactions with related parties;

 

Company

At the balance sheet date, the amount receivable from Triplast Ltd a subsidiary of 81% of ownership, was £467,875 (2022: £442,889) in interest-free loan repayable on demand. The company owed Triplast Ltd £Nil (2022: £28,908) in trading transactions. During the year, company received, in rent and other charges, £103,048 (2022: £75,709) from Triplast Ltd.

 

At the balance sheet date, the amount receivable from SEJ Pharmaceutical Limited, a subsidiary company of 51% ownership to the company, amounted to £62,499 (2022: £Nil) in interest-free loan repayable on demand.

 

At the balance sheet date the company was owed from Nexgen Capital Limited, a company under common control of directors £539,628 (2022: £499,909) in interest-free loan repayable on demand.

 

At the balance sheet date, the company was owed from the SEJ Pension Scheme which is under control of directors as trustees £358,210 (2022: £419,308). The company received £18,493 (2022: £8,986) in interest and £61,097 (2022: £8,564) in capital repayments. The loan bears interest and is fully repayable by instalments ending in August 2026.

 

At the balance sheet date the company was owed from SEJ Fininvest Limited, a company under common control of directors £1,026,324 (2022: £10) repayable on demand.

 

At the balance sheet date, the company owed Amit Aggarwal, a director of Triplast Limited £54 (2022: £54) in interest free loan repayable on demand.

 

Group

At the balance sheet date, the amount receivable from Triplast Ltd a subsidiary of 81% of ownership, was £490,832 (2022: £459,032) in interest-free loan repayable on demand. The group owed Triplast Limited£163,238 (2022: £237,884) in trading transactions.

 

During the year, the group received £114,926 (2022: £206,876) from Triplast Limited in goods, rent and other charges. The group purchased goods £951,330 (2022: £1,290,796) from Triplast Limited.

 

At the balance sheet date, the amount receivable from SEJ Pharmaceutical Limited, a subsidiary company of 51% ownership, to the group amounted to £62,499 (2022: £Nil) in interest-free loan repayable on demand.

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
30
Related party transactions
(Continued)
- 33 -

At the balance sheet date, the group owed £61,600 (2022: £61,600) to AMA Distribution Ltd in an interest-free loan repayable on demand. AMA Distribution Ltd owed the group £45,822 (2022: £45,822) in interest-free loan repayable on demand. The related party relationship is established by the common directorship held by two out of three directors of AMA Distribution Limited who also concurrently serve as directors of SEJ Assets Limited.

 

At the balance sheet date the group was owed from Nexgen Capital Limited, a company under common control of directors £539,628 (2022: £499,909) in interest-free loan repayable on demand.

 

At the balance sheet date the group was owed from SEJ Fininvest Limited, a company under common control of directors £1,026,324 (2022: £10) repayable on demand.

 

At the balance sheet date, the group was owed from the SEJ Pension Scheme which is under control of directors as trustees £358,210 (2022: £419,308). The group received £18,493 (2022: £8,986) in interest and £61,097 (2022: £8,564) in capital repayments. The loan bears interest and is fully repayable by instalments ending in August 2026.

 

At the balance sheet date, the group owed Amit Aggarwal, a director of Triplast Limited £12,800 (2022: £12,340) in interest free loan repayable on demand. The director of Triplast Limited owed the group £164,950 (2022: £164,950) in interest free-loan repayable on demand.

 

31
Directors' transactions

During the year, the company and the group entered into the following transactions with the directors:

 

Company

The company owed £2,329 (2022: £2,329) to the director of SEJ Assets Limited.

 

Group

The group owed £352,690 (2022: £278,608) to the director of SEJ Assets Limited. The director owed the group £825,000 (2022: £825,000) in interest-free loan repayable on demand.

32
Controlling party

The ultimate controlling party is Mr A K Aggarwal and his wife, Mrs S M Aggarwal.

SEJ ASSETS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 34 -
33
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
3,732,571
5,377,383
Adjustments for:
Taxation charged
1,139,494
1,252,335
Finance costs
122,956
144,110
Investment income
(205,354)
(24,245)
Loss on disposal of tangible fixed assets
231,650
5,060
Loss on disposal of investment property
18,117
-
0
Fair value loss/(gain) on investment properties
120,589
(478,081)
Amortisation and impairment of intangible assets
371,851
364,389
Depreciation and impairment of tangible fixed assets
113,312
152,752
Movements in working capital:
Increase in stocks
(102,318)
(264,318)
Increase in debtors
(938,201)
(555,412)
Decrease in creditors
(412,582)
(728,570)
Cash generated from operations
4,192,085
5,245,403
34
Analysis of changes in net funds - group
1 June 2022
Cash flows
31 May 2023
£
£
£
Cash at bank and in hand
15,712,658
284,817
15,997,475
Borrowings excluding overdrafts
(1,833,002)
1,112,420
(720,582)
Obligations under finance leases
(8,004)
(38,486)
(46,490)
13,871,652
1,358,751
15,230,403
2023-05-312022-06-01falseCCH SoftwareCCH Accounts Production 2023.300Anish Kumar AggarwalSejal Mahesh 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