The directors present the strategic report for the year ended 31 October 2023.
The principal activity of Indespension Ltd is that of manufacture, distribution and retail of high quality trailers and trailer parts. Through retail branches it offers a full package of sales, servicing and hire of trailers, supply and fitting of towbars to towing vehicles and sales of a wide range of related products. The principal activity of D.R.A. Ltd is that of a holding company and property management of the Indespension business premises.
Turnover in the 12 months to October 2023 fell 6% year on year finishing at £20.1m compared to £21.3m in 2022. Increases in interest rates and the cost of living crisis during the year suppressed the retail side of the business in particular, but also impacted our B2B customer base with demand for large trailer orders being lower than in previous years. Lower new trailer sales were partially offset by strong performance around all our workshops where tow bar fittings and servicing were up year on year – this resulted in our overall gross margin % reducing by around 1% versus prior year. The group also benefitted from a £613k profit on sale of an investment property held in a subsidiary company.
An EBITDA profit for the year of £922k was generated compared to £1,154k the year before. Despite the challenging year we are pleased with this underlying level of core profitability and remain cautiously optimistic as we move in to 2024.
The group actively encourages and continues to invest in new technology and innovative designs. We are confident in the quality and uniqueness of our product designs and take the appropriate steps to protect our intellectual property should circumstances arise where it has been misappropriated. The back end of the year saw the launch of our new Tilting Flatbed range of trailers which have been well received in the market.
Moving into 2024 the order book isn’t as strong as previous years and there is a general reluctance in the market to commit to large purchases. However there remains a number of opportunities in the offing but costs are being kept to minimum until these materialise. Lower than normal trailer sales means that our workshops are busy given more people are repairing or refurbishing trailers as opposed to replacing them, which is one positive effect of the wider poor economic conditions.
Key risks include:
Shortage of skilled and unskilled labour
Continued increases in input costs
Competition in the market place both from domestic suppliers and imported product
UK Consumer confidence impacting retail sales
Key performance indicators remain net current assets, shareholders' funds and distributable profits. The directors consider the group to be in a strong financial position given the net current assets of £3.2m (£1.1m previous year) and shareholders' funds of £14.8m (£14.5m previous year) at 31 October 2023.
Future investment will be aimed at continuing our production capacity improvements, investment in systems and in growing our more profitable sectors and products.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 October 2023.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £162,000 (2022: £115,000). The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group finances its operations through a mixture of retained profits and where necessary to fund expansion or capital expenditure programmes through bank borrowings.
The management’s objectives are to:
Retain sufficient liquid funds to enable it to meet its day to day obligations as they fall due whilst maximizing returns on surplus funds;
Minimise the group’s exposure to fluctuation interest rates when seeking new borrowings; and
Match the repayment schedule of any external borrowings or overdrafts with the expected future cash flows expected to arise from the group’s trading activities.
The group’s funds are invested in bank accounts and borrowings are all obtained from standard bank loan accounts. As such, there is little price risk exposure.
The group’s funds are held primarily in short term variable rate accounts. The directors believe that this gives them the flexibility to release cash resources at short notice and also allows them to take advantage of changing conditions in the finance markets as they arise.
The group’s borrowings are in fixed or variable interest loans.
Development costs are capitalised within intangible assets where they can be identified with a specific product or project anticipated to produce future benefits, and are amortised on a straight line basis over the anticipated life of the benefits arising from the completed product or project.
Deferred research and development costs are reviewed annually, and where future benefits are deemed to have ceased or be in doubt, the balance of any related research and development is written off to the profit and loss account.
Following the merger of MHA Moore and Smalley with MHA, the company's independent auditor has now become MHA. The auditor, MHA, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The group has continued to follow policies and procedures that take account of the need to preserve and protect the environment.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report certain information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.
We have audited the financial statements of D.R.A. Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for opinion
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 group and parent 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 group's and parent 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.
Other information
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.
In the light of the knowledge and understanding of the group and parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations;
Enquires with management about any known or suspected instances of fraud;
Examination of journal entries and other adjustments to test for appropriateness and identify any instances of management override of controls;
Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries;
Auditing the risk of fraud in revenue, including through the testing of income cut off at the period end and through sales transaction testing to provide comfort that revenue is completely stated in 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 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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £190,000 (2022 - £172,000).
D.R.A. Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Paragon Business Park, Chorley New Road, Horwich, Bolton, BL6 6HG.
The group consists of D.R.A. Ltd and all of its subsidiaries.
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 £'000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
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’ – Carrying amounts, 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 consolidated group financial statements consist of the financial statements of the parent company D.R.A. Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 October 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Whilst the group continues to perform well, it faces future hurdles around cost pressures – primarily around impact of inflation and high interest rates, as well as salary cost rises for cost of living and challenges around labour availability.
The directors will continue to monitor these items closely and will make decisions to align the business with movements up or down in any of these cost areas promptly.
Previous actions taken enabled the group to establish a strong financial platform. This, together with the current balance sheet strength, positions the group well.
The directors have prepared cash flow projections for the group to cover at least the twelve months following the approval of the financial statements as well as considering obligations falling due over the next twelve months. The projections indicate that the group is expected to generate sufficient resources to meet their obligations as they fall due.
After considering the impact of the above, at the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
Turnover represents the invoiced amount of goods sold and services provided less returns and allowances, excluding value added tax. Rent receivable is recognised in the period to which it relates.
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.
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.
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 recognised in the profit and loss account.
No depreciation has been charged on certain land and buildings as the directors consider that the depreciable amount, being the cost less the residual value, is immaterial.
In the parent company financial statements, investments in subsidiaries are initially measured at cost, and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group 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).
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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 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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
All of the group's assets are basic 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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
All of the group's liabilities are basic financial liabilities.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
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 are included in the profit and loss account for the period.
The profit and loss accounts and balance sheets of overseas subsidiary undertakings are translated into sterling at the rates of exchange ruling at the balance sheet date. Exchange adjustments arising from the translation of balance sheets are taken to reserves.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
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.
The present value of the defined benefit pension scheme liability depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost or income for pensions include the discount rate. Any changes in these assumptions, which are disclosed in the notes to the accounts, will impact on the carrying value of the pension liability.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 0).
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:
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
Investment property comprises a property held for capital appreciation. The directors have undertaken a review of the investment property and believe that the valuation as at 31 October 2022 is a fair reflection of the value as at this date, taking into account available market data regarding property prices in the area. The property was sold during the year.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
The directors elected to take the previous UK GAAP valuation of properties on the date of transition to FRS 102 as the deemed cost at that date. A revaluation reserve exists within group reserves and the directors have elected not to merge this within profit and loss reserves as undistributable profit. The directors continue to monitor property carrying values, with reference to the local market and recent transactions of similar properties and deem the current valuation to remain relevant.
The historic cost of the properties is £6,132,000 (2022: £6,132,000) for the group and company.
Details of the company's subsidiaries at 31 October 2023 are as follows:
Registered office address:
1. Castlemungret, Dock Road, Limerick, Ireland
2. Paragon Business Park, Chorley New Road, Horwich, Bolton, BL6 6HG
3. Unit C2, North City Business Park, North Road, Dublin 11, Ireland
4. Palma De Mallorca, Spain
Group stock with a gross carrying value of £5,651,000 (2022: £5,518,000) has been written down by £48,000 (2022: £30,000).
Group trade debtors with a gross value of £1,416,000 (2022: £2,685,000) have been written down by £24,000 (2022: £6,000).
The group and company other creditors balance includes £nil (2022: £250,000) due to the Moorlands Pension Fund, and £127,000 (2022: £1,526,000) due to the directors. These balances are interest free and repayable on demand.
The bank loan, bank overdraft and other bank borrowings are secured by fixed and floating charges over the assets of the group. The bank overdraft and other bank borrowings are repayable on demand.
