Company registration number 10559417 (England and Wales)
OTTERDENE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
OTTERDENE LIMITED
COMPANY INFORMATION
Directors
Mr TJ Parson
Mr DF Parson
Mr RS Parson
Mr AR Parson
Mr PM Parson
Company number
10559417
Registered office
Saunders Way
Kingsmill Industrial Estate
Cullompton
EX15 1BS
Auditor
Bush & Co Limited
2 Barnfield Crescent
Exeter
EX1 1QT
OTTERDENE LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
OTTERDENE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
The Company operates from offices and showrooms in Cullompton with a Distribution Centre in Willand. The company imports and distributes Summer Toys and Gifts to a wide range of retail outlets.
Fair review of the business
The company supplies a range of small impulse products to retail outlets in the tourist sector.
These products are sourced from a variety of suppliers right across the globe.
The key performance indicator is the turnover of the company which is tracked daily.
Trading continues to be very good and the company continues to see good growth.
Stock levels are high but are managed carefully and especially aged and excess inventory.
The company experiences a relatively low level of bad debt.
Overheads are steady and consistent with the growth of the company.
Principal risks and uncertainties
The directors identify risks and mitigate them accordingly.
The principal risk in the retail outlet sector is the increase of online sales. This is mitigated by the fact that the
company deals in impulse low-priced items which aren't generally purchased online.
Another risk is interruption of supply from the Far East. This is somewhat mitigated by the large stock levels held
enabling continued supply for some time before running out.
Also, there is a risk of a downturn in spending due to Cost of Living. This is mitigated by the sale of lower priced
economy goods that are bought even when the population has less to spend.
There is a risk of poor weather in the summer season but the company constantly looks for product that isn't
weather dependent to mitigate this risk.
Mr TJ Parson
Director
20 September 2024
OTTERDENE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their 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 distribution of wholesale leisure goods.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £3,000,010. 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:
Mr TJ Parson
Mr DF Parson
Mr RS Parson
Mr AR Parson
Mr PM Parson
Mrs HR Parson
(Resigned 19 January 2023)
Mrs LJ Parson
(Resigned 19 January 2023)
Mrs VA Parson
(Resigned 19 January 2023)
Mrs SL Parson
(Resigned 19 January 2023)
Mrs J Parson
(Resigned 19 January 2023)
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr TJ Parson
Director
20 September 2024
OTTERDENE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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.
OTTERDENE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF OTTERDENE LIMITED
- 4 -
Opinion
We have audited the financial statements of Otterdene Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its 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.
OTTERDENE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OTTERDENE LIMITED
- 5 -
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
- Enquiry of management, those charged with governance and review of legal and professional nominal accounts round actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
- Attendance of annual onsite stock take and review of control and systems.
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.
OTTERDENE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OTTERDENE LIMITED
- 6 -
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Mr Shane Cann BA(Hons) ACA FCCA CTA
Senior Statutory Auditor
For and on behalf of Bush & Co Limited
25 September 2024
Chartered Accountants
Statutory Auditor
2 Barnfield Crescent
Exeter
EX1 1QT
OTTERDENE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
10,385,128
11,768,929
Cost of sales
(5,662,994)
(6,474,287)
Gross profit
4,722,134
5,294,642
Administrative expenses
(2,045,770)
(1,766,324)
Operating profit
4
2,676,364
3,528,318
Interest receivable and similar income
7
30,329
5,250
Interest payable and similar expenses
8
(10,330)
(50,495)
Profit before taxation
2,696,363
3,483,073
Tax on profit
9
(630,200)
(680,082)
Profit for the financial year
2,066,163
2,802,991
The profit and loss account has been prepared on the basis that all operations are continuing operations.
OTTERDENE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
3,875
5,500
Tangible assets
12
744,509
607,435
748,384
612,935
Current assets
Stocks
13
2,342,305
2,529,684
Debtors
14
1,507,987
1,467,686
Cash at bank and in hand
2,557,683
3,991,934
6,407,975
7,989,304
Creditors: amounts falling due within one year
15
(796,061)
(1,332,028)
Net current assets
5,611,914
6,657,276
Total assets less current liabilities
6,360,298
7,270,211
Provisions for liabilities
Deferred tax liability
16
113,134
89,200
(113,134)
(89,200)
Net assets
6,247,164
7,181,011
Capital and reserves
Called up share capital
18
1,000
1,000
Profit and loss reserves
6,246,164
7,180,011
Total equity
6,247,164
7,181,011
The financial statements were approved by the board of directors and authorised for issue on 20 September 2024 and are signed on its behalf by:
Mr TJ Parson
Director
Company Registration No. 10559417
OTTERDENE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
1,000
4,637,020
4,638,020
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
2,802,991
2,802,991
Dividends
10
-
(260,000)
(260,000)
Balance at 31 December 2022
1,000
7,180,011
7,181,011
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
2,066,163
2,066,163
Dividends
10
-
(3,000,010)
(3,000,010)
Balance at 31 December 2023
1,000
6,246,164
6,247,164
OTTERDENE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
2,419,956
2,395,400
Interest paid
(10,330)
(50,495)
Income taxes paid
(673,295)
(894,379)
Net cash inflow from operating activities
1,736,331
1,450,526
Investing activities
Purchase of tangible fixed assets
(202,901)
(80,464)
Proceeds from disposal of tangible fixed assets
2,000
Interest received
30,329
5,250
Net cash used in investing activities
(170,572)
(75,214)
Financing activities
Dividends paid
(3,000,010)
(260,000)
Net cash used in financing activities
(3,000,010)
(260,000)
Net (decrease)/increase in cash and cash equivalents
(1,434,251)
1,115,312
Cash and cash equivalents at beginning of year
3,991,934
2,876,622
Cash and cash equivalents at end of year
2,557,683
3,991,934
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Otterdene Limited is a private company limited by shares incorporated in England and Wales. The registered office is Saunders Way, Kingsmill Industrial Estate, Cullompton, EX15 1BS.
