Company registration number 08265471 (England and Wales)
APELSON APPLIANCES UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
APELSON APPLIANCES UK LIMITED
COMPANY INFORMATION
Directors
J J Morales Del Pino
M E Johnson
Company number
08265471
Registered office
Good Hope Close
Normanton Industrial Estate
Normanton
West Yorkshire
United Kingdom
WF6 1TR
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
APELSON APPLIANCES UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 34
APELSON APPLIANCES UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Review of the business

The high inflation that begin increasing throughout 2022 had little impact on the business initially, until the Bank of England started putting up interest rates to try and combat the inflation. The interest raises started to impact the consumer spending by increasing the cost of mortgages, this in turn slowed down the housing market with less houses being bought and sold. The reduced activity in the housing market along with the increased general cost of living put the kitchen appliance market in decline.

Despite the decline in the market size Apelson increased B2B revenue by 15%. Service revenue with third parties also increased by 5%.

The business undertook a review of its approach to the B2C market. This resulted in a change to the pricing strategy in order to reduce friction with the B2B channels: this resulted in a drop in revenue of over 50% in that business segment.

As a result, overall revenue decreased by 9% in 2023 v 2022, with the increased B2B revenue failing to offset the reduction in B2C.

Gross margin on product sales reduced by 2.5 p.p. as a result of the reduced sales mix between B2C and B2B. External storage and handling costs reduced, and the advertising and processing costs related to B2C transactions reduced as a result of the decreased activity. Costs related to after sales servicing also reduced leading to an increase in gross profit of around £550k to £5.5m.

A new long-term lease was signed in June 2023 on a fully refurbished site close to the existing operations, which will significantly reduce the cost of storage and handling of appliances across the long term. There were, however, exceptional one-off costs incurred in bringing the site into operation of £0.5m in relation to dual operation, increased staff requirements to consolidate and move stock and transportation between sites.

The Group’s balance sheet continues to show a strong position with net assets amounting to £3.1m (2022 - £3.2m).

The Group recognises the importance of maintaining good business relationships with its suppliers and remains committed to paying all invoices in accordance with agreed terms.

Despite the current environmental uncertainties, the long term future remains encouraging and the Directors expect that the financial results for 2024 will continue to show a positive outlook.

APELSON APPLIANCES UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

Risk is an inevitable part of business. Management monitors the key risks that the business faces and take action to mitigate those risks.

Economic risk

We have seen a large increase in inflation in the UK economy and along with increased interest rates has combined to limit the spending capacity of consumers. The business is exposed to different aspects of consumer spending (capital / refurbishment, discretionary / replacement, and necessary / break down and management feel that through the diversification of the customer base and sales channels this provides a mitigation to this risk.

Strategic risk

We continue to invest in new opportunities and areas of growth in order to diversify our offering. Significant work is undertaken to develop and source products that are at the right price points and market position for our customers. Management closely monitor consumer trends and preferences in order to maintain stock of relevant products for our customers.

Manufacture and supply chain risk

The business has developed associations with several manufacturers both near shore and in the Far East and has a broad portfolio of products which helps reduce the risk around supply issues and delays. Along with holding increased stock levels throughout 2022 and 2023, the business has developed relationships with transport businesses to aid in the fluid movement of goods.

Financial risk

The principal financial risk is having the funds available at the right time to meet business needs. This risk is managed by forecasting cash flow to ensure that adequate funds are available to meet liabilities. The business has working capital facilities in place to fund operations and growth opportunities.

Product purchases are largely denominated in foreign currency and the management team utilise the cash flow forecast to assess the timing and amount of foreign currency requirements. Forward contracts are utilised to cover a portion of the foreign currency exposure in order to provide greater certainty on the cash requirement to settle the liabilities. Payments are also made using spot rates. The business does not have a policy to buy forward or hold foreign currency speculatively. Currency forward contracts are hedge accounted for at fair value.

Business interruption

A significant disaster at our operational sites would have a substantial impact on our business. To mitigate this risk, our systems are cloud based and remotely accessible by staff meaning neither a loss of data or lack of access by staff. Stock is also at multiple sites which would minimise disruption on supply.

