REGISTERED NUMBER: 09508902 (England and Wales) |
SCYLDING GROUP LIMITED |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED |
31 JULY 2023 |
REGISTERED NUMBER: 09508902 (England and Wales) |
SCYLDING GROUP LIMITED |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED |
31 JULY 2023 |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JULY 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 5 |
Consolidated Income Statement | 7 |
Consolidated Other Comprehensive Income | 8 |
Consolidated Balance Sheet | 9 |
Company Balance Sheet | 10 |
Consolidated Statement of Changes in Equity | 12 |
Company Statement of Changes in Equity | 13 |
Consolidated Cash Flow Statement | 14 |
Notes to the Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Financial Statements | 16 |
SCYLDING GROUP LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 JULY 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
And Statutory Auditors |
Ground Floor Cardigan House |
Castle Court |
Swansea Enterprise Park |
Swansea |
SA7 9LA |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31 JULY 2023 |
Principal Activities |
The Scylding Group is founded on ethical principles, trading in ethically sourced Natural Ingredients from the worldwide farming community. The group operates internationally, supplying these ingredients to consumers and businesses for a wide variety of uses including food, wellbeing and personal care. |
Review of business |
FY 22/23 | FY 21/22 |
Turnover | £13.0 | £16.5m |
Gross Profit Margin | 13.5% | 15.3% |
The reduction in turnover in the year reflects the continued impact of the exceptional market circumstances created by Covid-19, material supply challenges caused by external factors and an overall reduction in consumer spending. Further, gross profit margins have been adversely impacted by exceptional and rapidly increasing raw material prices due to the conflict in the Ukraine. This has had a lasting impact on the material cost of goods which has seen gross profit margins fall from 15.3% to 13.5%. |
The challenging trading landscape has continued post year end with many of the raw material costs remaining high and the cost-of-living crisis impacting on consumer spending. Consequently, in January 2023 the directors implemented a rigorous programme to reduce both operating costs and improve gross profit margins to reverse the trend of losses. The target of this was to return the company to profitability by the end of FY22/23. This resulted in a return to profitability in the final quarter of FY22/23. Whilst the post year-end trading environment remains challenging, with continued pressure of the cost-of-living crisis on consumer spend, the Directors continue to work on reducing both the material cost of goods and overall company overheads in order to ensure the long-term viability of the Group. |
The Directors are conscious that the complexity and costs of trading in Europe are increasing and are taking action to ensure that the company continues to be well able to service it's European customer base. The company already has a European distribution location and will continue to leverage this to provide a stable and consistent supply of product to our European customers. |
The Gorup is a principle-led business and considers attaining quality and ethical certifications and accreditations a crucial foundation in driving and evidencing its commitment to its principles. During the year the group held key certifications and accreditations as follows: |
- | Cruelty Free International Leaping Bunny |
- | Soil Association, Ecocert, COSMOS and US FDA Organic Certifications for both Food and Personal Care |
- | Food Standards Agency 5 Star Food Rating |
- | Vegan Society |
- | ISO 9001 |
- | Ethical Trade Initiative |
- | Fairtrade Foundation |
The group also continues its commitment to staff and supplier welfare. The Group staff at all levels of the business receive a range of benefits including pay above living wage regardless of age, extra days annual leave, sick pay, death in service insurance and a healthcare programme. Hybrid working remains a key staff working practice as the Group continues to protect its staff from from Covid-19. |
Going Concern & Future Outlook |
The group continues to invest in systems, people and new product development in order to maintain its position within the natural products marketplace and enable it to be best placed to expand its customer basis, both within existing and new markets. |
During the year company was in breach of its financial covenants and the carry amount reflects the full amounts shown under bank loans. Under the terms of default the lenders may at any time require immediate repayment of the loan. Since the year end the company and lenders have endeavoured to avoid such a scenario and work on possible solutions which may address the issue. |
