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Registered number: 07543303
Highlight Horticulture Limited
Strategic Report, Director's Report and
Financial Statements
For The Year Ended 30 September 2023
Contents
Page
Strategic Report 1
Director's Report 2—3
Independent Auditor's Report 4—7
Consolidated Profit and Loss Account 8
Consolidated Balance Sheet 9
Company Balance Sheet 10
Consolidated Statement of Changes in Equity 11
Company Statement of Changes in Equity 12
Consolidated Cash Flow Statement 13
Notes to the Consolidated Cash Flow Statement 14
Company Cash Flow Statement 15
Notes to the Company Cash Flow Statement 16
Notes to the Financial Statements 17—26
Page 1
Strategic Report
The director presents his strategic report for the year ended 30 September 2023.
Review of the Business
In the year to 30 September 2023 the director has managed to maintain consistent profit margins. Sales levels have increased as anticipated, after experiancing reduced sales and profit in 2022 following a period of growth in 2020 and 2021 due to the COVID-19 pandemic.
A focus of this year was to improve sales volume growth,
The industry in general is seeing a matched increase in price due to the current econimic climate.
Competition is key to maintaing market share and there is need to hold strong stock levels to ensure adequate and timely supply to the market.
The company's key financial and other performance indicators during the year were as follows:
2023
2022
£
£
Turnover
£
37,147,640
29,229,948
Turnover growth
%
27
(26)
Gross profit margin
%
20
25
Profit before tax
£
3,358,633
3,900,863
Principal Risks and Uncertainties
The director views the principal risks to the business to be the wider UK economy and the continued uncertainty surrounding the Eurozone and the ongoing results of Brexit negotiations. Stock levels have been increased in anticipation of any difficulties and the director continues to monitor the situation.
On behalf of the board
Mr David Oates
Director
23 September 2024
Page 1
Page 2
Director's Report
The director presents his report and the financial statements for the year ended 30 September 2023.
Principal Activity
The group's principal activity continues to be that of wholesale of horticultural supplies.
Directors
The director who held office during the year were as follows:
Mr David Oates
Streamlined Energy and Carbon Reporting
The company qualifies as a low energy user and is exempt from reporting under SECR regulations.
Statement of Director's Responsibilities
The director is responsible for preparing the Strategic Report, the Director's 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, comprising FRS102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law). Under company law the director 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 the group and of the profit or loss of the group for that period. In preparing the financial statements the director is required to:
  • select suitable accounting policies and then apply them consistently;
  • make judgments and accounting estimates that are reasonable and prudent;
  • state whether applicable United Kingdom Accounting Standards, comprising FRS102, 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company and group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The director is responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Statement of Disclosure of Information to Auditors
In the case of each director in office at the date the Director's Report is approved:
  • so far as the director is aware, there is no relevant audit information of which the company and group's auditors are unaware; and
  • they have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company and group's auditors are aware of that information.
Page 2
Page 3
Independent Auditors
The auditors, Nuvo Audit Limited, have indicated their willingness to continue in office and a resolution concerning their re-appointment will be proposed at the Annual General Meeting.
On behalf of the board
Mr David Oates
Director
23 September 2024
Page 3
Page 4
Independent Auditor's Report
Opinion
We have audited the financial statements of Highlight Horticulture Limited (the "parent company") and its subsidiaries (the "group") for the year ended 30 September 2023 which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes of Equity, Company Statement of Changes of Equity, Consolidated Cash Flow Statement, Company Cash Flow Statement and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
In our opinion the financial statements:
  • give a true and fair view of the state of the group's and of the parent company's affairs as at 30 September 2023 and of the group's profit/(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.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions Relating to Going Concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group and parent company's ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other Information
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The 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. In connection with our audit of the financial statements, 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 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 the audit:
  • the information given in the Strategic Report and Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
  • the Strategic Report and Director's Report have been prepared in accordance with applicable legal requirements.