Key performance indicators

The main financial key performance indicators that are monitored by the management team are revenue, product gross margin and EBITDA. Overall revenue decreased by £2.0m (9%), this was driven by a £4.0m decrease in B2C revenue only partially offset by an increase of £2.0m in B2B revenue. Product gross margin reduced to c32% as a result of the lower B2C sales with the B2C generating a higher margin. EBITDA was £0.5m after incurring exceptional costs of £0.5m related to the opening of the new warehouse.

On behalf of the board

M E Johnson
Director
11 September 2024
APELSON APPLIANCES UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Principal activities

The principal activity of the company and group continued to be that of the importation and distribution of kitchen appliances and the provision of after sales support services.

Results and dividends

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

No ordinary dividends were paid. 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 J Morales Del Pino
M E Johnson
Auditor

Azets Audit Services Limited were appointed as auditor to the group and 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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
M E Johnson
Director
11 September 2024
APELSON APPLIANCES UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group 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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

APELSON APPLIANCES UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF APELSON APPLIANCES UK LIMITED
- 5 -
Opinion

We have audited the financial statements of Apelson Appliances UK Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information 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:

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

In the light of the knowledge and understanding of the group and the parent company and their 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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.

APELSON APPLIANCES UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF APELSON APPLIANCES UK 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.

Martin Davey (Senior Statutory Auditor)
For and on behalf of Azets Audit Services Limited
11 September 2024
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
APELSON APPLIANCES UK LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
21,177,966
23,145,088
Cost of sales
(15,692,481)
(18,210,192)
Gross profit
5,485,485
4,934,896
Distribution costs
(940,049)
(1,228,896)
Administrative expenses
(4,385,733)
(3,711,964)
Operating profit/(loss)
4
159,703
(5,964)
Interest receivable and similar income
8
201,510
174,238
Interest payable and similar expenses
9
(455,361)
(314,665)
Loss before taxation
(94,148)
(146,391)
Tax on loss
10
(48,062)
(22,594)
Loss for the financial year
(142,210)
(168,985)
Other comprehensive income
Currency translation gain taken to retained earnings
114,556
68,410
Total comprehensive income for the year
(27,654)
(100,575)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
APELSON APPLIANCES UK LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
11
134,388
235,980
Other intangible assets
11
996,292
782,621
Total intangible assets
1,130,680
1,018,601
Tangible assets
12
682,363
465,928
1,813,043
1,484,529
Current assets
Stocks
15
8,919,348
10,399,735
Debtors
16
9,497,609
8,601,269
Cash at bank and in hand
198,400
157,551
18,615,357
19,158,555
Creditors: amounts falling due within one year
19
(15,670,265)
(15,558,989)
Net current assets
2,945,092
3,599,566
Total assets less current liabilities
4,758,135
5,084,095
Creditors: amounts falling due after more than one year
20
(951,584)
(1,179,972)
Provisions for liabilities
Provisions
21
592,750
643,674
Deferred tax liability
22
73,133
92,127
(665,883)
(735,801)
Net assets
3,140,668
3,168,322
Capital and reserves
Called up share capital
24
20,000
20,000
Profit and loss reserves
3,120,668
3,148,322
Total equity
3,140,668
3,168,322
The financial statements were approved by the board of directors and authorised for issue on 11 September 2024 and are signed on its behalf by:
11 September 2024
M E Johnson
Director
Company registration number 08265471 (England and Wales)
APELSON APPLIANCES UK LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
11
495,191
224,886
Tangible assets
12
682,363
465,928
Investments
13
1,098,394
1,098,394
2,275,948
1,789,208
Current assets
Stocks
15
8,919,348
10,399,735
Debtors
16
8,920,221
8,238,689
Cash at bank and in hand
182,295
141,237
18,021,864
18,779,661
Creditors: amounts falling due within one year
19
(15,548,308)
(15,351,485)
Net current assets
2,473,556
3,428,176
Total assets less current liabilities
4,749,504
5,217,384
Creditors: amounts falling due after more than one year
20
(951,584)
(1,179,972)
Provisions for liabilities
Provisions
21
592,750
643,674
Deferred tax liability
22
73,133
92,127
(665,883)
(735,801)
Net assets
3,132,037
3,301,611
Capital and reserves
Called up share capital
24
20,000
20,000
Profit and loss reserves
3,112,037
3,281,611
Total equity
3,132,037
3,301,611

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £169,574 (2022 - £7,161 profit).

The financial statements were approved by the board of directors and authorised for issue on 11 September 2024 and are signed on its behalf by:
11 September 2024
M E Johnson
Director
Company registration number 08265471 (England and Wales)
APELSON APPLIANCES UK LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
20,000
3,248,897
3,268,897
Year ended 31 December 2022:
Loss for the year
-
(168,985)
(168,985)
Other comprehensive income:
Currency translation differences
-
68,410
68,410
Total comprehensive income
-
(100,575)
(100,575)
Balance at 31 December 2022
20,000
3,148,322
3,168,322
Year ended 31 December 2023:
Loss for the year
-
(142,210)
(142,210)
Other comprehensive income:
Currency translation differences
-
114,556
114,556
Total comprehensive income
-
(27,654)
(27,654)
Balance at 31 December 2023
20,000
3,120,668
3,140,668
APELSON APPLIANCES UK LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
20,000
3,274,450
3,294,450
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
7,161
7,161
Balance at 31 December 2022
20,000
3,281,611
3,301,611
Year ended 31 December 2023:
Profit and total comprehensive income
-
(169,574)
(169,574)
Balance at 31 December 2023
20,000
3,112,037
3,132,037
APELSON APPLIANCES UK LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
27
481,988
(1,070,654)
Interest paid
(455,361)
(314,665)
Income taxes paid
(297,834)
(190,133)
Net cash outflow from operating activities
(271,207)
(1,575,452)
Investing activities
Purchase of intangible assets
(68,937)
(224,886)
Purchase of tangible fixed assets
(292,535)
(75,483)
Proceeds from disposal of tangible fixed assets
900
14,168
Interest received
201,510
174,238
Net cash used in investing activities
(159,062)
(111,963)
Financing activities
Repayment of borrowings
(500,000)
(332,123)
Drawdown of invoice financing
953,701
1,864,606
Payment of finance leases obligations
(82,187)
27,945
Net cash generated from financing activities
371,514
1,560,428
Net decrease in cash and cash equivalents
(58,755)
(126,987)
Cash and cash equivalents at beginning of year
157,551
253,454
Effect of foreign exchange rates
99,604
31,084
Cash and cash equivalents at end of year
198,400
157,551
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

Apelson Appliances UK Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .

 

The group consists of Apelson Appliances UK Limited and all of its subsidiaries.

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 under the historical cost convention. The principal accounting policies adopted are set out below.

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

 

1.2
Prior period error

Included within Goods In Transit in the prior period was £224,886 allocated in respect of development costs. These have been reclassified to Intangible Assets.

 

Deferred income, included within the current accruals balance of £550,369 was deemed to be released in over 1 year and therefore reclassified to long-term creditors in the prior year. Similarly the aging of HP creditors was reclassified to have £9,863 shown within current payables.

 

£2,000,000 held within long term creditors in the prior year in respect of a loan repayable has been adjusted to under 1 year to match the loan receivable.

APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.3
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Apelson Appliances UK Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.5
Going concern

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

1.6
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.

APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.8
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Software
10 - 50% straight line basis
Patents & licences
5 years straight line
Development costs
5 years straight line
1.9
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:

Leasehold improvements
10 years straight line
Plant and equipment
10 - 50% straight line basis
Motor vehicles
4 years straight line

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

1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.11
Impairment of fixed assets

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

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.12
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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

1.13
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.14
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

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

APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
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 group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

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

APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group 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 group.

1.16
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 group’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 if, and only if, there is 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.

1.17
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.18
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

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

 

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

1.19
Retirement benefits

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

1.20
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 leased asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 22 -
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.

Warranty provision

Warranty provisions are calculated as a percentage of the average annual sales figures, based upon historic warranty claims data, and included as an expense within sales.

Inventories

Inventories are valued at the lower cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete inventories. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.

Bad debt provision

The recoverability of debtors is based upon management judgement if a debtor is not to pay within their set payment terms. The recognition point at which a debtor is deemed to become bad and is to be written off is also considered a key estimate, however this risk is mitigated to an extent as a result of the company having credit insurance so a bad debt would still have an element of recovery.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Product sales
17,718,777
19,948,583
After sales servicing income
3,233,925
3,049,434
Brand royalties
225,264
147,071
21,177,966
23,145,088
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
20,444,542
22,611,226
EU
733,424
533,862
21,177,966
23,145,088
2023
2022
£
£
Other revenue
Interest income
201,510
174,238
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
4
Operating profit/(loss)
2023
2022
£
£
Operating profit/(loss) for the year is stated after charging/(crediting):
Exchange losses
7,729
210,164
Depreciation of owned tangible fixed assets
43,193
89,909
Depreciation of tangible fixed assets held under finance leases
18,752
-
Profit on disposal of tangible fixed assets
(900)
(10,567)
Amortisation of intangible assets
269,625
161,233
Operating lease charges
330,232
84,000
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
21,500
21,500
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Directors
2
2
2
2
Administrative staff
54
48
54
48
Total
56
50
56
50

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
2,021,192
1,683,609
2,021,192
1,683,609
Social security costs
213,525
181,225
213,525
181,225
Pension costs
147,155
131,249
147,155
131,249
2,381,872
1,996,083
2,381,872
1,996,083
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
99,917
96,200
Company pension contributions to defined contribution schemes
11,840
9,141
111,757
105,341

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

8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
201,510
174,238
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
454,408
313,712
Interest on finance leases and hire purchase contracts
953
953
Total finance costs
455,361
314,665
10
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
67,056
(23,492)
Deferred tax
Origination and reversal of timing differences
(18,994)
46,086
Total tax charge
48,062
22,594
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 25 -

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

2023
2022
£
£
Loss before taxation
(94,148)
(146,391)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(22,125)
(27,814)
Tax effect of expenses that are not deductible in determining taxable profit
263
(1,752)
Tax effect of utilisation of tax losses not previously recognised
-
0
108,924
Adjustments in respect of prior years
67,056
24,662
Permanent capital allowances in excess of depreciation
2,250
(1,584)
Other adjustments
618
(79,842)
Taxation charge
48,062
22,594
11
Intangible fixed assets
Group
Goodwill
Software
Patents & licences
Development costs
Total
£
£
£
£
£
Cost
At 1 January 2023 as restated
235,980
-
0
718,968
224,886
1,179,834
Additions
-
0
53,585
-
0
15,352
68,937
Transfers
-
0
577,092
-
0
-
0
577,092
Exchange adjustments
-
0
-
0
(3,109)
-
0
(3,109)
At 31 December 2023
235,980
630,677
715,859
240,238
1,822,754
Amortisation and impairment
At 1 January 2023
-
0
-
0
161,233
-
0
161,233
Amortisation charged for the year
101,592
48,399
71,586
48,048
269,625
Transfers
-
0
279,277
-
0
-
0
279,277
Exchange adjustments
-
0
-
0
(18,061)
-
0
(18,061)
At 31 December 2023
101,592
327,676
214,758
48,048
692,074
Carrying amount
At 31 December 2023
134,388
303,001
501,101
192,190
1,130,680
At 31 December 2022 as restated
235,980
-
0
557,735
224,886
1,018,601
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Intangible fixed assets
(Continued)
- 26 -
Company
Software
Development costs
Total
£
£
£
Cost
At 1 January 2023 as restated
-
0
224,886
224,886
Additions
53,585
15,352
68,937
Transfers
577,092
-
0
577,092
At 31 December 2023
630,677
240,238
870,915
Amortisation and impairment
At 1 January 2023
-
0
-
0
-
0
Amortisation charged for the year
48,399
48,048
96,447
Transfers
279,277
-
0
279,277
At 31 December 2023
327,676
48,048
375,724
Carrying amount
At 31 December 2023
303,001
192,190
495,191
At 31 December 2022 as restated
-
0
224,886
224,886
12
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
163,129
784,364
53,575
1,001,068
Additions
223,024
342,088
11,083
576,195
Disposals
-
0
-
0
(9,740)
(9,740)
Transfers
-
0
(577,092)
-
0
(577,092)
At 31 December 2023
386,153
549,360
54,918
990,431
Depreciation and impairment
At 1 January 2023
123,801
388,805
22,534
535,140
Depreciation charged in the year
23,160
25,517
13,268
61,945
Eliminated in respect of disposals
-
0
-
0
(9,740)
(9,740)
Transfers
-
0
(279,277)
-
0
(279,277)
At 31 December 2023
146,961
135,045
26,062
308,068
Carrying amount
At 31 December 2023
239,192
414,315
28,856
682,363
At 31 December 2022
39,328
395,559
31,041
465,928
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Tangible fixed assets
(Continued)
- 27 -
Company
Leasehold improvements
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
163,129
784,364
53,575
1,001,068
Additions
223,024
342,088
11,083
576,195
Disposals
-
0
-
0
(9,740)
(9,740)
Transfers
-
0
(577,092)
-
0
(577,092)
At 31 December 2023
386,153
549,360
54,918
990,431
Depreciation and impairment
At 1 January 2023
123,801
388,805
22,534
535,140
Depreciation charged in the year
23,160
25,517
13,268
61,945
Eliminated in respect of disposals
-
0
-
0
(9,740)
(9,740)
Transfers
-
0
(279,277)
-
0
(279,277)
At 31 December 2023
146,961
135,045
26,062
308,068
Carrying amount
At 31 December 2023
239,192
414,315
28,856
682,363
At 31 December 2022
39,328
395,559
31,041
465,928

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
275,867
-
0
275,867
-
0
Motor vehicles
20,091
31,050
20,091
31,050
295,958
31,050
295,958
31,050
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
1,098,394
1,098,394
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Fixed asset investments
(Continued)
- 28 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
1,098,394
Carrying amount
At 31 December 2023
1,098,394
At 31 December 2022
1,098,394
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Zerin 5000 S.L
Barcelona 08036, Spain
Ordinary Shares
100.00
15
Stocks
Group
Company
2023
2022
2023
2022
as restated
as restated
£
£
£
£
Raw materials and consumables
1,451,762
1,592,275
1,451,762
1,592,275
Finished goods and goods for resale
7,467,586
8,807,460
7,467,586
8,807,460
8,919,348
10,399,735
8,919,348
10,399,735
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
3,087,937
2,288,652
2,905,721
2,278,796
Amounts owed by group undertakings
1,686,439
1,719,634
2,240,137
2,274,039
Amounts owed by undertakings in which the company has a participating interest
-
32,328
-
-
Other debtors
1,086,619
1,196,977
184,727
322,176
Prepayments and accrued income
1,041,318
929,990
994,340
929,990
6,902,313
6,167,581
6,324,925
5,805,001
Amounts falling due after more than one year:
Other debtors
2,595,296
2,433,688
2,595,296
2,433,688
Total debtors
9,497,609
8,601,269
8,920,221
8,238,689
17
Loans and overdrafts
Group
Company
2023
2022
2023
2022
as restated
as restated
£
£
£
£
Bank loans
3,897,352
2,943,651
3,897,352
2,943,651
Other loans
2,583,333
3,083,333
2,583,333
3,083,333
6,480,685
6,026,984
6,480,685
6,026,984
Payable within one year
6,397,352
5,415,463
6,397,352
5,415,463
Payable after one year
83,333
611,521
83,333
611,521

Other loans consists of two loans. One loan of £2m was recognised as part of a transaction where the business acuired a loan receivable and was reclassified from trade creditors. No interest is charged in relation to this loan.

 

The second loan consists of an unsecured cash flow loan that refinanced an ecistin secured loan in the year as part of a refinancing to provide increased working capital facilities. The loan was £1.5m reduced for directly relateable costs and has capital repayments of £500,000 per year. A market rate margin above the Bank of England base rate is payable on this loan.

 

Bank loans represents advances in respect of invoice financing and are secured on the book debts of the company.

APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
18
Finance lease obligations
Group
Company
2023
2022
2023
2022
as restated
as restated
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
76,969
9,863
76,969
9,863
In two to five years
152,449
18,082
152,449
18,082
229,418
27,945
229,418
27,945

