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COMPANY REGISTRATION NUMBER: 09579112
Merit Group Holdings Limited
Financial Statements
31 August 2023
Merit Group Holdings Limited
Financial Statements
Year ended 31 August 2023
Contents
Page
Strategic report
1
Directors' report
3
Independent auditor's report to the members
5
Consolidated income statement
9
Consolidated statement of comprehensive income
10
Consolidated statement of financial position
11
Company statement of financial position
12
Consolidated statement of changes in equity
13
Company statement of changes in equity
15
Consolidated statement of cash flows
16
Notes to the financial statements
17
Merit Group Holdings Limited
Strategic Report
Year ended 31 August 2023
Review of the business The activities of the Group during the year include: Holding company Provision of courier services Provision of premium insulation products Warehouse & distribution and office installations Provision of office equipment Provision of building services Manufacture of insulation products Provision of glazing products to both the residential and commercial sectors. The key financial and other performance indicators during the year were as follows: 2023 2022 Change £'000 £'000 Turnover 24,679 23,057 + 7.0% Operating profit 2,303 3,487 -24.3% Profit after tax 1,549 2,683 -32.4%
Credit risk
Credit risk is the risk of financial loss to the group. Exposure to credit risk in relation to customers is managed through credit control processes which include active debtor management.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure as far as possible, that we will always have sufficient liquidity to meet liabilities when due under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Groups reputation. Considering the risk mitigation activities in place, the Groups exposure to liquidity and credit risk is considered to be within normal parameters and represents an acceptable level of risk.
Development
The Group is constantly assessing ways to further strengthen and evolve its core processes and services offered. The Group is recognised as innovative in problem solving and dealing with specialist projects. The second depot for Merit Insulation Supplies in Dartford was fully stocked and successfully opened in March 2023, with additional container storage also being facilitated on this site to further bolster Merit Office Installations' crucial storage offering. Additionally, a storage site was purchased and made operational in Sittingbourne in November 2022, housing a further 120 containers that immediately supported major project works under the Merit Office Installations banner. Additional investment has been made in an existing operational system, which has been enhanced to produce electronic POD's, an efficiency saving in both time and paper usage. To increase efficiency and productivity of resources, the decision was taken to absorb Merit Couriers into Merit Office Installations early in 2023. In addition to this, VIC UK Insulation ceased trading shortly after the end of the financial year, with the focus instead switching to ongoing commitment to a large, external supplier of the same product type within the industry.
Environment
The Group continues to have environment and sustainable matters and initiatives at the forefront of its operations. In the last year, the provision of electric vehicle charging stations has increased from 12 units to 19, with the capability of the new units charging at faster rates than their original counterparts. This facilitated the additional requirements of the growing EV fleet, particularly the fully electric "Jumbo" Transit vans that arrived in October 2022. These vehicles necessitated additional training for our existing drivers due to their size and weight. Merit funded this education, enhancing the driving licenses of all involved. Following the previous years' initiative to continually improve our practices, the Group has looked at alternative waste streams for items we are tasked with the responsibility to dispose of. A project that is continuing to grow in popularity is providing reuseable items to schools and other local charitable projects. This has not only seen a vast number of items being reused by those who need it in the local community, but has also vastly reduced the carbon that would have been generated from the manufacture of new products if those who received the donations had purchased them.
Future developments
Further expansion of the fleet held among the companies in the Group has led to enhanced coverage of all services. Additional services offered continue to help further the Group's standing in the industry, with such offerings as asset tagging and barcoded crate hire key among these. Significant investment in education, training and benchmarked salary tiers have been rolled out among staff at all levels within the Group. Merit's personnel continue to develop and strive towards professional growth for the betterment of them as individuals as well as their respective teams. Merit's Professional Services division continues to increase its offering to new and existing customers, with new technologies and advancements forming the backbone to the company's ever-increasing stature and repute in a highly competitive market. Following the tragic passing of its beloved Managing Director Nick Pope in January 2023, and period of stabilising in the wake of this awful event, Merit Insulation Supplies formed a robust and dynamic growth plan effective from January 2024 under the guidance of its new Managing Director, galvanising the staff and harnessing the goodwill and support of customers and suppliers alike in an unwavering attempt to honour the continuing legacy of the Group's sorely missed friend. This plan has yielded results exceeding projections in 2024 and the future of this and all other Merit companies continues to look ever-brighter.
This report was approved by the board of directors on 29 August 2024 and signed on behalf of the board by:
Mr R Ashford
Mr J Ashford
Director
Director
Registered office:
Merit House, Units 1-4 Whitewall Road
Medway City Estate
Rochester
Kent
England
ME2 4WS
Merit Group Holdings Limited
Directors' Report
Year ended 31 August 2023
The directors present their report and the financial statements of the group for the year ended 31 August 2023 .
Directors
The directors who served the company during the year were as follows:
Mr R Ashford
Mr R Ashford
Mr J Ashford
Dividends
Particulars of recommended dividends are detailed in note 13 to the financial statements.
Future developments
The directors have prepared a strategic report and within this have declared details surrounding future developments of the Group.
Other matters
During the year the decision was made to cease the trade of VIC UK Insulations Limited and to absorb the trade of Merit Couriers Limited into Merit Office Installations Limited.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' 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 group and the company and 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 judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.
This report was approved by the board of directors on 29 August 2024 and signed on behalf of the board by:
Mr R Ashford
Mr J Ashford
Director
Director
Registered office:
Merit House, Units 1-4 Whitewall Road
Medway City Estate
Rochester
Kent
England
ME2 4WS
Merit Group Holdings Limited
Independent Auditor's Report to the Members of Merit Group Holdings Limited
Year ended 31 August 2023
Opinion
We have audited the financial statements of Merit Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2023 which comprise the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the group's and of the parent company's affairs as at 31 August 2023 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the 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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on pages 3 and 4, 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 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Capability of the audit in detecting irregularities, including fraud Based on our understanding of the group and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, taxation and pension legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. 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 accounting estimates such as bad debt provision and accruals and the inappropriate posting of journals. Audit procedures performed by the group engagement team included: - Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud; and - Challenging assumptions and judgements made by management in its significant accounting estimates; and - Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and - Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Mark Attwood FCCA
(Senior Statutory Auditor)
For and on behalf of
Kreston Reeves
Chartered Accountants & Statutory Auditors
Montague Place
Quayside
Chatham Maritime
Chatham
Kent
29 August 2024
Merit Group Holdings Limited
Consolidated Income Statement
Year ended 31 August 2023
2023
2022
Continuing operations
Discont'd operations
Total
Continuing operations
Discont'd operations
Total
Note
£
£
£
£
£
£
Turnover
4
24,679,888
( 228)
24,679,660
21,565,234
1,491,443
23,056,677
Cost of sales
17,894,727
50,272
17,944,999
14,735,130
1,701,130
16,436,260
-------------
--------
-------------
-------------
------------
-------------
Gross profit
6,785,161
( 50,500)
6,734,661
6,830,104
( 209,687)
6,620,417
Administrative expenses
4,406,979
24,605
4,431,584
2,940,386
194,803
3,135,189
Other operating income
5
2,370
2,370
------------
--------
------------
------------
---------
------------
Operating profit
6
2,378,182
( 75,105)
2,303,077
3,892,088
( 404,490)
3,487,598
Other interest receivable and similar income
10
442
442
2,358
2,358
Interest payable and similar expenses
11
130,506
15,748
146,254
119,359
119,359
------------
--------
------------
------------
---------
------------
Profit before taxation
2,248,118
( 90,853)
2,157,265
3,775,087
( 404,490)
3,370,597
Tax on profit
12
607,976
( 155)
607,821
676,963
10,181
687,144
------------
--------
------------
------------
---------
------------
Profit for the financial year
1,640,142
( 90,698)
1,549,444
3,098,124
( 414,671)
2,683,453
------------
--------
------------
------------
---------
------------
Profit for the financial year attributable to:
The owners of the parent company
1,358,469
2,192,585
Non-controlling interests
190,975
490,868
------------
------------
1,549,444
2,683,453
------------
------------
Merit Group Holdings Limited
Consolidated Statement of Comprehensive Income
Year ended 31 August 2023
2023
2022
£
£
Profit for the financial year
1,549,444
2,683,453
Tax relating to components of other comprehensive income
( 32,458)
------------
------------
Other comprehensive income for the year
( 32,458)
------------
------------
Total comprehensive income for the year
1,549,444
2,650,995
------------
------------
Total comprehensive income for the year attributable to:
The owners of the parent company
1,358,469
2,163,373
Non-controlling interests
190,975
487,622
------------
------------
1,549,444
2,650,995
------------
------------
Merit Group Holdings Limited
Consolidated Statement of Financial Position
31 August 2023
2023
2022
Note
£
£
Fixed assets
Intangible assets
14
25,814
32,277
Tangible assets
15
2,829,714
2,090,395
------------
------------
2,855,528
2,122,672
Current assets
Stocks
17
1,521,592
1,167,392
Debtors
18
9,639,683
8,817,959
Cash at bank and in hand
322,716
366,897
-------------
-------------
11,483,991
10,352,248
Creditors: amounts falling due within one year
19
10,295,175
8,342,697
-------------
-------------
Net current assets
1,188,816
2,009,551
------------
------------
Total assets less current liabilities
4,044,344
4,132,223
Creditors: amounts falling due after more than one year
20
1,072,978
1,676,031
Provisions
22
703,860
486,454
------------
------------
Net assets
2,267,506
1,969,738
------------
------------
Capital and reserves
Called up share capital
27
1,430
1,430
Revaluation reserve
28
365,155
365,155
Profit and loss account
28
1,738,425
1,791,043
------------
------------
Equity attributable to the owners of the parent company
2,105,010
2,157,628
Non-controlling interests
162,496
( 187,890)
------------
------------
2,267,506
1,969,738
------------
------------
These financial statements were approved by the board of directors and authorised for issue on 29 August 2024 , and are signed on behalf of the board by:
Mr R Ashford
Mr J Ashford
Director
Director
Company registration number: 09579112
Merit Group Holdings Limited
Company Statement of Financial Position
31 August 2023
2023
2022
Note
£
£
Fixed assets
Investments
16
11,568
1,518
Current assets
Debtors
18
391,832
421,600
Cash at bank and in hand
6,455
7,669
---------
---------
398,287
429,269
Creditors: amounts falling due within one year
19
274,919
187,973
---------
---------
Net current assets
123,368
241,296
---------
---------
Total assets less current liabilities
134,936
242,814
---------
---------
Net assets
134,936
242,814
---------
---------
Capital and reserves
Called up share capital
27
1,430
1,430
Profit and loss account
28
133,506
241,384
---------
---------
Shareholders funds
134,936
242,814
---------
---------
The profit for the financial year of the parent company was £ 78,121 (2022: £ 158,235 ).
These financial statements were approved by the board of directors and authorised for issue on 29 August 2024 , and are signed on behalf of the board by:
Mr R Ashford
Mr J Ashford
Director
Director
Company registration number: 09579112
Merit Group Holdings Limited
Consolidated Statement of Changes in Equity
Year ended 31 August 2023
Called up share capital
Revaluation reserve
Profit and loss account
Equity attributable to the owners of the parent company
Non-controlling interests
Total
£
£
£
£
£
£
At 1 September 2021
1,430
394,367
423,446
819,243
( 468,783)
350,460
Profit for the year
2,192,585
2,192,585
490,868
2,683,453
Other comprehensive income for the year:
Tax relating to components of other comprehensive income
12
( 29,212)
( 29,212)
( 3,246)
( 32,458)
-------
---------
------------
------------
---------
------------
Total comprehensive income for the year
( 29,212)
2,192,585
2,163,373
487,622
2,650,995
Dividends paid and payable
13
( 589,300)
( 589,300)
( 442,417)
( 1,031,717)
Transfer to minority interests
( 235,688)
( 235,688)
235,688
-------
---------
------------
------------
---------
------------
Total investments by and distributions to owners
( 824,988)
( 824,988)
( 206,729)
( 1,031,717)
At 31 August 2022
1,430
365,155
1,791,043
2,157,628
( 187,890)
1,969,738
Profit for the year
1,358,469
1,358,469
190,975
1,549,444
-------
---------
------------
------------
---------
------------
Total comprehensive income for the year
1,358,469
1,358,469
190,975
1,549,444
Merit Group Holdings Limited
Consolidated Statement of Changes in Equity (continued)
Year ended 31 August 2023
Called up share capital
Revaluation reserve
Profit and loss account
Equity attributable to the owners of the parent company
Non-controlling interests
Total
£
£
£
£
£
£
Dividends paid and payable
13
( 777,705)
( 777,705)
( 464,000)
( 1,241,705)
Redemption of shares
( 9,971)
( 9,971)
Transfer to minority interests
( 633,382)
( 633,382)
633,382
----
----
------------
------------
---------
------------
Total investments by and distributions to owners
( 1,411,087)
( 1,411,087)
159,411
( 1,251,676)
-------
---------
------------
------------
---------
------------
At 31 August 2023
1,430
365,155
1,738,425
2,105,010
162,496
2,267,506
-------
---------
------------
------------
---------
------------
Merit Group Holdings Limited
Company Statement of Changes in Equity
Year ended 31 August 2023
Called up share capital
Profit and loss account
Total
£
£
£
At 1 September 2021
1,430
180,149
181,579
Profit for the year
158,235
158,235
-------
---------
---------
Total comprehensive income for the year
158,235
158,235
Dividends paid and payable
13
( 97,000)
( 97,000)
-------
---------
---------
Total investments by and distributions to owners
( 97,000)
( 97,000)
At 31 August 2022
1,430
241,384
242,814
Profit for the year
78,121
78,121
-------
---------
---------
Total comprehensive income for the year
78,121
78,121
Dividends paid and payable
13
( 185,999)
( 185,999)
----
---------
---------
Total investments by and distributions to owners
( 185,999)
( 185,999)
-------
---------
---------
At 31 August 2023
1,430
133,506
134,936
-------
---------
---------
Merit Group Holdings Limited
Consolidated Statement of Cash Flows
Year ended 31 August 2023
2023
2022
£
£
Cash flows from operating activities
Profit for the financial year
1,549,444
2,683,453
Adjustments for:
Depreciation of tangible assets
286,105
210,133
Amortisation of intangible assets
6,463
6,462
Government grant income
( 2,370)
Other interest receivable and similar income
( 442)
( 2,358)
Interest payable and similar expenses
146,254
119,359
Gains on disposal of tangible assets
( 23,167)
( 9,033)
Tax on profit
607,821
687,144
Accrued expenses
84,991
266,987
Changes in:
Stocks
( 354,200)
( 283,710)
Trade and other debtors
( 712,760)
( 2,668,245)
Trade and other creditors
1,647,966
1,661,007
------------
------------
Cash generated from operations
3,238,475
2,668,829
Interest paid
( 146,254)
( 119,359)
Interest received
442
2,358
Tax paid
( 530,955)
( 470,114)
------------
------------
Net cash from operating activities
2,561,708
2,081,714
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 1,191,090)
( 514,457)
Proceeds from sale of tangible assets
188,833
46,634
------------
------------
Net cash used in investing activities
( 1,002,257)
( 467,823)
------------
------------
Cash flows from financing activities
Purchase of own shares
( 9,971)
Proceeds from borrowings
( 828,494)
( 417,867)
Government grant income
2,370
Payments of finance lease liabilities
476,538
38,187
Dividends paid
( 1,241,705)
( 1,031,717)
------------
------------
Net cash used in financing activities
( 1,603,632)
( 1,409,027)
------------
------------
Net (decrease)/increase in cash and cash equivalents
( 44,181)
204,864
Cash and cash equivalents at beginning of year
366,897
162,032
---------
---------
Cash and cash equivalents at end of year
322,716
366,896
---------
---------
Merit Group Holdings Limited
Notes to the Financial Statements
Year ended 31 August 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS, England.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Borrowing costs
All costs are recognised in the profit and loss account in the year in which they are incurred.
Going concern
These accounts have been prepared on the going concern basis as the directors see no reason why the Group and its subsidiaries are unable to continue to meet their debts as they fall due.
Dividends
Dividends to the group's shareholders are recognised when the dividends are approved for payment.
Debtors
Short term debtors are measured at transaction price, less any impairment.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:
(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.
Creditors
Short term creditors are measured at transaction price. Other financial liabilities, including bank loans, are measured at fair value, net of transaction costs.
Consolidation
The financial statements consolidate the financial statements of Merit Group Holdings Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Non-controlling interests
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination.
The proportions of profit or loss and changes in equity allocated to the owners of the parent and to the minority interests are determined on the basis of existing ownership interests and do not reflect the possible exercise or conversion of options or convertible instruments.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
10% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Long leasehold property
-
20% straight line
Short leasehold property
-
5% reducing balance
Plant and machinery
-
20% reducing balance
Fixtures and fittings
-
20% to 33% reducing balance
Motor vehicles
-
25% to 33% reducing balance
Containers
-
10% reducing balance
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell, utilising the average cost method of valuation. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires the directors to make judgments, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year.
The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following judgments have had the most significant impact on amounts recognised in the financial statements:
Tangible fixed assets
The group has recognised tangible fixed assets with a carrying value of £2,829,714 (2022 - £2,090,395) at the reporting date (see note 15). Tangible assets are stated at their cost less provision for depreciation and impairment.
Any tangible assets carried at revalued amounts are recorded at fair value at the date of revaluation and subsequent accumulated depreciation and subsequent accumulated impairment losses.
In order to determine the fair value of tangible assets the company has used a valuation technique based on comparable market data. Valuations are obtained with sufficient regularity to ensure that the carrying value of revalued assets reflects current market conditions.
The company’s accounting policy sets out the approach to calculating depreciation for tangible assets acquired. These estimates are based upon such factors as the expected use of the acquired asset and market conditions. At subsequent reporting dates the directors consider whether there are any factors such as changes in market conditions that indicate a need to reconsider the estimates used.
Where there are indicators that the carrying value of tangible assets may be impaired the company undertakes tests to determine the recoverable amount of assets. These tests require estimates of the fair value of assets less costs to sell and of their value in use. Wherever possible the estimate of the fair value of assets is based upon observable market prices less the incremental cost for disposing of the asset.
4. Turnover
Turnover arises from:
2023
2022
£
£
Sale of goods
10,917,567
8,741,376
Rendering of services
13,762,093
14,315,301
-------------
-------------
24,679,660
23,056,677
-------------
-------------
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
5. Other operating income
2023
2022
£
£
Government grant income
2,370
----
-------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Amortisation of intangible assets
6,463
6,462
Depreciation of tangible assets
286,105
210,133
Gains on disposal of tangible assets
( 23,167)
( 9,033)
Impairment of trade debtors
189,615
66,107
Operating lease rentals
174,070
112,544
Foreign exchange differences
693
696
---------
---------
7. Auditor's remuneration
2023
2022
£
£
Fees payable for the audit of the financial statements
40,795
35,000
--------
--------
8. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2023
2022
No.
No.
Production staff
10
4
Distribution staff
43
42
Administrative staff
31
29
Management staff
16
19
----
----
100
94
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
3,039,952
3,495,585
Social security costs
274,263
252,013
Other pension costs
50,907
48,930
------------
------------
3,365,122
3,796,528
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
50,041
49,767
Company contributions to defined contribution pension plans
1,263
1,249
--------
--------
51,304
51,016
--------
--------
10. Other interest receivable and similar income
2023
2022
£
£
Interest on bank deposits
100
4
Interest receivable on staff loan
2,354
Other interest receivable and similar income
342
----
-------
442
2,358
----
-------
11. Interest payable and similar expenses
2023
2022
£
£
Interest on banks loans and overdrafts
48,319
66,455
Interest on obligations under finance leases and hire purchase contracts
92,955
40,404
Other interest payable and similar charges
4,980
12,500
---------
---------
146,254
119,359
---------
---------
12. Tax on profit
Major components of tax income
2023
2022
£
£
Current tax:
UK current tax income
390,570
546,013
Adjustments in respect of prior periods
( 155)
---------
---------
Total current tax
390,415
546,013
---------
---------
Deferred tax:
Origination and reversal of timing differences
217,406
141,131
---------
---------
Tax on profit
607,821
687,144
---------
---------
Tax recognised as other comprehensive income or equity
The aggregate current and deferred tax relating to items recognised as other comprehensive income or equity for the year was £Nil (2022: £ 29,212 ).
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 21.50 % (2022: 19 %).
2023
2022
£
£
Profit on ordinary activities before taxation
2,157,265
3,370,597
------------
------------
Profit on ordinary activities by rate of tax
463,812
640,413
Adjustment to tax charge in respect of prior periods
( 1,636)
Effect of expenses not deductible for tax purposes
21,768
12,190
Effect of capital allowances and depreciation
69,872
55,314
Effect of different UK tax rates on some earnings
(40,827)
Utilisation of tax losses
( 301,739)
( 320,878)
Unused tax losses
394,935
301,740
Rounding on tax charge
1
------------
------------
Tax on profit
607,821
687,144
------------
------------
13. Dividends
2023
2022
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
1,241,705
1,031,717
------------
------------
14. Intangible assets
Group
Goodwill
£
Cost
At 1 September 2022 and 31 August 2023
64,625
--------
Amortisation
At 1 September 2022
32,348
Charge for the year
6,463
--------
At 31 August 2023
38,811
--------
Carrying amount
At 31 August 2023
25,814
--------
At 31 August 2022
32,277
--------
The company has no intangible assets.
15. Tangible assets
Group
At 1 September 2022
Additions
Disposals
At 31 August 2023
£
£
£
£
Cost
Long leasehold property
229,340
192,835
422,175
Short leasehold property
66,759
23,500
90,259
Plant and machinery
500,371
58,064
( 192,425)
366,010
Fixtures and fittings
48,816
4,139
( 4,378)
48,577
Motor vehicles
1,081,025
420,552
( 116,759)
1,384,818
Containers
1,534,346
492,000
2,026,346
------------
------------
---------
------------
3,460,657
1,191,090
( 313,562)
4,338,185
------------
------------
---------
------------
At 1 September 2022
Charge for the year
Disposals
At 31 August 2023
£
£
£
£
Depreciation
Long leasehold property
182,533
39,196
221,729
Short leasehold property
3,359
2,460
5,819
Plant and machinery
250,599
33,733
( 101,753)
182,579
Fixtures and fittings
32,762
3,763
( 3,750)
32,775
Motor vehicles
610,088
206,953
( 42,393)
774,648
Containers
290,921
290,921
------------
------------
---------
------------
1,370,262
286,105
( 147,896)
1,508,471
------------
------------
---------
------------
At 31 August 2023
At 31 August 2022
£
£
Carrying amount
Long leasehold property
200,446
46,807
Short leasehold property
84,440
63,400
Plant and machinery
183,431
249,772
Fixtures and fittings
15,802
16,054
Motor vehicles
610,170
470,937
Containers
1,735,425
1,243,425
------------
------------
2,829,714
2,090,395
------------
------------
The company has no tangible assets.
Assets held under finance leases or hire purchase agreements are financed on standard commercial terms.
Tangible assets held at valuation
At the year end the directors have revalued their containers, taking into account market value and their current condition. No independent valuers were involved. The revaluation this year did not result in any adjustment to the carrying values.
In respect of tangible assets held at valuation, aggregate cost, depreciation and comparable carrying amount that would have been recognised if the assets had been carried under the historical cost model are as follows:
Group
Containers
£
At 31 August 2023
Aggregate cost
1,485,377
Aggregate depreciation
(290,921)
------------
Carrying value
1,194,456
------------
At 31 August 2022
Aggregate cost
993,376
Aggregate depreciation
(290,921)
---------
Carrying value
702,455
---------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Group
Plant and machinery
Motor vehicles
Containers
Total
£
£
£
£
At 31 August 2023
90,324
521,924
1,100,400
1,712,648
--------
---------
------------
------------
At 31 August 2022
135,026
297,935
608,400
1,041,361
---------
---------
------------
------------
16. Investments
The group has no investments.
Company
Shares in group undertakings
£
Cost
At 1 September 2022
1,518
Additions
10,050
--------
At 31 August 2023
11,568
--------
Impairment
At 1 September 2022 and 31 August 2023
--------
Carrying amount
At 31 August 2023
11,568
--------
At 31 August 2022
1,518
--------
Subsidiaries, associates and other investments
Details of the investments in which the parent company has an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Merit Couriers Limited of Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS
Ordinary
60
Merit Insulation Supplies Limited of Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS
Ordinary
60
Merit Office Installations Limited of Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS
Ordinary
90
Merit Professional Services Limited of Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS
Ordinary
70
Merit Spaces Limited of Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS
Ordinary
85
Merit Careers Limited of Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS
Ordinary
75
VIC UK Insulations Limited of Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS
Ordinary
56
Merit Glazing Solutions Limited of Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS
Ordinary
100
17. Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
1,521,592
1,165,952
Work in progress
1,440
------------
------------
----
----
1,521,592
1,167,392
------------
------------
----
----
18. Debtors
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade debtors
4,927,474
4,919,035
18,365
Amounts owed by group undertakings
224,800
236,326
Prepayments and accrued income
925,906
726,915
Other debtors
3,786,303
3,172,009
167,032
166,909
------------
------------
---------
---------
9,639,683
8,817,959
391,832
421,600
------------
------------
---------
---------
Included within other debtors is £3,399,647 (2022 - £2,853,139) owed to the Group and £166,609 (2022 - £166,909) owed to the Company from connected companies.
19. Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans and overdrafts
494,604
416,707
Trade creditors
2,561,396
1,896,275
60,925
21,549
Invoice discounting finance
3,023,717
2,999,956
Amounts owed to group undertakings
101,179
50,029
Accruals and deferred income
746,911
552,956
61,087
86,515
Corporation tax
400,786
541,326
Social security and other taxes
979,010
566,135
12,356
19,572
Obligations under finance leases and hire purchase contracts
384,110
245,519
Director loan accounts
55,053
20,444
38,778
9,779
Other creditors
1,649,588
1,103,379
594
529
-------------
------------
---------
---------
10,295,175
8,342,697
274,919
187,973
-------------
------------
---------
---------
The bank loans and invoice discounting finance are secured via fixed and floating charges held by the lenders over the Group's assets. The hire purchase and finance lease creditors are secured against the assets to which they relate.
20. Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans and overdrafts
211,334
1,152,334
Obligations under finance leases and hire purchase contracts
861,644
523,697
------------
------------
----
----
1,072,978
1,676,031
------------
------------
----
----
The Coronavirus Business Interruption loan' final repayment is due in June 2026. Interest is payable at 3.25% p.a above base rate. The first 12 months of these loans were interest free.
The bank loans are secured via a fixed and floating charge held by the Bank over the Groups assets.
21. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Not later than 1 year
384,110
245,519
Later than 1 year and not later than 5 years
861,644
523,697
------------
---------
----
----
1,245,754
769,216
------------
---------
----
----
22. Provisions
Group
Deferred tax (note 23)
£
At 1 September 2022
486,454
Additions
217,406
---------
At 31 August 2023
703,860
---------
The company does not have any provisions.
23. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Included in provisions (note 22)
703,860
486,454
---------
---------
----
----
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2023
2022
2023
2022
£
£
£
£
Accelerated capital allowances
568,618
351,212
Revaluation of tangible assets
135,242
135,242
---------
---------
----
----
703,860
486,454
---------
---------
----
----
24. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 50,907 (2022: £ 48,930 ).
25. Government grants
The amounts recognised in the financial statements for government grants are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Recognised in other operating income:
Government grants recognised directly in income
2,370
----
-------
----
----
26. Financial instruments
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.
27. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
1,430
1,430
1,430
1,430
-------
-------
-------
-------
28. Reserves
Profit and loss account - This reserve records retained earnings and accumulated profits and losses. Revaluation reserve - This reserve records the value of fixed asset revaluations and associated deferred tax liabilities.
29. Analysis of changes in net debt
At 1 Sep 2022
Cash flows
At 31 Aug 2023
£
£
£
Cash at bank and in hand
366,897
(44,181)
322,716
Debt due within one year
(682,670)
(251,097)
(933,767)
Debt due after one year
(1,676,031)
603,053
(1,072,978)
------------
---------
------------
( 1,991,804)
307,775
( 1,684,029)
------------
---------
------------
30. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Not later than 1 year
151,385
124,404
Later than 1 year and not later than 5 years
158,135
54,572
---------
---------
----
----
309,520
178,976
---------
---------
----
----
Merit Group Holdings Limited
Notes to the Financial Statements (continued)
Year ended 31 August 2023
31. Directors' advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company and its subsidiary undertakings:
2023
Balance brought forward
Advances/ (credits) to the directors
Balance outstanding
£
£
£
Mr R Ashford
( 6,860)
( 15,974)
( 22,834)
Mr R Ashford
( 7,129)
( 19,022)
( 26,151)
Mr J Ashford
( 6,455)
387
( 6,068)
--------
--------
--------
( 20,444)
( 34,609)
( 55,053)
--------
--------
--------
2022
Balance brought forward
Advances/ (credits) to the directors
Balance outstanding
£
£
£
Mr R Ashford
( 7,791)
931
( 6,860)
Mr R Ashford
( 7,990)
861
( 7,129)
Mr J Ashford
( 7,181)
726
( 6,455)
--------
-------
--------
( 22,962)
2,518
( 20,444)
--------
-------
--------
32. Related party transactions
Group
During the year the group entered into the following transactions with related parties:
Transaction value
Balance owed by/(owed to)
2023
2022
2023
2022
£
£
£
£
Loan to connected companies
3,399,647
2,853,139
Loan from connected companies
( 1,589,413)
( 1,005,604)
Rent paid to entiries under common control
266,113
186,828
( 38,640)
( 27,012)
Sales to connected companies
1,526,246
1,373,764
484,619
362,561
------------
------------
------------
------------
Loans included above, with companies in which the directors have a controlling interest, have been made interest free, they are unsecured and have no fixed repayment schedule. The Group operates from premises owned by a Company controlled by the directors of this Group. Rent is charged to the Group at market rate.
Key management personnel include all persons that have authority and responsibility for planning, directing and controlling the activities of the company. The total compensation paid to key management personnel for services provided to the group was £ 296,353 (2022: £ 264,516 ).
Company
During the year the company entered into the following transactions with related parties:
Transaction value
Balance owed by/(owed to)
2023
2022
2023
2022
£
£
£
£
Loan to group companies
-
-
208,326
236,326
Loan to connected companies
-
-
166,909
166,909
Loan from group company
-
-
( 101,179)
( 50,029)
Sales to connected companies
3,807
585
123
-
-------
----
---------
---------
Loans included above, with companies in which the directors have a controlling interest, have been made interest free, they are unsecured and have no fixed repayment schedule.