Company registration number 02792576 (England and Wales)
SHEPPEE INTERNATIONAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SHEPPEE INTERNATIONAL LIMITED
COMPANY INFORMATION
Directors
Mr S P Holmes
Mr K R Johnson
Mr C Rice
Secretary
Mr K R Johnson
Company number
02792576
Registered office
Halifax Way
Airfield Business Park
Elvington
York
YO41 4AU
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
SHEPPEE INTERNATIONAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
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 - 21
SHEPPEE INTERNATIONAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
The company designs, manufactures and installs hot glassware handling equipment into glass container factories around the world. We continue to invest in new technologies and products with the aim that our portfolio of equipment meets the demands of our customers have for increased production speeds and reliability.
The glass container packaging industry experienced a decline in demand during 2023 which was driven in part by the sharp rise in energy and raw material costs within the whole supply chain. Many customers stopped production lines and paused major capex investments. It is the general consensus of the industry that this is a normalisation phase following the exponential growth coming experienced during the past 3 years. The industry has demonstrated cyclic activity of this nature over the past 30 years and we are confident that a growth cycle will return within the period of 2024.
Principal risks and uncertainties
2023 was the first year in four that we along with many other organisations were not adversely affected by the significant external factors of the COVID pandemic and the supply chain issues in sourcing key electrical components.
The high levels of UK inflation persisted for most of 2023 but we once again did not implement a mid-year price increase to our customers and with the rates reducing significantly towards the end of 2023 our 2024 price list included increases at much lower levels than the previous two years.
The company undertakes significant transactions in overseas currencies, which exposes it to foreign exchange rate risk. This risk is managed using both USD and Euro current accounts to receive funds from customers and pay suppliers resulting in a natural hedging position.
With the exception of foreign exchange, the company does not actively use financial instruments as part of its financial risk management. The company is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through credit control procedures. The nature of these financial instruments means that the company is not subject to a price risk or liquidity risk.
Key performance indicators
The company focuses on several key KPl's which are assessed at both company and product level with turnover and gross profit margins being the key areas of focus.
The company is reporting a sales figure in 2023 at £20.4 million, an increase of 19% compared to the sales figure of £17.2 million reported in 2022. This is a record figure for Sheppee and we believe is a result of the confidence returning to the industry in the second half of 2022 following the pandemic and the demand for our new Speedliner 65 stacker.
Gross profit margin increased from 30.4% to 34.8%. The 30.4% reported last year was unusually low and was due to us not passing on the mid-year price rises from our suppliers to our customers. Also, in 2022 we had to outsource the manufacture of goods with a turnover value of around £1.0 million due to capacity issues, which have now been resolved.
SHEPPEE INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Development and performance
The directors are satisfied with the turnover recognised in the year ended 31 December 2023.
A further Speedliner 65 trial in March within one factory of a large group was very successful, performing to a level that our competitors were unable to do so. As a result of the trial, the group has started ordering the Speedliner 65 and other ancillary equipment for other factories within their group. We are waiting to hear if it will be used as part of this group's green field site project which consists of 10 production lines.
Our new Stacker variant Speedliner 55 was on display at the Glasstech show in Dusseldorf and attracted interest from many customers. We currently have two operating successfully within two separate production facilities in the UK. We have completed the development of two new stackers, one for Emhart Glass and the Speedliner 25 which is a replacement for one of our older stackers the MRS. The Emahrt stacker Flecstacker 2 will be installed in March and we are currently identifying a suitable site in which to install the Speedliner 25. A new stacker development has just started with our system development partner with the intention of it being displayed at Glasstech in Oct 2024.
Mr S P Holmes
Director
7 March 2024
SHEPPEE INTERNATIONAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity continues to be the manufacture of machinery and spare parts for the glass container manufacturing industry worldwide.
Results and dividends
The results for the year are set out on page 8.
Interim ordinary dividends were paid amounting to £2,676,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S P Holmes
Mr K R Johnson
Mr C Rice
Auditor
The auditor, Azets Audit Services Limited, 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.
On behalf of the board
Mr S P Holmes
Director
7 March 2024
SHEPPEE INTERNATIONAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 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.