After reviewing the Group's forecasts and projections, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements. |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31 JULY 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
Financial Risk |
The group uses various financial instruments which include cash and other items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations. |
The main risk arising from the Group's financial instruments are interest rate risk and liquidity risk. The directors review and agree policies for managing each of these risks and they are summarised below. |
Liquidity Risk |
The Group's inventory policy drives a balance of having the right stock levels appropriate to suppliers leads times and customer demand ensuring the burden of working capital requirements is limited. The majority of the Group's sales which helps the group's liquidity position. |
Interest Rate Risk |
Interest cover ratios are monitored monthly to control the modest debt levels the Group has. The Group trades at a level that is adequate for the level of debt it has. |
Trading Risks |
Scylding customer base is large and therefore risk is spread across many different customers and across many different selling channels including websites and online and specialist marketplaces in numerous countries. Scylding's trading performance was profitable for the financial year. |
Despite the impact of raw material costs and the cost of living crisis impacting on consumer spending the Directors are confident that margins will improve and whilst demand for the group's products has returned, although not to pre Covid-19 levels, the group has been able to adequately balance the revised consumer demand with appropriate inventory levels. The war in Ukraine has posed challenging market conditions and pricing for a number of the group's key products but this has and continues to be mitigated by our relationships with our suppliers and sound planning. This has meant and continues to ensure the group has the products and service level our customers have come to expect. |
The group continues to adapt to the many changes and challenges presented by Brexit. The strength of our business model, our systems and the investment in staff have allowed us to continue trading and distributing our products during a challenging time for UK companies trading in Europe. Many of the costs associated with trading in Europe are being reduced as we continue to develop our systems and processes. |
Government Legislation |
The group is well place to mitigate the risk of Brexit by using its different distribution channels and its well established distribution & logistics partners. Scylding Group has a sister company based in Germany which has proven useful in helping to maintain a consistency of supply to our European customers. |
Information Technology |
Information technology plays an important role in the day to day functioning of the group. The group has continued to invest in its technology infrastructure and always looks to gain improvements from technology advances. The group has made significant progress in its ability to gather, analyse and report key performance data. |
Health & Safety, Quality and Environment |
The Health & Safety of the group's stakeholders is of paramount importance and Scylding Group has a robust Health & Safety policy which it adheres to. The group also has ISO9001 accreditation. |
KEY PERFORMANCE INDICATORS |
The group's main Key performance indicators are Sales and Profit. Management is please with the level of sales based on the trading environment and although decline in profitability is disappointing, understands that this has been largely driven by exceptional macro-economic factors. The actions undertaken in FY22/23 as set out in the Review of business on page 2 have sought to address these challenges. |
ON BEHALF OF THE BOARD: |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 JULY 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 July 2023. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 July 2023. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 August 2022 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
In accordance with Section 383(2) of the Companies Act 2014, the auditors, Bevan Buckland LLP, will continue in office. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SCYLDING GROUP LIMITED |
Disclaimer of Opinion |
We have audited the financial statements of Scylding Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 July 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
We do not express an opinion on the accompanying financial statements of the Group. |
Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements. |
