Company registration number 02190567 (England and Wales)
LEA & SANDEMAN COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LEA & SANDEMAN COMPANY LIMITED
COMPANY INFORMATION
Directors
Mr C A Lea
Mr H J G Field
Company number
02190567
Registered office
170 Fulham Road
London
SW10 9PR
Auditor
HJS (Reading) Limited
3 Richfield Place
Richfield Avenue
Reading
Berkshire
RG1 8EQ
LEA & SANDEMAN COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
LEA & SANDEMAN COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The principal activity of the Company during the year continued to be that of wine merchants, importing and selling fine wines, both to wholesale and retail customers.

Fair review of the business

 

In 2023, the Company returned to a more normal balance of sales through its various channels namely the five shops, private customers, on-trade sales and website.

 

The Directors consider the underlying trading results to be very satisfactory, having regard to the prevailing economic and market conditions. Revenue was slightly ahead of 2022 at £15.46m (2022: £15.19m) and Gross Profit increased by £0.69m to £5.07m (2022: £4.38m). As a result of the continuing pressure on staff costs and overheads, Operating Profit increased by £0.35m to £1.05m (2022: £0.70m).

 

Inventory levels rose to £6.0m at the year-end (2022: £4.9m) as a result of the expansion of the portfolio of wines and champagnes offered and in order to ensure the continuity of supply to all our customers.

 

The Directors are very grateful to the dedication and hard work of all our staff through this very challenging period and to their continued commitment and flexibility in dealing with events outside the Company’s control.

Principal risks and uncertainties

 

The objective of the Company in managing its liquidity risk is to ensure that the Company can meet its financial obligations as and when they fall due. The Company finances its operations through a mixture of retained profit, bank overdraft, trade invoice discounting, loans (including intercompany) and hire purchase agreements in relation to motor vehicles. The control of risk and efficient working capital management are integral to the Company’s business and the directors regularly review such risks and performance. The Company has no significant concentration of credit risk, with exposure spread over many counter parties and customers.

 

The Company is exposed to currency exchange rate fluctuations due to a significant portion of its trade payables being denominated in non-sterling currencies. Purchases of wines are principally denominated in Euros and to a significantly lesser extent in Sterling, New Zealand dollars, US dollars and Australian dollars. Sales of wines are denominated in Sterling. The exposure to exchange rate fluctuations is managed by the conservative use of forward foreign exchange rate contracts.

 

The Company is exposed to commodity price risk on the price of wines. The Company does not manage its exposure to commodity price risk.

 

The Company’s exposure to interest rate fluctuations is managed by review with the Company’s bankers.

LEA & SANDEMAN COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators

The Directors closely monitor sales and market trends as well as the stock levels and lines required to support future sales.

The key performance indicators include turnover, gross profit, gross profit margin and inventory levels. These are discussed as part of the business review.

 

On behalf of the board

Mr C A Lea
Director
29 August 2024
LEA & SANDEMAN COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the Company continues to be that of wine merchants, importing and selling fine wines, both to wholesale and retail customers.

Directors

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

Mr C A Lea
Mr H J G Field
Results and dividends

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

Ordinary dividends were paid amounting to £60,000. The directors do not recommend payment of a final dividend.

Auditor

The auditor, HJS (Reading) Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

Disclosure in the strategic report

In accordance with s414C(11) of the Companies Act 2006, the Company has prepared a strategic report for the year ended 31 December 2023. This includes a review of business, post balance sheet events and future developments and a description of the principal risks and uncertainties facing the Company.

On behalf of the board
Mr C A Lea
Director
29 August 2024
LEA & SANDEMAN COMPANY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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

 

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

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

LEA & SANDEMAN COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEA & SANDEMAN COMPANY LIMITED
- 5 -
Opinion

We have audited the financial statements of Lea & Sandeman Company Limited (the 'Company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, 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 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the 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 our audit:

LEA & SANDEMAN COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LEA & SANDEMAN COMPANY 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 directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK regulatory principles, such as those governed by the relevant alcohol licencing authorities within the UK. We also considered the laws and regulations which have a direct impact on the financial statements such as the Companies Act 2006.