SHEPPEE INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHEPPEE INTERNATIONAL LIMITED
- 5 -
Opinion
We have audited the financial statements of Sheppee International Limited (the 'company') for the year ended 31 December 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 31 December 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.
SHEPPEE INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHEPPEE INTERNATIONAL 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.
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.
SHEPPEE INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHEPPEE INTERNATIONAL LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Alan Sidebottom (Senior Statutory Auditor)
For and on behalf of Azets Audit Services Limited
8 March 2024
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
SHEPPEE INTERNATIONAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
20,397,773
17,205,522
Cost of sales
(13,281,950)
(11,967,744)
Gross profit
7,115,823
5,237,778
Administrative expenses
(3,602,900)
(2,716,634)
Operating profit
4
3,512,923
2,521,144
Interest payable and similar expenses
7
(1,839)
(586)
Profit before taxation
3,511,084
2,520,558
Tax on profit
8
(804,112)
(443,886)
Profit for the financial year
2,706,972
2,076,672
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SHEPPEE INTERNATIONAL LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
8,560
10,756
Tangible assets
11
146,436
116,784
154,996
127,540
Current assets
Stocks
12
2,863,823
2,975,368
Debtors
13
4,634,466
4,815,625
Cash at bank and in hand
2,896,432
3,401,922
10,394,721
11,192,915
Creditors: amounts falling due within one year
14
(4,047,845)
(4,849,555)
Net current assets
6,346,876
6,343,360
Net assets
6,501,872
6,470,900
Capital and reserves
Called up share capital
16
108,973
108,973
Capital redemption reserve
71,027
71,027
Profit and loss reserves
6,321,872
6,290,900
Total equity
6,501,872
6,470,900
The financial statements were approved by the board of directors and authorised for issue on 7 March 2024 and are signed on its behalf by:
Mr S P Holmes
Director
Company Registration No. 02792576
SHEPPEE INTERNATIONAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
108,973
71,027
6,254,228
6,434,228
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
2,076,672
2,076,672
Dividends
9
-
-
(2,040,000)
(2,040,000)
Balance at 31 December 2022
108,973
71,027
6,290,900
6,470,900
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
2,706,972
2,706,972
Dividends
9
-
-
(2,676,000)
(2,676,000)
Balance at 31 December 2023
108,973
71,027
6,321,872
6,501,872
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Sheppee International Limited is a company limited by shares incorporated in England and Wales. The registered office is Halifax Way, Airfield Business Park, Elvington, York, YO41 4AU.
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 £1.
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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The immediate parent company is Sheppee Holdings Limited, into which these financial statements are consolidated. The registered office is Halifax Way, Airfield Business Park, Elvington, York, YO41 4AU.
1.2
Going concern
The directors have considered all factors, including in the wider economy, as part of their assessment of going concern. Although the current economic and political climate creates both cashflow and profitability risks for the company, the company continues to trade profitably and is cash generative. Budgets and cashflows have been prepared using assumptions for customer demand and supply chain costs. These budgets and cashflows indicate continuing profitability and cash generation, consequently the directors believe on balance that they have sufficient resources to enable trading to continue for a period of at least one year from the date of approval of the financial statements. Accordingly, these financial statements have been prepared on the going concern basis.true
1.3
Turnover
Turnover represents amounts receivable for the manufacture of machinery and spare parts for the glass container manufacturing industry worldwide net of VAT and trade discounts.
Turnover 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 or once the contractual obligations giving rise to a commission have been met), the amount of turnover 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.
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation 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:
Software
33% Straight line
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Buildings
15 Years straight line
Plant and machinery
20% Straight line
Fixtures, fittings and equipment
33% Straight line
Motor vehicles
33% Straight line
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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset 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 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 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.
1.8
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.
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
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 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.
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors and loans from fellow group companies, 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
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.
1.11
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.
1.12
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.
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 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.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
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.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock
Stocks are valued at the lower of cost and estimated selling price less costs to complete and sell, as noted in accounting policy 1.8.
