COMPANY REGISTRATION NUMBER 00190422
R. J. STOKES & CO. LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
R. J. STOKES & CO. LIMITED
COMPANY INFORMATION
Directors
R J Stokes
T J Stokes
R C Stokes
R J Askham
Secretary
D A Large
Company number
00190422
Registered office
Rother Valley Way
Holbrook Industrial Estate
Sheffield
South Yorkshire
S20 3RW
Auditor
UHY Hacker Young
6 Broadfield Court
Broadfield Way
Sheffield
S8 0XF
Bankers
NatWest Bank plc
42 High Street
Sheffield
S1 2GE
R. J. STOKES & CO. LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 26
R. J. STOKES & CO. 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 financial statements show a decrease in turnover reflecting a slight downturn in the company's performance in a continued difficult trading environment.
Principal risks and uncertainties
The directors remain concerned about the impact of changes in foreign exchange rates affecting the cost of products sourced from overseas and the impact of brexit and consumer demand. They continue to review the situation and will take actions wherever appropriate.
Key performance indicators
The key financial highlights are as follows:
1) Turnover £8.1m (2023), £8.6m (2022), £7.1m (2021)
2) Gross profit £1.1m (2023), £1.5m (2022), £1.5m (2021)
3) Gross profit margin 13.69% (2023), 17.60% (2022), 20.99% (2021)
D A Large
Secretary
18 September 2024
R. J. STOKES & CO. LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of retail and wholesale distribution of tiles.
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 final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R J Stokes
T J Stokes
R C Stokes
R J Askham
G Marples
(Resigned 31 October 2023)
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
By order of the board
D A Large
Secretary
18 September 2024
R. J. STOKES & CO. LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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.
- 4 -
6 Broadfield Court
Broadfield Way
Sheffield
S8 0XF
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
R. J. STOKES & CO. LIMITED
Opinion
We have audited the financial statements of R. J. Stokes & Co. Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, 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 loss 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.
- 5 -
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
R. J. STOKES & CO. LIMITED CONTINUED
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.
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.
- 6 -
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
R. J. STOKES & CO. LIMITED CONTINUED
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.
Based on our understanding of the company and the industry in which it operates, we identified the principal risks of non-compliance with laws and regulations related to the acts by the company, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to revenue recognition, recovery of trade receivables and stock valuation.
To address the risk of fraud through management bias and override of controls, we:
• performed analytical procedures to identify any unusual or unexpected relationships;
• tested journal entries to identify unusual transactions;
• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
• investigated the rationale behind significant or unusual transactions.
There are inherent limitations in the audit procedures described above and the further removed non compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
- 7 -
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
R. J. STOKES & CO. LIMITED CONTINUED
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.
Andrew Hulse (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
18 September 2024
Chartered Accountants
Statutory Auditor
R. J. STOKES & CO. LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
8,104,397
8,634,978
Cost of sales
(6,994,575)
(7,115,566)
Gross profit
1,109,822
1,519,412
Administrative expenses
(1,374,830)
(1,353,916)
Other operating income
161,311
766,962
Operating (loss)/profit
4
(103,697)
932,458
Interest receivable and similar income
8
5,021
400
Interest payable and similar expenses
9
-
(46)
Gains and losses on investments
10
16
3,503
(Loss)/profit before taxation
(98,660)
936,315
Tax on loss/profit
11
(3,500)
(55,546)
(Loss)/profit for the financial year
(102,160)
880,769
The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.
R. J. STOKES & CO. LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
6,261,246
6,176,418
Investment property
14
1,000,000
1,895,048
7,261,246
8,071,466
Current assets
Stocks
15
2,942,983
2,766,842
Debtors
16
1,004,286
1,064,532
Cash at bank and in hand
766,119
566,225
4,713,388
4,397,599
Creditors: amounts falling due within one year
17
(934,721)
(1,330,492)
Net current assets
3,778,667
3,067,107
Total assets less current liabilities
11,039,913
11,138,573
Provisions for liabilities
Deferred tax liability
18
56,000
52,500
(56,000)
(52,500)
Net assets
10,983,913
11,086,073
Capital and reserves
Called up share capital
20
26,140
26,140
Capital redemption reserve
23,588
23,588
Profit and loss reserves
21
10,934,185
11,036,345
Total equity
10,983,913
11,086,073
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 18 September 2024 and are signed on its behalf by:
R J Stokes
Director
Company registration number 00190422 (England and Wales)
R. J. STOKES & CO. LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
26,140
23,588
10,155,576
10,205,304
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
880,769
880,769
Balance at 31 December 2022
26,140
23,588
11,036,345
11,086,073
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(102,160)
(102,160)
Balance at 31 December 2023
26,140
23,588
10,934,185
10,983,913
R. J. STOKES & CO. LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
26
(553,274)
(37,672)
Interest paid
(46)
Income taxes paid
(17,546)
(37,659)
Net cash outflow from operating activities
(570,820)
(75,377)
Investing activities
Purchase of tangible fixed assets
(204,627)
(303,240)
Proceeds on disposal of tangible fixed assets
11,000
179,216
Purchase of investment property
(243,062)
Proceeds on disposal of investment property
959,320
Proceeds from other investments and loans
-
65,000
Interest received
5,021
400
Net cash generated from/(used in) investing activities
770,714
(301,686)
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
199,894
(377,063)
Cash and cash equivalents at beginning of year
566,225
943,288
Cash and cash equivalents at end of year
766,119
566,225
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
R. J. Stokes & Co. Limited is a private company limited by shares incorporated in England and Wales. The registered office is Rother Valley Way, Holbrook Industrial Estate, Sheffield, South Yorkshire, S20 3RW.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.
1.3
Turnover
Turnover represents amounts receivable for goods net of VAT and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings freehold
1% & 4% Straight line on buildings
Land and buildings leasehold
1% Straight line on buildings
Plant and machinery
12.5% Straight line
Fixtures, fittings and equipment
12.5% Straight line
Motor vehicles
12.5% & 25% 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 credited or charged to profit or loss.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is measured using the fair value model and stated at its fair value at the reporting end date. The surplus or deficit on revaluation is recognised in the profit and loss account.
The directors consider that this accounting policy results in the accounts presenting fairly the company's financial position, financial performance and cash flows. Depreciation or amortisation is only one of many factors reflected in the annual valuation and the amount of this which might otherwise have been charged cannot be separately identified or quantified.
1.6
Fixed asset investments
Fixed asset investments are stated at cost less provision for diminution in value.
1.7
Impairment of fixed assets
At each reporting period end date, the company 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.
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.
1.8
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, those overheads that have been incurred in bringing the stocks to their present location and condition.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
1.9
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.
1.10
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 balance sheet 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 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.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including 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.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
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.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
8,004,542
8,521,535
Recharge of wages costs
99,855
113,443
8,104,397
8,634,978
2023
2022
£
£
Other revenue
Interest income
5,021
400
The recharge of wages costs is wholly to Tiles360 Limited. A company which is owned by more than 75% of the shareholders of R.J. Stokes & Co. Limited.
