Registered number:
for the year ended
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H Marcel Guest Limited
Company Information
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H Marcel Guest Limited
Contents
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H Marcel Guest Limited
Chairman's Statement
for the year ended 30 September 2023
The chairman presents his statement for the period.
2023 has been a year of continuing international political and financial turbulence. The war in Ukraine shows few signs of ending soon, and conflict in Israel has brought another dangerous element into an already tense mix. Fortunately, there are signs that inflation has peaked in most of the world giving hope for reduction in interest rates and the attendant improvement in business financing generally. The global supply chains that we rely on show ponderous betterment, but it does appear that we may never return to the high standards of the past for the supply of raw material, packaging, and logistics fields.
Inflation and shortages from last year meant that 2022-23 had a difficult start for all the Marcel Guest family of companies but the second half of the year showed a marked improvement. The Riverside Works, which as I have previously noted, is the oldest continually manufacturing site for paints and coatings on the planet, and some of our buildings reflect that! During 2023 H Marcel Guest has completed the major refurbishment of the main store fabric but we still have concerns over the underpinnings etc. of that structure. During the next year it is planned to negotiate with the Pension fund owners of the building a settlement that treats this structure fairly for all concerned. Sustainability and ecological matters continue to grow in global consciousness and Marcel Guest continues to develop and build on our relevant ecological projects. More trees have been planted in Cumbria as part of a re-establishment of forest on previously sheep denuded land. The new era woods adjacent to the site are having planned thinning and maintenance to allow larger trees to prosper in a more accessible layout and, as part of Nova Paint Club membership, HMG supported by Marcel Guest, is participating in a global initiative to reduce global temperatures as part of the Cool Roofs Cool Planet initiative. In closing, I must thank all my fellow directors within H Marcel Guest and the amazing and able team within HMG Paints for their hard work and dedication in 2023. It is my pleasure to sign this report that records their achievements.
NameS Falder
Chairman
Date23 April 2024
Page 1
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H Marcel Guest Limited
Group Strategic Report
for the year ended 30 September 2023
The directors present their strategic report for the year ended 30 September 2023
Business review During this year of continued economic uncertainty and political instability, the Group once again demonstrated its agility and adaptability in diversifying its product range and managing to secure several new contracts which have strengthened our customer base. We have continued to monitor costs and prices throughout this challenging year to navigate through the issues caused by the conflict in the Ukraine and spiralling inflation. Despite these adverse macro-economic factors, we succeeded in increasing turnover whilst reporting a slight improvement in gross margin which is reflected in these results. Considering this combination of extraordinary adverse and unstable conditions, turnover and profitability are deemed by the Board to be satisfactory given the challenges faced by the Group through the year. The Group’s principal subsidiary, HMG Paints Ltd, maintains a strategy of long-term business, at the heart of which is the aim of building security for all the company stakeholders. During 2022/23 the company has continued to maintain its performance in line with those objectives. We have continued to invest heavily in the health and safety, technical training, and development of our people along with the continuous enhancement of our working environment. Indeed, in the year the Group invested £0.4 million in capital improvements throughout the business. Overall, we are satisfied with the performance of the business through 2022/23 and we believe that, because of the continued investment, we are well positioned to embrace the challenges which the financial year 2023/24 will bring. Principal risks and uncertainties The group’s activities expose it to several financial risks including credit risk and liquidity risk. The factors described below highlight risks and uncertainties which affect the company, but they are not intended to be an exhaustive analysis of all the potential risks which may arise in the ordinary course of business. The directors are of the opinion that sufficient internal controls have been implemented to monitor these factors and to enable timely management action to be taken to mitigate the risks. Political risk The war in Ukraine and the departure of the UK from the European Union continue to represent a period of uncertainty for the business as our supply chain relies heavily on materials from the EU. We are managing this risk by ensuring we have appropriate finance in place should it be needed, as well as increasing levels of stock so that any disruption does not leave us exposed. Financial risk Our financial risk management objectives are to ensure sufficient working capital for the company and plans remain absolutely to our expectations. Financial risks are managed through internal management controls, timely and accurate management information and by careful monitoring of sales activity and margins. The company does not feel it is necessary to hedge its currency or interest rate risk.