Basis for disclaimer of 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 Auditors' 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 opinion. The Group introduced a new ERP system in August 2023. Following the introduction of the ERP system the management has been unable to access the previous system. Management have continued to work to rectify this matter but at the date of this report have yet to find a solution. |
As a result of this matter, we were unable to determine whether any adjustments might have been found necessary in respect of stock, debtors and creditors, and these elements making up the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows and have been unable to satisfy ourselves by alternative means. |
Conclusions relating to going concern |
Because of the matter described in the basis for disclaimer of opinion section of our report we're unable to conclude on the financial statements as a whole. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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 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 |
Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have been unable to form an opinion, whether based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SCYLDING GROUP LIMITED |
Matters on which we are required to report by exception |
Notwithstanding our disclaimer of an opinion on the financial statements, in the light of the knowledge of the group and the parent company and its environment obtained in the course of the audit performed subject to the pervasive limitation described above, we have not identified material misstatements in the Strategic Report or the Report of the Director. |
Arising from the limitation of our work referred to above: |
- | we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and |
- | we were unable to determine whether adequate accounting records have been kept. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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 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 directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our responsibility is to conduct an audit of the group and company's financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor's report. |
However, because of the matter described in the basis for disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements. |
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. |
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 a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants |
And Statutory Auditors |
Ground Floor Cardigan House |
Castle Court |
Swansea Enterprise Park |
Swansea |
SA7 9LA |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
CONSOLIDATED |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 4 | 13,049,449 | 16,500,001 |
Cost of sales | 11,281,606 | 13,980,038 |
GROSS PROFIT | 1,767,843 | 2,519,963 |
Administrative expenses | 2,733,964 | 3,463,594 |
(966,121 | ) | (943,631 | ) |
Other operating income | 18,730 | 18,730 |
GROUP OPERATING LOSS | 6 | (947,391 | ) | (924,901 | ) |
Share of operating loss in |
Associates | (55,692 | ) | (21,764 | ) |
Interest payable and similar expenses | 7 | 143,479 | 68,707 |
LOSS BEFORE TAXATION | (1,146,562 | ) | (1,015,372 | ) |
Tax on loss | 8 | (139,548 | ) | (174,688 | ) |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
Loss attributable to: |
Owners of the parent | (1,007,014 | ) | (840,684 | ) |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
CONSOLIDATED |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ |
LOSS FOR THE YEAR | (1,007,014 | ) | (840,684 | ) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(1,007,014 |
) |
(840,684 |
) |
Total comprehensive income attributable to: |
Owners of the parent | (1,007,014 | ) | (840,684 | ) |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
CONSOLIDATED BALANCE SHEET |
31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 11 | 163,079 | 140,926 |
Tangible assets | 12 | 95,043 | 166,962 |
Investments | 13 |
Interest in associate | 2,156,838 | 2,204,517 |
2,414,960 | 2,512,405 |
CURRENT ASSETS |
Stocks | 14 | 1,314,171 | 2,371,914 |
Debtors | 15 | 1,021,931 | 633,550 |
Cash at bank | 86,340 | 90,663 |
2,422,442 | 3,096,127 |
CREDITORS |
Amounts falling due within one year | 16 | 4,050,787 | 2,317,946 |
NET CURRENT (LIABILITIES)/ASSETS | (1,628,345 | ) | 778,181 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
786,615 |
3,290,586 |
CREDITORS |
Amounts falling due after more than one year |
17 |
(293,415 |
) |
(1,806,852 |
) |
PROVISIONS FOR LIABILITIES | 21 | (29,876 | ) | (15,924 | ) |
NET ASSETS | 463,324 | 1,467,810 |
CAPITAL AND RESERVES |
Called up share capital | 22 | 100 | 100 |
Share premium | 23 | 977,800 | 977,800 |
Retained earnings | 23 | (514,576 | ) | 489,910 |
SHAREHOLDERS' FUNDS | 463,324 | 1,467,810 |
The financial statements were approved by the Board of Directors and authorised for issue on 29 August 2024 and were signed on its behalf by: |