The company converts raw materials to finished goods. Stock values include any costs such as labour and overheads attributable to generating finished goods, as management believe this is the most suitable costing method to take into account the matching concept of accounting.
Bad debt provision
Outstanding trade debtor balances are reviewed on a line by line basis by management to identify possible amounts where a provision is required. Management closely manage the collection of trade debtors and therefore are able to identify balances where there is uncertainty about its recoverability, and determine what provision is required (if any).
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sales of machinery, support and servicing
20,397,773
17,205,522
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
904,542
1,160,853
Rest of Europe
12,360,262
10,935,215
Rest of the World
7,132,969
5,109,454
20,397,773
17,205,522
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(2,925)
(30,037)
Research and development costs
10,447
568
Fees payable to the company's auditor for the audit of the company's financial statements
13,180
11,925
Depreciation of owned tangible fixed assets
63,213
68,731
Amortisation of intangible assets
6,215
6,015
Operating lease charges
112,806
125,037
Additional research and development costs are included within wages and salaries costs.
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
34
33
Administration
24
16
Directors
3
3
Total
61
52
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,661,675
2,172,840
Social security costs
271,116
235,791
Pension costs
241,486
200,008
3,174,277
2,608,639
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
426,345
340,377
Company pension contributions to defined contribution schemes
80,650
97,152
506,995
437,529
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
207,606
168,024
Company pension contributions to defined contribution schemes
24,608
31,965
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
7
Interest payable and similar expenses
2023
2022
£
£
Other interest
1,839
586
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
842,500
473,000
Adjustments in respect of prior periods
(38,388)
(29,114)
Total current tax
804,112
443,886
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
3,511,084
2,520,558
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
825,105
478,906
Tax effect of expenses that are not deductible in determining taxable profit
438
2,678
Depreciation on assets not qualifying for tax allowances
259
836
Under/(over) provided in prior years
(38,388)
(29,114)
Other
16,698
(9,420)
Taxation charge for the year
804,112
443,886
9
Dividends
2023
2022
£
£
Interim paid
2,676,000
2,040,000
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
10
Intangible fixed assets
Software
£
Cost
At 1 January 2023
148,469
Additions
4,019
At 31 December 2023
152,488
Amortisation and impairment
At 1 January 2023
137,713
Amortisation charged for the year
6,215
At 31 December 2023
143,928
Carrying amount
At 31 December 2023
8,560
At 31 December 2022
10,756
11
Tangible fixed assets
Buildings
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
117,963
407,658
222,172
74,135
821,928
Additions
85,139
7,726
92,865
Disposals
(8,714)
(8,714)
At 31 December 2023
117,963
492,797
221,184
74,135
906,079
Depreciation and impairment
At 1 January 2023
117,799
332,414
188,296
66,635
705,144
Depreciation charged in the year
164
38,658
16,891
7,500
63,213
Eliminated in respect of disposals
(8,714)
(8,714)
At 31 December 2023
117,963
371,072
196,473
74,135
759,643
Carrying amount
At 31 December 2023
121,725
24,711
146,436
At 31 December 2022
164
75,244
33,876
7,500
116,784
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Stocks
2023
2022
£
£
Raw materials and consumables
2,680,672
2,710,143
Finished goods and goods for resale
183,151
265,225
2,863,823
2,975,368
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,170,080
2,119,692
Amounts owed by group undertakings
2,254,848
2,473,151
Other debtors
122,348
134,592
Prepayments and accrued income
87,190
88,190
4,634,466
4,815,625
14
Creditors: amounts falling due within one year
2023
2022
£
£
Payments received on account
562,509
1,012,449
Trade creditors
1,175,113
1,533,492
Amounts owed to group undertakings
591,657
1,214,087
Corporation tax
55,000
45,500
Other taxation and social security
198,065
154,166
Other creditors
246
Accruals and deferred income
1,465,255
889,861
4,047,845
4,849,555
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
241,486
200,008
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.
SHEPPEE INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
108,973
108,973
108,973
108,973
17
Operating lease commitments
Lessee
The company currently licenses its premises used during the course of its trade and accordingly no lease commitment arises.