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H Marcel Guest Limited
Group Strategic Report (continued)
for the year ended 30 September 2023
Credit risk
The group's principal financial assets are bank balances and cash, trade, and other receivables. Its credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The company has a credit insurance policy in place to mitigate the credit risk from trade receivables. Liquidity risk To maintain liquidity and to ensure that sufficient funds are available for ongoing operations and future developments the company has a mixture of long term and short-term finance. Financial key performance indicators
The key performance indicators that are monitored on a weekly, monthly, and annual basis are revenue, profit, and cash balances, all of which are derived from the financial statements. The revenue and profit figures are stated below:
The results were acceptable throughout the year and the performance marginally exceeded our budgeted expectations.
This report was approved by the board and signed on its behalf.
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H Marcel Guest Limited
Directors' Report
for the year ended 30 September 2023
The directors present their report and the financial statements for the year ended 30 September 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.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements 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.
The profit for the year, after taxation, amounted to £1,130,847 (2022 :£1,524,283).
The directors have declared dividends during the year of £340,000 (2022: £286,729).
The directors who served during the year were:
The directors consider that the forthcoming financial year will be another year of solid performance, building further security for all our stakeholders.
The Group will continue to invest heavily in research and development activities in the forthcoming year to ensure that it stays at the forefront of innovation in the coatings industry. The continued investment will enable the business to offer unique innovative products for its customers.
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H Marcel Guest Limited
Directors' Report (continued)
for the year ended 30 September 2023
There have been no significant events affecting the Group since the year end.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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H Marcel Guest Limited
Independent Auditors' Report to the Members of H Marcel Guest Limited
We have audited the financial statements of H Marcel Guest Limited (the 'parent company') and its subsidiaries (the 'Group') for the year ended 30 September 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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H Marcel Guest Limited
Independent Auditors' Report to the Members of H Marcel Guest Limited (continued)
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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H Marcel Guest Limited
Independent Auditors' Report to the Members of H Marcel Guest Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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:
Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
∙The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
∙The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.
∙Supporting documentation relating to the Company's policies and procedures for:
°Identifying, evaluating, and complying with laws and regulations
°Detecting and responding to the risks of fraud
∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
∙The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption.
Audit response to risks identified Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
∙Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
∙Enquiring of management about any actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
∙Reading minutes of meetings of those charges with governance.
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H Marcel Guest Limited
Independent Auditors' Report to the Members of H Marcel Guest Limited (continued)
We have also considered the risk of fraud through management override of controls by:
∙Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.
∙Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
∙Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. 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 or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants & Statutory Auditors
3 Stockport Exchange
Railway Road
SK1 3GG
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H Marcel Guest Limited
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2023
Page 10
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H Marcel Guest Limited
Registered number: 00251148
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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H Marcel Guest Limited
Registered number: 00251148
Company Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 38 form part of these financial statements.
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H Marcel Guest Limited
Consolidated Statement of Changes in Equity
for the year ended 30 September 2023
Consolidated Statement of Changes in Equity
for the year ended 30 September 2022
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H Marcel Guest Limited
Company Statement of Changes in Equity
for the year ended 30 September 2023
Company Statement of Changes in Equity
for the year ended 30 September 2022
Page 14
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H Marcel Guest Limited
Consolidated Statement of Cash Flows
for the year ended 30 September 2023
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H Marcel Guest Limited
Consolidated Statement of Cash Flows (continued)
for the year ended 30 September 2023
Consolidated Analysis of Net Debt
for the year ended 30 September 2023
Page 16
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
H Marcel Guest Limited is a private company limited by shares, incorporated in England. The registered office is Riverside Works, Collyhurst Road, Manchester, M40 7RU.
