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COMPANY REGISTRATION NUMBER: 11961465
AJWG Limited
Financial Statements
29 March 2023
AJWG Limited
Financial Statements
Year ended 29 March 2023
Contents
Page
Officers and professional advisers
1
Strategic report
2
Director's report
5
Independent auditor's report to the members
7
Consolidated statement of comprehensive income
11
Consolidated statement of financial position
12
Company statement of financial position
13
Consolidated statement of changes in equity
14
Company statement of changes in equity
15
Consolidated statement of cash flows
16
Notes to the financial statements
17
AJWG Limited
Officers and Professional Advisers
Director
Mr AWG Clugston
Registered office
The Old Rectory
High Street
Fillingham
Gainsborough
DN21 5BS
Auditor
Versant Associates LLP
Chartered accountants & statutory auditor
The Old Mill,
9 Soar Lane
Leicester
LE3 5DE
AJWG Limited
Strategic Report
Year ended 29 March 2023
The directors present their annual report and financial statements for the period ended 29 March 2023 Fair review of the business Following the previous year's rapid recovery growth following the Covid pandemic, taking the turnover from £12,920,387 at year end 2021 back up to £20,579,087 in 2022, it was good to see the company remain consistent at a turnover of £23,809,666 despite all the market influences. Whilst this appears to be a small increase in turnover, it is purely attributable to price rate increases with existing customers in response to the "cost of living" crisis, rather than a result of additional trading. Nevertheless, the aim of the group had been stabilisation, and despite the overall market conditions, this was achieved, although it was a difficult year for the company for several reasons. Although the acquisition of Clugston International Trading Limited on 10 March 2022 has added £1,398,917 to the group turnover in 2023. It is acknowledged that the Ukraine invasion which shocked the world, has had a knock-on impact on not just industry but everyday living. Energy price increases for Gas, Oil, Fuel and Electricity; manufacturing shortages on raw materials and components plus raw ingredients for food especially grain have all resulted in over inflated costs for businesses. As a haulage company, Clugston Distribution Services Limited, the significant company in the group, has suffered the impact of these rates of of inflation and has responded to the influences wherever it has needed, with significant wage increases, particularly for Drivers who saw another 16% rise, which comes on top of the previous year's 11%. The additional impact of Brexit caused the unforeseen loss of many overseas drivers leaving a huge gap in the industry and which subsequently drove drivers wages to record levels and was the initial cause of the driver wage increase last year, and which carried on into this.
Availability of spare parts and everyday commodities such as tyres has caused some issues but in the main, the company has through careful management in its workshop division and good planning practices, managed to sustain its own fleet, albeit it at higher cost impact averaging 20-30%. The workshops overall in the circumstances achieved decent results in the retail element of the company. Similarly, the company had to overcome severe time delays on new vehicles and trailers for its fleet, with orders taking a year to arrive. Careful management of the fleet was a necessity and impacted on maintenance and repair costs due to aging vehicles being higher than budget. The continued increase year on year of the minimum wage furthered the pressure on the company, as with all employers. The significant impact on the profitability from all the above influences was compounded in the middle of the year with a reduction in work volumes by up to 20% with some of our major customers. In November, the company resultantly took critical action, and reassessed its position within the market and with its customers. Renegotiation with the loyal customer base produced improved rates and averted potential failure.
A significant event in the group's history added positivity to the year, with the celebration of its 100-year anniversary in transport of Clugston Distribution Services Limited. This significant achievement is attributed to its loyal and hard-working staff, many of whom celebrate their own individual longevity as employees, and with some having generations of family work for the business we feel reflects the family orientated environment, and ethical approach the company takes towards its employees, customers and suppliers. These are the key ingredients to the company's continued existence and provides the foundation for future success. The group's longevity reveals that in the ever-changing economic environment, those businesses that recognise the need to adapt are the ones that survive. This year the company commissioned a full compliance audit by Backhouse Jones to help improve the company and stay on top of the regulations for its O licence. This will inevitably bring some operational changes to ensure it remains compliant in every way. Additionally, the group has taken a step towards moral responsibility by focusing resource on on reducing its carbon footprint and in 2021 it commenced a programme of R and D into its technology and processes to see what enhancements and improvements could be made. The company aim is to achieve positive results by enhancing and improving existing technology provisions. To achieve the project aims, the company have so far undertaken planning, research and analysis and intend to use the results to apply change. Already the early testing results are proving that there is a benefit to be gained in reducing the company's carbon emissions, a responsibility the company takes very seriously.