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
61,443
14,144
Between two and five years
94,790
3,979
156,233
18,123
18
Directors' transactions
Description
% Rate
Opening balance
Amounts repaid
Closing balance
£
£
£
Mr S P Holmes -
-
18,073
(18,073)
-
18,073
(18,073)
-
19
Ultimate controlling party
The company's immediate parent company is Sheppee Holdings Limited, into which these financial statements are consolidated. The ultimate parent company and controlling party is Rondot Group. Copies of the group financial statements for Rondot Group are available from its registered office of 9 rue Jean Elysée Dupuy, 69410 Champagne au Mont d'Or, France.
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.100Mr S P HolmesMr C RiceMr C RiceMr K R Johnsonfalsefalse027925762023-01-012023-12-3102792576bus:Director12023-01-012023-12-3102792576bus:CompanySecretaryDirector12023-01-012023-12-3102792576bus:Director22023-01-012023-12-3102792576bus:CompanySecretary12023-01-012023-12-3102792576bus:Director32023-01-012023-12-3102792576bus:RegisteredOffice2023-01-012023-12-31027925762023-12-31027925762022-01-012022-12-3102792576core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3102792576core:RetainedEarningsAccumulatedLosses2023-01-012023-12-3102792576core:OtherResidualIntangibleAssets2023-12-3102792576core:OtherResidualIntangibleAssets2022-12-3102792576core:ComputerSoftware2023-12-3102792576core:ComputerSoftware2022-12-31027925762022-12-3102792576core:LandBuildingscore:OwnedOrFreeholdAssets2023-12-3102792576core:PlantMachinery2023-12-3102792576core:FurnitureFittings2023-12-3102792576core:MotorVehicles2023-12-3102792576core:LandBuildingscore:OwnedOrFreeholdAssets2022-12-3102792576core:PlantMachinery2022-12-3102792576core:FurnitureFittings2022-12-3102792576core:MotorVehicles2022-12-3102792576core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3102792576core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3102792576core:CurrentFinancialInstruments2023-12-3102792576core:CurrentFinancialInstruments2022-12-3102792576core:ShareCapital2023-12-3102792576core:ShareCapital2022-12-3102792576core:CapitalRedemptionReserve2023-12-3102792576core:CapitalRedemptionReserve2022-12-3102792576core:RetainedEarningsAccumulatedLosses2023-12-3102792576core:RetainedEarningsAccumulatedLosses2022-12-3102792576core:ShareCapital2021-12-3102792576core:CapitalRedemptionReserve2021-12-3102792576core:RetainedEarningsAccumulatedLosses2021-12-3102792576core:IntangibleAssetsOtherThanGoodwill2023-01-012023-12-3102792576core:ComputerSoftware2023-01-012023-12-3102792576core:LandBuildingscore:OwnedOrFreeholdAssets2023-01-012023-12-3102792576core:PlantMachinery2023-01-012023-12-3102792576core:FurnitureFittings2023-01-012023-12-3102792576core:MotorVehicles2023-01-012023-12-310279257612023-01-012023-12-310279257612022-01-012022-12-3102792576core:UKTax2023-01-012023-12-3102792576core:UKTax2022-01-012022-12-310279257622023-01-012023-12-310279257622022-01-012022-12-310279257632023-01-012023-12-310279257632022-01-012022-12-3102792576core:ComputerSoftware2022-12-3102792576core:ComputerSoftwarecore:ExternallyAcquiredIntangibleAssets2023-01-012023-12-3102792576core:LandBuildingscore:OwnedOrFreeholdAssets2022-12-3102792576core:PlantMachinery2022-12-3102792576core:FurnitureFittings2022-12-3102792576core:MotorVehicles2022-12-31027925762022-12-3102792576core:WithinOneYear2023-12-3102792576core:WithinOneYear2022-12-3102792576core:BetweenTwoFiveYears2023-12-3102792576core:BetweenTwoFiveYears2022-12-3102792576bus:PrivateLimitedCompanyLtd2023-01-012023-12-3102792576bus:FRS1022023-01-012023-12-3102792576bus:Audited2023-01-012023-12-3102792576bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP