Registered number: 13115461
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Company information
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Contents
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Group strategic report
Year ended 30 April 2023
The directors present their strategic report for the year ending 30th of April 2023.
BGRP Holdings Limited acts as a holding company for its subsidiary, BGRP Limited. BGRP Limited operates across the UK and EU as a leading manufacturer and retailer of beanbags and soft furnishings.
The net liabilities of BGRP Holdings Limited as at 30 April 2023 were £0.8m (2022: net assets of £1.3m).
Turnover in the year increased by 14.1% to £11.2m (2022: £9.9m) whilst operating profit reduced from £1.3m to zero. The growth in turnover resulted from the introduction of additional channels and was helped by the opening of our Hamburg site mid-year. Operating profit was adversely impacted by exceptional costs relating to legal and set up costs of the new German operation.
The Board monitors progress against the overall group strategy and trading by reference to KPIs, the principal measures being turnover, EBITDA, operating profit, working capital and cashflow. These can be seen in the attached financial statements.
The following table provides a reconciliation from operating profit to EBITDA and the calculation of EBITDA:
Macro-economic factors including the war in Ukraine affected procurement during the year and resulted in high cost inflation in some areas.
There is a risk that any disruption to supply chain could impact the ability to manufacture and distribute products. The business mitigates this by reducing reliance on single suppliers and establishing long term supplier relationships. The group targets growth in existing markets using its core skills. There is a risk that the business is not as efficient or effective as key new relationships are established. The risk is mitigated by regular review of new activities to ensure resources are deployed effectively.
We have a plan to continue expansion in both the UK and EU. We expect business efficiency to improve as the business scales.
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Group strategic report (continued)
Year ended 30 April 2023
We endeavour to listen to our people, provide feedback and keep them informed and engaged. Successful performance is delivered through a high level of engagement ensuring our people share the group’s core values and feel supported by our culture.
Dialogue with suppliers is important to mitigate supply chain risk and to ensure the most cost effective solutions and reliable products and services. We continue to investigate more sustainable ways to achieve our business requirements. We support local charities and support our people to participate in local community events to raise funds to support those charities. The group is a UK incorporated business owned by Comhar Capital and management. Monthly reporting of performance is discussed by management and Comhar. Lenders to the business provide a significant source of capital to enable the business to be successful and finance activities. In this process they participate as investors in and supporters of the business. We regularly share financial and operational data with lenders.
This report was approved by the board on 22 February 2024 and signed on its behalf by:
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Directors' report
Year ended 30 April 2023
The directors present their report and the financial statements for the year ended 30 April 2023.
The loss for the year, after taxation, amounted to £2,143,072 (2022: loss £558,603).
A dividend of £nil (2022: £nil) was paid during the year. The directors do not recommend a final dividend in respect of the year.
The directors who served during the year and up to the date of signing the financial statements were:
Future developments, which otherwise would be disclosed in the directors' report are instead set out in the strategic report as permitted by Section 414C(11) of the Companies Act 2006.
Pursuant to section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and UNW LLP will therefore continue in office.
This report was approved by the board on
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Directors' responsibilities statement
Year ended 30 April 2023
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 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 2006. They 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.
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Independent auditor's report to the members of BGRP Holdings Limited
We have audited the financial statements of BGRP Holdings Limited ('the parent company') and its subsidiaries (the 'group') for the year ended 30 April 2023, which comprise the group statement of comprehensive income, the group and company balance sheets, the group statement of cash flows, the group and company statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) ('ISAs (UK)') and applicable law. Our responsibilities under those standards are further described in the 'Auditor's 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.
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.
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Independent auditor's report to the members of BGRP Holdings Limited (continued)
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.
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.
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.
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Independent auditor's report to the members of BGRP Holdings Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 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:
We identified areas of law and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience and through discussions with the directors and other management (as required by Auditing Standards) and from inspection of the group's legal correspondence and we discussed with the directors and other management the policies and procedures in place regarding compliance with the laws and regulations. We communicated identified laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit. Firstly, the group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Secondly, the group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; health and safety, employment law, data protection, environmental law and certain aspects of company legislation, recognising the nature of the group's activities. Auditing Standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance material to the financial statements. 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.
