Company registration number 04654483 (England and Wales)
SIAN WHOLESALE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SIAN WHOLESALE LIMITED
COMPANY INFORMATION
Directors
A E S Klimcke
C S Klimcke
Secretary
CS Klimcke
Company number
04654483
Registered office
Copse Cottage
Mole Street
Ockley
Surrey
RH5 5PE
Auditor
Sumer Audit
5 Peveril Court
6-8 London Road
Crawley
West Sussex
RH10 8JE
Business address
Gardeners Cottage
Jayes Park
Ockley
Surrey
RH5 5RR
SIAN WHOLESALE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
SIAN WHOLESALE 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 principal activity remains the wholesale and distribution of FMCG toiletries, health and beauty, grocery and pharmaceuticals.
We continue to work “our process”, following pricing trends, evaluating pricing and product range while staying focused on our customer requirements. These key areas allow us to stay nimble and react to changes in the supply chain. Our core business remains B2B volume wholesale, export and discount retail channels.
Our staff are our greatest assets, trusting and training the team whilst encouraging and enabling personal growth is a core value. We have added to our teams where necessary and are always looking to stay ahead of our growth curve by employing and deploying staff according to the needs of the business.
Principal risks and uncertainties
Our major concern for 2024 is global instability. More conflicts, more disruption and higher interest rates have increased the challenges in shipping & costs. We are also seeing more and more fraud attempts on the business and our customers which is a very real concern.
Development and performance
Our focus is always on continually improving performance while seeking efficiencies within the business. We are always striving to improve our working practices and looking to add value to our offering wherever possible. Our continued participation at domestic and international trade shows enables us to keep a keen eye on buying habits and changes in product range and origins. This has led us to focus on new supply chain opportunities globally. This is a direct result of customer need and supply chain instability; demand will always be the key driver for supply.
Our new Banking Partners, Lloyds Bank PLC have structured excellent new funding models that have strengthened our position and enabled us to retain control over areas that other banks have not been able to match.
Employee Ownership Trust
Retaining and training great people is fundamental to our business, and therefore the founders of SIAN Wholesale have decided to outline a clear succession plan for the next decade. In that plan is the creation of an EOT, this trust will, in time, give our employees ownership of the business. This is a bold but innovative way of giving our employees the progression and drive to take our business forward in the future.
Our 2023 financial report shows that SIAN Wholesale is a strong and successful business, with an eye on progression and a passion for trade. Continuing to grow in a still very challenging environment is testament to the tenacity and attitude of the whole team.
Financial Key Performance Indicators
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SIAN WHOLESALE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
A E S Klimcke
Director
10 May 2024
SIAN WHOLESALE 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 SIAN Wholesale Limited is the wholesale distribution of consumer products.
Business Review
The Director’s focus has been on team building, process improvement and security of supply chain. Through 2023 we have seen all 3 of these key areas strengthen and mature. We are very pleased with the increase in turnover and profitability that has been achieved through the dedication of our team and the focus on these areas.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £60,000. 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:
A E S Klimcke
C S Klimcke
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade receivables are monitored on an ongoing basis and provisions are made for doubtful debts where necessary.
Auditor
The auditor, Sumer Audit, is deemed reappointed under Section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
SIAN WHOLESALE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
A E S Klimcke
Director
10 May 2024
SIAN WHOLESALE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SIAN WHOLESALE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SIAN WHOLESALE LIMITED
- 6 -
Opinion
We have audited the financial statements of SIAN Wholesale Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
SIAN WHOLESALE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SIAN WHOLESALE LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the company’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud; and
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: health & safety, employment law and compliance with the UK Companies Act.