 

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates and judgmental areas of the financial statements.

 

Audit procedures performed by the audit engagement team included:

 

 

LEA & SANDEMAN COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LEA & SANDEMAN COMPANY LIMITED
- 7 -

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 the 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 misrepresentations, or though collusion.

 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Mark Rogers FCCA
Senior Statutory Auditor
For and on behalf of HJS (Reading) Limited
30 August 2024
Chartered Accountants and Statutory Auditor
3 Richfield Place
Richfield Avenue
Reading
Berkshire
RG1 8EQ
LEA & SANDEMAN COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
15,462,096
15,192,017
Cost of sales
(10,396,226)
(10,811,502)
Gross profit
5,065,870
4,380,515
Administrative expenses
(4,018,920)
(3,684,433)
Operating profit
4
1,046,950
696,082
Interest payable and similar expenses
8
(11,635)
(2,871)
Profit before taxation
1,035,315
693,211
Tax on profit
9
(331,194)
(60,005)
Profit for the financial year
704,121
633,206

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

LEA & SANDEMAN COMPANY LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
202,102
162,003
Current assets
Stocks
13
6,049,475
4,881,781
Debtors
14
1,462,244
1,432,110
Cash at bank and in hand
4,882
2,104
7,516,601
6,315,995
Creditors: amounts falling due within one year
16
(3,905,588)
(3,316,176)
Net current assets
3,611,013
2,999,819
Total assets less current liabilities
3,813,115
3,161,822
Creditors: amounts falling due after more than one year
17
(43,670)
(36,498)
Net assets
3,769,445
3,125,324
Capital and reserves
Called up share capital
20
8,540
8,540
Profit and loss reserves
3,760,905
3,116,784
Total equity
3,769,445
3,125,324
The financial statements were approved by the board of directors and authorised for issue on 29 August 2024 and are signed on its behalf by:
Mr C A Lea
Director
Company Registration No. 02190567
LEA & SANDEMAN COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
8,540
2,543,578
2,552,118
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
633,206
633,206
Dividends
10
-
(60,000)
(60,000)
Balance at 31 December 2022
8,540
3,116,784
3,125,324
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
704,121
704,121
Dividends
10
-
(60,000)
(60,000)
Balance at 31 December 2023
8,540
3,760,905
3,769,445
LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

Lea & Sandeman Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is 170 Fulham Road, London, SW10 9PR.

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.

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

 

Lea & Sandeman Company Limited is a wholly owned subsidiary of Lea & Sandeman Group of Companies Limited and the results of Lea & Sandeman Company Limited are included in the consolidated financial statements of Lea & Sandeman Group of Companies Limited which are available from Brooks House 1, Albion Place, Maidstone, Kent, ME14 5DY.

1.2
Going concern

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

1.3
Turnover

Turnover represents the amount invoiced by the Company for goods provided in the normal course of business, excluding value added tax. Turnover is recognised at the point when substantially all of the risks and rewards of ownership are transferred to the customer; normally this is when a sales invoice is raised.

 

Goods sold on En Primeur are recognised when the sale is made, as this is considered to be when the risks and rewards of ownership are transferred, as the customer is committed to the wine being purchased at that point.

LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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 basis:

Leasehold Property
5% straight line
Plant and Machinery
15% straight line
Fixtures & Fittings
15% straight line
Motor Vehicles
20% straight line

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 end date, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.

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.

LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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 only enters into Basic financial instrument transactions.

 

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.

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.

LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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 receipts 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.

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.

LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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

The Company contributes into a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the Company. The annual contributions payable are charged to the profit and loss account.

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.

1.14
Foreign exchange

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.

LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty

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

 

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

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:

Impairment of stock

Stocks are valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Due to the nature of the Company's stock being bottles of wine, which have aged over a number of years, there is a provision for corkage of the bottle. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and stock loss trends.

