Company registration number 06000299 (England and Wales)
DENIS MAY & SONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
DENIS MAY & SONS LIMITED
COMPANY INFORMATION
Directors
HJ May
EJ May
PJ Jago
Company number
06000299
Registered office
Peat House
Newham Road
TRURO
Cornwall
TR1 2DP
Auditor
RRL LLP
Peat House
Newham Road
TRURO
Cornwall
TR1 2DP
Business address
Goonvean Works
St Stephen
ST AUSTELL
Cornwall
PL26 7QF
DENIS MAY & SONS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
DENIS MAY & SONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 September 2023.
Principal activities
The company is a producer of concrete products for the construction industry in the South West region.
Review of the business
There has been continuing steady demand from the construction industry for the company’s products and the company continued to trade well during 2022/23, despite external pressures from the general UK economic environment such as high levels of inflation. The business managed these well as evidenced by a consistent gross profit margin.
Significant investment of £835k has been undertaken by the company during the year in upgrading and expanding the block plant, which is included within assets under construction in note 11 to the financial statements. The continued profitability has allowed for the company to operate and invest in the future without any requirement for bank finance.
The directors consider the company to be in a good trading position with forecasted sales for 2023/24 anticipated to be fairly similar to the current year, however, this is dependent upon the construction industry and its demand for products. With a strong balance sheet, the directors believe the company is in a good position to continue to adjust to any future changes and any uncertainty due to the general UK economic environment.
Principal risks and uncertainties
Levels of activity are dependent upon those experienced within the industry and consequently the major risks to the business lies with the fluctuations in demand from the construction activity, which is further impacted by the general UK economic environment and high levels of inflation.
Development and performance
The group closely monitors its financial performance and the market place in which it operates and aligned to a strategy of maintaining a strong balance sheet and minimal external financing believes it can manage any downturn in activity levels satisfactorily.
Key performance indicators
The company’s key financial performance indicators for the year during the year were as follows:
2023 2022
Turnover £17,582,960 £17,376,371
Gross profit margin 25.3% 26.2%
Profit before taxation £3,414,162 £3,280,458
HJ May
Director
15 February 2024
DENIS MAY & SONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 September 2023.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £3,000,000. 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:
HJ May
EJ May
PJ Jago
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Credit risk
Investments of cash surpluses are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Future developments
As discussed within the Strategic Report, significant investment has been undertaken in upgrading and improvement of the block plant which will improve efficiency and strengthen the company’s position within its industry. The directors continue to review any further investment and examine opportunities for expansion on related markets. Identified risks will continue to be well managed and the directors have a clear strategy to maintain the company’s strong reputation. The company is in a good financial position and the directors are confident in the company’s ability to maintain and build on this position.
Auditor
The auditor, RRL LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 company’s auditor 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 company’s auditor 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.
DENIS MAY & SONS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
On behalf of the board
HJ May
Director
15 February 2024
DENIS MAY & SONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies 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 company 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
DENIS MAY & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF DENIS MAY & SONS LIMITED
- 5 -
Opinion
We have audited the financial statements of Denis May & Sons Limited (the 'company') for the year ended 30 September 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 30 September 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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 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 auditor's report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
DENIS MAY & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF DENIS MAY & SONS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 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 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.
As part of our audit work, we obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in which they operate. We determined that the laws and regulations most significant to the company, as well as the laws and regulations that have a direct impact on the preparation of the financial statements are: the Companies Act 2006, British Block Standards, health and safety regulations and employment legislation.
The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:
Discussion with management as to how compliance with these laws and regulations is monitored;
Review of the disclosures in the financial statements and testing to supporting documentation;
Enquiries of management concerning actual and potential litigation and claims;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
Reviewing minutes of directors’ meetings and correspondence with regulators;
Performing audit work in connection with the risk of management override of controls, including testing journal entries for reasonableness and evaluating the business rationale of significant transactions outside the normal course of business.
DENIS MAY & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF DENIS MAY & SONS LIMITED
- 7 -
We also communicate relevant identified laws and regulations and potential fraud risk to all engagement team members and remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit approach also considered the opportunities and incentives that may exist within the company for fraud and identified the greatest potential for fraud being in respect of cut off around revenue recognition. Under ISA (UK) we are also required to undertake procedures to respond to the risk of management override of controls. Our procedures included the following:
Performing cut off testing;
Undertaking transactional testing on revenue;
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale for significant transactions outside the normal course of business;
Reviewing estimates and judgments made in the accounts for any indication of bias and challenged assumptions used by management in making estimates.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities 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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Nicholas Skerratt FCA CTA
Senior Statutory Auditor
For and on behalf of RRL LLP
20 February 2024
Chartered Accountants
Statutory Auditor
Peat House
Newham Road
TRURO
Cornwall
TR1 2DP
DENIS MAY & SONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
17,582,960
17,376,371
Cost of sales
(13,132,495)
(12,826,518)
Gross profit
4,450,465
4,549,853
Administrative expenses
(1,434,278)
(1,330,668)
Operating profit
4
3,016,187
3,219,185
Interest receivable and similar income
7
399,664
61,273
Interest payable and similar expenses
8
(1,689)
Profit before taxation
3,414,162
3,280,458
Tax on profit
9
(769,529)
(634,387)
Profit for the financial year
2,644,633
2,646,071
The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.
DENIS MAY & SONS LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,474,389
1,569,171
Current assets
Stocks
12
400,211
325,998
Debtors
13
3,653,356
4,978,864
Cash at bank and in hand
10,290,045
9,136,672
14,343,612
14,441,534
Creditors: amounts falling due within one year
14
(12,343,652)
(11,226,689)
Net current assets
1,999,960
3,214,845
Total assets less current liabilities
4,474,349
4,784,016
Provisions for liabilities
Deferred tax liability
15
129,600
83,900
(129,600)
(83,900)
Net assets
4,344,749
4,700,116
Capital and reserves
Called up share capital
17
1
1
Profit and loss reserves
4,344,748
4,700,115
Total equity
4,344,749
4,700,116
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 15 February 2024 and are signed on its behalf by:
HJ May
Director
Company registration number 06000299 (England and Wales)
DENIS MAY & SONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2021
1
2,054,044
2,054,045
Year ended 30 September 2022:
Profit and total comprehensive income
-
2,646,071
2,646,071
Balance at 30 September 2022
1
4,700,115
4,700,116
Year ended 30 September 2023:
Profit and total comprehensive income
-
2,644,633
2,644,633
Dividends
10
-
(3,000,000)
(3,000,000)
Balance at 30 September 2023
1
4,344,748
4,344,749
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
1
Accounting policies
Company information
Denis May & Sons Limited is a private company limited by shares incorporated in England and Wales. The registered office is Peat House, Newham Road, TRURO, Cornwall, TR1 2DP. The principal place of business is Goonvean Works, St Stephen, ST AUSTELL, Cornwall, PL26 7QF.
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. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of DMS Holdings Limited. These consolidated financial statements are available from its registered office.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.
1.3
Turnover
Turnover represents revenue recognised in the financial statements. Revenue is recognised when the company fulfils its contractual obligations to customers by supplying goods and excludes value added tax.
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.
1.4
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.
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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:
Leasehold property
Over the term of the lease
Plant and machinery
15% straight line per annum
Fixtures, fittings & equipment
25% straight line per annum
Motor vehicles
16.66% straight line per annum
Assets under construction
No depreciation charged
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 credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
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.
1.7
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.
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.8
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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.
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 company 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 company after deducting all of its liabilities.
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company 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 company.
