Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
● |
the information given in the 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. |
|
|
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 directors’ remuneration specified by law are not made; or |
● |
we have not received all the information and explanations we require for our audit. |
|
Responsibilities of directors |
As explained more fully in the directors’ responsibilities statement, 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
|
Our assessment focused on key laws and regulations the company has to comply with and areas of the financial statements we assessed as being more susceptible to misstatement. These key laws and regulations included but were not limited to compliance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice and relevant tax legislation. |
|
We are not responsible for preventing irregularities. Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, included but was not limited to the following: |
● |
obtaining an understanding of the legal and regulatory framework applicable to the entity and how the entity is complying with that framework; |
● |
obtaining an understanding of the entity's policies and procedures and how the entity has complied with these, through discussions and walkthrough tests of key systems |
● |
designing our audit procedures to respond to our risk assessment; and |
● |
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud. |
|
|
|
|
|
|
|
|
|
To address the risk of fraud through management bias and override of controls, we conducted the following procedures: |
● |
tested journal entries to identify any non-routine or unusual transactions outside the course of ordinary business; |
● |
assessed whether judgements and assumptions made in determining any accounting estimates were indicative of potential bias; |
● |
Investigated the rationale behind significant or unusual transactions; |
● |
reviewed descriptions of certain nominal codes for indication of any management override; and |
● |
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations |
|
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
● |
agreed financial statement disclosures to underlying supporting documentation; |
● |
enquired with management as to actual and potential litigation and claims |
● |
reviewed correspondence in relation to actual litigation, claims or regulatory inspections. |
|
Whilst considering how our audit work addressed the detection of irregularities, we also consider the likelihood of detection based on our approach. Irregularities arising from fraud are inherently more difficult to detect than those arising from error. |
|
Because of the inherent limitations of an·audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation |
|
A further description of our responsibilities for the audit of the financial statements is available on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. |
|
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
|
|
|
|
Richard Wesley FCA |
(Senior Statutory Auditor) |
Parker House |
for and on behalf of |
44 Stafford Road |
Wesley Cooper Ltd |
Wallington |
Accountants and Statutory Auditors |
Surrey |
29 July 2024 |
SM6 9AA |
|
|
|
Intangible fixed assets |
|
Client Base |
|
Purchased client base has been capitalised, classified as an asset on the balance sheet and amortised on a straight line basis over its useful life. Where reliable estimate of the finite life cannot be made, the life will not exceed 5 years |
|
|
Stocks |
|
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in, first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
|
|
|
|
|
Debtors |
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
|
Creditors |
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
|
|
Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable 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 reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
|
|