3
Turnover and other revenue

An analysis of the Company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Wine Merchant
15,462,096
15,192,017
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
7,444
(12,233)
Depreciation of owned tangible fixed assets
24,100
41,398
Depreciation of tangible fixed assets held under finance leases
24,930
19,700
Loss on disposal of tangible fixed assets
1,386
-
Operating lease charges
558,865
612,240
5
Auditor's remuneration
2023
2022
Fees payable to the Company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the Company
18,861
17,028
LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
6
Employees

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

2023
2022
Number
Number
Head office
10
9
Sales
9
8
Warehouse
11
11
Retail shops
15
14
Total
45
42

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,118,852
1,860,368
Social security costs
231,602
197,397
Pension costs
43,992
32,276
2,394,446
2,090,041
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
120,647
108,457
Company pension contributions to defined contribution schemes
6,500
2,436
127,147
110,893

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
3,035
2,871
Other interest
8,600
-
0
11,635
2,871
LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
242,615
139,420
Adjustments in respect of prior periods
88,579
(79,415)
Total current tax
331,194
60,005

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
1,035,315
693,211
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
243,506
131,710
Tax effect of expenses that are not deductible in determining taxable profit
21,072
17,523
Change in unrecognised deferred tax assets
(21,956)
(656)
Under/(over) provided in prior years
88,572
(88,572)
Taxation charge for the year
331,194
60,005
10
Dividends
2023
2022
£
£
Interim paid
60,000
60,000
11
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
23,667
Amortisation and impairment
At 1 January 2023 and 31 December 2023
23,667
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Tangible fixed assets
Leasehold Property
Fixtures & Fittings
Motor Vehicles
Total
£
£
£
£
Cost
At 1 January 2023
169,863
325,081
245,979
740,923
Additions
-
0
-
0
90,515
90,515
Disposals
-
0
-
0
(55,812)
(55,812)
At 31 December 2023
169,863
325,081
280,682
775,626
Depreciation and impairment
At 1 January 2023
102,871
319,611
156,438
578,920
Depreciation charged in the year
4,030
2,080
42,920
49,030
Eliminated in respect of disposals
-
0
-
0
(54,426)
(54,426)
At 31 December 2023
106,901
321,691
144,932
573,524
Carrying amount
At 31 December 2023
62,962
3,390
135,750
202,102
At 31 December 2022
66,992
5,470
89,541
162,003

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Motor Vehicles
131,160
65,575
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
6,049,475
4,881,781
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
774,627
643,924
Other debtors
576,722
676,526
Prepayments and accrued income
110,895
111,660
1,462,244
1,432,110
LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
15
Loans and overdrafts
2023
2022
£
£
Bank loans
20,426
40,117
Bank overdrafts
639,471
475,438
659,897
515,555
Payable within one year
659,897
494,723
Payable after one year
-
0
20,832

 

16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
659,897
494,723
Obligations under finance leases
18
39,624
28,391
Trade creditors
1,901,594
1,578,884
Corporation tax
339,794
148,576
Other taxation and social security
652,876
652,947
Other creditors
220
-
0
Accruals and deferred income
311,583
412,655
3,905,588
3,316,176

Obligations under finance leases are secured against the assets to which it relates.

17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
-
0
20,832
Obligations under finance leases
18
43,670
15,666
43,670
36,498

Included in obligations under finance leases over one year is a hire purchase creditor totalling £43,670 (2022: £15,666) which is secured against the assets to which it relates.

LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
44,871
30,183
In two to five years
50,887
16,822
95,758
47,005
Less: future finance charges
(12,464)
(2,948)
83,294
44,057

Finance lease payments represent rentals payable by the Company for certain motor vehicles. 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 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
43,992
32,276

 

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
8,540
8,540
8,540
8,540

The Company has one class of ordinary shares which carry no right to fixed income. These shares carry full voting rights.

21
Financial commitments, guarantees and contingent liabilities

There is right to group set off and a composite Company unlimited multilateral guarantee including the Company and Lea & Sandeman Group of Companies Limited, The Barnes Wine Company Limited and The Gate Wine Company Limited, to secure the bank liabilities across the group via a fixed and floating charge.

 

The bank has a first legal charge over the freehold property at 170 Fulham Road and 15 Cavaye Place, properties which are owned by Mr C A Lea, a director, personally.