J R Skelding - Director |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
COMPANY BALANCE SHEET |
31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 11 |
Tangible assets | 12 |
Investments | 13 |
CURRENT ASSETS |
Debtors | 15 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 16 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
17 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 22 |
Share premium | 23 |
Retained earnings | 23 | ( |
) |
SHAREHOLDERS' FUNDS |
Company's loss for the financial year | (161,750 | ) | (22,078 | ) |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
COMPANY BALANCE SHEET - continued |
31 JULY 2023 |
The financial statements were approved by the Board of Directors and authorised for issue on |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 JULY 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 August 2021 | 100 | 1,382,309 | 977,800 | 2,360,209 |
Changes in equity |
Translation differences | - | (1,715 | ) | - | (1,715 | ) |
Dividends | - | (50,000 | ) | - | (50,000 | ) |
Total comprehensive income | - | (840,684 | ) | - | (840,684 | ) |
Balance at 31 July 2022 | 100 | 489,910 | 977,800 | 1,467,810 |
Changes in equity |
Translation differences | - | 2,528 | - | 2,528 |
Total comprehensive income | - | (1,007,014 | ) | - | (1,007,014 | ) |
Balance at 31 July 2023 | 100 | (514,576 | ) | 977,800 | 463,324 |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 JULY 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 August 2021 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 July 2022 |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 July 2023 | ( |
) |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
CONSOLIDATED CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 JULY 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 460 | (255,541 | ) |
Interest paid | (143,479 | ) | (68,707 | ) |
Tax paid | 247,869 | (63,315 | ) |
Net cash from operating activities | 104,850 | (387,563 | ) |
Cash flows from investing activities |
Purchase of intangible fixed assets | (86,813 | ) | (2,391 | ) |
Purchase of tangible fixed assets | - | (6,633 | ) |
Purchase of fixed asset investments | (8,013 | ) | (23,315 | ) |
Sale of intangible fixed assets | 8,326 | - |
Net cash from investing activities | (86,500 | ) | (32,339 | ) |
Cash flows from financing activities |
Loan repayments in year | (159,445 | ) | (257,916 | ) |
Amount introduced by directors | 200,001 | - |
Amount withdrawn by directors | (184,375 | ) | (160,611 | ) |
Net cash from financing activities | (143,819 | ) | (418,527 | ) |
Decrease in cash and cash equivalents | (125,469 | ) | (838,429 | ) |
Cash and cash equivalents at beginning of year |
2 |
18,088 |
856,517 |
Cash and cash equivalents at end of year | 2 | (107,381 | ) | 18,088 |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 JULY 2023 |
1. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Loss before taxation | (1,146,562 | ) | (1,015,372 | ) |
Depreciation charges | 128,253 | 209,920 |
Loss on disposal of fixed assets | - | 6,554 |
Share if operating loss in Associates | 55,692 | 21,764 |
Translation differences | 2,529 | (1,715 | ) |
Government grants | (18,730 | ) | (18,730 | ) |
Finance costs | 143,479 | 68,707 |
(835,339 | ) | (728,872 | ) |
Decrease in stocks | 1,057,743 | 235,422 |
(Increase)/decrease in trade and other debtors | (429,707 | ) | 327,164 |
Increase/(decrease) in trade and other creditors | 207,763 | (89,255 | ) |
Cash generated from operations | 460 | (255,541 | ) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 July 2023 |
31.7.23 | 1.8.22 |
£ | £ |
Cash and cash equivalents | 86,340 | 90,663 |
Bank overdrafts | (193,721 | ) | (72,575 | ) |
(107,381 | ) | 18,088 |
Year ended 31 July 2022 |
31.7.22 | 1.8.21 |
£ | £ |
Cash and cash equivalents | 90,663 | 856,517 |
Bank overdrafts | (72,575 | ) | - |
18,088 | 856,517 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1.8.22 | Cash flow | At 31.7.23 |
£ | £ | £ |
Net cash |
Cash at bank | 90,663 | (4,323 | ) | 86,340 |
Bank overdrafts | (72,575 | ) | (121,146 | ) | (193,721 | ) |
18,088 | (125,469 | ) | (107,381 | ) |
Debt |
Debts falling due within 1 year | (159,444 | ) | (1,270,371 | ) | (1,429,815 | ) |
Debts falling due after 1 year | (1,429,816 | ) | 1,429,816 | - |
(1,589,260 | ) | 159,445 | (1,429,815 | ) |
Total | (1,571,172 | ) | 33,976 | (1,537,196 | ) |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JULY 2023 |
1. | STATUTORY INFORMATION |
Scylding Group Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Going Concern |