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses
97
Depreciation of owned tangible fixed assets
119,799
116,266
Profit on disposal of tangible fixed assets
(11,000)
(1,507)
Loss on disposal of investment property
507
Operating lease charges
41,095
33,211
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
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 company
6,700
6,200
For other services
All other non-audit services
8,204
11,533
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Management and administration
19
19
Sales and distribution
37
35
Total
56
54
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,794,790
1,666,161
Social security costs
160,099
152,753
Pension costs
53,555
44,774
2,008,444
1,863,688
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
361,720
365,268
Company pension contributions to defined contribution schemes
11,387
8,596
373,107
373,864
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 20 -
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 5).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
92,032
85,997
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
5,021
400
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
5,021
400
9
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Other interest
46
10
Amounts written off investments
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Amounts written back to fair value through profit or loss
16
3,503
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
17,546
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Taxation
2023
2022
£
£
(Continued)
- 21 -
Deferred tax
Origination and reversal of timing differences
3,500
38,000
Total tax charge
3,500
55,546
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
(Loss)/profit before taxation
(98,660)
936,315
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(24,665)
177,900
Tax effect of expenses that are not deductible in determining taxable profit
1,214
1,127
Effect of revaluations of investments
(16,195)
(136,185)
Depreciation in excess of capital allowances
(34,374)
(25,008)
Other
(288)
Deferred tax debit/(credit)
3,500
38,000
Trading losses carried forward
74,020
Taxation charge for the year
3,500
55,546
12
Intangible fixed assets
Goodwill
Total
£
£
Cost
At 1 January 2023 and 31 December 2023
640,000
640,000
Amortisation and impairment
At 1 January 2023 and 31 December 2023
640,000
640,000
Carrying amount
At 31 December 2023
At 31 December 2022
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
13
Tangible fixed assets
Land and buildings freehold
Land and buildings leasehold
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
6,546,323
350,732
146,501
994,990
392,055
8,430,601
Additions
128,932
2,655
1,495
71,545
204,627
Disposals
(136,523)
(136,523)
At 31 December 2023
6,675,255
350,732
149,156
996,485
327,077
8,498,705
Depreciation and impairment
At 1 January 2023
991,842
55,355
66,381
891,325
249,280
2,254,183
Depreciation charged in the year
48,355
3,499
13,429
27,266
27,250
119,799
Eliminated in respect of disposals
(136,523)
(136,523)
At 31 December 2023
1,040,197
58,854
79,810
918,591
140,007
2,237,459
Carrying amount
At 31 December 2023
5,635,058
291,878
69,346
77,894
187,070
6,261,246
At 31 December 2022
5,554,481
295,377
80,120
103,665
142,775
6,176,418
14
Investment property
2023
£
Fair value
At 1 January 2023
1,895,048
Disposals
(959,827)
Net gains or losses through fair value adjustments
64,779
At 31 December 2023
1,000,000
Investment property comprises property held for its rental income potential. The fair value of the investment property has been arrived at on the basis of a valuation carried out by the directors. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
15
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,942,983
2,766,842
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
810,021
914,545
Other debtors
1,402
Prepayments and accrued income
159,937
115,659
971,360
1,030,204
2023
2022
Amounts falling due after more than one year:
£
£
Other debtors
32,926
34,328
Total debtors
1,004,286
1,064,532
Trade debtors disclosed above are measured at amortised cost.
17
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
530,076
885,692
Corporation tax
17,546
Other taxation and social security
115,344
145,423
Other creditors
273,097
242,994
Accruals and deferred income
16,204
38,837
934,721
1,330,492
The directors consider that the carrying amount of trade creditors approximates to their fair value.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
56,000
52,500
2023
Movements in the year:
£
Liability at 1 January 2023
52,500
Charge to profit or loss
3,500
Liability at 31 December 2023
56,000
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
53,555
44,774
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
26,140 Ordinary shares of £1 each
26,140
26,140
The company has one class of ordinary shares which carry no right to fixed income. These shares carry voting rights of one vote per share.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
21
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
11,036,345
10,155,576
(Loss)/profit for the year
(102,160)
880,769
At the end of the year
10,934,185
11,036,345
22
Financial commitments, guarantees and contingent liabilities
The company has provided a guarantee to HM Revenue and Customs in the event of the non payment of duty, by way of a bond for £10,000.
23
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for certain of its motor vehicles and some office equipment.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
16,918
12,453
Between two and five years
29,361
6,909
46,279
19,362
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
373,107
373,864
25
Ultimate controlling party
The ultimate controlling party is R J Stokes who owns 53% of the share capital.
R. J. STOKES & CO. LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
26
Cash generated from operations
2023
2022
£
£
(Loss)/profit for the year after tax
(102,160)
880,769
Adjustments for:
Taxation charged
3,500
55,546
Finance costs
46
Investment income
(5,021)
(400)
Gain on disposal of tangible fixed assets
(11,000)
(1,507)
Loss on disposal of investment property
507
Fair value gains on investment property
-
(716,765)
Depreciation and impairment of tangible fixed assets
119,799
116,266
Movements in working capital:
(Increase) in stocks
(176,141)
(630,009)
Decrease/(increase) in debtors
60,246
(102,132)
(Decrease)/increase in creditors
(378,225)
360,514
Cash absorbed by operations
(488,495)
(37,672)
27
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
566,225
199,894
766,119
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