Provisions |
|
Provisions (i.e., liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. The costs of acquiring leases including stamp duty on rental leases are capitalised and allocated to profit and loss over the terms of the lease |
|
|
Financial Instruments |
|
The company only enters into basic financial instruments that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and third parties, and loans to and from related parties. Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable are initially measured at the present value of 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 payables or receivables are measured, initially and subsequently, at the undiscounted amount of cash or other consideration, expected to be paid or received. However, if arrangements of a short term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond the normal business terms or financed at a rate of interest that is not a market rate or in the case of an outright short term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequent amortised cost. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account. |
|
|
Derivatives |
|
Derivatives, including forward currency exchange contracts are initially recognised on the date the contract is entered into and are subsequently re-measured at their fair value. Changes in fair value are recognised in the profit or loss in finance costs or income as appropriate. The company applies hedge accounting for foreign exchange derivatives if material. |
|
|
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate. |
|
|
|
|
|
|
|
2 |
Critical accounting estimates and judgements |
|
|
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contigent assets and liabilities at the date of the financial statements and reported amounts of income and expenditure in the reporting period, particularly in relation to the useful economic life of fixed assets and cost allocations to stock. Actual results could differ from those estimates. |
|
|
|
3 |
Analysis of turnover |
2023 |
|
2022 |
£ |
£ |
|
|
Sale of goods |
18,384,134 |
|
17,951,366 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
16,387,780 |
|
16,986,189 |
|
Europe |
1,906,670 |
|
835,147 |
|
Rest of world |
89,684 |
|
130,030 |
|
|
|
|
|
|
18,384,134 |
|
17,951,366 |
|
|
|
|
|
|
|
|
|
|
|
4 |
Operating profit |
2023 |
|
2022 |
£ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
546,639 |
|
522,385 |
|
Depreciation of assets held under finance leases and hire purchase contracts |
|
50,644 |
|
50,644 |
|
Amortisation of goodwill |
34,703 |
|
41,643 |
|
Operating lease rentals - plant and machinery |
263,683 |
|
276,592 |
|
Operating lease rentals - land and buildings |
600,000 |
|
600,000 |
|
Exchange rate differences |
(9,779) |
|
62,267 |
|
Auditors' remuneration for audit services |
12,000 |
|
11,000 |
|
Carrying amount of stock sold |
11,844,355 |
|
11,702,492 |
|
|
|
|
|
|
|
|
|
|
|
5 |
Directors' emoluments |
2023 |
|
2022 |
£ |
£ |
|
|
Emoluments |
275,251 |
|
272,800 |
|
Company contributions to defined contribution pension plans |
6,932 |
|
6,932 |
|
|
|
|
|
|
282,183 |
|
279,732 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
Directors emoluments (continued) |
|
|
Emoluments of highest paid director: |
|
Emoluments |
73,364 |
|
73,000 |
|
Company contributions to defined contribution pension plans |
1,680 |
|
2,190 |
|
|
|
|
|
|
75,044 |
|
75,190 |
|
|
|
|
|
|
|
|
|
|
|
Number of directors to whom retirement benefits accrued: |
2023 |
|
2022 |
Number |
Number |
|
|
Defined contribution plans |
4 |
|
4 |
|
|
|
|
|
|
|
|
|
|
6 |
Staff costs |
2023 |
|
2022 |
£ |
£ |
|
|
Wages and salaries |
2,179,446 |
|
2,083,282 |
|
Social security costs |
228,100 |
|
233,241 |
|
Other pension costs |
47,201 |
|
43,384 |
|
|
|
|
|
|
2,454,747 |
|
2,359,907 |
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
23 |
|
26 |
|
Manufacturing |
31 |
|
24 |
|
Sales |
9 |
|
10 |
|
|
|
|
|
|
63 |
|
60 |
|
|
|
|
|
|
|
|
|
|
7 |
