Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
COMPANY INFORMATION
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ARTHUR CHATWIN LIMITED
CONTENTS
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ARTHUR CHATWIN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their strategic report of the year ended 31st December 2023.
Arthur Chatwin Limited has operated as a family business since 1913 under the trading name “Chatwins”. With a central bakery in Nantwich the Company services its 24 shops and wholesale customers in Cheshire, Staffordshire, North Wales and Merseyside.
Turnover increased by 18% to £13.6m. During 2023 we opened one new outlet and closed 2 as they came to the end of their lease. The cost challenges we saw in 2022 have continued into 2023. High inflation affecting our ingredient costs, living wage rises on our wage cost and energy costs affecting our overall profitability. During the year we invested £0.8m in new bakery equipment, new vehicles, and in our retail outlets.
Liquidity risk:
The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs by closely managing cashflow projections. The company does finance some of its investments in tangible fixed assets through hire purchase contracts. The maturity of these obligations is set out in the notes to the financial statements. Economic Risk: The company purchases significant volume of wholesale food product and energy costs, both which can have significant volatility and have considerable impact on the cost base. This risk is mitigated by fixing long term contracts with suppliers and constant review of product pricing. Trading risk: The company identifies that there are significant risks complying with legislation in the following areas: - Health and Safety - Food Hygiene - Employment Law The company uses external advisors to provide a framework of policies, procedures and internal controls to address risks in all these areas. Key performance indicators: The company manages the business through the following key performance indicators: - Increase/decrease in turnover - Change in the average transaction value - Raw ingredient percentage - Wage percentage - Waste percentage - EBITDA
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ARTHUR CHATWIN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors do not foresee any changes to the principal activities of the company. We actively look for new shops and continue to re-brand existing shops. With the UK food to go market expected to continue to grow we are in a strong position to expand our number of outlets.
This report was approved by the board on 30 May 2024 and signed on its behalf.
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ARTHUR CHATWIN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and 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 for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £8,586 (2022 - loss £258,787).
Ordinary dividends were paid amounting to £25,000. The directors do not recommend payment of a final
dividend.
The directors who served during the year were:
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ARTHUR CHATWIN LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Disabled persons
The company is responsive to the needs of its employees. As such, should any employee of the company become disabled during their time with us, we will actively retrain that employee and make reasonable adjustments to their working environment where possible, in order to keep the employee with the company. It is the policy of the company that the recruitment, training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees. Employee involvement The Board maintain regular communication with employees by holding regular staff meetings where free flow of information and ideas is encouraged. Through these meetings, informal shop visits and factory floor walks, the views of the teams operating in the shops and the bakery are well known.
The auditors, WR Partners, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 30 May 2024 and signed on its behalf.
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ARTHUR CHATWIN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARTHUR CHATWIN LIMITED
We have audited the financial statements of Arthur Chatwin Limited (the 'Company') for the year ended 31 December 2023, which comprise the Profit and Loss Account, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
The company has a defined benefit pension scheme, which, other than the disclosure in note 26 describing
the potential scheme liability, is not included in the financial statements in accordance with FRS 102. The directors have not requested an FRS 102 actuarial report on the defined benefit pension scheme at 31.12.23. For this reason, we were unable to obtain sufficient appropriate audit evidence to be able to verify the value of the defined pension scheme liability at 31.12.23 or 31.12.22. In addition the FRS 102 defined benefit pension scheme disclosures were not included within the financial statements. In addition, were any adjustments to the pension balance to be required, the strategic report and directors report would also need to be amended. We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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ARTHUR CHATWIN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARTHUR CHATWIN LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
As described in the Basis for qualified opinion on other matters prescribed by the Companies Act 2006 section of our report we were unable to satisfy ourselves concerning the value of the defined pension scheme liability. We have concluded that where the other information refers to the profit or loss for the year, it may be materially misstated for the same reason.
Except for the matter described in the Basis for qualified opinion section of our report, 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 stategic report and directors report have been prepared in accordance with applicable legal requirements.
Except for the matter described in the Basis for qualified opinion section of our report, 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 and 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:
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ARTHUR CHATWIN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARTHUR CHATWIN LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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: The audit team obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to the reporting framework (FRS102 and the Companies Act 2006), the relevant tax compliance regulations, employment law, Health and Safety Regulations and the EU General Data Protection Regulation (GDPR). We understood how the Company is complying with these frameworks by making enquiries of management and those responsible for legal and compliance procedures. We also reviewed board minutes to identify any recorded instances of irregularity or non compliance that might have a material impact on the financial statements. We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur by meeting with key management to understand where they considered there was susceptibility to fraud. Based on our understanding our procedures involved enquiries of management and those charged with governance, manual journal entry testing, cashbook reviews for large and unusual items and the challenge of significant accounting estimates used in preparing the financial statements.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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ARTHUR CHATWIN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARTHUR CHATWIN LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Drake House
Gadbrook Park
Rudheath
Cheshire
CW9 7RA
31 May 2024
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ARTHUR CHATWIN LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
REGISTERED NUMBER: 00716597
BALANCE SHEET
AS AT 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
REGISTERED NUMBER: 00716597
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 May 2024.
The notes on pages 15 to 34 form part of these financial statements.
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ARTHUR CHATWIN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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ARTHUR CHATWIN LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Arthur Chatwin Limited is a private company limited by shares incorporated in England and Wales. The
registered office is 4 Market Street, Nantwich, Cheshire, CW5 5DJ.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
At 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.
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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,
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form.
Financial liabilities within the scope of IAS 39 are initially classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
The company determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs. Subsequently, the measurement of financial liabilities depends on their classification as follows: After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised respectively in finance revenue and finance cost. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such as an exchange or modification, this is treated as a derecognition of the original liability, such that the difference in the respective carrying amounts together with any costs or fees incurred are recognised in profit or loss.
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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. Dilapidations The directors estimate the value of dilapidation cost for each of the leasehold properties. The cost of dilapidations is based on both historic and recent dilapidations claims on a cost per metre squared adjusted for the period remining on the leases. The dilapidations provision at 31 December 2023 was £209,212. In the opinion of the directors, the accounting estimates and judgements made in the course of preparing these financial statements are not difficult, subjective or complex to a degree which would warrant their description as critical. The directors have made the decision not to include the defined benefit pension deficit in the financial statements.
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Analysis of turnover by country of destination:
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
13.Taxation (continued)
At 31 December 2023 corporation tax losses of £176,068 were carried forward to relieve against future profits. The future relief is regognised as a reduction in the deferred tax liability at 31 December 2023.
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
16.Tangible fixed assets (continued)
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Investment property comprises one property commercially let. The fair value of the investment property
has been arrived at on the basis of a valuation carried out at 8 December 2021 by Lamb & Swift Commercial Property, RICS registered valuers, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. The directors do not consider that the fair value of the property has changed since then.
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
The charge to the profit and loss account in respect of defined contribution pension schemes was £119,246 (2022: £106,241).
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ARTHUR CHATWIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
31.Other financial commitments
The company previously operated a defined benefit pension scheme for its members. Contributions to this scheme are made by Arthur Chatwin Limited, the sponsoring employer. The assets of the scheme are held in funds independent of the company and administered by trustees. Contributions to the company's defined benefit scheme are charged to the profit and loss account such that when taken together with expected future benefits the scheme will be able to meet its obligations as they fall due. The pension scheme obligations are determined by a qualified actuary. The pension costs for the period represent pension charges, levies and contributions payable by the company to the fund to spread the cost of pensions over employees working lives with the company. There were no outstanding or prepaid contributions at either the beginning or end of the financial period.
The latest full actuarial valuation / funding update was performed at 5 April 2022 by an independent, professionally qualified actuary. Following the actuarial valuation there were significant changes to defined benefit pension liability resulting from increases in the the discount rate reducing pension scheme liabilities. The actuarial valuation / funding update as at 31 October 2022 reported a deficit of £785,000. The directors acknowledge that in the absence of a Full FRS102 pension disclosures report they have not complied with the disclosure requirements of FRS102 but in view of the deficit have arranged that the scheme hold a legal charge against company property, have earmarked a schedule of shortfall payments and are undertaking to regularly review the asset position to ensure the scheme is adequately funded in order to meet its ongoing liabilities. During the year the company made pension deficit payments totalling £143,545 (31 December 2022: £138,875) during the year. Going forward, payments have been set to increase at 5% p.a from the base level of £138,915 set by the scheme actuaries in 2022. The 2023/24 figure of £145,860 will increase to £153,153 for 2024/25. The scheme is closed to new members with all current employees paying contributions to a defined contribution scheme.
Dividends paid to directors: 2023 - £20,250 (2022- £20,250)
Amounts owed by the directors at 31 December 2023 are as follows:- N J Jenks, £1,060, E Chatwin £5,981. The loan balances are due to be repaid within 9 months of the year end 31 December 2023.
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