The principal activity is the manufacture of paints, surface coatings and related products and services.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3). Parent company disclosure exemptions In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available to qualifying entities:
∙No cash flow statement or net debt reconciliation has been presented for the parent company;
∙No statement of comprehensive income has been presented for the parent company;
∙Disclosures in respect of the parent company’s income, expense, net gains and net losses on financial instruments measured at amortised cost have not been presented as equivalent disclosures have been provided in respect of the group as a whole; and
∙No disclosure has been given for the aggregate remuneration of the key management personnel of the parent company as their remuneration is included in the totals for the group as a whole.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the 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. They are deconsolidated from the date control ceases.
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Page 18
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Defined contribution pension plan
The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payment obligations. The contributions are recognised as an expense in the profit and loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the group in independently administered funds. Scheme membership and benefits The group also operates a hybrid arrangement scheme with both benefit and defined contribution elements. The benefits of "director members" are provided on a money purchase basis, but such benefits are restricted to the net assets available, having first made full provision for the benefits of all defined benefit members. The principal employer is H Marcel Guest Limited and the participating employer is HMG Paints Limited.
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
2.Accounting policies (continued)
Acquired trademarks are shown at historical cost. The trademark is being amortised over the 10 years. This is also subject to an annual impairment review.
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in unlisted group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated profit and loss the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment. Investments in listed company shares are remeasured to market value at each Balance Sheet date. Gains and losses on remeasurement are recognised in profit and loss for the period.
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
2.Accounting policies (continued)
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated Statement of Comprehensive Income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated Balance Sheet, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition. Any premium on acquisition is dealt with in accordance with the goodwill policy. At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. .
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
Stock provision Stock is reviewed to assess obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in profit and loss, the company makes judgements as to whether there is any observable data indicating that there is any future saleability of the product and the estimated net realisable value for such product. Accordingly, provision for impairment is made where the net realisable value is less than the cost based on best estimates by the management. The provision for obsolescence of stock is based on the ageing and historical sales pattern. As at 30 September 2023, the value of stock net of provision was £4,709,681 (2022: £5,890,750). Stock valuation and overhead absorption Stock is valued including raw material costs, production labour and an allocation of production related overheads. The overhead calculation is based on a judgement of the production element of certain overheads which may differ from the actual. As at 30 September 2023, the value of labour and overheads included in stock was £677,951 (2022: £732,538). Other estimates and judgements Management exercises judgement in providing for impairment loss on trade receivables. The balance of trade receivables as at 30 September 2023, net of provision was £4,284,012 (2022: £4,147,454). Management of the company also exercises judgement in estimating the useful economic life of property, plant and equipment, such estimations are reviewed regularly to ensure they remain appropriate. The net book value of fixed assets as at 30 September 2023 was £3,696,589 (2022: £3,877,866). Should these estimates vary, the profit or loss and balance sheet of the following years could be significantly impacted.
The whole of the turnover is attributable to the sales of paint products.
Analysis of turnover by country of destination:
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Notes to the Financial Statements
for the year ended 30 September 2023
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
11.Taxation (continued)
There were no factors that may affect future tax charges.
From 1 April 2023 the main rate of corporation tax increased to 25%. The 22% rate used above reflects 6 months of the new rate and 6 months of the previous rate of 19%.
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Notes to the Financial Statements
for the year ended 30 September 2023
15.Tangible fixed assets (continued)
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
18.Debtors (continued)
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
Profit and loss account
The profit and loss account includes all current and prior period retained profits and losses after dividends paid.
The group operates a defined contribution pension scheme and also a hybrid arrangement with both defined benefit and defined contribution elements. The assets of the schemes are held separately from those of the company in individual independently administered funds. The pension cost charge represents contributions payable by the group to the fund and amounted to £244,043 in relation to defined contribution schemes (2022: £227,288) and £Nil (2022: £202) in relation to hybrid schemes. Contributions totalling £38,518 (2022: £37,808) were payable to the funds at the balance sheet date.
Included within other debtors due within one year is an interest-free loan to a director totalling £5,000 (2022: £5,000). This is in relation to purchasing a new car which is used by the director for personal and business reasons. The amount will be repaid should the director cease their employment with the business or dispose of the car.
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H Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2023
In the opinion of the director, the ultimate controlling party, by virtue of their shareholding are the Falder family.
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