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.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which was 5 years.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
20% on cost
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
Not depreciated
Leasehold land and buildings
10% on cost
Plant and equipment
10% on reducing balance
Computers
25% on cost
Motor vehicles
25% on reducing balance
Freehold land is not depreciated.
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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
A formal write down policy is used and applied to old stock on a consistent basis each year.
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
OTTERDENE 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.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
10,385,128
11,768,929
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 16 -
2023
2022
£
£
Other revenue
Interest income
30,329
5,250
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
275
(1,509)
Fees payable to the company's auditor for the audit of the company's financial statements
9,000
7,000
Depreciation of owned tangible fixed assets
62,056
62,692
Loss on disposal of tangible fixed assets
1,771
-
Amortisation of intangible assets
1,625
1,625
Operating lease charges
204,075
219,426
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
6
10
Other staff
32
27
Total
38
37
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,035,134
871,506
Social security costs
87,507
67,811
Pension costs
9,375
6,091
1,132,016
945,408
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
54,375
87,000
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
30,329
3,328
Other interest income
1,922
Total income
30,329
5,250
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
30,329
3,328
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
10,002
50,402
Other finance costs:
Other interest
328
93
10,330
50,495
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
606,266
653,295
Deferred tax
Origination and reversal of timing differences
23,934
26,787
Total tax charge
630,200
680,082
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 18 -
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
2,696,363
3,483,073
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
674,091
661,784
Tax effect of expenses that are not deductible in determining taxable profit
4,475
18
Change in unrecognised deferred tax assets
23,934
26,787
Group relief
(21,503)
Permanent capital allowances in excess of depreciation
(12,663)
(8,507)
Effect of change in rate of taxation
(38,134)
Taxation charge for the year
630,200
680,082
10
Dividends
2023
2022
£
£
Interim paid
3,000,010
260,000
11
Intangible fixed assets
Goodwill
Software
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
22,200
8,123
30,323
Amortisation and impairment
At 1 January 2023
22,200
2,623
24,823
Amortisation charged for the year
1,625
1,625
At 31 December 2023
22,200
4,248
26,448
Carrying amount
At 31 December 2023
3,875
3,875
At 31 December 2022
5,500
5,500
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Plant and equipment
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
192,303
81,313
485,525
52,078
67,725
878,944
Additions
350
10,261
192,290
202,901
Disposals
(19,500)
(19,500)
At 31 December 2023
192,303
81,313
485,875
62,339
240,515
1,062,345
Depreciation and impairment
At 1 January 2023
32,023
160,561
42,587
36,338
271,509
Depreciation charged in the year
8,131
31,070
5,476
17,379
62,056
Eliminated in respect of disposals
(15,729)
(15,729)
At 31 December 2023
40,154
191,631
48,063
37,988
317,836
Carrying amount
At 31 December 2023
192,303
41,159
294,244
14,276
202,527
744,509
At 31 December 2022
192,303
49,290
324,964
9,491
31,387
607,435
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,342,305
2,529,684
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
805,191
712,527
Other debtors
640,549
692,109
Prepayments and accrued income
62,247
63,050
1,507,987
1,467,686
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
15
Creditors: amounts falling due within one year
2023
2022
£
£
Payments received on account
50,654
41,915
Trade creditors
80,300
222,567
Corporation tax
286,266
353,295
Other taxation and social security
162,631
146,001
Other creditors
202,022
505,938
Accruals and deferred income
14,188
62,312
796,061
1,332,028
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
113,134
89,200
2023
Movements in the year:
£
Liability at 1 January 2023
89,200
Charge to profit or loss
23,934
Liability at 31 December 2023
113,134
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
9,375
6,091
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.
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each of £1 each
200
200
200
200
Ordinary B of £1 each of £1 each
400
400
400
400
Ordinary C of £1 each of £1 each
400
400
400
400
1,000
1,000
1,000
1,000
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
180,938
193,232
Between two and five years
809,098
737,576
In over five years
197,154
368,788
1,187,190
1,299,596
20
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
2,066,163
2,802,991
Adjustments for:
Taxation charged
630,200
680,082
Finance costs
10,330
50,495
Investment income
(30,329)
(5,250)
Loss on disposal of tangible fixed assets
1,771
-
Amortisation and impairment of intangible assets
1,625
1,625
Depreciation and impairment of tangible fixed assets
62,056
62,692
Movements in working capital:
Decrease/(increase) in stocks
187,379
(1,171,078)
(Increase)/decrease in debtors
(40,301)
420,876
Decrease in creditors
(468,938)
(447,033)
Cash generated from operations
2,419,956
2,395,400
OTTERDENE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
21
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
3,991,934
(1,434,251)
2,557,683
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