The challenging trading landscape has continued post year end with many of the raw material costs remaining high and the cost-of-living crisis impacting on consumer spending. Consequently, in January 2023 the directors implemented a rigorous programme to reduce both operating costs and improve gross profit margins to reverse the trend of losses. The target of this was to return the company to profitability by the end of FY22/23. This resulted in a return to profitability in the final quarter of FY22/23. Whilst the post year-end trading environment remains challenging, with continued pressure of the cost-of-living crisis on consumer spend, the Directors continue to work on reducing both the material cost of goods and overall company overheads in order to ensure the long-term viability of the Group. |
During the year company was in breach of its financial covenants and the carry amount reflects the full amounts shown under bank loans. Under the terms of default the lenders may at any time require immediate repayment of the loan. Since the year end the company and lenders have endeavoured to avoid such a scenario and work on possible solutions which may address the issue. |
After reviewing the Group's forecasts and projections, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements. |
Basis of consolidation |
The consolidated financial statements include the company and its subsidiary undertakings and have been prepared using the acquisition method of accounting. |
The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting period as the parent company and are based on consistent accounting policies. The results of subsidiaries acquired or disposed of during the period are included in the consolidated financial statements from the effective date of acquisition up to the effective date of disposal, as appropriate. |
Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. |
Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Turnover is recognised at point of order by the customer. VAT is deducted in accordance with EU VAT compliance rules and accounted for in the relevant country. |
Management charges represent the use of assets and resources by a company under company control and is recognised over the period of use. |
Goodwill |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
2. | ACCOUNTING POLICIES - continued |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Computer software is being amortised evenly over their estimated useful lives. Varying useful lives have been estimated between 3 - 5 years. |
Tangible fixed assets |
Improvements to property | - |
Plant and Machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Cost comprises the purchase price of the asset and expenditure directly attributable to the acquisition of the item. |
A fixed asset is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. 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 the income statement. |
Impairment of fixed assets |
The group performs impairment testing where there are any indicators of impairment. Impairment is calculated as the difference between the carrying value and the recoverable value of the asset. Recoverable value is the higher of net realisable value and estimated value in use at the date the impairment loss is recognised. Value in use represents the present value of expected future discounted cash flows. If incurred, impairment is recognised immediately in the income statement. |
Where an impairment loss subsequently reverses, the carrying value of the asset is increased to the revised estimate of the recoverable amount, but so that the increased carrying value does not exceed the carrying value that would have been determined if no impairment loss had been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately as a credit to the income statement. |
Investments in associates |
The Company's investments in shares in group companies are stated at cost less provision for impairment. Any impairment is charged to the profit and loss account as it arises. |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
2. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Net realisable value is based on estimated normal selling price, less further costs expected to be incurred in bringing the products to completion and disposal. |
Debtors |
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured at fair value, net of transaction costs are measured subsequently at amortised cost using the effective interest method, less any impairment. |
Cash and cash equivalents |
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
In the statement of cash flows, cash and cash equivalents are shown in net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management. |
Creditors |
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest rate method. |
Provisions for liabilities |
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation. |
Provisions are charged as an expense to the Statement of Comprehensive Income in the year the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. |
When payments are eventually made, they are charged to the provision carried in the Statement of financial position. |
Government grants |
Grants that relate to specific capital expenditure are treated as deferred income which is credited to the profit and loss account over the related asset's useful life. Other grants are credited to the profit and loss account when received. |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The group has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial instruments Issues' of FRS 102 to all of its financial instruments. |
Financial instruments are recognised in the group's statement of financial position when the group 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 trade and other 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. |
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. |
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition. |
Impairment of financial assets |
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date. |
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss. |
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss. |
Derecognition of financial assets |
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. |
Classification of financial liabilities |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
Basic financial liabilities |
Basic financial liabilities, including trade and other creditors, bank loans, loans from fellow group companies, 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. |
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
2. | ACCOUNTING POLICIES - continued |
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. |
Derecognition of financial liabilities |
Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled. |
Equity instruments |
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Group. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
Foreign currencies |
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 transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Employee benefits |
The group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined contribution pension plans. |
Short term benefits, including holiday pay and similar non-monetary benefits are recognised as an expense in the period in which the service is received. |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results in the future may differ from these estimates. |
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 and in any future periods affected. |
Significant management judgements |
The following are management judgements in applying the accounting policies of the company that have the most significant effect on the amounts recognised in the financial statements. |
Useful lives of assets |
Tangible fixed assets, other than investment properties, are depreciated over their useful economic lives based on various factors. The actual lives of the assets are re-assessed on a periodic basis and may vary depending on the standard of the asset. |
Stock Provision |
Management reviews stock on a line by line basis and using knowledge of their products and order book to estimate a stock provision. |
Valuation of debtors |
Management review balances on a customer by customer basis and use knowledge of their customers to determine the recoverability of its debts. |
Provisions and accruals |
Management bases its judgements on the circumstances relating to each specific event and upon currently available information. However, given the inherent difficulties in the estimation of liabilities in these areas, it cannot be guaranteed that additional costs will not be incurred beyond the amounts accrued. |
4. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the group. |
The group supplies various markets other than just in the UK, the disclosure of which would be seriously prejudicial to the interests of the company and therefore will not be disclosed. |
5. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries | 1,759,662 | 2,554,795 |
Social security costs | 169,190 | 212,275 |
Other pension costs | 75,021 | 80,292 |
2,003,873 | 2,847,362 |
The average number of employees during the year was as follows: |
2023 | 2022 |
Direct | 18 | 25 |
Indirect | 41 | 56 |
At the year end pension contributions of £5,939 (2022: £7,578) were outstanding. |
2023 | 2022 |
£ | £ |
Directors' remuneration | 9,100 | 8,929 |
Directors' pension contributions to money purchase schemes | 40,000 | 38,333 |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
5. | EMPLOYEES AND DIRECTORS - continued |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 1 | 1 |
6. | OPERATING LOSS |
The operating loss is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery | 13,224 | 21,308 |
Other operating leases | 192,017 | 304,242 |
Depreciation - owned assets | 71,919 | 102,249 |
Depreciation - assets on hire purchase contracts or finance leases | - | 45,248 |