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Independent auditor's report to the members of BGRP Holdings Limited (continued)
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 auditor's 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.
Newcastle upon Tyne
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Consolidated statement of comprehensive income
Year ended 30 April 2023
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Consolidated balance sheet
At
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 17 to 37 form part of these financial statements.
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Company balance sheet
At
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
Company registered number: 13115461
The notes on pages 17 to 37 form part of these financial statements.
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Consolidated statement of changes in equity
Year ended 30 April 2023
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Company statement of changes in equity
Year ended 30 April 2023
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Consolidated statement of cash flows
Year ended 30 April 2023
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Consolidated statement of cash flows (continued)
Year ended 30 April 2023
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Consolidated analysis of net debt
Year ended 30 April 2023
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Notes to the financial statements
Year ended 30 April 2023
BGRP Holdings Limited ('the company') is a private company limited by shares, incorporated and domiciled in England. The nature of the company's operations and principal activities are disclosed in the group strategic report.
The address of the registered office is given in the company information page of these financial statements.
The financial statements have been prepared in accordance with the United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland' ('FRS 102') and the Companies Act 2006.
3.Accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.
These financial statements comprise the consolidated (group) financial statements and the company's separate financial statements. However, as permitted by section 408 of the Companies Act 2006, the separate profit and loss account of the company is not presented.
The financial statements are prepared on a going concern basis, under the historical cost convention. They are presented in pounds sterling, which is the functional currency of the company, and rounded to the nearest £. The preparation of financial statements under FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the group's and company's accounting policies. The areas involving higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4. Reduced disclosure FRS 102 allows a qualifying entity certain disclosure exemptions. The company meets the definition of a qualifying entity in respect of its separate (non-group) financial statements and has taken advantage of the exemption relating to the preparation of a cash flow statement, analysis of net debt, and key management personnel compensation disclosures. The equivalent disclosures, on a consolidated basis, are included in the group financial statements, presented herein alongside the company financial statements.
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Notes to the financial statements
Year ended 30 April 2023
3.Accounting policies (continued)
The consolidated financial statements present the results of the company and its subsidiary undertaking ('the group').
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The consolidated financial statements incorporate the results of business combinations using the purchase method. In the balance sheet, 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. In accordance with section 405(2) of the Companies Act 2006, the results of Bazaar Assets LLP have not been consolidated on the grounds that it is not material for the purpose of giving a true and fair view. In the parent company financial statements investments in subsidiaries are stated at cost less impairment.
The group meets its working capital requirements through operating cash flows, supported by significant cash balances.
The directors have prepared financial forecasts which indicate that the group will be able to meet its liabilities as they fall due in the normal course of business for at least the next twelve months following approval of these financial statements. Accordingly, they continue to prepare the financial statements on a going concern basis. Turnover is measured at fair value of the consideration of received or receivable for goods supplied and services rendered, net of discounts and excluding Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Government grants Government grants are recognised on the accruals basis. Grants relating to expenditure on tangible fixed assets are credited to the profit and loss account at the same rate as the depreciation on the assets to which the grant relates. Grants of revenue nature are credited to the profit and loss account over the same period as the related expenditure is incurred. Grant monies received but deferred to future periods are included on the balance sheet within creditors. Interest receivable and similar income Interest receivable and similar income is recognised on an accruals basis.
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Notes to the financial statements
Year ended 30 April 2023
3.Accounting policies (continued)
Research and development expenditure is written off to the profit and loss account in the period in which it is incurred.
Short-term benefits, including holiday pay and other similar non-monetary benefits are recognised as an expense in the period in which the employee's entitlement to the benefit accrues. Defined contribution pension plan The group operates a defined contribution pension plan for its employees. Contributions are recognised as an expense when they fall due. Amounts due but not yet paid are included within creditors on the balance sheet. The assets of the plan are held seperately from the group in independently administered funds.
All of the group's leasing arrangements are operating leases. Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit and loss account on a straight-line basis over the term of the lease unless payments to the lessor are structured to increase in line with expected general inflation; in which case the payments related to the structured increases are recognised as incurred. Lease incentives received are recognised in profit and loss over the term of the lease and an integral part of the total lease expense.
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Notes to the financial statements
Year ended 30 April 2023
3.Accounting policies (continued)
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the consolidated statement of comprehensive income over its useful economic life.
Management assess the estimated useful life of the goodwill in these financial statements to be 10 years.
Intangible fixed assets are stated at cost, less accumulated amortisation and accumulated impairment losses.
Amortisation is provided on all intangible fixed assets calculated to write off the cost less estimated residual value of each asset on a systematic basis over its expected useful life as follows: Computer software - 33% - 50% straight line Asset residual values and useful lives are reviewed at the end of each reporting period, and adjusted if appropriate. The effect of any change is accounted for prospectively. Amortisation is included in administrative expenses in the profit and loss account.
Tangible fixed assets are stated at cost, less accumulated depreciation and accumulated impairment losses. Cost includes the purchase price plus any further costs directly attributable to making the asset operate as intended.
Depreciation is provided on all tangible fixed assets calculated to write off the cost less estimated residual value of each asset on a systematic basis over its expected useful life as follows: Leasehold property improvements - 20% straight line Plant and machinery - 6.667% - 33% straight line Assets residual values and useful lives are reviewed at the end of each reporting period, and adjusted if appropriate. The effect of any changes is accounted for prospectively. Assets under construction represent costs incurred in the construction or development of property, plant, and equipment but not yet ready for their intended use. These costs include direct costs such as materials and labour, as well as attributable indirect costs. Assets under construction are not depreciated until they are ready for use.
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Notes to the financial statements
Year ended 30 April 2023
3.Accounting policies (continued)
Current tax is the amount of corporation tax payable in respect of the taxable profit for the current or prior years. It is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and previous years and arises from 'timing differences' (where transactions or events are included in the financial statements in periods different from those in which they are assessed for tax). Deferred tax is recognised in respect of all timing differences, except that unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probably that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences. Investments in associates within the company balance sheet are measured at cost less accumulated impairment losses. Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Provision is made as necessary for damaged, obsolete or slow-moving items.
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Notes to the financial statements
Year ended 30 April 2023
3.Accounting policies (continued)
Basic debt instruments
The group enters into financial instruments transactions that result in the recognition of basic debt financial assets and liabilities like trade and other accounts receivable and payable, cash and bank balances and loans to or from related parties, including fellow group companies. Debt instruments due within one year are measured, initially and subsequently at the transaction price. Debt instruments due after one year are measured initially at the transaction price and subsequently at amortised cost using the effective interest method. At the end of each reporting period debt financial assets are assessed for impairment, and their carrying value reduced if necessary. Any impairment charge is recognised in the profit and loss account. Derivative financial intruments Derivative financial instruments, comprising forward currency contracts, are initially recognised at fair value at the date the contract is entered into and are subsequently remeasured to their fair value at each reporting date. Changes in fair value are recognised in the profit and loss account within administrative expenses. The group does not currently apply hedge accounting for its forward currency contracts. Significant judgments in applying the entity's accounting policies In preparing these financial statements, the directors do not consider there to have been any significant judgements that were required in the process of applying the company's accounting policies. Key sources of estimation uncertainty Useful life of goodwill Intangible assets are considered to have a finite useful life and are amortised over the period in which benefit from the assets acquired is expected to be derived being a maximum period of 10 years. The amortisation charge for the year was £932,086 (2022: £932,086) for the group as set out in note 16. Impairment of goodwill Determining whether goodwill is impaired requires estimation of the value in use of the cash generating unit to which the assets relates. The value in use calculation requires the entity to estimate the value and timing of future cash flows expected to arise from each cash generating unit and apply a suitable discount rate, in order to calculate the present value of those future cash flows. The carrying value of goodwill at the balance sheet date was £7,223,667 (2022: £8,155,753) as set out in note 16.