Change can often be negatively received, but for the group it is considered by all to be crucially important and necessary to keep itself at least conversant, and potentially ahead of the day's standards. Whilst the group continues to survive and thrive in an ever-changing market place, testing its resolve and resource, it firmly believes that to have concluded the financial year without significant losses in the circumstances reflects on the efforts of the company and moving into 2024 we anticipate the changes to impact positively on the profitability.
Principal risks and uncertainties As with any business we face risks and uncertainties every day. The careful management of risk is therefore, important to the achievement of our strategic objectives and to sustain growth. The company operates a system of internal contro;ls and risk management to address the principal risks and uncertainties. The Board measures progress through the review of Key Performance Indicators and other relevant management information which are closely aligned to the strategic objectives of the business. The principal risks are reviewed by the Board on an ongoing basis. Updates in terms of emerging risks or significant actions to be undertaken are addressed as and when required at Board meetings. The principal risks are determined through an evaluation of liklihood of occurrence and potential impact. Management also review specific strategic, operational, financial, health and safety and compliance risks in monthly business review meetings. This approach is also embedded at the operational level within each of our business units.
Post year end events Since the balance sheet date there has been changes made to the ownership of the company. Demis Ohandjanian and Lindsay Khan, who held 33.33% each of the total share capital have sold their shareholdings. The company is now owned in equal shares by Alistair Clugston, David Schreiber and AWG Clugston Holdings Limited. Demis Ohandjanian and HLD GOC Holdings Limited have both resigned as directors of the company since the balance sheet date.
This report was approved by the board of directors on 9 August 2024 and signed on behalf of the board by:
Mr AWG Clugston
Director
Registered office:
The Old Rectory
High Street
Fillingham
Gainsborough
DN21 5BS
AJWG Limited
Director's Report
Year ended 29 March 2023
The director presents his report and the financial statements of the group for the year ended 29 March 2023 .
Directors
The directors who served the company during the year were as follows:
Mr DA Ohandjanian
Mr AWG Clugston
HLD GOC Holdings Limited
Dividends
The director does not recommend the payment of a dividend.
Director's responsibilities statement
The director is responsible for preparing the strategic report, director's 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 group and the company and the profit or loss of the group for that period. In preparing these financial statements, the director is required to: - select suitable accounting policies 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 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.
This report was approved by the board of directors on 9 August 2024 and signed on behalf of the board by:
Mr AWG Clugston
Director
Registered office:
The Old Rectory
High Street
Fillingham
Gainsborough
DN21 5BS
AJWG Limited
Independent Auditor's Report to the Members of AJWG Limited
Year ended 29 March 2023
Qualified opinion
We have audited the financial statements of AJWG Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 29 March 2023 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, the financial statements: - give a true and fair view of the state of the group's and of the parent company's affairs as at 29 March 2023 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
We were not appointed as auditors of one of the subsidiary companies until after 30 March 2023 and thus did not observe the counting of the physical inventories at the balance sheet date. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 30 March 2023 which are stated in the financial statements at £129,346. Any adjustment as a result of this would have an effect on the profit or loss of the for the period. In the previous year we were unable to obtain sufficient evidence to verify the quantities and value of stock included in the Balance Sheet at £391,345. Consequently, we were unable to determine whether any adjustment to the amount was required. Any adjustment to this amount will have an effect on the profit and loss account for the period.
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 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 qualified opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 or the 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 director 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 director is responsible for the other information. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent 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 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 director's remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of the 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 group's and 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 director either intends to liquidate the group or the parent 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: - Enquiry of management with regard to actual and potential fraud and non-compliance with laws and regulations; - Reviewing legal correspondence and correspondence with regard to potential fraud and non compliance with laws and regulations; - Understanding and evaluating the company's internal controls; - Testing of journal entries that were deemed unusual; - Assessing financial statement disclosures, and testing to supporting documentation, for compliance with applicable laws and regulations. There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentation or through collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director. - Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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.