Page 4
Page 5
Matters on Which We Are Required to Report by Exception
In the light of the knowledge and understanding of the group and parent company and their 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:
  • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
  • the parent company financial statements are not in agreement with the accounting records or returns; or
  • certain disclosures of director's 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 Director's Responsibilities Statement set out on page 2—3, 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 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 director is responsible for assessing the group and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Page 5
Page 6
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: 
The Company is subject to many laws and regulations within the country it operates, where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. We identified the following laws and regulations as the most likely to have a material effect if non-compliance were to occur; financial reporting legislation, Companies Act legislation, tax legislation, anti-bribery legislation and employment law;
We communicated relevant laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit;
We understood how the Company is complying with those legal and regulatory frameworks by making enquiries of management. We corroborated our enquiries through our review of board minutes;
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by meeting with employees from different parts of the business to understand where it is considered there was susceptibility to fraud. We also considered performance targets and their propensity to influence efforts made by management to manage earnings. We considered the programs and controls that the Company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programs and controls. Where the risk was considered to be higher, we performed audit procedures to addressed identified fraud risk; Our audit procedures involved: journal entry testing, with a focus on manual credits to revenue and journals indicating large or unusual transactions based on our understanding of the business and enquiries of management. In addition, we completed audit procedures to conclude on the compliance of disclosures in the annual report and accounts with applicable financial reporting requirements; 
Assessment and appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s:
  • Knowledge of the industry in which the client operates
  • Understanding the legal and regulatory requirements specific to the entity including:
  • The provisions of the applicable legislation
  • The regulators rules and related guidance, including guidance issued by relevant authorities that interprets those rules
  • The provisions of the applicable legislation
The regulators rules and related guidance, including guidance issued by relevant authorities that interprets those rulesThe applicable statutory provisionsIn assessing the potential risks of material misstatement, we obtained an understanding of:
  • The entity’s operations, including the nature of its revenue sources, products and services and of its objectives and strategies to understand classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement. 
  • The entity’s control environment, including policies and procedures implemented to comply with the entity’s relevant regulatory requirements, including the adequacy of procedures for authorisation of transactions, internal review procedures over the entity’s compliance with regulatory requirements and procedures to ensure that possible breaches of requirements are appropriately investigated and reported. 
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website 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 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 that 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.
Page 6
Page 7
Mr Daniel Johnson FCCA (Senior Statutory Auditor)
for and on behalf of Nuvo Audit Limited , Statutory Auditor
23 September 2024
Nuvo Audit Limited
7 Faraday Court
First Avenue
Burton Upon Trent
Staffordshire
DE14 2WX
Page 7
Page 8
Consolidated Profit and Loss Account
2023 2022
Notes £ £
TURNOVER 3 37,147,640 29,229,948
Cost of sales (29,599,021 ) (22,000,251 )
GROSS PROFIT 7,548,619 7,229,697
Administrative expenses (3,995,951 ) (3,198,708 )
OPERATING PROFIT 4 3,552,668 4,030,989
(Loss)/profit on disposal of fixed assets (472 ) 487
Other interest receivable and similar income 9 72,468 26,696
Interest payable and similar charges 10 (27,175 ) (157,309 )
PROFIT BEFORE TAXATION 3,597,489 3,900,863
Tax on Profit 11 (797,573 ) (764,515 )
PROFIT AFTER TAXATION BEING PROFIT FOR THE FINANCIAL YEAR ATTRIBUTABLE TO THE OWNERS OF THE PARENT 2,799,916 3,136,348
The notes on pages 14 to 26 form part of these financial statements.
Page 8
Page 9
Consolidated Balance Sheet
Registered number: 07543303
2023 2022
Notes £ £ £ £
FIXED ASSETS
Intangible Assets 12 1,000,000 -
Tangible Assets 13 417,603 461,558
Investments 14 41,319 -
1,458,922 461,558
CURRENT ASSETS
Stocks 15 10,597,000 9,074,765
Debtors 16 4,800,973 3,887,073
Cash at bank and in hand 7,685,051 7,530,468
23,083,024 20,492,306
Creditors: Amounts Falling Due Within One Year 17 (5,949,035 ) (4,165,997 )
NET CURRENT ASSETS (LIABILITIES) 17,133,989 16,326,309
TOTAL ASSETS LESS CURRENT LIABILITIES 18,592,911 16,787,867
PROVISIONS FOR LIABILITIES
Deferred Taxation 18 (110,492 ) (105,364 )
NET ASSETS 18,482,419 16,682,503
CAPITAL AND RESERVES
Called up share capital 20 100 100
Profit and Loss Account 18,482,319 16,682,403
SHAREHOLDERS' FUNDS 18,482,419 16,682,503
On behalf of the board
Mr David Oates
Director
23 September 2024
The notes on pages 14 to 26 form part of these financial statements.