SIAN WHOLESALE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SIAN WHOLESALE LIMITED
- 8 -
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to stock provisions; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Tony Summers BA FCA (Senior Statutory Auditor)
For and on behalf of Sumer Audit
10 May 2024
Chartered Accountants
Statutory Auditor
Crawley
Sumer Audit is the trading name of Sumer Auditco Limited
SIAN WHOLESALE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Revenue
4
72,939,016
66,584,671
Cost of sales
(66,264,745)
(61,247,411)
Exceptional item - inventory write off
3
(300,692)
-
Gross profit
6,373,579
5,337,260
Administrative expenses
(4,357,434)
(3,752,171)
Exceptional item - share options expense
3
(1,294,392)
Operating profit
5
721,753
1,585,089
Finance costs
8
(272,417)
(168,626)
Profit before taxation
449,336
1,416,463
Tax on profit
9
(111,501)
(264,500)
Profit for the financial year
337,835
1,151,963
The income statement has been prepared on the basis that all operations are continuing operations.
SIAN WHOLESALE LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
11
290,046
402,216
Current assets
Inventories
12
6,521,425
7,348,250
Trade and other receivables
13
9,262,838
8,772,309
Cash and cash equivalents
356,599
651,903
16,140,862
16,772,462
Current liabilities
14
(9,923,231)
(11,960,776)
Net current assets
6,217,631
4,811,686
Total assets less current liabilities
6,507,677
5,213,902
Non-current liabilities
15
(134,849)
(403,401)
Provisions for liabilities
Deferred tax liability
18
19,600
29,500
(19,600)
(29,500)
Net assets
6,353,228
4,781,001
Equity
Called up share capital
21
400,000
400,000
Retained earnings
5,953,228
4,381,001
Total equity
6,353,228
4,781,001
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 10 May 2024 and are signed on its behalf by:
A E S Klimcke
Director
Company registration number 04654483 (England and Wales)
SIAN WHOLESALE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 January 2022
400,000
3,469,038
3,869,038
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,151,963
1,151,963
Dividends
10
-
(240,000)
(240,000)
Balance at 31 December 2022
400,000
4,381,001
4,781,001
Year ended 31 December 2023:
Profit and total comprehensive income
-
337,835
337,835
Dividends
10
-
(60,000)
(60,000)
Credit relating to equity settled share-based payments
20
-
1,294,392
1,294,392
Balance at 31 December 2023
400,000
5,953,228
6,353,228
SIAN WHOLESALE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
64,434
1,420,227
Interest paid
(272,417)
(168,626)
Income taxes paid
(439,999)
(188,961)
Net cash (outflow)/inflow from operating activities
(647,982)
1,062,640
Investing activities
Purchase of property, plant and equipment
(14,284)
(78,613)
Net cash used in investing activities
(14,284)
(78,613)
Financing activities
Proceeds from borrowings
795,000
Repayment of borrowings
(300,000)
(179,049)
Payment of finance leases obligations
(68,038)
(76,818)
Dividends paid
(60,000)
(240,000)
Net cash generated from/(used in) financing activities
366,962
(495,867)
Net (decrease)/increase in cash and cash equivalents
(295,304)
488,160
Cash and cash equivalents at beginning of year
651,903
163,743
Cash and cash equivalents at end of year
356,599
651,903
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
SIAN Wholesale Limited is a private company limited by shares incorporated in England and Wales. The registered office is Copse Cottage, Mole Street, Ockley, Surrey, RH5 5PE.
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.
1.2
Going concern
At 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. The directors have considered relevant information, including the company’s principal risks and uncertainties, the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. true
Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.
1.3
Revenue
Revenue is recognised at the fair value of the consideration received or receivable for goods 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.
1.4
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant & Machinery
20% straight line
Fixtures & Fittings
20% straight line
Computer Equipment
33% 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.
1.5
Impairment of non-current assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.6
Inventories
Inventories are stated at the lower of cost and estimated selling price less costs to sell, on an AVCO basis. Inventories comprise of finished goods only.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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.
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Basic financial liabilities
Basic financial liabilities, including trade and other payables and bank loans, 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.
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. All called up share capital is allotted and fully paid.
1.10
Derivatives
Where material, derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year.
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.
1.12
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 non-current assets.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Share-based payments
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using an earnings based model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.15
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 statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.17
Where debts are invoice discounted, the separate presentation treatment has been adopted, the gross amount of the debts is included within trade debtors with the advances received from invoice discounting are shown as a liability.
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock Valuation
The directors have made key assumptions in determining the appropriate impairment provision against stock items held at the end of the reporting period. At the financial reporting date, the carrying amount of stock was £6,521,425 (2022 - £7,348,250).