Mark Illingsworth
(Senior Statutory Auditor)
For and on behalf of
Versant Associates LLP
Chartered accountants & statutory auditor
The Old Mill,
9 Soar Lane
Leicester
LE3 5DE
12 August 2024
AJWG Limited
Consolidated Statement of Comprehensive Income
Year ended 29 March 2023
2023
2022
Note
£
£
Turnover
4
23,809,666
20,579,087
Cost of sales
20,201,728
16,744,437
-------------
-------------
Gross profit
3,607,938
3,834,650
Administrative expenses
3,330,989
2,381,845
Other operating income
5
2,000
------------
------------
Operating profit
6
278,949
1,452,805
Interest payable and similar expenses
10
369,154
205,464
------------
------------
(Loss)/profit before taxation
( 90,205)
1,247,341
Tax on (loss)/profit
11
( 102,562)
131,044
---------
------------
Profit for the financial year and total comprehensive income
12,357
1,116,297
---------
------------
All the activities of the group are from continuing operations.
AJWG Limited
Consolidated Statement of Financial Position
29 March 2023
2023
2022
Note
£
£
Fixed assets
Negative goodwill
12
( 630,647)
( 798,822)
Tangible assets
13
3,981,173
3,362,582
Investments
14
350,000
350,000
------------
------------
3,700,526
2,913,760
Current assets
Stocks
15
453,006
391,345
Debtors
16
5,921,572
6,309,023
Cash at bank and in hand
809,347
465,389
------------
------------
7,183,925
7,165,757
Creditors: amounts falling due within one year
17
8,625,447
7,807,835
------------
------------
Net current liabilities
1,441,522
642,078
------------
------------
Total assets less current liabilities
2,259,004
2,271,682
Creditors: amounts falling due after more than one year
18
846,164
871,199
------------
------------
Net assets
1,412,840
1,400,483
------------
------------
Capital and reserves
Called up share capital
22
1,001
1,001
Profit and loss account
1,411,839
1,399,482
------------
------------
Shareholders funds
1,412,840
1,400,483
------------
------------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 9 August 2024 , and are signed on behalf of the board by:
Mr AWG Clugston
Director
Company registration number: 11961465
AJWG Limited
Company Statement of Financial Position
29 March 2023
2023
2022
Note
£
£
Fixed assets
Investments
14
1,407,790
1,407,790
Current assets
Debtors
16
614,496
611,959
Cash at bank and in hand
551
4,957
---------
---------
615,047
616,916
Creditors: amounts falling due within one year
17
2,185,376
2,165,170
------------
------------
Net current liabilities
1,570,329
1,548,254
------------
------------
Total assets less current liabilities
( 162,539)
( 140,464)
---------
---------
Net liabilities
( 162,539)
( 140,464)
---------
---------
Capital and reserves
Called up share capital
22
1,001
1,001
Profit and loss account
( 163,540)
( 141,465)
---------
---------
Shareholders deficit
( 162,539)
( 140,464)
---------
---------
The loss for the financial year of the parent company was £ 22,075 (2022: £ 40,502 ).
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 9 August 2024 , and are signed on behalf of the board by:
Mr AWG Clugston
Director
Company registration number: 11961465
AJWG Limited
Consolidated Statement of Changes in Equity
Year ended 29 March 2023
Called up share capital
Profit and loss account
Total
£
£
£
At 28 March 2021
1,000
283,185
284,185
Profit for the year
1,116,297
1,116,297
-------
------------
------------
Total comprehensive income for the year
1,116,297
1,116,297
Issue of shares
1
1
-------
------------
------------
Total investments by and distributions to owners
1
1
At 29 March 2022
1,001
1,399,482
1,400,483
Profit for the year
12,357
12,357
-------
------------
------------
Total comprehensive income for the year
12,357
12,357
-------
------------
------------
At 29 March 2023
1,001
1,411,839
1,412,840
-------
------------
------------
AJWG Limited
Company Statement of Changes in Equity
Year ended 29 March 2023
Called up share capital
Profit and loss account
Total
£
£
£
At 28 March 2021
1,000
( 100,963)
( 99,963)
Loss for the year
( 40,502)
( 40,502)
-------
---------
--------
Total comprehensive income for the year
( 40,502)
( 40,502)
Issue of shares
1
1
-------
---------
--------
Total investments by and distributions to owners
1
1
At 29 March 2022
1,001
( 141,465)
( 140,464)
Loss for the year
( 22,075)
( 22,075)
-------
---------
---------
Total comprehensive income for the year
( 22,075)
( 22,075)
-------
---------
---------
At 29 March 2023
1,001
( 163,540)
( 162,539)
-------
---------
---------
AJWG Limited
Consolidated Statement of Cash Flows
Year ended 29 March 2023
2023
2022
£
£
Cash flows from operating activities
Profit for the financial year
12,357
1,116,297
Adjustments for:
Depreciation of tangible assets
656,700
565,189
Amortisation of intangible assets
( 130,175)
( 140,817)
Interest payable and similar expenses
369,154
205,464
Gains on disposal of tangible assets
( 5,052)
( 146,236)
Tax on loss
(4,423)
Accrued (income)/expenses
( 263,076)
60,760
Changes in:
Stocks
( 61,661)
( 164,309)
Trade and other debtors
387,451
( 2,271,973)
Trade and other creditors
