Company registration number 01362580 (England and Wales)
GARDNER & SCARDIFIELD LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
GARDNER & SCARDIFIELD LIMITED
COMPANY INFORMATION
Directors
Mr N D Neale
Mrs L Neale
Mrs S M McCann
Secretary
Mr N D Neale
Company number
01362580
Registered office
2-12 Penhill Road
Lancing
West Sussex
BN15 8HJ
Auditor
Sumer Audit
Amelia House
Crescent Road
Worthing
West Sussex
BN11 1RL
Business address
2-12 Penhill Road
Lancing
West Sussex
BN15 8HJ
GARDNER & SCARDIFIELD LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
GARDNER & SCARDIFIELD LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
During 2023 the builders merchant industry has been affected by the uncertainty in the economy, increases in inflation, stock shortages and a contraction in the construction industry. Margins are very competitive; the retail side of the business has been affected by the demise of the high street and the cost-of-living crisis.
In 2024 trading for the first 3 months has been challenging mainly due to the uncertainty of the economy, both UK and world events, which has significantly affected the construction industry, and the inclement weather which has hindered the building trade. Trade has improved in April, and we hope to see this trend continue for the rest of the year.
We should continue to operate profitably. We are reviewing our operating costs for savings and hope to improve our margins. The board will look to continue to grow, at a rate sustainable with the constraints we have being cash, supplies, staff, economy.
Key performance indicators
Our sales increased by £952k. The company's gross profit increased during the year by £45k, the gross profit margin was 35.17% compared to 36.55% for 2022.
The profit on ordinary activities before taxation stands at £388k compared to £472k in 2022. Operating costs have increased by 2.5%, mainly attributable to wages and salary costs.
The net assets at the year-end have increased from £5,998k to £6,128k.
Principal risks and uncertainties
Management of risk remains critical for the company in delivering growth in 2024. The risk of competition is managed by monitoring competitor prices. The principal risks and uncertainties facing the company are being able to remain competitive and management liquidity, especially in the current economic situation. Risks are also mentioned in the directors' report.
Mr N D Neale
Director
27 June 2024
- 1 -
GARDNER & SCARDIFIELD LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of builders' merchants.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr N D Neale
Mrs L Neale
Mrs S M McCann
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £140,000 (2022 - £120,000).
Dividends totalling £80,000 have been declared and paid since the reporting date.
Financial instruments
Liquidity risk
The company operates a range of policies to ensure there is sufficient liquidity and cash to meet its liabilities as they fall due. Cash balances are closely monitored to ensure that liabilities can be met as arising.
Interest rate risk
The company seeks to limit the interest rate risk exposure of the company, which arises on variable rate mortgages, by regularly monitoring interest rate movements and taking appropriate action where necessary. It also uses fixed rate hire purchase agreements to acquire the majority of plant and machinery.
Credit risk
The company operates a number of policies and procedures designed to mitigate credit risk. In particular, before opening a new sales credit account with a customer, a detailed credit review is undertaken to determine whether or not, in the opinion of the directors, the customer has the ability to meet its debts as they fall due.
Future developments
The directors have presented the future developments of the company in the Strategic Report.
Auditor
The auditor, Sumer Audit, 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
Mr N D Neale
Director
27 June 2024
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GARDNER & SCARDIFIELD LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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.
- 3 -
GARDNER & SCARDIFIELD LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GARDNER & SCARDIFIELD LIMITED
Opinion
- 4 -
We have audited the financial statements of Gardner & Scardifield Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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:
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.
GARDNER & SCARDIFIELD LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GARDNER & SCARDIFIELD LIMITED
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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, 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.
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.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework in which the company operates, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the company's policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud; and
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: compliance with the UK Companies Act.
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Challenging assumptions and judgments made by management in their significant accounting estimates, in particular in relation to stock provisions; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
- 5 -
GARDNER & SCARDIFIELD LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GARDNER & SCARDIFIELD LIMITED
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planed and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
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.
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.
Kristina Perry FCCA (Senior Statutory Auditor)
For and on behalf of Sumer Audit
27 June 2024
Chartered Accountants
Statutory Auditor
Worthing
Sumer Audit is the trading name of Sumer Auditco Limited
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GARDNER & SCARDIFIELD LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
2023
2022
Notes
£
£
Revenue
3
22,028,293
21,076,233
Cost of sales
(14,279,936)
(13,372,598)
Gross profit
7,748,357
7,703,635
Administrative expenses
(7,495,755)
(7,247,990)
Other operating income
238,322
103,887
Operating profit
4
490,924
559,532
Investment income
27,591
7,353
Finance costs
7
(130,257)
(94,678)
Profit before taxation
388,258
472,207
Tax on profit
8
(117,842)
(92,524)
Profit for the financial year
270,416
379,683
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
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GARDNER & SCARDIFIELD LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
11
5,504,609
3,797,613
Investments
12
115,001
50,001
5,619,610
3,847,614
Current assets
Inventories
15
2,598,001
2,749,306
Trade and other receivables
16
2,536,825
2,423,920
Cash and cash equivalents
877,355
1,706,535
6,012,181
6,879,761
Current liabilities
17
(3,152,666)
(3,659,015)
Net current assets
2,859,515
3,220,746
Total assets less current liabilities
8,479,125
7,068,360
Non-current liabilities
18
(2,085,202)
(824,453)
Provisions for liabilities
Deferred tax liability
21
265,600
246,000
(265,600)
(246,000)
Net assets
6,128,323
5,997,907
Equity
Called up share capital
23
1,000
1,000
Retained earnings
6,127,323
5,996,907
Total equity
6,128,323
5,997,907
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 27 June 2024 and are signed on its behalf by:
Mr N D Neale
Director
Company registration number 01362580 (England and Wales)
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GARDNER & SCARDIFIELD LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 January 2022
1,000
5,737,224
5,738,224
Year ended 31 December 2022:
Profit and total comprehensive income
-
379,683
379,683
Dividends
9
-
(120,000)
(120,000)
Balance at 31 December 2022
1,000
5,996,907
5,997,907
Year ended 31 December 2023:
Profit and total comprehensive income
-
270,416
270,416
Dividends
9
-
(140,000)
(140,000)
Balance at 31 December 2023
1,000
6,127,323
6,128,323
- 9 -
GARDNER & SCARDIFIELD LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
466,208
498,146
Interest paid
(130,257)
(94,678)
Income taxes paid
(71,242)
(216,824)
Net cash inflow from operating activities
264,709
186,644
Investing activities
Purchase of property, plant and equipment
(1,795,322)
(641,407)
Proceeds from disposal of property, plant and equipment
78,620
42,367
Purchase of joint ventures
(15,000)
Purchase of investments
(50,000)
(50,000)
Interest received
27,591
7,353
Net cash used in investing activities
(1,754,111)
(641,687)
Financing activities
Proceeds from new bank loans
1,750,000
Repayment of bank loans
(669,492)
(195,719)
Payment of finance leases obligations
(280,286)
(247,161)
Dividends paid
(140,000)
(120,000)
Net cash generated from/(used in) financing activities
660,222
(562,880)
Net decrease in cash and cash equivalents
(829,180)
(1,017,923)
Cash and cash equivalents at beginning of year
1,706,535
2,724,458
Cash and cash equivalents at end of year
877,355
1,706,535
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GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
Company information
Gardner & Scardifield Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2-12 Penhill Road, Lancing, West Sussex, BN15 8HJ.
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 £1.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
The financial statements present information about the company as an individual entity and not about its group. The company has taken advantage of the exemption under sections 402 and 405 of the Companies Act 2006 to exclude the dormant subsidiary on the grounds that it is not material.
1.2
Going concern
The financial statements have been prepared on a going concern basis. The directors have considered relevant information, including future cash flow forecasts and the impact of subsequent events in making their assessment. true
Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty in relation to the appropriateness of continuing to adopt the going concern basis in preparing the annual report and accounts.
1.3
Revenue
Revenue represents amounts receivable for goods net of VAT and trade discounts. Revenue is recognised when the company obtains the right to consideration in exchange for the goods and services provided, which occurs on despatch or collection by the customer.
1.4
Property, plant and equipment
Property, plant and equipment 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 (excluding land) less their residual values over their useful lives on the following bases:
Land and buildings
Freehold buildings - straight line over 50 years
Leasehold improvements
Leasehold improvements - straight line over 25 years
Plant and machinery
15% diminishing balance basis per annum
Fixtures, fittings & equipment
25% diminishing balance basis per annum
Motor vehicles
25% diminishing balance basis per annum
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.
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GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
1.5
Non-current investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.6
Impairment of non-current assets
- 12 -
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.
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 is estimated to be less than its carrying amount, the carrying amount of the asset 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.
1.7
Inventories
Inventory is valued at the lower of cost and estimated selling price less costs on a FIFO (first in, first out) basis having made due consideration for slow moving and obsolete items.
1.8
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade debtors and other receivables, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.
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.
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
Impairment of financial assets
Financial assets 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.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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.
1.10
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.
1.11
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.
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GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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 initially 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 statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the income statement so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Assets held under finance leases are depreciated over the shorter of the assets leased term and its useful life. If there is a reasonable certainty that ownership of the asset will be obtained by the end of the lease term, the asset is depreciated over its useful life.
