SAVOY TIMBER LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
Company registration number 02416333 (England and Wales)
SAVOY TIMBER LIMITED
COMPANY INFORMATION
Director
Mr C Powell
(Appointed 8 September 2023)
Company number
02416333
Registered office
Thorncliffe Works
Midland Road
Bradford
West Yorkshire
BD8 7DQ
Auditor
Azets Audit Services
Carlton House
Grammar School Street
Bradford
BD1 4NS
SAVOY TIMBER LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
SAVOY TIMBER LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -

The director presents the strategic report for the year ended 30 November 2023.

Review of the business

The director is satisfied with the current year results. Key KPI's are set out below.

 

Turnover (£000)

2023 - £11,543

2022 - £12,099

2021 - £13,448

 

Profit before tax (£000)

2023 - £610

2022 - £241

2021 - £808

 

Shareholders' funds (£000)

2023 - £5,183

2022 - £4,710

2021 - £4,508

 

Gross profit margin

2023 - 37.79%

2022 - 34.28%

2021 - 37.77%

 

Going forwards the company is confident that through tighter controls over pricing, associated costs, and purchases there is no reason why the company cannot maintain the level of profit and further increase Shareholders Funds.

SAVOY TIMBER LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
Principal risks and uncertainties

The greatest risk to the company is the pressure on retaining healthy margins whilst maintaining competitive pricing. In addition to this at uncertain economic times such as these there is always a risk that consumers will cut back spending on non necessities such as household DIY.

 

Financial risks

 

Credit risk

The company's principal financial assets are bank balances, trade and other receivables.

 

The company's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. However, the company has solid relationships with its trade customers and historically low doubtful debts.

 

The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

 

Liquidity risk and Cash flow risk

To manage liquidity and cash flow risk, the company closely monitors its operating cash flows to ensure that there are sufficient funds to meet not only its day to day working capital commitments but any future capital commitments that may fall due.

 

Competitive risks

 

The industry has seen an influx of online competitors over recent years and this had led to the company having to lower prices and therefore reduce margins in order to secure a piece of this online market. There is no way for the company to control risks from competitors. However, by introducing tighter controls over overheads and pricing as its the director's intentions then this should llow the company to maintain their competitive edge and maintain a healthy market share of the online UK timber industry.

 

Legislative risks

 

In the UK the timber market is governed by the Timber and Timber Products Regulations 2013. However, these regulations are linked to EU regulations. In the wake of Brexit there is uncertainty over how the import and export of goods will be affected and how new regulations will affect wholesalers and suppliers within the industry. It is unclear whether Brexit may have a positive or negative effect on purchasing, and if negative may further deplete the profit margins of the company.

 

Other risks

 

Fluctuations in currency exchange rates

The company makes purchases from overseas. Therefore is exposed to foreign currency fluctuations. Going forward, management are looking into forward foreign exchange contracts and other financial instruments to reduce the exposure. Shipping rates for the following year are also expected to fall substantially.

 

Interest and Inflation

The UK is currently in the midst of a period of high inflation and interest rates, with reductions only taking affect after the year end. As a company, we have no borrowings from financial institutions so the exposure to interest rate risk is minimal. The high rates of inflation seen this past financial year have caused pressures on staff costs along with utilities and other costs. However, the company is well placed to absorb these costs.

On behalf of the board

Mr C Powell
Director
15 August 2024
SAVOY TIMBER LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -

The director presents his annual report and financial statements for the year ended 30 November 2023.

Principal activities

The principal activity of the company continued to be that of timber merchants.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Mr C Powell
(Appointed 8 September 2023)
G L Cornwell
(Resigned 8 September 2023)
L Royle
(Resigned 8 September 2023)
Auditor

Azets Audit Services were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr C Powell
Director
15 August 2024
SAVOY TIMBER LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 4 -

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

 

 

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.

SAVOY TIMBER LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SAVOY TIMBER LIMITED
- 5 -
Opinion

We have audited the financial statements of Savoy Timber Limited (the 'company') for the year ended 30 November 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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 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 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 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:

SAVOY TIMBER LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SAVOY TIMBER LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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:

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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.

SAVOY TIMBER LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SAVOY TIMBER LIMITED
- 7 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

Victoria Wainwright
Senior Statutory Auditor
For and on behalf of Azets Audit Services
15 August 2024
Chartered Accountants
Statutory Auditor
Carlton House
Grammar School Street
Bradford
BD1 4NS
SAVOY TIMBER LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
11,542,622
12,098,888
Cost of sales
(7,180,248)
(7,950,475)
Gross profit
4,362,374
4,148,413
Administrative expenses
(3,851,515)
(3,924,965)
Operating profit
4
510,859
223,448
Interest receivable and similar income
7
101,612
17,533
Interest payable and similar expenses
8
(2,775)
-
0
Profit before taxation
609,696
240,981
Tax on profit
9
(137,845)
(38,768)
Profit for the financial year
471,851
202,213

The profit and loss account has been prepared on the basis that all operations are continuing operations.