Page 9
Page 10
Company Balance Sheet
Registered number: 07543303
2023 2022
Notes £ £ £ £
FIXED ASSETS
Tangible Assets 13 417,603 461,558
Investments 14 1,041,619 -
1,459,222 461,558
CURRENT ASSETS
Stocks 15 10,597,000 9,074,765
Debtors 16 4,800,673 3,887,073
Cash at bank and in hand 7,685,051 7,530,468
23,082,724 20,492,306
Creditors: Amounts Falling Due Within One Year 17 (5,949,035 ) (4,165,997 )
NET CURRENT ASSETS (LIABILITIES) 17,133,689 16,326,309
TOTAL ASSETS LESS CURRENT LIABILITIES 18,592,911 16,787,867
PROVISIONS FOR LIABILITIES
Deferred Taxation 18 (110,492 ) (105,364 )
NET ASSETS 18,482,419 16,682,503
CAPITAL AND RESERVES
Called up share capital 20 100 100
Profit and Loss Account 18,482,319 16,682,403
SHAREHOLDERS' FUNDS 18,482,419 16,682,503
In accordance with section 408(3) of the Companies Act 2006, the company has not presented its own profit and loss account and the related notes. The company's profit for the year was £ 2,799,916 (2022: £ 3,136,348 profit).
On behalf of the board
Mr David Oates
Director
23 September 2024
The notes on pages 14 to 26 form part of these financial statements.
Page 10
Page 11
Consolidated Statement of Changes in Equity
Share Capital Profit and Loss Account Total
£ £ £
As at 1 October 2021 100 13,546,055 13,546,155
Profit for the year and total comprehensive income - 3,136,348 3,136,348
As at 30 September 2022 and 1 October 2022 100 16,682,403 16,682,503
Profit for the year and total comprehensive income - 2,799,916 2,799,916
Dividends paid - (1,000,000) (1,000,000)
As at 30 September 2023 100 18,482,319 18,482,419
Page 11
Page 12
Company Statement of Changes in Equity
Share Capital Profit and Loss Account Total
£ £ £
As at 1 October 2021 100 13,546,055 13,546,155
Profit for the year and total comprehensive income - 3,136,348 3,136,348
As at 30 September 2022 and 1 October 2022 100 16,682,403 16,682,503
Profit for the year and total comprehensive income - 2,799,916 2,799,916
Dividends paid - (1,000,000) (1,000,000)
As at 30 September 2023 100 18,482,319 18,482,419
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Page 13
Consolidated Cash Flow Statement
2023 2022
Notes £ £
Cash flows from operating activities
Net cash generated from operations 1 2,412,627 3,362,212
Interest paid (27,175 ) (157,309 )
Tax paid (224,578 ) (1,532,348 )
Net cash generated from operating activities 2,160,874 1,672,555
Cash flows from investing activities
Purchase of intangible assets (1,000,000 ) -
Purchase of tangible assets (47,829 ) (92,448 )
Proceeds from disposal of tangible assets 10,389 10,000
Purchase of other fixed asset investments (41,319 ) -
Interest received 72,468 26,696
Net cash used in investing activities (1,006,291 ) (55,752 )
Cash flows from financing activities
Equity dividends paid (1,000,000 ) -
Increase in cash and cash equivalents 154,583 1,616,803
Cash and cash equivalents at beginning of year 2 7,530,468 5,913,665
Cash and cash equivalents at end of year 2 7,685,051 7,530,468
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Notes to the Consolidated Cash Flow Statement
1. Reconciliation of profit for the financial year to cash generated from operations
2023 2022
£ £
Profit for the financial year 2,799,916 3,136,348
Adjustments for:
Tax on profit 797,573 764,515
Interest expense 27,175 157,309
Interest income (72,468 ) (26,696 )
Depreciation of tangible assets 80,923 96,451
Loss/(profit) on disposal of tangible assets 472 (487)
Movements in working capital:
Increase in stocks (1,522,235 ) (1,079,758 )
Increase in trade and other debtors (913,900 ) (582,190 )
Increase in trade and other creditors 1,215,171 896,720
Net cash generated from operations 2,412,627 3,362,212
2. Cash and cash equivalents
Cash and cash equivalents, as stated in the Statement of Cash Flows, relates to the following items in the Balance Sheet:
2023 2022
£ £
Cash at bank and in hand 7,685,051 7,530,468
3. Analysis of changes in net funds
As at 1 October 2022 Cash flows As at 30 September 2023
£ £ £
Cash at bank and in hand 7,530,468 154,583 7,685,051
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Company Cash Flow Statement
2023 2022
Notes £ £
Cash flows from operating activities
Net cash generated from operations 1 2,412,927 3,362,212
Interest paid (27,175 ) (157,309 )
Tax paid (224,578 ) (1,532,348 )
Net cash generated from operating activities 2,161,174 1,672,555
Cash flows from investing activities
Purchase of tangible assets (47,829 ) (92,448 )
Proceeds from disposal of tangible assets 10,389 10,000
Purchase of other fixed asset investments (1,041,619 ) -
Interest received 72,468 26,696
Net cash used in investing activities (1,006,591 ) (55,752 )
Cash flows from financing activities
Equity dividends paid (1,000,000 ) -
Increase in cash and cash equivalents 154,583 1,616,803
Cash and cash equivalents at beginning of year 2 7,530,468 5,913,665
Cash and cash equivalents at end of year 2 7,685,051 7,530,468
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Notes to the Company Cash Flow Statement
1. Reconciliation of profit for the financial year to cash generated from operations
2023 2022
£ £
Profit for the financial year 2,799,916 3,136,348
Adjustments for:
Tax on profit 797,573 764,515
Interest expense 27,175 157,309
Interest income (72,468 ) (26,696 )
Depreciation of tangible assets 80,923 96,451
Loss/(profit) on disposal of tangible assets 472 (487)
Movements in working capital:
Increase in stocks (1,522,235 ) (1,079,758 )
Increase in trade and other debtors (913,600 ) (582,190 )
Increase in trade and other creditors 1,215,171 896,720
Net cash generated from operations 2,412,927 3,362,212
2. Cash and cash equivalents
Cash and cash equivalents, as stated in the Statement of Cash Flows, relates to the following items in the Balance Sheet:
2023 2022
£ £
Cash at bank and in hand 7,685,051 7,530,468
3. Analysis of changes in net funds
As at 1 October 2022 Cash flows As at 30 September 2023
£ £ £
Cash at bank and in hand 7,530,468 154,583 7,685,051
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Notes to the Financial Statements
1. General Information
Highlight Horticulture Limited is a private company, limited by shares, incorporated in England & Wales, registered number 07543303 . The registered office is The Willows, Ransom Wood Business Park, Southwell Road West, Rainworth, Mansfield, Nottinghamshire, NG21 0HJ.
2. Accounting Policies
2.1. Basis of Preparation of Financial Statements
The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland'' and the Companies Act 2006.
2.2. Basis Of Consolidation
The group consolidated financial statements include the financial statements of the company and all of its subsidiary undertakings together with the group’s share of the results of associates made up to 30 September 2023.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Where the group owns less than 50% of the voting powers of an entity but controls the entity by virtue of an agreement with other investors which give it control of the financial and operating policies of the entity, it accounts for that entity as a subsidiary.
Where a subsidiary has different accounting policies to the group, adjustments are made to those subsidiary financial statements to apply the group’s accounting policies when preparing the consolidated financial statements.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and where the group has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate. The results of associates are accounted for using the equity method of accounting.
Any subsidiary undertakings or associates sold or acquired during the year are included up to, or from, the dates of change of control or change of significant influence respectively.
Where control of a subsidiary is lost, the gain or loss is recognised in the consolidated income statement. The cumulative amounts of any exchange differences on translation, recognised in equity, are not included in the gain or loss on disposal and are transferred to retained earnings. The gain or loss also includes amounts included in other comprehensive income that are required to be reclassified to profit or loss but excludes those amounts that are not required to be reclassified.
Where control of a subsidiary is achieved in stages, the initial acquisition that gave the group control is accounted for as a business combination. Thereafter where the group increases its controlling interest in the subsidiary the transaction is treated as a transaction between equity holders. Any difference between the fair value of the consideration paid and the carrying amount of the non-controlling interest acquired is recognised directly in equity. No changes are made to the carrying value of assets, liabilities or provisions for contingent liabilities.
2.3. Business Combinations
Business combinations are accounted for by applying the purchase method.
The cost of a business combination is the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued plus the costs directly attributable to the business combination. Where control is achieved in stages the cost is the consideration at the date of each transaction.
Contingent consideration is initially recognised at estimated amount where the consideration is probable and can be measured reliably. Where (i) the contingent consideration is not considered probable or cannot be reliably measured but subsequently becomes probable and measurable or (ii) contingent consideration previously measured is adjusted, the amounts are recognised as an adjustment to the cost of the business combination.
On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be measured reliably, in which case the value is incorporated in goodwill. Intangible assets are only recognised separately from goodwill where they are separable and arise from contractual or other legal rights. Where the fair value of contingent liabilities cannot be reliably measured they are disclosed on the same basis as other contingent liabilities.
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2.4. Going Concern Disclosure
The company meets its day to day working capital requirements through its cash reserves. The company's forcasts and projections, taking account of reasonable possible changes in trading performance show that the company is in a strong position and able to operate within the levels of its current cash reserves. After making resonable enquiries the director has a reasonable expectation that the company has adequate resources to continue operating at its current level and maintaining if not improving on current dividend policy.
The financial statements have been prepared on a going concern basis.
2.5. Turnover
Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover is reduced for estimated customer returns, rebates and other similar allowances.
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.
Rendering of services
Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. Turnover is only recognised to the extent of recoverable expenses when the outcome of a contract cannot be estimated reliably.
2.6. Intangible Fixed Assets and Amortisation - Goodwill
Goodwill represents the excess of the cost of a business combination over the fair value of the group’s share of the identifiable net assets, liabilities and contingent liabilities acquired.
Goodwill arising on the acquisition of subsidiaries is included in Intangible Assets. Goodwill arising on the acquisition of associates and joint ventures is included in the related equity accounted investment value.
Goodwill is amortised over its expected useful life which is estimated to be .... years.
Goodwill is assessed for impairment when there are indicators of impairment and any impairment is charged to the profit and loss account. No reversals of impairment are recognised.
2.7. Intangible Fixed Assets and Amortisation - Other Intangible
Other intangible assets are patents. It is amortised to profit and loss account over its estimated economic life of 10 years.
2.8. Research and Development
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research is recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised to ... on a straight line basis over their expected useful economic lives, which range from ... to ... years.
If it is not possible to distinguish between the research phase and the development phase of an internal project the expenditure is treated as if it were all incurred in the research phase only.
2.9. Tangible Fixed Assets and Depreciation
Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided at rates calculated to write off the cost of the fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
Plant & Machinery 20% Reducing balance
Motor Vehicles 25% Reducing balance
Fixtures & Fittings 15% Reducing balance
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2.10. Leasing and Hire Purchase Contracts
Assets obtained under finance leases are capitalised as tangible fixed assets. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives. Assets acquired under hire purchase contracts are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in the creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to profit and loss account as incurred.
2.11. Stocks and Work in Progress
Stocks and work in progress are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks.
Cost is determined using the first-in, first-out method. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.
Work in progress is reflected in the accounts on a contract by contract basis by recording turnover and related costs as contract activity progresses.
At the end of each reporting period stocks are assessed for impairment. If an item of stock is impaired, the identified stock is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is required the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit and loss account.
2.12. Cash and Cash Equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks, other short-term highly liquid investments that mature in no more than three months from the date of acquisition and are readily convertible to a known amount of cash with insignificant risk of change in value, and bank overdrafts.
2.13. Foreign Currencies
Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.
2.14. Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable timing differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible timing differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. The measurement of deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current or deferred tax for the year is recognised in profit or loss, except when they related to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax is also recognised in other comprehensive income or directly in equity respectively.
2.15. Pensions
The group operates a defined pension contribution scheme. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme.
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3. Turnover
In accordance with UKSI 2008/410, schedule 1, paragraph 68, the group has not disclosed an analysis of turnover by class of business as the directors are of the opinion it would be seriously prejudicial to the interests of the group.
4. Operating Profit
The operating profit is stated after charging:
2023 2022
£ £
Bad debts - 2,836
Depreciation of tangible fixed assets 80,923 96,451
5. Auditor's Remuneration
Remuneration received by the company's auditors and their associates during the year was as follows:
2023 2022
£ £
Audit Services
Audit of the group and company's financial statements 9,250 9,250
Other Services
Other non-audit services 12,060 13,826
6. Staff Costs
Staff costs, including directors' remuneration, were as follows:
Group Company
2023 2022 2023 2022
£ £ £ £
Wages and salaries 1,817,853 1,670,590 1,817,853 1,670,590
Social security costs 214,344 209,360 214,344 209,360
Other pension costs 23,408 20,939 23,408 20,939
2,055,605 1,900,889 2,055,605 1,900,889
7. Average Number of Employees
Group
Average number of employees, including directors, during the year was: 30
Company
Average number of employees, including directors, during the year was: 30 (2022: 28)
30 28
30 28
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8. Director's remuneration
2023 2022
£ £
Emoluments 648,858 635,084
Information regarding the highest paid director was as follows:
2023 2022
£ £
Emoluments 648,858 635,084
9. Interest Receivable and Similar Income
2023 2022
£ £
Bank interest receivable 72,468 26,696
10. Interest Payable and Similar Charges
2023 2022
£ £
Foreign exchange charges 27,175 145,771
Other finance charges - 11,538
27,175 157,309
11. Tax on Profit
The tax charge on the profit for the year was as follows:
Tax Rate 2023 2022
2023 2022 £ £
Current tax
UK Corporation Tax 25.0% 19.0% 792,445 738,592
Deferred Tax
Deferred taxation 5,128 25,923
Total tax charge for the period 797,573 764,515
The actual charge for the year can be reconciled to the expected charge for the year based on the profit and the standard rate of corporation tax as follows:
2023 2022
£ £
Profit before tax 3,597,489 3,900,863
Tax on profit at 25% (UK standard rate) 783,192 741,164
Goodwill/depreciation not allowed for tax 17,809 -
Expenses not deductible for tax purposes 3,565 3,332
...CONTINUED
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Capital allowances (12,121 ) -
Short term timing differences - 20,019
Difference in tax rates 5,128 -
Total tax charge for the period 797,573 764,515
12. Intangible Assets
Group
Goodwill Other Development Costs Total
£ £ £ £
Cost
As at 1 October 2022 2,257,482 22,000 4 2,279,486
Additions 1,000,000 - - 1,000,000
As at 30 September 2023 3,257,482 22,000 4 3,279,486
Amortisation
As at 1 October 2022 2,257,482 22,000 4 2,279,486
As at 30 September 2023 2,257,482 22,000 4 2,279,486
Net Book Value
As at 30 September 2023 1,000,000 - - 1,000,000
As at 1 October 2022 - - - -
Company