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Notes to the financial statements
Year ended 30 April 2023
4.Judgments in applying accounting policies (continued)
The annual amortisation charge for intangible fixed assets and depreciation charge for tangible fixed assets are sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed regularly. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See notes 16-17 for the carrying value of intangible and tangible fixed assets, and notes 3.12-3.13 for the useful economic lives for each class of asset. Impairment of fixed assets The group considers whether fixed assets, including intangible fixed assets, tangible fixed assets and investments, are impaired. Where an indication of impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash generating units (CGUs). This requires estimation of the future cash flows from the CGUs and also selection of appropriate discount rates in order to calculate the net present value of these cash flows. In addition to this, the useful lives of fixed assets are regularly reviewed and any reduction in the length of the life would result in an impairment charge to the profit and loss account and a reduction in the carrying value of the asset. See notes 16-18 for the carrying values of intangible fixed assets, tangible fixed assets and fixed asset investments respectively. Stock provisioning Provision is made against specific stock items which are slow moving or obsolete to ensure the stock items are held at the lower of cost and net realisable value. See note 19 for the carrying value of stock and the provision for impairment. Impairment of debtors Provision is made against debts which are not considered to be recoverable. See note 20 for the carrying value of trade debtors and the provision for impairment.
The whole of the turnover is attributable to the principal activity of the group.
Analysis of turnover by country of destination:
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Notes to the financial statements
Year ended 30 April 2023
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Notes to the financial statements
Year ended 30 April 2023
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Notes to the financial statements
Year ended 30 April 2023
26
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Notes to the financial statements
Year ended 30 April 2023
27
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Notes to the financial statements
Year ended 30 April 2023
14.Taxation (continued)
In the Spring Budget 2021 it was announced that the main UK corporation tax rate would increase from 19% to 25% from 1 April 2023. This rate increase was substantively enacted as part of the Finance Act 2021 on 24 May 2021 and has now taken effect. Accordingly, the group’s profits are taxed at an effective rate of 19.5% for the year ended 30 April 2023 (19% for year ended 30 April 2022), and future profits will be taxed at a rate of 25%. Deferred tax at the balance sheet date has been calculated at 25% (2022: 25%), as this was the tax rate substantively enacted at the year end.
28
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Notes to the financial statements
Year ended 30 April 2023
29
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Notes to the financial statements
Year ended 30 April 2023
30
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Notes to the financial statements
Year ended 30 April 2023
31
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Notes to the financial statements
Year ended 30 April 2023
32
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Notes to the financial statements
Year ended 30 April 2023
Loan notes were issued as part of the acquisition of BGRP Limited. Loan notes comprise £5,290,719 secured A loan notes and £3,531,426 secured B loan notes. These loan notes accrue interest at 10% per annum, payable quarterly in arrears, and are fully repayable on 30 April 2026.
Associated legal costs of £76,610 have been set off against these loan notes and are being amortised over the life of the loan with a current year release of £14,532 (2022: £13,849). The loan notes are secured by means of a fixed and floating charge over the assets of the company.
33
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Notes to the financial statements
Year ended 30 April 2023
34
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Notes to the financial statements
Year ended 30 April 2023
35
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Notes to the financial statements
Year ended 30 April 2023
Share premium account
Profit and loss account
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 £98,571 (2022: £73,155).
Contributions totalling £147 (2022: £12,532) were payable to the fund at the balance sheet date and are included in creditors.
36
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Notes to the financial statements
Year ended 30 April 2023
The immediate parent company is Comhar Capital (1806) Limited. The ultimate controlling party is Hawksford Trustees Jersey Limited, incorporated in Jersey.
37
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