- 14 -
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 systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Inventories
The directors have made key assumptions in determining the appropriate impairment provision against inventory items held at the end of the reporting period. This provision includes significant estimates in relation to the expected obsolescence of stock across all branches, anticipated supplier rebates, and slow moving product lines that have not sold within 6 or 12 months of the year-end. At the financial reporting date, the impairment provision made against inventories was £2,068,494 (2022 - £2,307,821)
3
Revenue
An analysis of the company's revenue is as follows:
2023
2022
£
£
Revenue analysed by class of business
Sales of goods
22,028,293
21,076,233
All revenue is derived from the sale of goods in the United Kingdom.
2023
2022
£
£
Other significant income
Grants received
-
1,599
Rental income
153,507
88,563
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(1,599)
Fees payable to the company's auditor for the audit of the company's financial statements
17,500
16,500
Depreciation of owned property, plant and equipment
182,505
153,747
Depreciation of property, plant and equipment held under finance leases
177,600
174,103
Loss/(profit) on disposal of property, plant and equipment
9,407
(3,470)
Operating lease charges
349,406
392,459
- 15 -
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
24
24
Sales and distribution
138
145
Total
162
169
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,357,305
4,150,391
Social security costs
414,745
411,703
Pension costs
196,383
150,574
4,968,433
4,712,668
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
126,548
150,313
Company pension contributions to defined contribution schemes
83,129
42,066
209,677
192,379
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
The directors are also considered to represent the key management personnel of the company.
7
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
97,319
28,267
Other finance costs:
Interest on finance leases and hire purchase contracts
31,352
20,578
Other interest
1,586
45,833
130,257
94,678
- 16 -
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
99,000
72,000
Adjustments in respect of prior periods
(758)
1,824
Total current tax
98,242
73,824
Deferred tax
Origination and reversal of timing differences
19,600
18,700
Total tax charge
117,842
92,524
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
388,258
472,207
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
91,318
89,719
Tax effect of expenses that are not deductible in determining taxable profit
14,643
10,025
Tax effect of income not taxable in determining taxable profit
(14,721)
Adjustments in respect of prior years
(758)
Permanent capital allowances in excess of depreciation
(221)
(17,506)
Depreciation on assets not qualifying for tax allowances
13,751
7,325
Adjustments in respect of financial assets
1,824
Other permanent differences
10,991
Deferred tax adjustments in respect of prior years
700
Effect of change in local deferred tax rate
1,089
4,700
Rounding and other adjustments
1,050
(3,563)
Taxation charge for the year
117,842
92,524
9
Dividends
2023
2022
£
£
Final paid
140,000
120,000
- 17 -
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Intangible fixed assets
Positive goodwill
Negative goodwill
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
170,849
(104,243)
66,606
Amortisation and impairment
At 1 January 2023 and 31 December 2023
170,849
(104,243)
66,606
Carrying amount
At 31 December 2023
At 31 December 2022
11
Property, plant and equipment
Land and buildings
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
3,266,355
20,947
780,688
707,597
1,370,071
6,145,658
Additions
1,708,440
49,066
82,392
315,230
2,155,128
Disposals
(161,539)
(110,290)
(271,829)
At 31 December 2023
4,974,795
20,947
668,215
789,989
1,575,011
8,028,957
Depreciation and impairment
At 1 January 2023
602,971
838
384,449
526,270
833,517
2,348,045
Depreciation charged in the year
59,574
838
60,404
54,440
184,849
360,105
Eliminated in respect of disposals
(123,892)
(59,910)
(183,802)
At 31 December 2023
662,545
1,676
320,961
580,710
958,456
2,524,348
Carrying amount
At 31 December 2023
4,312,250
19,271
347,254
209,279
616,555
5,504,609
At 31 December 2022
2,663,384
20,109
396,239
181,327
536,554
3,797,613
- 18 -
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Property, plant and equipment
(Continued)
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
210,320
227,870
Motor vehicles
508,089
464,538
718,409
692,408
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
1
1
Investments in joint ventures
14
15,000
Other investments
100,000
50,000
115,001
50,001
Movements in non-current investments
Shares in subsidiaries and joint ventures
Other investments
Total
£
£
£
Cost or valuation
At 1 January 2023
1
50,000
50,001
Additions
15,000
50,000
65,000
At 31 December 2023
15,001
100,000
115,001
Carrying amount
At 31 December 2023
15,001
100,000
115,001
At 31 December 2022
1
50,000
50,001
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Invictor Limited
See note (a)
Dormant
Ordinary
100.00
- 19 -
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Subsidiaries
(Continued)
Registered office addresses (all UK unless otherwise indicated):
(a)
The registered office of Invictor Limited is 2-16 Penhill Road, Lancing, West Sussex, BN15 8HJ
14
Joint ventures
Details of the company's joint ventures at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of share
% Held
held
Direct
Indirect
Tamp & Grind (Lancing) Ltd
See note (a)
Coffee shop
Ordinary
-
50.00
(a) The registered office of Tamp & Grind (Lancing) Ltd is 2-16 Penhill Road, Lancing, West Sussex, BN15 8HJ.