Interest payable |
2023 |
|
2022 |
£ |
£ |
|
|
Finance charges payable under finance leases and hire purchase contracts |
|
10,625 |
|
13,778 |
|
|
|
|
|
|
|
|
|
|
|
8 |
Taxation |
2023 |
|
2022 |
£ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
272,982 |
|
74,797 |
|
Adjustments in respect of previous periods |
(202,030) |
|
- |
|
|
|
|
|
|
70,952 |
|
74,797 |
|
|
|
|
|
|
|
|
|
|
Deferred tax: |
|
Origination and reversal of timing differences |
(117,442) |
|
124,882 |
|
Tax on (loss)/profit on ordinary activities |
(46,490) |
|
199,679 |
|
|
|
|
|
|
|
|
|
|
8 |
Taxation (continued) |
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
Profit on ordinary activities before tax |
750,500 |
|
197,056 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
23% |
|
19% |
|
£ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
168,997 |
|
37,441 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
2,701 |
|
3,755 |
|
Capital allowances for period in excess of depreciation |
101,284 |
|
33,601 |
|
Research & development claim |
(202,030) |
|
- |
|
|
Current tax charge for period |
70,952 |
|
74,797 |
|
|
|
|
|
|
|
|
|
|
|
|
Factors that may affect future tax charges |
|
Future tax charges will be affected by the new corporation tax rates that increased up to a rate of 25% with affect from 1st April 2023. |
|
|
9 |
Intangible fixed assets |
£ |
|
Client base: |
|
|
Cost |
|
At 1 November 2022 |
208,215 |
|
At 31 October 2023 |
208,215 |
|
|
|
|
|
|
|
|
|
|
Amortisation |
|
At 1 November 2022 |
173,512 |
|
Provided during the year |
34,703 |
|
At 31 October 2023 |
208,215 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 October 2023 |
- |
|
At 31 October 2022 |
34,703 |
|
|
|
|
|
|
|
|
|
|
Client base is being written off in equal annual instalments over its estimated economic life of 5 years. |
|
|
|
10 |
Tangible fixed assets |
|
|
|
|
Land and buildings |
|
Plant and machinery |
|
Total |
|
|
|
|
At cost |
|
At cost |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 November 2022 |
185,833 |
|
5,665,014 |
|
5,850,847 |
|
Additions |
- |
|
78,003 |
|
78,003 |
|
At 31 October 2023 |
185,833 |
|
5,743,017 |
|
5,928,850 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 November 2022 |
31,591 |
|
2,645,622 |
|
2,677,213 |
|
Charge for the year |
7,433 |
|
589,850 |
|
597,283 |
|
At 31 October 2023 |
39,024 |
|
3,235,472 |
|
3,274,496 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 October 2023 |
146,809 |
|
2,507,545 |
|
2,654,354 |
|
At 31 October 2022 |
154,242 |
|
3,019,392 |
|
3,173,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
Carrying value of plant and machinery included above held under finance leases and hire purchase contracts |
|
278,543 |
|
329,187 |
|
|
|
|
|
|
|
|
|
|
|
11 |
Stocks |
2023 |
|
2022 |
£ |
£ |
|
|
Raw materials and consumables |
1,184,970 |
|
1,162,949 |
|
Work in progress |
17,817 |
|
31,703 |
|
Finished goods and goods for resale |
1,685,829 |
|
1,643,743 |
|
|
|
|
|
|
2,888,616 |
|
2,838,395 |
|
|
|
|
|
|
|
|
|
|
|
12 |
Debtors |
2023 |
|
2022 |
£ |
£ |
|
|
Trade debtors |
3,477,609 |
|
3,664,714 |
|
Other debtors |
27,805 |
|
123,433 |
|
Prepayments and accrued income |
521,163 |
|
479,216 |
|
|
|
|
|
|
4,026,577 |
|
4,267,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
13 |
Current asset investments |
|
Short term deposit |
1,500,000 |
|
- |
|
|
|
|
|
|
1,500,000 |
|
- |
|
|
|
|
|
|
|
|
|
|
Investment in a short term deposit has a maturity of 4 months with an interest rate of 4.48%. |
|
|
14 |
Creditors: amounts falling due within one year |
2023 |
|
2022 |
£ |
£ |
|
|
Obligations under finance lease and hire purchase contracts |
103,000 |
|
103,000 |
|
Trade creditors |
2,208,269 |
|
2,448,066 |
|
Other taxes and social security costs |
468,201 |
|
588,526 |
|
Other creditors |
- |
|
794 |
|
Accruals and deferred income |
65,675 |
|
39,002 |
|
|
|
|
|
|
2,845,145 |
|
3,179,388 |
|
|
|
|
|
|
|
|
|
|
15 |
Creditors: amounts falling due after one year |