1.10
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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 when the company has 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.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
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 leases asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
17,582,960
17,376,371
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
3
Turnover and other revenue
(Continued)
- 16 -
2023
2022
£
£
Turnover analysed by geographical market
UK
17,582,960
17,376,371
2023
2022
£
£
Other revenue
Interest income
399,664
61,273
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
10,000
7,000
Depreciation of owned tangible fixed assets
434,096
388,987
Loss/(profit) on disposal of tangible fixed assets
15,958
(36)
Operating lease charges
113,842
93,838
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
20
17
Administration
14
14
Total
34
31
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,263,757
1,106,992
Social security costs
134,172
124,672
Pension costs
28,540
26,204
1,426,469
1,257,868
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 17 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
98,081
98,871
Company pension contributions to defined contribution schemes
2,352
2,365
100,433
101,236
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
399,664
61,273
8
Interest payable and similar expenses
2023
2022
£
£
Other interest
1,689
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
723,829
613,987
Deferred tax
Origination and reversal of timing differences
45,700
20,400
Total tax charge
769,529
634,387
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
9
Taxation
(Continued)
- 18 -
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
3,414,162
3,280,458
Expected tax charge based on the standard rate of corporation tax in the UK of 22.01% (2022: 19.00%)
751,395
623,287
Tax effect of expenses that are not deductible in determining taxable profit
3,922
518
Permanent capital allowances in excess of depreciation
(31,488)
(9,818)
Origination and reversal of timing differences
45,700
20,400
Taxation charge for the year
769,529
634,387
10
Dividends
2023
2022
£
£
Final paid
3,000,000
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 19 -
11
Tangible fixed assets
Leasehold property
Assets under construction
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 October 2022
889,302
5,477,919
102,269
949,273
7,418,763
Additions
38,500
835,197
465,112
14,993
1,353,802
Disposals
(16,696)
(28,169)
(97,900)
(142,765)
Transfers
1,470
1,470
At 30 September 2023
929,272
835,197
5,926,335
89,093
851,373
8,631,270
Depreciation and impairment
At 1 October 2022
172,976
4,858,702
85,614
732,300
5,849,592
Depreciation charged in the year
13,639
295,358
10,443
114,656
434,096
Eliminated in respect of disposals
(16,696)
(28,169)
(81,942)
(126,807)
At 30 September 2023
186,615
5,137,364
67,888
765,014
6,156,881
Carrying amount
At 30 September 2023
742,657
835,197
788,971
21,205
86,359
2,474,389
At 30 September 2022
716,326
619,217
16,655
216,973
1,569,171
The carrying value of land and buildings comprises:
2023
2022
£
£
Short leasehold
742,657
716,326
All land, buildings, and other tangible fixed assets of the company have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings.
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
400,211
325,998
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,432,762
3,685,551
Amounts owed by group undertakings
11,164
Other debtors
96,647
1,209,059
Prepayments and accrued income
112,783
84,254
3,653,356
4,978,864
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,612,846
1,620,118
Amounts owed to group undertakings
9,849,657
8,377,085
Corporation tax
367,565
379,632
Other taxation and social security
217,043
287,668
Other creditors
46,817
258,881
Accruals and deferred income
249,724
303,305
12,343,652
11,226,689
The intercompany loan is secured by a fixed and floating charge on the company's assets.
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
129,600
83,900
2023
Movements in the year:
£
Liability at 1 October 2022
83,900
Charge to profit or loss
45,700
Liability at 30 September 2023
129,600
The expected net reversal of deferred tax assets and liabilities in 2023 is £Nil (2022: £Nil) being the expected movement in accelerated capital allowances.
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 21 -
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
28,540
26,204
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
The company has one class of ordinary shares which carry no right to fixed income.
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
46,450
39,950
Between two and five years
185,800
159,800
In over five years
249,075
269,525
481,325
469,275
19
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
96,399
393,570
20
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
DENIS MAY & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
20
Related party transactions
(Continued)
- 22 -
Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Carnsworth Limited
119
246
-
-
South Molton Block Company Limited
934,924
837,689
1,731,826
1,724,429
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
South Molton Block Company Limited
203,535
394,787
The company trades with South Molton Block Company Limited , a company which is 50% owned by the company’s parent company, DMS Holdings (South West) Limited. Transactions are at arms length and on usual trade terms.
The company also trades with Carnsworth Limited, a company which is controlled by Mr HJ May, director. Transactions are at arms length and on usual trade terms.
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Carnsworth Limited
-
823,289
South Molton Block Company Limited
90,374
86,495
Other information
The company has taken advantage of the exemption from disclosing transactions with wholly owned group undertakings.
21
Directors' transactions
During the year there were transactions with directors. At the year end the company was owed £Nil by a director (2022: £211 owed to the director).
At the year end the company was owed £88,628 (2022: £88,628) by a director. This loan is interest free. No repayments were made in the year.
22
Ultimate controlling party
The immediate parent and largest group financial statements that consolidate this company is DMS Holdings (South West) Limited. These group accounts are available to the public from its registered office.
The ultimate controlling party is Mr H J May, director.
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