Company registration number 01228092 (England and Wales)
LEDROP EXPORTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
LEDROP EXPORTS LIMITED
COMPANY INFORMATION
Director
H W P Clift
Company number
01228092
Registered office
325-327 Oldfield Lane North
Greenford
Middlesex
UB6 0FX
Auditor
Landau Morley LLP
325-327 Oldfield Lane North
Greenford
Middlesex
UB6 0FX
LEDROP EXPORTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 20
LEDROP EXPORTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 1 -
The director presents the strategic report for the year ended 31 July 2023.
Review of the business
The Profit and Loss Account is set out on page 8. Turnover for the year ended 31 July 2023 is £30m (2022: £29m). Gross profit margin for the year increased to 19%, compared to 13% for the prior year, reflecting continued increase in demand for premium branded spirits and the ongoing premiumisation of the company’s product mix.
Trading conditions however continued to be challenging and exchange rates volatile. Administrative expenses at year end, including exchange losses, were £2.9m (2022: £1.7m). The company generated a profit before tax of £2.7m (2022: £2.1m).
The director considers the results for the year to be satisfactory and will continue to pursue strategies that will realize a steady growth in turnover and improve profitability.
The company’s net assets have increased to £9.3m (2022: £8.4m) as at the year end.
Principal risks and uncertainties
The company continues to operate in a highly price and marketing investment competitive market for the export, in-market distribution, and marketing of alcoholic beverages. Risks are regularly reviewed by the director and appropriate strategies are put in place to mitigate and monitor them, ensuring that its risk management objectives support the company’s strategic objectives.
Financial risk management objectives and policies:
The company uses various financial instruments that include Cash, Trade and other Receivables and Creditors that arise from its trading operations. The main financial risks inherent from the company’s operations are liquidity, credit and operational risks and these are closely monitored and managed by management.
Liquidity risk:
The director closely manages financial risk by regular working capital and cash flow management, ensuring sufficient liquidity is available to meet the company's operational commitments.
Credit and operational risk:
The company has implemented policies that require both appropriate due diligence and credit checks to be executed on customers, whilst simultaneously focusing on adequate internal processes and systems to ensure compliance with the regulatory framework.
Key performance indicators
The director uses both financial and non-financial performance indicators to monitor the company's position. The key financial performance indicators of the company are sales £30m (2022 £29m), gross profit of £5.6m (2022: £3.8m) and balance sheet with net current assets of £9.3m (2022: £8.4m).
The key non-financial performance indicators are maintaining good working relations and high level of satisfaction with suppliers and in-market distributors. The director is of the belief that the monitoring of the above mentioned indicators is an effective aspect of business performance review.
LEDROP EXPORTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 2 -
Going concern
The director undertook an assessment of the ability of the company to continue in operation and meet its liabilities as they fall due over the 12 months. In doing so, the director considered events throughout the period of their assessment, including confirmed existing orders and upcoming contracts. The director also mitigated the risks as much as possible through the use of the existing finance facilities from the company's current banking partners.
The director has prepared management accounts post year end, including a plausible downside scenario reflecting possible disruptions to operations as a result of in-market political and economic factors, using historic interruptions in operating as a basis. Under all scenarios considered, the company was able to operate with existing borrowing facilities and financial liabilities.
The director is confident, based on the circumstances outlined above, that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
H W P Clift
Director
30 July 2024
LEDROP EXPORTS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 3 -
The director presents his annual report and financial statements for the year ended 31 July 2023.
Principal activities
The principal activity of the company continued to be that of export merchants.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £818,247. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
H W P Clift
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
H W P Clift
Director
30 July 2024
LEDROP EXPORTS LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2023
- 4 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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. He is 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.
LEDROP EXPORTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEDROP EXPORTS LIMITED
- 5 -
Opinion
We have audited the financial statements of Ledrop Exports Limited (the 'company') for the year ended 31 July 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows 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 July 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
LEDROP EXPORTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEDROP EXPORTS LIMITED (CONTINUED)
- 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 director's 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 director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
We are not responsible for preventing non-compliance and cannot be expected to detect non compliance with all laws and regulations - this responsibility lies with management with the oversight of the directors.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
With the exception of any known or possible non-compliance, and as required by auditing standards, our work in respect of these included enquiry of management about company's policies, procedures and related controls regarding compliance with laws and regulations and if there are any known instances of non-compliance.
LEDROP EXPORTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEDROP EXPORTS LIMITED (CONTINUED)
- 7 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly significant in the case of misstatement resulting from fraud because fraud may involve sophisticated and carefully organized schemes designed to conceal it, including deliberate failure to record transactions, collusion or intentional misrepresentations being made to us.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's 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.
Paul Faber FCA
Senior Statutory Auditor
For and on behalf of Landau Morley LLP
30 July 2024
Chartered Accountants
Statutory Auditor
325-327 Oldfield Lane North
Greenford
Middlesex
UB6 0FX
LEDROP EXPORTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
29,958,059
28,962,814
Cost of sales
(24,352,293)
(25,151,427)
Gross profit
5,605,766
3,811,387
Administrative expenses
(2,910,077)
(1,675,475)
Operating profit
2,695,689
2,135,912
Interest payable and similar expenses
6
(990)
(843)
Profit before taxation
2,694,699
2,135,069
Tax on profit
7
(568,063)
(405,800)
Profit for the financial year
2,126,636
1,729,269
The income statement has been prepared on the basis that all operations are continuing operations.
LEDROP EXPORTS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2023
31 July 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
651
1,151
Current assets
Debtors
10
14,532,799
10,419,285
Cash at bank and in hand
6,323,346
4,250,403
20,856,145
14,669,688
Creditors: amounts falling due within one year
12
(11,605,860)
(6,225,792)
Net current assets
9,250,285
8,443,896
Net assets
9,250,936
8,445,047
Capital and reserves
Called up share capital
13
1,388
1,500
Capital redemption reserve
122
10
Profit and loss reserves
9,249,426
8,443,537
Total equity
9,250,936
8,445,047
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 30 July 2024
H W P Clift
Director
Company registration number 01228092 (England and Wales)
LEDROP EXPORTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 August 2021
1,500
10
7,664,268
7,665,778
Year ended 31 July 2022:
Profit and total comprehensive income
-
-
1,729,269
1,729,269
Dividends
8
-
-
(950,000)
(950,000)
Balance at 31 July 2022
1,500
10
8,443,537
8,445,047
Year ended 31 July 2023:
Profit and total comprehensive income
-
-
2,126,636
2,126,636
Dividends
8
-
-
(818,247)
(818,247)
Own shares acquired
-
-
(502,500)
(502,500)
Redemption of shares
13
112
112
Reduction of shares
13
(112)
-
(112)
Balance at 31 July 2023
1,388
122
9,249,426
9,250,936
LEDROP EXPORTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
16
3,711,942
2,997,348
Interest paid
(990)
(843)
Income taxes paid
(317,262)
(948,671)
Net cash inflow from operating activities
3,393,690
2,047,834
Investing activities
Purchase of tangible fixed assets
(1,500)
Net cash used in investing activities
-
(1,500)
Financing activities
Purchase of own shares
(502,500)
Dividends paid
(818,247)
(950,000)
Net cash used in financing activities
(1,320,747)
(950,000)
Net increase in cash and cash equivalents
2,072,943
1,096,334
Cash and cash equivalents at beginning of year
4,250,403
3,154,069
Cash and cash equivalents at end of year
6,323,346
4,250,403
LEDROP EXPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
- 12 -
1
Accounting policies
Company information
Ledrop Exports Limited is a private company limited by shares incorporated in England and Wales. The registered office is 325-327 Oldfield Lane North, Greenford, Middlesex, UB6 0FX.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
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:
Computer Equipment
33% straight line
Fixtures and fittings
20% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
LEDROP EXPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 13 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
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.
1.7
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 statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
LEDROP EXPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
LEDROP EXPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
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.
1.9
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 income statement 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.
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 income statement, 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.
1.10
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.
1.11
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.
LEDROP EXPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Export sales
29,958,059
28,962,814
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
4,000
4,000
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
2
2
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
18,044
16,275
6
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Other interest
990
843
LEDROP EXPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 17 -
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
568,066
405,800
Adjustments in respect of prior periods
(3)
Total current tax
568,063
405,800
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
2,694,699
2,135,069
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
673,675
405,663
Tax effect of expenses that are not deductible in determining taxable profit
2,418
137
Effect of change in corporation tax rate
(108,030)
Taxation charge for the year
568,063
405,800
8
Dividends
2023
2022
£
£
Interim paid
818,247
950,000
9
Tangible fixed assets
Computer Equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 August 2022 and 31 July 2023
4,012
37,394
41,406
Depreciation and impairment
At 1 August 2022
2,862
37,393
40,255
Depreciation charged in the year
500
500
At 31 July 2023
3,362
37,393
40,755
Carrying amount
At 31 July 2023
650
1
651
At 31 July 2022
1,150
1
1,151
LEDROP EXPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 18 -
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
7,867,833
1,790,309
Other debtors
6,582,461
8,609,876
Prepayments and accrued income
82,505
19,100
14,532,799
10,419,285
11
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
14,450,294
10,400,185
Carrying amount of financial liabilities
Financial liabilities measured at amortised cost
10,206,652
5,150,081
Financial assets that are debt instruments measured at amortised cost comprise trade debtors and other debtors.
Financial liabilities measured at amortised cost comprise bank overdrafts, trade creditors and other creditors.
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
9,601,573
4,204,846
Corporation tax
341,157
90,356
Other creditors
605,079
945,235
Accruals and deferred income
1,058,051
985,355
11,605,860
6,225,792
13
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
9,750 'A' Ordinary shares of 10p each
975
975
3,000 'B' Ordinary shares of 10p each
300
300
375 'C' Ordinary shares of 10p each
38
38
750 'D' Ordinary shares of 10p each
75
75
1,125 'E' Ordinary shares of 10p each
-
112
1,388
1,500
LEDROP EXPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 19 -
14
Related party transactions
At the balance sheet date, included within other debtors is an amount of £5,602,836 (2022: £7,991,481) due from Ledrop Nigeria Limited, a company related by common control. The sales for the year relating to Ledrop Nigeria Limited amounted to £28,027,890 (2022:£28,006,571).
At the balance sheet date, included within other debtors is an amount of £366,545 (2022: £190,943) due from Ledrop Ghana Limited, a company related by common control.
Included within other debtors is an amount of £12,341 (2022: £23,542) due from Ledrop Spain Limited, a company related by common control. Admin charges for the year relating to Ledrop Spain Limited amounted to £154,621 (2022:£87,348).
15
Directors' transactions
Dividends totalling £818,247 (2022 - £950,000) were paid in the year in respect of shares held by the company's directors.
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Closing balance
£
£
£
H W P Clift -
-
(920,270)
341,241
(579,029)
(920,270)
341,241
(579,029)
16
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
2,126,636
1,729,269
Adjustments for:
Taxation charged
568,063
405,800
Finance costs
990
843
Depreciation and impairment of tangible fixed assets
500
433
Movements in working capital:
Increase in debtors
(4,113,514)
(4,215,944)
Increase in creditors
5,129,267
5,076,947
Cash generated from operations
3,711,942
2,997,348
LEDROP EXPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 20 -
17
Analysis of changes in net funds
1 August 2022
Cash flows
31 July 2023
£
£
£
Cash at bank and in hand
4,250,403
2,072,943
6,323,346
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