15
Inventories
2023
2022
£
£
Finished goods and goods for resale
2,598,001
2,749,306
The replacement cost of stock as at 31 December 2023 is estimated at £4,668,000 (31 December 2022 - £5,057,000).
16
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
1,946,804
1,966,507
Other receivables
83,706
34,710
Prepayments and accrued income
506,315
422,703
2,536,825
2,423,920
17
Current liabilities
2023
2022
Notes
£
£
Bank loans
19
77,752
176,797
Obligations under finance leases
20
221,919
223,595
Trade payables
2,240,956
2,425,691
Corporation tax
99,000
72,000
Other taxation and social security
333,861
313,706
Other payables
22,588
50,966
Accruals and deferred income
156,590
396,260
3,152,666
3,659,015
- 20 -
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Current liabilities
(Continued)
Net obligations under hire purchase contracts are secured by fixed charges on the assets concerned.
18
Non-current liabilities
2023
2022
Notes
£
£
Bank loans and overdrafts
19
1,663,319
483,766
Obligations under finance leases
20
421,883
340,687
2,085,202
824,453
Net obligations under hire purchase contracts are secured by fixed charges on the assets concerned.
Amounts included above which fall due after five years are as follows:
Payable by instalments
1,461,787
109,187
19
Borrowings
2023
2022
£
£
Bank loans
1,741,071
660,563
Payable within one year
77,752
176,797
Payable after one year
1,663,319
483,766
The bank loans and overdrafts are secured by first legal charges over the company's freehold land and buildings.
The bank loans include various mortgages, with interest rates ranging from 5.95% to 6.99%, the latter being the Bank of England base rate plus 1.74%. The repayment terms range from the reporting date to February 2043.
20
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
221,919
223,595
In two to five years
421,883
340,687
643,802
564,282
The lessee is obligated to make capital and interest payments as they become due, for the duration of the finance lease contracts.
- 21 -
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Deferred taxation
The following are the major deferred tax liabilities recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
265,600
246,000
2023
Movements in the year:
£
Liability at 1 January 2023
246,000
Charge to profit or loss
19,600
Liability at 31 December 2023
265,600
The directors have considered the deferred tax liabilities noted above and concluded that it is not possible to state the estimated liabilities which will reverse within the next 12 months. This is due to the level of reversal being dependant on events which are not yet known.
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
196,383
150,574
The company contributes to a personal pension scheme on behalf of the directors and employees. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund.
23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
1000 ordinary shares of £1 each
1,000
1,000
1,000
1,000
Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights.
- 22 -
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, some of which include break clauses, which fall due as follows:
2023
2022
£
£
Within one year
330,576
338,305
Between two and five years
585,484
369,427
In over five years
45,250
56,125
961,310
763,857
25
Events after the reporting date
Dividends totalling £80,000 have been declared and paid since the balance sheet date.
26
Related party transactions
During the year, the company paid rent of £20,000 (2022 - £20,000) to the shareholders' self-invested personal pension. At the balance sheet the company owed £18,677 (2022- £47,208) to shareholders of the company which is included in other payables. The balance is payable on demand.
During the year, the company entered into a joint venture in Tamp & Grind (Lancing) Ltd. At the balance sheet date the company is owed £12,828 from Tamp & Grind (Lancing) Ltd, which is included within other receivables.
27
Directors' transactions
Directors received dividends from the company during the year of £140,000 (2022 - £120,000). At the reporting date the amount owed to directors amounted to £18,677 (2022 - £47,208).
- 23 -
GARDNER & SCARDIFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
28
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
270,416
379,683
Adjustments for:
Taxation charged
117,842
92,524
Finance costs
130,257
94,678
Investment income
(27,591)
(7,353)
Loss/(gain) on disposal of property, plant and equipment
9,407
(3,470)
Depreciation and impairment of property, plant and equipment
360,105
327,850
Movements in working capital:
Decrease/(increase) in inventories
151,305
(193,124)
Increase in trade and other receivables
(112,905)
(64,312)
Decrease in trade and other payables
(432,628)
(128,330)
Cash generated from operations
466,208
498,146
29
Analysis of changes in net funds/(debt)
1 January 2023
Cash flows
New finance leases
31 December 2023
£
£
£
£
Cash at bank and in hand
1,706,535
(829,180)
-
877,355
Borrowings excluding overdrafts
(660,563)
(1,080,508)
-
(1,741,071)
Obligations under finance leases
(564,282)
280,286
(359,806)
(643,802)
481,690
(1,629,402)
(359,806)
(1,507,518)
- 24 -
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