Loss on disposal of fixed assets | - | 6,554 |
Computer software amortisation | 56,334 | 62,423 |
Auditors' remuneration | 10,150 | 15,700 |
Auditor remuneration non audit | 12,124 | 16,967 |
Foreign exchange differences | 8,507 | (15,041 | ) |
Deferred capital grants | (18,730 | ) | (18,730 | ) |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank interest | - | 5 |
Bank loan interest | 60,716 | 68,702 |
Other interest | 82,763 | - |
143,479 | 68,707 |
8. | TAXATION |
Analysis of the tax credit |
The tax credit on the loss for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
Under/(over) CT provisions | (153,500 | ) | (149,549 | ) |
Deferred tax | 13,952 | (25,139 | ) |
Tax on loss | (139,548 | ) | (174,688 | ) |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
8. | TAXATION - continued |
Reconciliation of total tax credit included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Loss before tax | (1,146,562 | ) | (1,015,372 | ) |
Loss multiplied by the standard rate of corporation tax in the UK of 21.005 % (2022 - 19 %) |
(240,835 |
) |
(192,921 |
) |
Effects of: |
Expenses not deductible for tax purposes | (344 | ) | (319 | ) |
Income not taxable for tax purposes | (3,934 | ) | (3,559 | ) |
Depreciation in excess of capital allowances | 3,042 | 33,218 |
Utilisation of tax losses | 242,071 | 19,943 |
Adjustments to tax charge in respect of previous periods | (153,500 | ) | (11,212 | ) |
Deferred tax | 13,952 | 25,139 |
enhanced deduction |
Impact of prior year adjustment | - | (44,977 | ) |
Total tax credit | (139,548 | ) | (174,688 | ) |
The deferred tax assets/liabilities at 31 July 2023 have been calculated at the rate of 25% (2022: 19%). |
9. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
10. | DIVIDENDS |
2023 | 2022 |
£ | £ |
Interim | - | 50,000 |
11. | INTANGIBLE FIXED ASSETS |
Group |
Patents |
and | Computer |
Goodwill | licences | software | Totals |
£ | £ | £ | £ |
COST |
At 1 August 2022 | 1,066,957 | 8,326 | 644,506 | 1,719,789 |
Additions | - | - | 86,813 | 86,813 |
Disposals | - | (8,326 | ) | - | (8,326 | ) |
At 31 July 2023 | 1,066,957 | - | 731,319 | 1,798,276 |
AMORTISATION |
At 1 August 2022 | 1,066,957 | - | 511,906 | 1,578,863 |
Amortisation for year | - | - | 56,334 | 56,334 |
At 31 July 2023 | 1,066,957 | - | 568,240 | 1,635,197 |
NET BOOK VALUE |
At 31 July 2023 | - | - | 163,079 | 163,079 |
At 31 July 2022 | - | 8,326 | 132,600 | 140,926 |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
12. | TANGIBLE FIXED ASSETS |
Group |
Improvements | Fixtures |
to | Plant and | and | Motor |
property | Machinery | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 August 2022 |
and 31 July 2023 | 27,998 | 1,058,492 | 84,363 | 101,080 | 1,271,933 |
DEPRECIATION |
At 1 August 2022 | 27,998 | 935,118 | 40,775 | 101,080 | 1,104,971 |
Charge for year | - | 63,482 | 8,437 | - | 71,919 |
At 31 July 2023 | 27,998 | 998,600 | 49,212 | 101,080 | 1,176,890 |
NET BOOK VALUE |
At 31 July 2023 | - | 59,892 | 35,151 | - | 95,043 |
At 31 July 2022 | - | 123,374 | 43,588 | - | 166,962 |
13. | FIXED ASSET INVESTMENTS |
Group |
Interest |
in |
associate |
£ |
COST |
At 1 August 2022 | 2,204,517 |
Additions | 8,013 |
Share of profit/(loss) | (55,692 | ) |
At 31 July 2023 | 2,156,838 |
NET BOOK VALUE |
At 31 July 2023 | 2,156,838 |
At 31 July 2022 | 2,204,517 |
Company |
Shares in | Interest |
group | in |
undertakings | associate | Totals |
£ | £ | £ |
COST |
At 1 August 2022 | 3,671,443 |
Additions | 8,013 |
Share of profit/(loss) | - | (55,692 | ) | (55,692 | ) |
At 31 July 2023 | 2,156,838 | 3,623,764 |
NET BOOK VALUE |
At 31 July 2023 | 3,623,764 |
At 31 July 2022 | 3,671,443 |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
13. | FIXED ASSET INVESTMENTS - continued |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiaries |
Registered office: |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Loss for the year | ( |
) | ( |
) |
Registered office: USA |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves | ( |
) | ( |
) |
Loss for the year | ( |
) | ( |
) |
Associated company |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Loss for the year | ( |
) | ( |
) |
14. | STOCKS |
Group |
2023 | 2022 |
£ | £ |
Raw materials | 582,098 | 744,399 |
Finished goods | 732,073 | 1,627,515 |
1,314,171 | 2,371,914 |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
15. | DEBTORS |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Amounts falling due within one year: |
Trade debtors | 475,783 | 196,488 |
Amounts owed by related undertakings | 68,861 | 34,521 |
Other debtors | 127,403 | - |
Tax | 142,087 | 236,456 |
Prepayments | 120,151 | 131,482 |
934,285 | 598,947 |
Amounts falling due after more than one | year: |
Directors' loan accounts | 87,646 | 34,603 | 87,646 | 34,603 |
Aggregate amounts | 1,021,931 | 633,550 |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 18) | 1,623,536 | 232,019 |
Trade creditors | 1,563,167 | 1,163,257 |
Amounts owed to related undertakings | 377,861 | 292,767 |
Amounts owed to group undertakings | - | - | 1,407,626 | 1,150,052 |
Social security and other taxes | 33,719 | 50,340 |
VAT | 112,018 | 365,731 | - | - |
Other creditors | 5,939 | 7,934 |
Accruals and deferred income | 315,817 | 187,167 |
Deferred government grants | 18,730 | 18,731 |
4,050,787 | 2,317,946 |
17. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans (see note 18) | - | 1,429,816 |
VAT | 215,508 | 349,070 | - | - |
Directors' loan accounts | 70,103 | 1,434 | 70,103 | 1,434 |
Deferred government grants | 7,804 | 26,532 |
293,415 | 1,806,852 |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
18. | LOANS |
An analysis of the maturity of loans is given below: |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Amounts falling due within one year or on | demand: |
Bank overdrafts | 193,721 | 72,575 |
Bank loans | 1,429,815 | 159,444 |
1,623,536 | 232,019 |
Amounts falling due between one and two | years: |
Bank loans - 1-2 years | - | 166,609 |
Amounts falling due between two and five | years: |
Bank loans - 2-5 years | - | 546,925 |
Amounts falling due in more than five years: |
Repayable by instalments |
Bank loans more 5 yr by instal | - | 716,282 | - | 716,282 |
The company bank loan is repayable over 120 equal monthly installments, at a fixed interest rate of 4%. |
During the year company was in breach of its financial covenants and the carry amount reflects the full amounts shown under bank loans. Under the terms of default the lenders may at any time require immediate repayment of the loan. Since the year end the company and lenders have endeavoured to avoid such a scenario and work on possible solutions which may address the issue. |
19. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year | 92,500 | 122,922 |
Between one and five years | 185,000 | 277,500 |
277,500 | 400,422 |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
20. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group |
2023 | 2022 |
£ | £ |
Bank overdrafts | 193,721 | 72,575 |
Bank loans | 1,429,815 | 1,589,260 |
1,623,536 | 1,661,835 |
HSBC Bank plc holding a fixed and floating charge over all assets. |
DBW Investments (14) Limited hold a fixed and floating charge over the fixed assets of the company. |
DBW Investments (8) Limited hold a fixed and floating charge over the fixed assets of the company. |
Lear Investments Limited have a charge on a rent deposit deed for any monies that become due under the terms of the lease. |
Hire Purchase debts are secured on the assets in which they relate. |
21. | PROVISIONS FOR LIABILITIES |
Group |
2023 | 2022 |
£ | £ |
Deferred tax | 29,876 | 15,924 |
Group |
Deferred |
tax |
£ |
Balance at 1 August 2022 | 15,924 |
Charge to Income Statement during year | 13,952 |
Balance at 31 July 2023 | 29,876 |
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following analysis is the analysis of the deferred tax balances (after offset) for financial reporting purposes: |
2023 | 2022 |
Net liability | Net liability |
Balances: | £ | £ |
ACAs | 31,350 | 17,820 |
Other timing differences | (1,474 | ) | (1,894 | ) |
29,876 | 15,924 |
22. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 100 | 100 |
Each share is entitled to: |
- One vote in any circumstances; |
- Pari Passu to dividend or any other distribution; and |
- full participation in capital distributions.. |
SCYLDING GROUP LIMITED (REGISTERED NUMBER: 09508902) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 JULY 2023 |
23. | RESERVES |
Group |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 August 2022 | 489,910 | 977,800 | 1,467,710 |
Deficit for the year | (1,007,014 | ) | (1,007,014 | ) |
Translation differences | 2,528 | - | 2,528 |
At 31 July 2023 | (514,576 | ) | 977,800 | 463,224 |
Company |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 August 2022 | 981,978 |
Deficit for the year | ( |
) | ( |
) |
At 31 July 2023 | ( |
) | 820,228 |
Called up share capital - represents the nominal value of shares that have been issued. |
Share Premium - represents the premium above the nominal value of shares that have been issued. |
Retained earnings - included all current and prior year retained profit and losses. |
24. | RELATED PARTY DISCLOSURES |
Group |
Included within debtors are amounts due from companies in which the directors have a common interest of £68,861 (2022: £34,521). |
Included within other creditors are amounts due from companies in which the directors have a common interest of £377,861 (2022: £292,767). |
25. | ULTIMATE CONTROLLING PARTY |
The directors are considered to be the ultimate controlling party by virtue of each owning 50% of the share capital. |