1,080,059
2,614,825
------------
------------
Cash generated from operations
2,041,334
1,839,200
Interest paid
( 369,154)
( 205,464)
Tax (paid)/received
( 24,027)
70,492
------------
------------
Net cash from operating activities
1,648,153
1,704,228
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 1,339,466)
( 695,635)
Proceeds from sale of tangible assets
69,226
269,276
Purchase of intangible assets
( 30,000)
Acquisition of subsidiaries
( 38,000)
( 368,424)
Other investing cash flow adjustment
(30,000)
------------
------------
Net cash used in investing activities
( 1,308,240)
( 854,783)
------------
------------
Cash flows from financing activities
Proceeds from issue of ordinary shares
1
Proceeds from borrowings
( 29,693)
34,824
Payments of finance lease liabilities
33,737
( 738,651)
------------
------------
Net cash from/(used in) financing activities
4,044
( 703,826)
------------
------------
Net increase in cash and cash equivalents
343,957
145,619
Cash and cash equivalents at beginning of year
465,389
319,770
---------
---------
Cash and cash equivalents at end of year
809,346
465,389
---------
---------
AJWG Limited
Notes to the Financial Statements
Year ended 29 March 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is The Old Rectory, High Street, Fillingham, Gainsborough, DN21 5BS.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The directors have considered the current and potential future impact of the current economic climate and the directors do not believe that there is any significant uncertainty over the company's and group's ability to continue and to trade as a going concern. Furthermore, the director has received assurances from the shareholders that they intend to continue to financially support the company and group in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102: (a) No cash flow statement has been presented for the company.
Consolidation
The financial statements consolidate the financial statements of AJWG Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 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. Significant judgements The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: Useful economic life of tangible fixed assets Tangible fixed assets (note 13)) are depreciated over their useful economic lives taking into account residual values, where appropriate. The expected lives of the assets and residual values are assessed annually and may depend on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value reassessments consider future market conditions, the remaining life of the assets and projected disposal values. Useful economic life of intangible fixed assets Goodwill and negative goodwill is released in line with when the economic benefit of the acquired assets is expected to be written off and recovered, based on judgements made by management. Amortisation of goodwill will be assessed in line with the above if any changes to useful lives are significant.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Goodwill
Goodwill comprises of both positive and negative goodwill. Positive goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Negative goodwill arises on business acquisitions and represents the excess of the company's interest in the identifiable assets, liabilities and contingent liabilities of the acquired business over the cost. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed five years. For the benefit of impairment testing, goodwill is allocated to the cash generating units expected to benefit from the acquisition. Cash generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is can indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
9-10 years straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant and machinery
-
2-15 years straight line
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2023
2022
£
£
Sale of goods
1,380,844
70,150
Rendering of services
22,428,822
20,508,937
-------------
-------------
23,809,666
20,579,087
-------------
-------------
The turnover is attributable to the one principal activity of the group. An analysis of turnover by the geographical markets that substantially differ from each other is given below:
2023
2022
£
£
United Kingdom
23,358,477
20,348,849
Overseas sales
451,189
230,238
-------------
-------------
23,809,666
20,579,087
-------------
-------------
5. Other operating income
2023
2022
£
£
Other operating income
2,000
-------
----
6. Operating loss
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Amortisation of intangible assets
( 130,175)
( 140,817)
Depreciation of tangible assets
656,700
565,189
Gains on disposal of tangible assets
( 5,052)
( 146,236)
Impairment of trade debtors
(1,904)
(82,763)
Operating lease rentals
27,190
---------
---------
7. Auditor's remuneration
2023
2022
£
£
Fees payable for the audit of the financial statements
57,296
19,950
--------
--------
8. Staff costs
The average number of persons employed by the group during the year, including the director, amounted to:
2023
2022
No.