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

19
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
as restated
as restated
Notes
£
£
£
£
Bank loans
17
3,897,352
2,943,651
3,897,352
2,943,651
Obligations under finance leases
18
76,969
9,863
76,969
9,863
Other borrowings
17
2,500,000
2,471,812
2,500,000
2,471,812
Trade creditors
5,590,832
5,473,309
5,590,772
5,419,696
Corporation tax payable
210,741
441,519
210,741
441,519
Other taxation and social security
589,485
1,244,198
579,279
1,250,912
Other creditors
184,976
238,173
73,285
238,173
Accruals and deferred income
2,619,910
2,736,464
2,619,910
2,575,859
15,670,265
15,558,989
15,548,308
15,351,485
20
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
as restated
as restated
Notes
£
£
£
£
Obligations under finance leases
18
152,449
18,082
152,449
18,082
Other borrowings
17
83,333
611,521
83,333
611,521
Accruals and deferred income
715,802
550,369
715,802
550,369
951,584
1,179,972
951,584
1,179,972
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
21
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Warranty provision
592,750
643,674
592,750
643,674
Movements on provisions:
Warranty provision
Group
£
At 1 January 2023
643,764
Additional provisions in the year
(701,068)
Utilisation of provision
650,054
At 31 December 2023
592,750
Warranty provision
Company
£
At 1 January 2023
643,764
Additional provisions in the year
(701,068)
Utilisation of provision
650,054
At 31 December 2023
592,750
22
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
207,200
46,815
Tax losses
(134,067)
-
Investments
-
46,086
Other timing differences
-
(774)
73,133
92,127
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Deferred taxation
(Continued)
- 32 -
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
207,200
46,815
Tax losses
(134,067)
-
Investments
-
46,086
Other timing differences
-
(774)
73,133
92,127
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
92,127
92,127
Credit to profit or loss
(18,994)
(18,994)
Liability at 31 December 2023
73,133
73,133
23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
147,155
131,249

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £100 each
200
200
20,000
20,000
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
25
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
521,263
104,365
521,263
104,365
Between two and five years
1,886,924
61,840
1,886,924
61,840
In over five years
1,990,216
-
1,990,216
-
4,398,403
166,205
4,398,403
166,205
26
Controlling party

The company is a subsidiary of ED Corporation S.a.r.l.

 

The directors consider that JM Parlade De Elia the ultimate controlling party.

27
Cash generated from/(absorbed by) group operations
2023
2022
£
£
Loss for the year after tax
(142,210)
(168,985)
Adjustments for:
Taxation charged
48,062
22,594
Finance costs
455,361
314,665
Investment income
(201,510)
(174,238)
Gain on disposal of tangible fixed assets
(900)
(10,567)
Amortisation and impairment of intangible assets
269,625
161,233
Depreciation and impairment of tangible fixed assets
61,945
89,909
(Decrease)/increase in provisions
(50,924)
43,782
Movements in working capital:
Decrease/(increase) in stocks
1,480,387
(76,212)
(Increase)/decrease in debtors
(896,340)
62,508
Decrease in creditors
(541,508)
(1,335,343)
Cash generated from/(absorbed by) operations
481,988
(1,070,654)
APELSON APPLIANCES UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 34 -
28
Analysis of changes in net debt - group
1 January 2023
Cash flows
New finance leases
Exchange rate movements
31 December 2023
£
£
£
£
£
Cash at bank and in hand
157,551
(58,755)
-
99,604
198,400
Borrowings excluding overdrafts
(6,026,984)
(453,701)
-
-
(6,480,685)
Obligations under finance leases
(27,945)
82,187
(283,660)
-
(229,418)
(5,897,378)
(430,269)
(283,660)
99,604
(6,511,703)
29
Prior period adjustment

Included within Intangibles in te prior period was £235,980 of Goodwill which had been transferred in prior periods to 2022. As such this has been classified back to Goodwill to correctly represent the nature of the balance.

 

Included within Goods In Transit in the prior period was £224,886 allocated in respect of development costs. These have been reclassified to Intangible Assets. This in combination with the above Goodwill movement leads to an overall net decrease of £11,094.

 

Deferred income, included within the current accruals balance of £550,369 was deemed to be released in over 1 year and therefore reclassified to long-term creditors in the prior year. Similarly the aging of HP creditors was reclassified to have £9,863 shown within current payables.

 

£2,000,000 held within long term creditors in the prior year in respect of a loan repayable has been adjusted to under 1 year to match the loan receivable.

Changes to the balance sheet - group
As previously reported
Adjustment
As restated at 31 Dec 2022
£
£
£
Fixed assets
Goodwill
-
235,980
235,980
Other intangibles
793,715
(11,094)
782,621
Current assets
Stocks
10,624,621
(224,886)
10,399,735
Creditors due within one year
Loans and overdrafts
(3,415,463)
(2,000,000)
(5,415,463)
Finance leases
-
(9,863)
(9,863)
Other creditors
(8,998,315)
550,369
(8,447,946)
Creditors due after one year
Loans and overdrafts
(2,611,521)
2,000,000
(611,521)
Finance leases
(27,945)
9,863
(18,082)
Other creditors
-
(550,369)
(550,369)
Net assets
3,168,322
-
3,168,322
Capital and reserves
Total equity
3,168,322
-
3,168,322
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