Company Registration No. 11888188 (England and Wales)
SK SALES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
31 December 2023
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
SK SALES LIMITED
COMPANY INFORMATION
Director
Mr L Dolbeau
Company number
11888188
Registered office
SK Sales Limited
Unit 33 Stakehill Industrial Estate
Middleton
Manchester
M24 2RW
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
SK SALES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
SK SALES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The director presents the strategic report for the year ended 31 December 2023.

Review of business

Sales declined in the year due to loss of key sales personnel at two of our main sites. Actions have been taken and implemented to minimise the risk of such an occurrence happening again. The impacted sites struggled throughout the year while recruitment activities took place to make sure we have the right staff on board. While our Gross Profit Percentage continued to grow based on growing our own brand sales and the improved usage of our central facility, this was more than offset by the decline in sales and the impact of bad debts.

Key Performance Indicators
2023
2022
£
£
Turnover
15,056,393
16,463,471
Gross Profit
4,495,922
4,600,553
Gross Profit Percentage
30%
28%
Operating profit (loss) before tax, and interest
(1,429,772)
(477,724)
Interest
17,263
29,334
Operating profit (loss) before tax
(1,447,035)
(507,058)
Principal risks and uncertainties

Construction market

Given the various risks in the economy management continually monitors the state of the market. By reviewing internal and industry data supported by continual dialog with our customers and suppliers we are able to understand the direction of the market and make adjustments to our business accordingly.

 

Systems risk

IT is critical in delivering and enhancing our services to our customers, the threat of potential outages, virus and malicious attacks is ever present, and the company and group are vigilant in preventing such risks.

 

Increased global volatility

Since the turn of the decade there have been a number of events which have had economic impacts both domestically and internationally; Covid, the Wars in Ukraine & Gaza, changing Prime ministers and policies, increased political tensions and uncertainties are just some of the major events that have happened. These events are having both direct and indirect consequences to our supply chain and trading environment. Management stay abreast of these situations and continually evaluate the options and responses.

 

Employee risk

The company is proud of its hard-working staff recognising that they are key assets in developing our relationships with customers and suppliers. Our staff are crucial to business performance and the ongoing threat to our talent pool means the company is fully aware of the need to reward, train, retain and develop key individuals. This is increasingly more important in a labour market that remains tight. Management regularly reviews remuneration and incentive schemes to ensure it is competitive against competitors and keeps employees engaged and motivated.

 

Financial instrument risk

The company uses various financial instruments, these include the use of an intercompany loan during 2022, cash and various items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to provide finance for the company's operations.

 

The existence of these financial instruments exposes the company to interest rate, liquidity and credit risk. The company is supported by the group’s Treasury function which helps manage interest rate risk. Regular cash forecasting and close contact with the group helps mitigate liquidity risk while credit risk is managed through regularly reviews of credit limits and system controls.

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

On behalf of the board

Mr L Dolbeau
Director
13 March 2024
SK SALES LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The director presents his annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the supply of air handling heating and ventilation equipment to the construction industry.

Results and dividends

The loss for the period, after taxation amounted to £1,447k, (2022 - £645k). No dividends will be distributed for the year ended 31 December 2023.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

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

Mr L Dolbeau
Mr R Ward
(Resigned 11 October 2023)
Auditor

The auditors, PM+M Solutions for Business LLP, will be proposed for reappointment at the forthcoming Annual General Meeting.

Statement of director's responsibilities

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

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

 

 

The director is 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. He is 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.

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.

SK SALES LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
Mr L Dolbeau
Director
13 March 2024
SK SALES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF SK SALES LIMITED
- 5 -
Opinion

We have audited the financial statements of SK Sales 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 and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements, as described in note 1.2 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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:

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

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

 

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

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

SK SALES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SK SALES LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud

Identifying and assessing potential risks related to irregularities

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:

 

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety regulations, pensions legislation and tax legislation.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

SK SALES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SK SALES LIMITED
- 8 -

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.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Miss Helen Louise Clayton BSc FCA
Senior Statutory Auditor
For and on behalf of PM+M Solutions for Business LLP
20 March 2024
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
SK SALES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
15,056,393
16,463,471
Cost of sales
(10,560,471)
(11,862,918)
Gross profit
4,495,922
4,600,553
Distribution costs
(1,182,370)
(989,008)
Administrative expenses
(4,743,841)
(4,114,245)
Other operating income
517
24,976
Operating loss
4
(1,429,772)
(477,724)
Interest payable and similar expenses
7
(17,263)
(29,334)
Loss before taxation
(1,447,035)
(507,058)
Tax on loss
8
-
0
(137,733)
Loss for the financial year
(1,447,035)
(644,791)

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

SK SALES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
58,904
116,135
Tangible assets
10
207,587
188,858
266,491
304,993
Current assets
Stocks
11
1,467,848
1,664,107
Debtors
12
3,113,731
3,181,142
Cash at bank and in hand
123,127
433,852
4,704,706
5,279,101
Creditors: amounts falling due within one year
13
(1,874,498)
(1,829,618)
Net current assets
2,830,208
3,449,483
Total assets less current liabilities
3,096,699
3,754,476
Creditors: amounts falling due after more than one year
14
(763,651)
-
0
Provisions for liabilities
Provisions
16
492,325
466,718
(492,325)
(466,718)
Net assets
1,840,723
3,287,758
Capital and reserves
Called up share capital
18
12,501
12,501
Share premium account
1,237,500
1,237,500
Capital contribution
6,991,670
6,991,670
Profit and loss reserves
(6,400,948)
(4,953,913)
Total equity
1,840,723
3,287,758
The financial statements were approved by the board of directors and authorised for issue on 13 March 2024 and are signed on its behalf by:
Mr L Dolbeau
Director
Company Registration No. 11888188
SK SALES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Capital contribution
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2022
12,501
1,237,500
-
(4,309,122)
(3,059,121)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(644,791)
(644,791)
Transfers
-
-
6,991,670
-
0
6,991,670
Balance at 31 December 2022
12,501
1,237,500
6,991,670
(4,953,913)
3,287,758
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
-
(1,447,035)
(1,447,035)
Balance at 31 December 2023
12,501
1,237,500
6,991,670
(6,400,948)
1,840,723
SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

SK Sales Limited is a private company limited by shares incorporated in England and Wales. The registered office is SK Sales Limited, Unit 33 Stakehill Industrial Estate, Middleton, Manchester, M24 2RW.

 

1.1
Accounting convention

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

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

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

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

 

 

SK Sales Limited is a wholly owned subsidiary of France Air Corporate SAS and the results of SK Sales Limited are included in the consolidated financial statements of France Air Corporate which are available from the French equivalent of Companies House, Societe.com

1.2
Going concern

As highlighted in the directors report the company has sustained losses in the year. Given the group’s strong cash balance coupled with the commitment and support from the parent company, the directors are confident the company has adequate resources to continue in operational existence for the foreseeable future and will return to profitability as part of its turnaround strategy agreed with its parent. The company therefore continues to adopt the going concern basis in preparing the financial statements.true

 

1.3
Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of discounts, customer rebates and value added taxes. Turnover is earned from the sale of goods. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods has transferred to the buyer. This is usually at the point that the customer has signed for the delivery of the goods.

SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.4
Intangible fixed assets other than goodwill

Intangible assets are measured at cost less accumulated amortisation and any accumulated impairment losses.

 

Purchased intangible assets relate primarily to software that is separable from any associated hardware where the value to the business extends beyond the end of the current financial period.

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

Software
3 - 5 years
1.5
Tangible fixed assets

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

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

Leasehold improvements
over 3 to 8 years
Plant and equipment
over 3 to 8 years

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

1.6
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.

1.7
Stocks

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

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.

1.8
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.

1.9
Financial instruments
Other financial assets

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

SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Other financial liabilities

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.

1.10
Taxation

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

Current tax

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

SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Deferred tax

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

 

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

1.11
Provisions

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

 

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

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 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.

1.13
Retirement benefits

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

1.14
Leases

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.

1.15
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.

SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.16

Debtors and creditors

Debtors

Short term debtors are measured at transaction price, less any impairment. The majority of the Company's revenue arises from contracts with customers for the sale of goods, with one performance obligation. Revenue is recognised at the point in time that control of the goods passes to the customer, usually on delivery to the customer.

 

Volume Rebates

The Company provides volume rebates to certain customers either on a tiered or retrospective flat rate basis. A provision has been included as a reduction to trade receivables to account for the volume rebates that is expected to be paid.

 

Creditors

Short term trade creditors representing obligations to pay suppliers for goods or services acquired during ordinary course of business are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 

Supplier rebates

The company earns rebates based on agreements that it held either directly with suppliers or indirectly as part of the France Air Group. For the agreements that the Company held directly with suppliers the amounts at the balance sheet date are included as reduction to trade creditors.

1.17

Property provisions

The Company makes provisions in respect of leasehold property contracts and leasehold dilapidation commitments where it is probable that a transfer of economic benefit will be required to settle a present obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation.

2
Judgements and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

 

Provision against stock has been made to ensure that stock is valued at the lower of cost and net realisable value taking into account the level of stock on hand, estimates of future demand for individual stock lines and factors affecting saleability of individual products.

 

Provision for onerous leases has been included based on reviewing the ongoing commitments for the now closed Norwich site.

3
Turnover

Turnover in the current and prior year is wholly derived from the company's principal activity in the United Kingdom.

SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange losses
19,738
220,273
Fees payable to the company's auditor for the audit of the company's financial statements
21,500
20,000
Depreciation of owned tangible fixed assets
64,429
42,549
Amortisation of intangible assets
57,231
61,422
Profit on disposal of intangible assets
(80)
-
0
Operating lease charges
532,678
491,226
5
Employees

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

2023
2022
Number
Number
Store & Distribution
46
46
Support & Admin
5
4
Management
6
6
Total
57
56

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,576,753
2,384,613
Social security costs
257,323
237,977
Pension costs
123,452
101,527
2,957,528
2,724,117
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
186,999
209,618
Company pension contributions to defined contribution schemes
6,338
13,697
193,337
223,315

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2022 - 1).

SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Director's remuneration
(Continued)
- 18 -
Remuneration disclosed below include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
n/a
209,618
Company pension contributions to defined contribution schemes
n/a
13,697

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for this year.

7
Interest payable and similar expenses
2023
2022
£
£
Other interest on financial liabilities
17,263
29,334
8
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
-
0
137,733

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

2023
2022
£
£
Loss before taxation
(1,447,035)
(507,058)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(340,343)
(96,341)
Tax effect of expenses that are not deductible in determining taxable profit
5,337
4,540
Tax effect of utilisation of tax losses not previously recognised
338,782
96,773
Permanent capital allowances in excess of depreciation
(3,776)
(4,972)
Deferred tax adjustments in respect of prior years
-
0
137,733
Taxation charge for the year
-
137,733
SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Intangible fixed assets
Software
£
Cost
At 1 January 2023 and 31 December 2023
289,957
Amortisation and impairment
At 1 January 2023
173,822
Amortisation charged for the year
57,231
At 31 December 2023
231,053
Carrying amount
At 31 December 2023
58,904
At 31 December 2022
116,135
10
Tangible fixed assets
Leasehold improvements
Assets under construction
Plant and equipment
Total
£
£
£
£
Cost
At 1 January 2023
64,696
2,467
292,534
359,697
Additions
38,099
-
0
46,195
84,294
Disposals
-
0
(717)
(1,297)
(2,014)
Transfers
-
0
(1,750)
1,750
-
0
At 31 December 2023
102,795
-
0
339,182
441,977
Depreciation and impairment
At 1 January 2023
20,153
-
0
150,686
170,839
Depreciation charged in the year
4,870
-
0
59,559
64,429
Eliminated in respect of disposals
-
0
-
0
(878)
(878)
At 31 December 2023
25,023
-
0
209,367
234,390
Carrying amount
At 31 December 2023
77,772
-
0
129,815
207,587
At 31 December 2022
44,543
2,467
141,848
188,858
11
Stocks
2023
2022
£
£
Raw materials and consumables
1,467,848
1,664,107
SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,732,279
2,876,067
Other debtors
-
0
24,721
Prepayments and accrued income
381,452
280,354
3,113,731
3,181,142
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other borrowings
15
17,263
-
0
Trade creditors
1,296,497
1,341,771
Amounts owed to group undertakings
450
-
0
Taxation and social security
272,758
198,704
Other creditors
2,366
16,032
Accruals and deferred income
285,164
273,111
1,874,498
1,829,618
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Other borrowings
15
763,651
-
0
15
Loans and overdrafts
2023
2022
£
£
Loans from group undertakings
780,914
-
0
Payable within one year
17,263
-
0
Payable after one year
763,651
-
0

At 31 December 2023, the company owed £780,914 (2022 - £nil) to Airvance Group. Interest is charged at Euribor interest rate plus 0.5%. There is no fixed repayment date.

16
Provisions for liabilities
2023
2022
£
£
Other provisions
492,325
466,718
SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Provisions for liabilities
(Continued)
- 21 -
Movements on provisions:
Other provisions
£
At 1 January 2023
466,718
Additional provisions in the year
26,400
Utilisation of provision
(793)
At 31 December 2023
492,325

The provision arises from obligations under property leases, principally relating to dilapidations on properties currently in use and onerous rental terms on a property no longer in use.

 

17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
123,452
101,527

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.

18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 1p each
1,250,100
1,250,100
12,501
12,501
19
Operating lease commitments
Lessee

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
589,795
530,747
Between two and five years
1,662,189
1,717,827
In over five years
738,264
1,043,448
2,990,248
3,292,022
SK SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
20
Ultimate controlling party

The immediate parent undertaking is AirVance, a company registered in France. The ultimate parent undertaking and controlling party of the largest and smallest group that includes the company and for which group financial statements are prepared is France Air Corporate SAS, a company registered in France, which manages the investment in Arivance and all subsidiary undertakings. Consolidated financial statements of the group can be requested from the registered office, 383 rue des Barronnieres, 01700, Beynost, France.

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