No.
Distribution staff
145
130
Administrative staff
38
40
----
----
183
170
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
7,718,740
6,687,213
Social security costs
920,116
710,738
Other pension costs
198,354
158,571
------------
------------
8,837,210
7,556,522
------------
------------
9. Director's remuneration
The director's aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
243,100
183,333
---------
---------
Remuneration of the highest paid director in respect of qualifying services:
2023
2022
£
£
Aggregate remuneration
243,100
184,066
---------
---------
10. Interest payable and similar expenses
2023
2022
£
£
Interest on banks loans and overdrafts
154,363
74,677
Interest on obligations under finance leases and hire purchase contracts
214,791
130,787
---------
---------
369,154
205,464
---------
---------
11. Tax on loss
Major components of tax income
2023
2022
£
£
Current tax:
UK current tax income
2,797
Adjustments in respect of prior periods
( 7,220)
-------
----
Total current tax
( 4,423)
-------
----
Deferred tax:
Origination and reversal of timing differences
( 98,139)
131,044
---------
---------
Tax on loss
( 102,562)
131,044
---------
---------
Reconciliation of tax (income)/expense
The tax assessed on the (loss)/profit on ordinary activities for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 25 % (2022: 19 %).
2023
2022
£
£
(Loss)/profit on ordinary activities before taxation
( 90,205)
1,247,341
--------
------------
(Loss)/profit on ordinary activities by rate of tax
( 67,935)
184,417
Adjustment to tax charge in respect of prior periods
( 7,220)
( 16,584)
Effect of expenses not deductible for tax purposes
52,317
14,070
Effect of capital allowances and depreciation
( 164,562)
Unused tax losses
182,977
Effect of change in corporation tax rate
(50,859)
Deferred tax
(98,139)
---------
------------
Tax on loss
( 102,562)
131,044
---------
------------
12. Intangible assets
Group
Goodwill
£
Cost
At 30 March 2022
( 1,138,925)
Acquisitions through business combinations
38,000
------------
At 29 March 2023
( 1,100,925)
------------
Amortisation
At 30 March 2022
( 340,103)
Charge for the year
( 130,175)
------------
At 29 March 2023
( 470,278)
------------
Carrying amount
At 29 March 2023
( 630,647)
------------
At 29 March 2022
( 798,822)
------------
The company has no intangible assets.
The intangible assets of the group consist of negative goodwill brought forward on the purchase of the entire share capital of a subsidiary company amounting to net book value of £996,429 (2022: £1,167,246) and positive goodwill on the purchase of the entire share capital of a subsidiary on 10 March 2023 amounting to £365,782 (2022: £368,424).
13. Tangible assets
Group
Plant and machinery
£
Cost
At 30 March 2022
4,410,596
Additions
1,339,466
Disposals
( 97,939)
------------
At 29 March 2023
5,652,123
------------
Depreciation
At 30 March 2022
1,048,015
Charge for the year
656,700
Disposals
( 33,765)
------------
At 29 March 2023
1,670,950
------------
Carrying amount
At 29 March 2023
3,981,173
------------
At 29 March 2022
3,362,581
------------
The company has no tangible assets.
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Group
Plant and machinery
£
At 29 March 2023
1,849,105
------------
At 29 March 2022
2,155,105
------------
14. Investments
Group
Other investments other than loans
£
Cost
At 30 March 2022 and 29 March 2023
350,000
---------
Impairment
At 30 March 2022 and 29 March 2023
---------
Carrying amount
At 30 March 2022 and 29 March 2023
350,000
---------
At 29 March 2022
350,000
---------
Company
Shares in group undertakings
Other investments other than loans
Total
£
£
£
Cost
At 30 March 2022 and 29 March 2023
1,307,790
100,000
1,407,790
------------
---------
------------
Impairment
At 30 March 2022 and 29 March 2023
------------
---------
------------
Carrying amount
At 30 March 2022 and 29 March 2023
1,307,790
100,000
1,407,790
------------
---------
------------
At 29 March 2022
1,307,790
100,000
1,407,790
------------
---------
------------
Subsidiaries, associates and other investments
Details of the investments in which the group and the parent company have an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Clugston Distribution Services Limited
Ordinary
100
Clugston International Trading Limited
Ordinary
100
The registered offices of all subsidiaries are C/O Mill Lane Industrial Estate, Mill Lane, Leicester. LE3 8DX.
15. Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
453,006
391,345
---------
---------
----
----
16. Debtors
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade debtors
4,064,024
4,372,129
Deferred tax asset
366,239
268,100
21,273
20,903
Prepayments and accrued income
851,928
1,071,373
Director's loan account
1,001
1,001
1,001
Other debtors
638,380
597,421
592,222
590,055
------------
------------
---------
---------
5,921,572
6,309,023
614,496
611,959
------------
------------
---------
---------
17. Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans and overdrafts
15,626
15,626
Trade creditors
2,217,355
1,773,480
19,361
630
Amounts owed to group undertakings
1,791,440
1,791,440
Accruals and deferred income
239,899
502,975
13,975
6,500
Corporation tax
42,042
70,492
Social security and other taxes
2,118,419
1,516,940
Obligations under finance leases and hire purchase contracts
651,804
607,426
Director loan accounts
15,299
Other creditors
3,340,302
3,305,597
360,600
366,600
------------
------------
------------
------------
8,625,447
7,807,835
2,185,376
2,165,170
------------
------------
------------
------------
Obligations under finance lease and hire purchase contracts are secured by related assets.
Included within other creditors is an invoice discounting facility of £2,413,668 (2022: £2,483,251) which is secured on assets of one of the subsidiaries.
18. Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans and overdrafts
39,505
53,899
Obligations under finance leases and hire purchase contracts
806,659
817,300
---------
---------
----
----
846,164
871,199
---------
---------
----
----
Obligations under finance lease and hire purchase contracts are secured by related asssets.
19. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Not later than 1 year
677,786
710,238
Later than 1 year and not later than 5 years
964,009
874,328
------------
------------
----
----
1,641,795
1,584,566
Less: future finance charges
( 183,332)
( 159,840)
------------
------------
----
----
Present value of minimum lease payments
1,458,463
1,424,726
------------
------------
----
----
20. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Included in debtors (note 16)
366,239
268,100
21,273
20,903
---------
---------
--------
--------
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2023
2022
2023
2022
£
£
£
£
Accelerated capital allowances
( 170,032)
( 21,914)
Unused tax losses
536,271
290,014
21,273
20,903
---------
---------
--------
--------
366,239
268,100
21,273
20,903
---------
---------
--------
--------
21. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 198,354 (2022: £ 158,571 ).
22. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 0.10 each
10,006
1,001
10,006
1,001
--------
-------
--------
-------
23. Financial commitments, guarantees and contingent liabilities
There are two fixed and floating charges from HLD GOC Holdings Limited , dated 24 January 2020 covering all assets or undertakings of the company. These charges contain negative pledges.
There is a fixed charge from MIDOS GC Limited, dated 11 June 2020 covering all the assets of the company. This contains a negative pledge.
24. Analysis of changes in net debt
At 30 Mar 2022
Cash flows
At 29 Mar 2023
£
£
£
Cash at bank and in hand
465,389
343,958
809,347
Debt due within one year
(638,351)
(29,079)
(667,430)
Debt due after one year
(871,199)
25,035
(846,164)
------------
---------
---------
( 1,044,161)
339,914
( 704,247)
------------
---------
---------
25. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Not later than 1 year
333,527
211,706
Later than 1 year and not later than 5 years
4,094,255
3,981,058
------------
------------
----
----
4,427,782
4,192,764
------------
------------
----
----
26. Director's advances, credits and guarantees
Included within other creditors is an amount of £1,001 (2022: £1,000) due from directors. The balance represents unpaid share capital.
27. Related party transactions
Group
The remuneration of key management personnel of the group (aggregate compensation) was £284,330 (2022: £310,335). The company has taken advantage of the exemption available in accordance with FRS102 section 1.12(e) 'Related party disclosures' not to disclose transactions entered into between two or more members of a group, as the company is the parent company of the group to which it is a party to the transaction.
Company
Included within other debtors is an amount of £389,000 (2022: £389,000) due from a company that is related by virtue of common control. Included within other creditors are amounts of £360,600 (2022: £366,600) due to a company that is related by virtue of common control.
28. Controlling party
The directors consider there is no controlling party.