The bank loan total comprises a £186,667 (2022: £256,666) secured Coronavirus Business Interruption Loan Scheme (CBILS) loan repayable in instalments between July 2021 and June 2026 and carrying an interest rate of 3.99% above base rate from July 2021.
Finance lease payments represent rentals payable by the group for certain items of plant and machinery held under hire purchase. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The lease creditors are secured on the assets to which they relate.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
It is impractical to estimate the movement of the deferred tax liability relating to retirement obligations in the 12 months following the balance sheet date, due to the estimation uncertainty over the related obligations, which can only be assessed following the next balance sheet date. This is also true of the deferred tax provision in respect of properties carried at valuation. Furthermore as at the signing date of these financial statements, the group has not finalised its capital expenditure programme for 2023/24, an assessment as to the likely movement of other related timing differences cannot be made.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
There were outstanding pension contributions at the year end of £18,851 (2022: £19,961).
The group operates a defined benefit scheme for qualifying employees. Under the scheme the employees are entitled to retirement benefits based on a proportion of final salary on attainment of the retirement age. No other post retirement benefits are provided. The scheme is fully funded.
The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 31 December 2022.
The discount rate has been determined by reference to market yields on AA corporate bonds.
Assumed life expectations on retirement at age 65:
The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:
Amounts recognised in the profit and loss account
Amounts taken to other comprehensive income
Movements in the present value of defined benefit obligations
The defined benefit obligations arise from plans which are wholly or partly funded.
Movements in the fair value of plan assets
Fair value of plan assets at the reporting period end
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
As permitted by FRS102 Section 33, transactions entered into between two or more members of the group are not disclosed, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
The Moorlands Pension Fund ("MPF") is a self-administered pension scheme of which D.R.A. Ltd is the sponsoring employer. During the year the group made sales of £504,000 (2022: £540,000) to MPF and made payments of £24,000 (2022: £24,000) to MPF relating to the rental of certain properties. At the year end £25,000 (2022: £277,000) was due to MPF, and is included in creditors. At the year end £nil (2022: £315,000) was due from MPF, and is included in debtors.
Included in creditors at the year-end is £127,000 (2022: £1,526,000) due to the directors of the parent company, and included in debtors at the year-end is £nil (2022: £70,000) due from the directors of the parent company.
During the year dividends of £162,000 (2022: £115,000) were paid to the directors of the company.
At 1 November 2021 £9,000 was due to a director of the parent company by the group. During the previous year advances of £83,000 were made to the director, and repayments of £4,000 made by the director. At 31 October 2022 a balance of £70,000 was due to the group by the director. The maximum amount owed to the group during the previous year was £70,000. This balance was repaid to the group by the director during the year ended 31 October 2023.
Further details of transactions with directors are included in the related party transactions note.
The prior year adjustment is in respect of a subsidiary company, Gigondas SL, not previously consolidated, on the basis that the directors did not consider this to be material. During the year the sale of a property owned by Gigondas SL has highlighted that this subsidiary company is material to the consolidated financial statements. A prior year adjustment has been processed to consolidate this subsidiary.
At 31 October 2021 the balance sheet of Gigondas SL included an investment property with a fair value of £1,976,000, balances due to directors of £1,465,000, a deferred tax liability of £118,000, and profit and loss reserves of £393,000.
During the year ended 31 October 2022 there were fair value gains on the investment property of £375,000 and a deferred tax charge of £86,000. At 31 October 2022 the balance sheet of Gigondas SL included an investment property with a fair value of £2,351,000, balances due to directors of £1,465,000, a deferred tax liability of £204,000, and profit and loss reserves of £682,000.
The consolidated balances have been restated to reflect the above. There is no effect on the balances within the parent entity. Consolidated net assets are higher than previously reported by £393,000 at 31 October 2021 and by £682,000 at 31 October 2022. The consolidated profit after tax for the year ended 31 October 2022 is £289,000 higher than previously reported.