2023 |
|
2022 |
£ |
£ |
|
|
Obligations under finance lease and hire purchase contracts |
8,584 |
|
111,584 |
|
|
|
|
|
|
|
|
|
|
|
16 |
Loans |
2023 |
|
2022 |
£ |
£ |
|
Analysis of maturity of debt: |
|
Within one year or on demand |
103,000 |
|
103,000 |
|
Between one and two years |
8,854 |
|
103,000 |
|
Between two and five years |
- |
|
8,854 |
|
|
|
|
|
|
111,854 |
|
214,854 |
|
|
|
|
|
|
|
|
|
|
|
17 |
Deferred taxation |
2023 |
|
2022 |
£ |
£ |
|
|
Accelerated capital allowances |
605,039 |
|
722,481 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
|
At 1 November |
722,481 |
|
597,599 |
|
(Credited)/charged to the profit and loss account |
(117,442) |
|
124,882 |
|
At 31 October |
605,039 |
|
722,481 |
|
|
|
|
|
|
|
|
|
|
|
18 |
Share capital |
Nominal |
|
2023 |
|
2023 |
|
2022 |
value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
7,920 |
|
7,920 |
|
7,920 |
|
B Ordinary shares |
£1 each |
|
99 |
|
99 |
|
99 |
|
|
|
|
|
|
8,019 |
|
8,019 |
|
|
|
|
|
|
|
|
|
|
19 |
Profit and loss account |
2023 |
|
2022 |
£ |
£ |
|
|
At 1 November |
9,211,023 |
|
10,181,388 |
|
Profit/(loss) for the financial year |
796,990 |
|
(2,623) |
|
Dividends |
(322,580) |
|
(967,742) |
|
|
At 31 October |
9,685,433 |
|
9,211,023 |
|
|
|
|
|
|
|
|
|
|
20 |
Dividends |
2023 |
|
2022 |
£ |
£ |
|
|
Dividends on ordinary shares (note 19) |
322,580 |
|
967,742 |
|
|
|
|
|
|
|
|
|
|
21 |
Events after the reporting date |
|
|
Since the year end, there has been no events that have impacted on the company's ability to continue trading. |
|
|
22 |
Capital commitments |
2023 |
|
2022 |
£ |
£ |
|
|
Amounts contracted for but not provided in the accounts |
- |
|
- |
|
|
23 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
£ |
£ |
£ |
£ |
|
Falling due: |
|
within one year |
600,000 |
|
600,000 |
|
196,391 |
|
134,966 |
|
within two to five years |
2,400,000 |
|
2,400,000 |
|
299,236 |
|
68,082 |
|
in over five years |
9,000,000 |
|
9,600,000 |
|
- |
|
- |
|
|
12,000,000 |
|
12,600,000 |
|
495,627 |
|
203,048 |
|
|
|
|
|
|
|
|
|
|
24 |
Related party transactions |
|
|
The company had transactions with the following companies which are related by virtue of M Blackhall being a director and shareholder |
|
|
|
|
|
|
2023 |
|
2022 |
|
Sales |
£ |
£ |
|
Complete Intacare Hygiene Ltd |
184,741 |
|
187,823 |
|
|
|
|
|
|
|
|
|
|
Purchases |
£ |
£ |
|
Complete Intacare Hygiene Ltd |
10,194 |
|
10,509 |
|
|
|
|
|
|
|
|
|
|
Trade balances owed to Related party |
|
|
Complete Intacare Hygiene Ltd |
5,157 |
|
474 |
|
|
|
|
|
|
|
|
|
|
Trade balances owed by Related party |
|
|
Complete Intacare Hygiene Ltd |
19,641 |
|
28,456 |
|
|
|
|
|
|
|
|
|
|
The company had transactions with the following company which is related by virtue of A Mclean, M Blackhall and J Prentice being directors and shareholders |
|
|
Loan account balances due from |
(included in other debtors) |
|
Blackhall Building & Construction Ltd |
- |
|
800 |
|
|
|
|
|
|
|
|
|
|
The loans is interest free and payable on demand |
|
|
The company had transactions with the following related parties |
|
Rental of commercial buildings |
|
M Blackhall |
10,200 |
|
10,200 |
|
A Phippen |
15,600 |
|
15,600 |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid (inc related parties) |
|
A Mclean |
100,000 |
|
300,000 |
|
M Blackhall |
100,000 |
|
300,000 |
|
J Prentice |
100,000 |
|
300,000 |
|
A Phippen |
22,580 |
|
67,742 |
|
|
|
|
|
|
|
|
|
|
25 |
Controlling party |
|
|
A Mclean, M Blackhall and J Prentice control the entity by virtue of their directorships and shareholdings. No individual is considered to be the ultimate controlling party |
|
|
26 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
|
|
27 |
Legal form of entity and country of incorporation |
|
|
Allied Hygiene Systems Limited is a private company limited by shares and incorporated in England. |
|
|
|
28 |
Principal place of business |
|
Unit 5 |
|
Centurion Way |
|
Erith |
|
Kent |
|
DA18 4AF |