LEA & SANDEMAN COMPANY LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
22
Operating lease commitments
Lessee

At the reporting end date the Company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows

2023
2022
£
£
Within one year
291,368
230,015
Between two and five years
395,500
237,816
In over five years
65,646
83,417
752,514
551,248
23
Related party transactions

The Directors consider Key Management to be the same as the Directors. Therefore Key Management Remuneration is displayed in note 7.

Transactions with related parties

 

The Company has taken advantage of the exemption available under FRS 102 paragraph 33.1a whereby it has not disclosed transactions with the ultimate parent Company or any wholly owned subsidiary undertaking of the Group.

 

Mr C A Lea

 

Mr C A Lea is a director and shareholder of the Company.

 

There were no transactions with the director in the year.

 

Mr C A Lea has provided a personal guarantee to the bank on behalf of the Company.

 

Elephant Storage Limited

 

Elephant Storage Limited is a Company under common control.

 

During the year £14,792 (2022: £14,768) was charged to the related party.

 

The amount owed at the year end by the Company to Elephant Storage Limited totaled £453,911 (2022: £468,703).

24
Ultimate controlling party

The parent Company of Lea & Sandeman Company Limited is Lea & Sandeman Group of Companies Limited and its registered office is: Brooks House 1, Albion Place, Maidstone, Kent, ME14 5DY.

The ultimate controlling party of Lea & Sandeman Company Limited is Charles Lea due to his majority shareholding in its parent Company.

2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.200Mr C A LeaMr H J G Fieldfalsefalse021905672023-01-012023-12-3102190567bus:Director12023-01-012023-12-3102190567bus:Director22023-01-012023-12-3102190567bus:RegisteredOffice2023-01-012023-12-31021905672023-12-31021905672022-01-012022-12-3102190567core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3102190567core:RetainedEarningsAccumulatedLosses2023-01-012023-12-31021905672022-12-3102190567core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-12-3102190567core:FurnitureFittings2023-12-3102190567core:MotorVehicles2023-12-3102190567core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3102190567core:FurnitureFittings2022-12-3102190567core:MotorVehicles2022-12-3102190567core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3102190567core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3102190567core:CurrentFinancialInstruments2023-12-3102190567core:CurrentFinancialInstruments2022-12-3102190567core:Non-currentFinancialInstruments2023-12-3102190567core:Non-currentFinancialInstruments2022-12-3102190567core:ShareCapital2023-12-3102190567core:ShareCapital2022-12-3102190567core:RetainedEarningsAccumulatedLosses2023-12-3102190567core:RetainedEarningsAccumulatedLosses2022-12-3102190567core:ShareCapital2021-12-3102190567core:RetainedEarningsAccumulatedLosses2021-12-3102190567core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-01-012023-12-3102190567core:PlantMachinery2023-01-012023-12-3102190567core:FurnitureFittings2023-01-012023-12-3102190567core:MotorVehicles2023-01-012023-12-3102190567bus:K-FinancialInsuranceActivities2023-01-012023-12-3102190567bus:K-FinancialInsuranceActivities2022-01-012022-12-310219056712023-01-012023-12-310219056712022-01-012022-12-3102190567core:UKTax2023-01-012023-12-3102190567core:UKTax2022-01-012022-12-3102190567core:Goodwill2022-12-3102190567core:Goodwill2023-12-3102190567core:Goodwill2022-12-3102190567core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3102190567core:FurnitureFittings2022-12-3102190567core:MotorVehicles2022-12-31021905672022-12-3102190567core:WithinOneYear2023-12-3102190567core:WithinOneYear2022-12-3102190567core:BetweenTwoFiveYears2023-12-3102190567core:BetweenTwoFiveYears2022-12-3102190567core:MoreThanFiveYears2023-12-3102190567core:MoreThanFiveYears2022-12-3102190567bus:PrivateLimitedCompanyLtd2023-01-012023-12-3102190567bus:FRS1022023-01-012023-12-3102190567bus:Audited2023-01-012023-12-3102190567bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP