Company registration number 02213725 (England and Wales)
SCHADES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SCHADES LIMITED
COMPANY INFORMATION
Directors
J M Hugill
M Bergmann
J H Park
Secretary
S Aldridge
Company number
02213725
Registered office
Brittain Drive
Codnor Gate Industrial Estate
Ripley
Derbyshire
United Kingdom
DE5 3RZ
Auditor
Azets Audit Services
2 Regan Way
Chetwynd Business Park
Chilwell
Nottingham
United Kingdom
NG9 6RZ
SCHADES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
4
Directors' responsibilities statement
3
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 27
SCHADES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

 

Principal activities and business model

The company is engaged in the manufacture and supply of documentation paper rolls and self-adhesive labels for the food retails chains, non-food retailers, office stationery as well as financial institutions and resellers.

 

The company's objective is to firmly assert itself as the UK's largest supplier of thermal paper rolls and self-adhesive labels in support of the Schades Group's continued expansion and growth plans.

 

Business Review

Sales generated in the year increased from £34.1 million to £39.9 million. Excluding sales generated on intercompany activities, sales increased from £32.2 million to £37.1 million. The overall gross profit margin increased from 13.4% in 2022 to 15.3% in 2023, mainly due to the growth in label sales.

 

Gains were made in labels sales during 2023 and this again will be a continued area of sales focus for 2024 allowing us to increase the product portfolio with major customers. It will also open a further market to us with the online retailers.

 

Alongside BRC, ISO 45001 certification was achieved in 2023.

Principal risks and uncertainties

Our principal risks and uncertainties are outlined below. These are the most significant risks that may adversely affect our business strategy and financial position or future performance.

Economic uncertainties

The company is impacted by global economic fluctuations in raw material prices (e.g. paper pulp). A closer association, through the ultimate ownership, enables a more regular assessment of these potential cost drivers with the source of our main raw materials.

 

Whilst raw material is our main cost driver, Brexit and the war in Ukraine are all impacting labour, fuel (and thereby freight) and electricity costs so we are closely monitoring these situations.

Brand Reputation

The company has established a reputation for providing a quality product at a fair price and is the market leader in providing business critical POS products to major retailers on a European wide basis. In order to ensure the company continues to deliver a 'best in class' service proposition there is a continuing evaluation of manufacturing and operational performance to ensure that 98% of all customer orders are delivered on time and complete.

 

The aim for 2024 is to instil this long established POS brand reputation into the label market and to focus on growth of this side of the business, whilst maintaining the solid performance with POS products for the major retailers.

 

Technological changes

The companies business area will be impacted by the use of technology in retail POS applications, along with the increase of internet shopping, and as such the company continues to pursue a diversification strategy in order to develop a product mix and customer base which is less vulnerable to technological developments. The aim is to evolve with the changing retail world, hence the investment in Label production. Schades now complements it’s POS roll offering with labels for, not only product packaging, but also parcel labelling for the increase in demand of internet shopping and click and collect.

Financial key performance indicators

The company monitors and challenges performance to investigate the health and progress of the business. A range of financial measures are in place on a group wide basis which include the sales growth and gross profit margin.

 

In addition the company utilises a series of non-financial KPI's in line with Group objectives, to ensure a high standard of delivery performance, manufacturing and operational excellence.

SCHADES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

On behalf of the board

J M Hugill
Director
17 May 2024
SCHADES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

 

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

 

 

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

SCHADES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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

Results and dividends

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

Ordinary dividends were paid amounting to £3,365,709. The directors do not recommend payment of a further dividend.

Directors

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

J M Hugill
M Bergmann
J H Park
Auditor

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

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

On behalf of the board
J M Hugill
Director
17 May 2024
SCHADES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SCHADES LIMITED
- 5 -
Opinion

We have audited the financial statements of Schades Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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

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

 

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

Responsibilities of directors

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

Auditor's responsibilities for the audit of the financial statements

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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

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

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

 

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

 

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

 

 

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

Use of our report

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

Mr Stephen Harcourt (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
20 May 2024
Chartered Accountants
2 Regan Way
Chetwynd Business Park
Chilwell
Nottingham
United Kingdom
NG9 6RZ
SCHADES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
39,920,476
34,072,721
Cost of sales
(33,805,408)
(29,510,611)
Gross profit
6,115,068
4,562,110
Distribution costs
(1,710,130)
(1,325,611)
Administrative expenses
(706,655)
(641,566)
Operating profit
4
3,698,283
2,594,933
Interest receivable and similar income
8
79,163
59,630
Interest payable and similar expenses
9
(55,026)
(66,339)
Profit before taxation
3,722,420
2,588,224
Tax on profit
10
(850,895)
(545,766)
Profit for the financial year
2,871,525
2,042,458

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

 

SCHADES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
2,871,525
2,042,458
Other comprehensive income
Actuarial (loss)/gain on defined benefit pension schemes
(208,523)
1,140,000
Deferred tax attributable to actuarial loss
52,250
(285,000)
Other comprehensive income for the year
(156,273)
855,000
Total comprehensive income for the year
2,715,252
2,897,458
SCHADES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,787,796
2,407,767
Current assets
Stocks
13
2,961,266
3,257,801
Debtors
14
10,177,395
12,455,157
Cash at bank and in hand
1,652,433
1,336,207
14,791,094
17,049,165
Creditors: amounts falling due within one year
15
(9,652,433)
(10,981,175)
Net current assets
5,138,661
6,067,990
Total assets less current liabilities
7,926,457
8,475,757
Creditors: amounts falling due after more than one year
16
(821,986)
(858,561)
Provisions for liabilities
Deferred tax liability
19
442,450
321,718
Defined benefit pension liability
21
406,000
389,000
(848,450)
(710,718)
Net assets
6,256,021
6,906,478
Capital and reserves
Called up share capital
20
1,333,000
1,333,000
Profit and loss reserves
4,923,021
5,573,478
Total equity
6,256,021
6,906,478
The financial statements were approved by the board of directors and authorised for issue on 17 May 2024 and are signed on its behalf by:
J M Hugill
Director
Company Registration No. 02213725
SCHADES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
1,333,000
2,676,020
4,009,020
Year ended 31 December 2022:
Profit for the year
-
2,042,458
2,042,458
Other comprehensive income:
Actuarial gains on defined benefit plans
-
1,140,000
1,140,000
Tax relating to other comprehensive income
-
(285,000)
(285,000)
Total comprehensive income for the year
-
2,897,458
2,897,458
Balance at 31 December 2022
1,333,000
5,573,478
6,906,478
Year ended 31 December 2023:
Profit for the year
-
2,871,525
2,871,525
Other comprehensive income:
Actuarial gains on defined benefit plans
-
(208,523)
(208,523)
Tax relating to other comprehensive income
-
52,250
52,250
Total comprehensive income for the year
-
2,715,252
2,715,252
Dividends
11
-
(3,365,709)
(3,365,709)
Balance at 31 December 2023
1,333,000
4,923,021
6,256,021
SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Schades Limited is a private company limited by shares incorporated in England and Wales. The registered office is Brittain Drive, Codnor Gate Industrial Estate, Ripley, Derbyshire, United Kingdom, DE5 3RZ.

1.1
Accounting convention

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

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

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

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

 

 

The financial statements of the company are consolidated in the financial statements of Schades A/S. These consolidated financial statements are available from Entiveris - og Selskabsstynelsen, Kampmannsgade 1, DK-1780, Compentigiagon, Denmark.

1.2
Going concern

At the balance sheet date, the company had net assets of £true6,256,021 (2022 - £6,906,478 ). This is reflective of the reliable performance of the company and wider group across the financial year. The Company has seen an uplift in turnover due to cost increases that have been successfully passed through to customers, along with a very healthy forward order book (£9.4m). These cost increase are expected to level off. Continued growth in label sales will ensure diversification continues and budgeted sales targets are met.

 

In assessing the appropriateness of the going concern assumption, the Directors have reviewed detailed cash flow forecasts, considering all reasonably foreseeable potential scenarios and uncertainties in relation to revenue and expenditure for a period of at least 12 months from the date these financial statements have been approved. Based on these cash flow forecasts prepared the Directors have reasonable expectation that the company can meet its liabilities as they fall due, and the Directors have therefore concluded that it is appropriate for the financial statements to be prepared on the going concern basis.

SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.3
Turnover

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

 

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

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Tangible fixed assets

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

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

Freehold land and buildings
25 years
Plant and equipment
5 - 12 years
Fixtures and fittings
3 - 5 years

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

1.5
Impairment of fixed assets

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

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

 

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

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

SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

Cost is calculated using the average cost method.

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

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand.

1.8
Financial instruments
Other financial assets

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

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Other financial liabilities

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

Derecognition of financial liabilities

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

SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.9
Equity instruments

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

1.10
Taxation

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

Current tax

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

Deferred tax

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

 

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

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense,

 

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

 

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

1.12
Retirement benefits

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

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

 

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

 

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

1.13
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Judgements and key sources of estimation uncertainty

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

 

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

 

The directors have reviewed the estimates and underlying assumptions used in preparing these accounts and, in their opinion, they key estimates are:

 

Defined Benefit Plans

The company has obligations to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including; life expectancy, salary increases, asset valuations and the discount rates on corporate bonds. Management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends. The assumptions used are shown in note 21 and the year end provision is shown on the face of the balance sheet.

SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales of goods
39,920,476
34,072,721
2023
2022
£
£
Other significant revenue
Interest income
79,163
59,630
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
37,144,408
32,175,169
Rest of European Union
2,776,068
1,897,552
39,920,476
34,072,721
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
-
0
273,343
Depreciation of owned tangible fixed assets
494,003
472,083
Profit on disposal of intangible assets
(2,462)
-
Operating lease charges
26,920
15,227
5
Employees

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

2023
2022
Number
Number
Production
47
41
Administration
8
9
Total
55
50
SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,937,418
1,649,782
Social security costs
184,917
162,147
Pension costs
162,078
73,024
2,284,413
1,884,953
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
127,213
169,600
Company pension contributions to defined contribution schemes
94,920
7,680
222,133
177,280
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
127,213
169,600
Company pension contributions to defined contribution schemes
94,920
7,680
7
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
34,650
33,000
34,650
33,000
For other services
Accounts preparation
1,650
1,500
Tax compliance
5,250
4,200
6,900
5,700
SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest receivable from group companies
79,163
59,630
9
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
8,289
5,010
Interest on finance leases and hire purchase contracts
32,737
32,329
Net interest on the net defined benefit liability
14,000
29,000
55,026
66,339
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
714,637
373,351
Adjustments in respect of prior periods
(36,724)
5,051
Total current tax
677,913
378,402
Deferred tax
Origination and reversal of timing differences
172,931
126,142
Adjustment in respect of prior periods
51
41,222
Total deferred tax
172,982
167,364
Total tax charge
850,895
545,766
SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 21 -

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

2023
2022
£
£
Profit before taxation
3,722,420
2,588,224
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
875,513
491,763
Tax effect of expenses that are not deductible in determining taxable profit
1,822
11,365
Adjustments in respect of prior years
(36,724)
5,051
Effect of change in corporation tax rate
-
0
30,274
Remeasurement of deferred tax for chnage in tax rates
10,233
-
0
Deferred tax adjustments in respect of prior years
51
41,222
Super deduction allowances
-
0
(33,909)
Taxation charge for the year
850,895
545,766

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Actuarial differences recognised as other comprehensive income
(52,250)
285,000

On the 3rd March 2021 the UK government announced an intention to increase the UK corporation tax rate to 25% with effect from 1 April 2023. Upon enactment this has impacted the value of UK deferred tax balances and the tax charged on UK profits generated in 2023 and subsequently.

11
Dividends
2023
2022
£
£
Final paid
3,365,709
-
0
SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
12
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Computers
Total
£
£
£
£
Cost
At 1 January 2023
1,169,848
8,263,713
251,675
9,685,236
Additions
-
0
852,340
21,692
874,032
Disposals
-
0
(210,262)
-
0
(210,262)
At 31 December 2023
1,169,848
8,905,791
273,367
10,349,006
Depreciation and impairment
At 1 January 2023
956,841
6,123,071
197,557
7,277,469
Depreciation charged in the year
6,779
470,378
16,846
494,003
Eliminated in respect of disposals
-
0
(210,262)
-
0
(210,262)
At 31 December 2023
963,620
6,383,187
214,403
7,561,210
Carrying amount
At 31 December 2023
206,228
2,522,604
58,964
2,787,796
At 31 December 2022
213,007
2,140,642
54,118
2,407,767

 

13
Stocks
2023
2022
£
£
Raw materials and consumables
2,653,248
2,555,391
Finished goods
308,018
702,410
2,961,266
3,257,801
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
8,089,317
9,198,474
Amounts owed by group undertakings
8,936
1,575,174
Other debtors
75,466
273,864
Prepayments
75,736
72,126
8,249,455
11,119,638
SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Debtors
(Continued)
- 23 -
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
1,927,940
1,335,519
Total debtors
10,177,395
12,455,157
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
5,844
611,973
Obligations under finance leases
18
336,664
307,039
Trade creditors
6,764,258
8,214,833
Amounts owed to group undertakings
214,762
114,062
Corporation tax
714,638
515,621
Other taxation and social security
825,167
964,859
Other creditors and accruals
791,100
252,788
9,652,433
10,981,175
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
821,986
858,561
17
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
5,844
611,973
Payable within one year
5,844
611,973
SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
336,664
307,039
In two to five years
821,986
858,561
1,158,650
1,165,600

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

19
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
572,454
451,638
Tax losses
(26,052)
(32,086)
Retirement benefit obligations
(52,250)
(97,302)
Short term timing differences
(51,702)
(532)
442,450
321,718
2023
Movements in the year:
£
Liability at 1 January 2023
321,718
Charge to profit or loss
172,982
Credit to other comprehensive income
(52,250)
Liability at 31 December 2023
442,450

 

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
1,333,000
1,333,000
1,333,000
1,333,000
SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
162,078
73,024

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

Defined benefit schemes

The company operates a defined benefit scheme for qualifying employees. The company has adopted Financial Reporting Standard 102 "Retired Benefits" in these financial statements.

 

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 1 April 2018 and has been updated for Financial Reporting Standard 102 to 31 December 2022 for the purposes of these financial statements. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.

2023
2022
Key assumptions
%
%
Discount rate
5.0
5.0
Retail Price Inflation (RPI)
3.1
3.1
Pension increases - RPI maximum 5%
3.1
3.1
Mortality assumptions
2023
2022

Assumed life expectations on retirement at age 65:

Years
Years
Current pensioner aged 65
- Males
87.7
87.6
- Females
90.3
90.2
Future retiree upon reaching 65
- Males
89.9
89.8
- Females
92.6
92.5
2023
2022

Amounts recognised in the profit and loss account

£
£
Net interest on net defined benefit liability/(asset)
14,000
29,000
SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Retirement benefit schemes
(Continued)
- 26 -
2023
2022

Amounts taken to other comprehensive income

£
£
Actual return on scheme assets
(214,000)
1,621,000
Less: calculated interest element
321,000
148,000
Return on scheme assets excluding interest income
107,000
1,769,000
Actuarial changes related to obligations
101,523
(2,909,000)
Total costs/(income)
208,523
(1,140,000)

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

2023
2022
£
£
Present value of defined benefit obligations
6,491,000
6,907,000
Fair value of plan assets
(6,535,000)
(6,518,000)
Deficit in scheme
406,000
389,000
2023

Movements in the present value of defined benefit obligations

£
Liabilities at 1 January 2023 and 31 December 2023
406,000

The defined benefit obligations arise from plans which are wholly or partly funded.

2023

Movements in the fair value of plan assets

£
Fair value of assets at 1 January 2023 and 31 December 2023
(416,000)

The actual return on plan assets was £ (214,000) (2022 - £1,621,00).

SCHADES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Retirement benefit schemes
(Continued)
- 27 -
2023
2022

Fair value of plan assets at the reporting period end

£
£
Equity instruments
1,623,000
1,903,000
Bonds
754,000
549,000
Insured pension
3,935,000
3,499,000
Cash
223,000
567,000
6,535,000
6,518,000
22
Capital commitments

As at 31 December 2023, the Company had contracted to purchase Lantech Packing Lines amounting to £1,154,524 (2022: £1,154,524). The amount due for payment as at the year end date was £832,128 (2022: £1,154,524)

23
Ultimate controlling party

At the year end the immediate parent undertaking of the company was Harbour Investments, a German registered investment fund.

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