Goodwill Other Development Costs Total
£ £ £ £
Cost
As at 1 October 2022 2,257,482 22,000 4 2,279,486
As at 30 September 2023 2,257,482 22,000 4 2,279,486
Amortisation
As at 1 October 2022 2,257,482 22,000 4 2,279,486
As at 30 September 2023 2,257,482 22,000 4 2,279,486
Net Book Value
As at 30 September 2023 - - - -
As at 1 October 2022 - - - -
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13. Tangible Assets
Group
Plant & Machinery Motor Vehicles Fixtures & Fittings Total
£ £ £ £
Cost
As at 1 October 2022 334,523 88,304 525,305 948,132
Additions 6,279 - 41,550 47,829
Disposals (20,500 ) (16,950 ) - (37,450 )
As at 30 September 2023 320,302 71,354 566,855 958,511
Depreciation
As at 1 October 2022 151,765 45,732 289,077 486,574
Provided during the period 36,220 8,177 36,526 80,923
Disposals (15,463 ) (11,126 ) - (26,589 )
As at 30 September 2023 172,522 42,783 325,603 540,908
Net Book Value
As at 30 September 2023 147,780 28,571 241,252 417,603
As at 1 October 2022 182,758 42,572 236,228 461,558
Company
Plant & Machinery Motor Vehicles Fixtures & Fittings Total
£ £ £ £
Cost
As at 1 October 2022 334,523 88,304 525,305 948,132
Additions 6,279 - 41,550 47,829
Disposals (20,500 ) (16,950 ) - (37,450 )
As at 30 September 2023 320,302 71,354 566,855 958,511
Depreciation
As at 1 October 2022 151,765 45,732 289,077 486,574
Provided during the period 36,220 8,177 36,526 80,923
Disposals (15,463 ) (11,126 ) - (26,589 )
As at 30 September 2023 172,522 42,783 325,603 540,908
Net Book Value
As at 30 September 2023 147,780 28,571 241,252 417,603
As at 1 October 2022 182,758 42,572 236,228 461,558
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14. Investments
Group
Unlisted
£
Cost
As at 1 October 2022 -
Additions 41,319
As at 30 September 2023 41,319
Provision
As at 1 October 2022 -
As at 30 September 2023 -
Net Book Value
As at 30 September 2023 41,319
As at 1 October 2022 -
Company
Unlisted
£
Cost
As at 1 October 2022 -
Additions 1,041,619
As at 30 September 2023 1,041,619
Provision
As at 1 October 2022 -
As at 30 September 2023 -
Net Book Value
As at 30 September 2023 1,041,619
As at 1 October 2022 -
15. Stocks
Group Company
2023 2022 2023 2022
£ £ £ £
Stock 10,597,000 9,074,765 10,597,000 9,074,765
16. Debtors
Group Company
2023 2022 2023 2022
£ £ £ £
Due within one year
Trade debtors 4,534,169 3,376,851 4,534,169 3,376,851
Amounts owed by group undertakings 300 - - -
Other debtors 266,504 510,222 266,504 510,222
4,800,973 3,887,073 4,800,673 3,887,073
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17. Creditors: Amounts Falling Due Within One Year
Group Company
2023 2022 2023 2022
£ £ £ £
Trade creditors 3,524,624 2,457,874 3,524,624 2,457,874
Other creditors 555,831 679,330 555,831 679,330
Corporation tax 789,035 221,168 789,035 221,168
Taxation and social security 517,871 327,145 517,871 327,145
Accruals and deferred income 561,674 480,480 561,674 480,480
5,949,035 4,165,997 5,949,035 4,165,997
18. Deferred Taxation
The provision for deferred tax is made up as follows:
Group Company
2023 2022 2023 2022
£ £ £ £
Other timing differences 110,492 105,364 110,492 105,364
19. Provisions for Liabilities
Group
Deferred Tax Total
£ £
As at 1 October 2022 105,364 105,364
Deferred taxation 5,128 5,128
Balance at 30 September 2023 110,492 110,492
Company
Deferred Tax Total
£ £
As at 1 October 2022 105,364 105,364
Deferred taxation 5,128 5,128
Balance at 30 September 2023 110,492 110,492
20. Share Capital
2023 2022
Allotted, called up and fully paid £ £
100 Ordinary Shares of £ 1.00 each 100 100
21. Pension Commitments
The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund.
During the year the charge to profit or loss in respect of defined contribution schemes was £23,408 (2022: £20,939).
At the balance sheet date contributions of £5,336 (2022: £4,132) were due to the fund and are included in creditors.
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22. Dividends
2023 2022
£ £
On equity shares:
Final dividend paid 1,000,000 -
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