SAVOY TIMBER LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
471,851
202,213
Other comprehensive income
-
-
Total comprehensive income for the year
471,851
202,213
SAVOY TIMBER LIMITED
BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
175,587
301,671
Current assets
Stocks
11
1,484,369
2,150,095
Debtors
12
4,727,441
477,336
Cash at bank and in hand
1,073,383
2,767,844
7,285,193
5,395,275
Creditors: amounts falling due within one year
13
(2,142,624)
(923,663)
Net current assets
5,142,569
4,471,612
Total assets less current liabilities
5,318,156
4,773,283
Creditors: amounts falling due after more than one year
14
(99,056)
-
0
Provisions for liabilities
Deferred tax liability
16
36,460
62,494
(36,460)
(62,494)
Net assets
5,182,640
4,710,789
Capital and reserves
Called up share capital
18
8,350
8,350
Share premium account
299,178
299,178
Profit and loss reserves
4,875,112
4,403,261
Total equity
5,182,640
4,710,789
The financial statements were approved by the board of directors and authorised for issue on 15 August 2024 and are signed on its behalf by:
Mr C Powell
Director
Company Registration No. 02416333
SAVOY TIMBER LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 December 2021
8,350
299,178
4,201,048
4,508,576
Year ended 30 November 2022:
Profit and total comprehensive income for the year
-
-
202,213
202,213
Balance at 30 November 2022
8,350
299,178
4,403,261
4,710,789
Year ended 30 November 2023:
Profit and total comprehensive income for the year
-
-
471,851
471,851
Balance at 30 November 2023
8,350
299,178
4,875,112
5,182,640
SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 12 -
1
Accounting policies
Company information

Savoy Timber Limited is a private company limited by shares incorporated in England and Wales. The registered office is Thorncliffe Works, Midland Road, Bradford, West Yorkshire, BD8 7DQ.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Savoy Timber Holdings Limited. These consolidated financial statements are available from its registered office, Thorncliffe Works, Midland Road, Bradford, BD8 7DQ.

1.2
Going concern

Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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.

SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 13 -

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
2% on cost
Plant and equipment
15% on cost
Fixtures and fittings
15% on cost
Motor vehicles
20% on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

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 leases asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 17 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
11,542,622
12,098,888
2023
2022
£
£
Other revenue
Interest income
101,612
17,533
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
44,515
10,000
Depreciation of owned tangible fixed assets
126,043
132,909
Profit on disposal of tangible fixed assets
(6,556)
-
Operating lease charges
181,363
182,333
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Staff
70
72

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,170,335
2,398,797
Social security costs
201,023
241,464
Pension costs
54,114
55,963
2,425,472
2,696,224
SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 18 -
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
90,887
320,000
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
n/a
320,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
101,404
17,533
Other interest income
208
-
0
Total income
101,612
17,533
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
2,775
-
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
163,978
60,884
Adjustments in respect of prior periods
(99)
-
0
Total current tax
163,879
60,884
Deferred tax
Origination and reversal of timing differences
(27,149)
(22,116)
Adjustment in respect of prior periods
1,115
-
0
Total deferred tax
(26,034)
(22,116)
Total tax charge
137,845
38,768
SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
9
Taxation
(Continued)
- 19 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
609,696
240,981
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022: 19.00%)
140,291
45,786
Tax effect of expenses that are not deductible in determining taxable profit
9,250
172
Adjustments in respect of prior years
(99)
-
0
Group relief
(10,024)
-
0
Permanent capital allowances in excess of depreciation
(3,033)
(1,882)
Depreciation on assets not qualifying for tax allowances
27,494
16,808
Deferred tax adjustments in respect of prior years
1,115
-
0
Deferred tax movement
(27,149)
(22,116)
Taxation charge for the year
137,845
38,768
10
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 December 2022
45,322
314,146
114,431
701,186
1,175,085
Additions
-
0
-
0
8,990
27,414
36,404
Disposals
-
0
-
0
-
0
(72,568)
(72,568)
At 30 November 2023
45,322
314,146
123,421
656,032
1,138,921
Depreciation and impairment
At 1 December 2022
40,866
209,842
81,370
541,336
873,414
Depreciation charged in the year
906
34,446
8,947
81,744
126,043
Eliminated in respect of disposals
-
0
-
0
-
0
(36,123)
(36,123)
At 30 November 2023
41,772
244,288
90,317
586,957
963,334
Carrying amount
At 30 November 2023
3,550
69,858
33,104
69,075
175,587
At 30 November 2022
4,456
104,304
33,061
159,850
301,671
SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 20 -
11
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,484,369
2,150,095
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
70,601
201,768
Amounts owed by group undertakings
4,520,235
104,006
Other debtors
548
548
Prepayments and accrued income
136,057
171,014
4,727,441
477,336
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
15
59,433
-
0
Trade creditors
1,026,107
603,883
Amounts owed to group undertakings
151,994
-
0
Corporation tax
163,878
60,884
Other taxation and social security
204,985
220,305
Other creditors
452,427
1,072
Accruals and deferred income
83,800
37,519
2,142,624
923,663
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
15
99,056
-
0
SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 21 -
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
67,010
-
0
In two to five years
111,683
-
0
178,693
-
0
Less: future finance charges
(20,204)
-
0
158,489
-
0

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 22 -
16
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
36,460
62,494
2023
Movements in the year:
£
Liability at 1 December 2022
62,494
Credit to profit or loss
(26,034)
Liability at 30 November 2023
36,460

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
54,114
55,963

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
8,350
8,350
8,350
8,350
SAVOY TIMBER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 23 -
19
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
181,000
-
0
Between two and five years
724,000
-
0
In over five years
1,810,000
-
0
2,715,000
-
0
20
Ultimate controlling party

Savoy Timber Limited is a subsidiary of Savoy Holdings Limited, a company registered in England and Wales. The registered office address is Thorncliffe Works, Midland Road, Bradford, BD8 7DQ.

 

The ultimate parent company is Savoy Timber Holdings Limited, a company registerred in England and Wales. The registered office address is Thorncliffe Works, Midland Road, Bradford, BD8 7DQ.

The ultimate controlling party is Christopher Powell, by virtue of his controlling shareholding in the parent company.

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