3
Exceptional items
2023
2022
£
£
Expenditure
Exceptional item - Cost of sales
300,692
-
Exceptional item - share options expense
1,294,392
-
1,595,084
-
The exceptional item included in cost of sales is an inventory write off of hand sanitizer and face masks remaining from the COVID-19 pandemic, some of which have expired.
Refer to note 20 for details on the share option expense.
4
Revenue
2023
2022
£
£
Revenue analysed by class of business
Sale of goods
72,161,770
66,029,844
Management fee income
777,246
554,827
72,939,016
66,584,671
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Revenue
(Continued)
- 18 -
2023
2022
£
£
Revenue analysed by geographical market
UK
28,287,819
26,610,351
Europe
10,007,780
6,186,024
Rest of World
16,401,343
17,552,862
UAE
9,465,099
11,318,491
US
5,148,124
3,785,711
Saudi Arabia
3,628,851
1,131,232
72,939,016
66,584,671
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(6,895)
(730)
Fees payable to the company's auditor for the audit of the company's financial statements
12,800
17,300
Depreciation of owned property, plant and equipment
53,066
55,105
Depreciation of property, plant and equipment held under finance leases
73,388
73,388
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
676,500
376,000
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
The highest paid directors' remuneration was £570,000 (2022: £340,000), in addition to payments to a defined contribution pension scheme of £1,321 (2022: £1,321).
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
2
2
Office
22
19
Sales
7
7
Warehouse
15
14
Total
46
42
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,582,663
2,082,165
Social security costs
333,372
258,037
Pension costs
35,364
27,803
2,951,399
2,368,005
8
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
252,785
152,374
Other finance costs:
Other interest
19,632
16,252
272,417
168,626
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
420,000
260,000
Adjustments in respect of prior periods
24,999
Total current tax
444,999
260,000
Deferred tax
Origination and reversal of timing differences
(333,498)
4,500
Total tax charge
111,501
264,500
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 20 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
449,336
1,416,463
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
105,594
269,128
Tax effect of expenses that are not deductible in determining taxable profit
3,800
1,566
Adjustments in respect of prior years
24,999
Effects of 130% super capital allowance deduction
(57)
(4,365)
Difference between current and deferred tax rate
(19,736)
1,116
Effects of rounding
(3,099)
(2,945)
Taxation charge for the year
111,501
264,500
10
Dividends
2023
2022
£
£
Interim paid
60,000
240,000
11
Property, plant and equipment
Plant & Machinery
Fixtures & Fittings
Computer Equipment
Total
£
£
£
£
Cost
At 1 January 2023
207,000
429,144
145,697
781,841
Additions
3,248
11,036
14,284
At 31 December 2023
207,000
432,392
156,733
796,125
Depreciation and impairment
At 1 January 2023
78,508
188,293
112,824
379,625
Depreciation charged in the year
38,353
66,842
21,259
126,454
At 31 December 2023
116,861
255,135
134,083
506,079
Carrying amount
At 31 December 2023
90,139
177,257
22,650
290,046
At 31 December 2022
128,492
240,851
32,873
402,216
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Property, plant and equipment
(Continued)
- 21 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant & Machinery
137,319
187,001
Fixtures & Fittings
63,391
87,098
200,710
274,099
12
Inventories
2023
2022
£
£
Finished goods and goods for resale
6,521,425
7,348,250
13
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
7,482,725
6,848,150
Other receivables
1,199,860
1,655,139
Prepayments and accrued income
256,655
269,020
8,939,240
8,772,309
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 18)
323,598
Total debtors
9,262,838
8,772,309
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
14
Current liabilities
2023
2022
Notes
£
£
Obligations under finance leases
17
74,457
68,943
Other loans
690,000
Trade payables
4,805,417
8,185,800
Corporation tax
150,000
145,000
Other taxation and social security
122,489
69,757
Other payables
3,597,821
2,927,785
Accruals and deferred income
483,047
563,491
9,923,231
11,960,776
Within other payables is an invoice discounting facility amounting to £3,417,255 (2022 - £2,632,199) repayable. The loan is secured by fixed charges to the Company's debtor listings.
15
Non-current liabilities
2023
2022
Notes
£
£
Obligations under finance leases
17
134,849
208,401
Other loans
195,000
134,849
403,401
16
Borrowings
2023
2022
£
£
Other loans
690,000
195,000
Payable within one year
690,000
Payable after one year
-
195,000
There are no terms on the above borrowings and are therefore repayable on demand. However, the director believes it unlikely that these would be recalled in the next 12 months,
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
74,457
68,943
In two to five years
134,849
208,401
209,306
277,344
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Finance lease obligations
(Continued)
- 23 -
Finance lease payments represent rentals payable by the company for certain items of plant & machinery and fixtures & fittings. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
19,600
29,500
-
-
Share based payments
-
-
323,598
-
19,600
29,500
323,598
-
2023
Movements in the year:
£
Liability at 1 January 2023
29,500
Credit to profit or loss
(333,498)
Asset at 31 December 2023
(303,998)
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
35,364
27,803
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.
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
20
Share-based payment transactions
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023
Granted
34,782
4.19
Outstanding at 31 December 2023
34,782
4.19
Exercisable at 31 December 2023
During the year a share option scheme was implemented for key employees. The options were granted with an exercise price as shown in the table above and become exercisable upon a change in control of the company. As explained in note 24, such an event occurred on 5 April 2024 and all options were exercised on this date.
A charge has been recorded in the statement of profit or loss at the fair value of the options granted. This has been determined using the actual price per share contracted with the Employee Ownership Trust referred to in note 24. The directors have assessed this as a suitable method.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
400,000
400,000
400,000
400,000
Ordinary shares have full voting, dividend and distribution rights.
22
Operating lease commitments
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
401,674
401,674
Between two and five years
1,492,948
1,525,448
In over five years
2,861,102
3,230,276
4,755,724
5,157,398
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
23
Related party transactions
At the financial reporting date the amount owed to family members of the directors' was £600,000 (2022- £70,000). The balance is repayable on demand and interest is charged on the outstanding amount.
During the year, £1,693,696 (2022: £2,824,483) was paid to connected companies for services provided and goods purchased. In addition, sales of £3,991,932 (2022- £3,309,495) were made to these connected companies.
Amounts due to connected companies included within debtors totalled £1,171,951 (2022- £1,211,138), and amounts owed to connected companies included within trade creditors totalled £82,500 (2022- £229,764). There are no specific terms on these amounts and no interest is charged.
24
Events after the reporting date
On 5 April 2024, a share purchase agreement was signed for an Employee Ownership Trust (EOT) to acquire 100% of the share capital of SIAN Wholesale Limited.
25
Directors' transactions
Dividends totalling £30,600 (2022 - £122,400) were paid in the year in respect of shares held by the company's directors.
At the financial reporting date the amount owed to directors was £113,113 (2022 - £156,844), of which £Nil (2022 - £125,000) included in other payables, will be repayable in more than one year.
An interest rate of 5% per annum is charged on the outstanding balance. During the year the total interest payable to the directors and their partners was £19,632 (2022 - £16,252).
26
Analysis of changes in net funds/(debt)
1 January 2023
Cash flows
New finance leases
31 December 2023
£
£
£
£
Cash at bank and in hand
651,903
(295,304)
-
356,599
Other borrowings
(195,000)
(495,000)
-
(690,000)
Obligations under finance leases
(277,344)
68,038
-
(209,306)
179,559
(722,266)
-
(542,707)
SIAN WHOLESALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
27
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
337,835
1,151,963
Adjustments for:
Taxation charged
111,501
264,500
Finance costs
272,417
168,626
Depreciation and impairment of property, plant and equipment
126,454
128,493
Equity settled share based payment expense
1,294,392
-
Movements in working capital:
Decrease/(increase) in inventories
826,825
(1,720,562)
Increase in trade and other receivables
(166,931)
(2,424,358)
(Decrease)/increase in trade and other payables
(2,738,059)
3,851,565
Cash generated from operations
64,434
1,420,227
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