Registration number:
Slemcka (DMS) Limited
for the Year Ended 31 December 2023
Slemcka (DMS) Limited
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Consolidated Profit and Loss Account |
|
Consolidated Statement of Comprehensive Income |
|
Consolidated Balance Sheet |
|
Balance Sheet |
|
Consolidated Statement of Changes in Equity |
|
Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Notes to the Financial Statements |
Slemcka (DMS) Limited
Company Information
Directors |
K. J. Bates M. K. Bates C. M. Bates L. D. Goodfellow S. E. Laronde |
Registered office |
|
Auditors |
|
Slemcka (DMS) Limited
Strategic Report for the Year Ended 31 December 2023
The directors present their strategic report for the year ended 31 December 2023.
Principal activity
The principal activity of the group is that of manufacture, import and distribution of housewares, including bathroom and living products. The principal activity of the parent company is that of a holding company.
Review of the business
The group experienced weaker trading results during the year from Lloyd Pascal & Company Limited and it’s Hong Kong subsidiary, Lloyd Pascal Limited. The consolidated revenue and results of the group which incorporates the Hong Kong subsidiary are disclosed in the statutory financial statements.
The impact on the economy of higher inflation and reduced consumer spending have impacted on sales and profitability. Retailers have changed business models with a significant increase in marketplace channels, with consumers more price sensitive the group has promoted heavily during the year to reduce stocks from £2,750,641 to £1,678,537. The impact of this resulted in revenues increasing by 3.9% to £13.3 million (2022: £12.8 million), gross profit margin has increased to 29.8% (2022: 26.1%), however increased distribution costs and administrative expenses resulted in a net operating loss of £371,020 (2022: profit of £196,559) before unrealised gains on the revaluation of investments.
Overall, the group traded profitability reporting profit before tax of £194,188 (2022: £238,682). The group’s net assets increased by £224,478 (1.7%) from 2022 after dividends for the year of £200,000 (2022: £200,000).
The directors are pleased to report unrealised gains on investment properties of £460,000 (2022: £nil) and operating warehouses of £320,000 (2022: £315,000) following the assets being revalued at the year end, against which the deferred tax provision being increased by £219,940 (2022: £78,750).
As a consequence of the above, and the changing needs of certain shareholders, the directors commenced a strategic review of the business during the year which is now largely complete.
The group's key financial and other performance indicators during the year were as follows:
Financial KPIs |
Unit |
2023 |
2022 |
Gross profit margin |
% |
29.80 |
26.14 |
Net profit margin |
% |
1.72 |
1.49 |
Working capital ratio |
6.92 |
7.16 |
|
Debtor days |
72.00 |
89.00 |
|
Creditor days |
28.00 |
23.00 |
|
Stock turnover |
3.47 |
3.24 |
Slemcka (DMS) Limited
Strategic Report for the Year Ended 31 December 2023
Research and development
The group has invested heavily in R&D in order to adapt to consumer trends. Extensive research has been undertaken to include the use of third party trend forecasting and future consumer insights, and the addition of external design agencies and product designer to develop robust new concepts for customer new product development strategies. All products designed under the Lloyd Pascal and tertiary brands, remain the intellectual property of Lloyd Pascal & Co Limited and fully comply with required parameters and relevant safety and industry standards.
Principal risks and uncertainties
Management continually monitor the key risks facing the group together with assessing the controls used for managing these risks. The board of directors formally reviews and documents the principal risks facing the business at least annually. The principal risks and uncertainties facing the group are volatility in ongoing market conditions and UK consumer confidence. Price pressure from both customers and suppliers and ongoing disruptions to the supply chain.
Future developments
The business of the group has comprised three main activities for many years:
• The supply of housewares, including bathroom and living products from stock (“the Lloyd Pascal division” of Lloyd Pascal & Co. Limited)
• The supply of garden and outdoor living products from stock (“the Slemcka division” of Lloyd Pascal & Co. Limited)
• The direct supply of housewares, including bathroom and living products from suppliers based predominantly in the Far East (“the Hong Kong business”)
The strategic review of the business has highlighted the differing needs of the family shareholders as well as the relative profitability of the activities carried out by the group.
As a consequence, the board have taken the following actions in the current year:
To effect the wind down of the domestic retail division that supplies houseware product, including bathroom and living products in order to stem the losses being incurred, and formulated a plan for the restructure of the current group by way of a demerger and sale of certain properties to facilitate the exit of some of the shareholders from the trading activities.
This has resulted in:
• redundancies being necessary which will be concluded by 30 September 2024 incurring an expected cost to the business of £301,790.
• additional provisions being made against the value of stocks held at 31 December 2023 meaning a total stock provision held of £357,338 (2022: £262,654), and
• the disposal of all group properties that will not be required to facilitate the successful continuing operations of the group, which is expected to be concluded by the end of September 2024.
Slemcka (DMS) Limited
Strategic Report for the Year Ended 31 December 2023
Under the terms of the planned demerger certain shareholders intend to exit and are expected to resign from the board at that time leaving a reduced, but substantial trading business that will continue in the future with the Slemcka division and Hong Kong business continuing.
Those shareholders choosing to exit expect to receive full consideration for their shares, funded through a mixture of property, existing cash resources, and proceeds from the sale of certain properties that completed in 2024.
After the proposed reorganisation, the group will be under the control of a new holding company owned by two of the current shareholders. The continuing group is expected to retain a net asset value in excess of £3 million with sufficient cash available to meet the ongoing working capital needs of the ongoing business.
The Slemcka division will continue to operate through existing warehousing premises and infrastructure in the UK, and forecasts demonstrate sufficient cash and available headroom to fund anticipated growth in 2025.
The Hong Kong business will continue to operate via the wholly owned trading subsidiary, and the prospects to the end of 2025 are very encouraging in terms of turnover and profitability.
Approved and authorised by the
......................................... |
Slemcka (DMS) Limited
Directors' Report for the Year Ended 31 December 2023
The directors present their report and the for the year ended 31 December 2023.
Directors of the group
The directors who held office during the year were as follows:
Information included in the Strategic Report
As permitted by Paragraph 1A of Schedule 7 to the Large and medium-sized Companies and Groups (Accounts and reports) Regulations 2008 certain matters which are required to be disclosed in the director's report have been omitted as they are included in the strategic report on pages 2 and 4.
Financial instruments
The group currently has no requirement for an overdraft or other facilities in order to trade.
Risks
Liquidity risk
The group's exposure to liquidity risk is not considered to be material.
Foreign currency risk
The group's foreign currency transactions are mainly in US dollars and holds sufficient dollar reserves for trading purposes.
Credit risk
Investment of cash surpluses are made on bank deposits only. All customers who wish to trade on credit terms are subject to credit verification procedures. Receivable balances are closely monitored and provision is made for any doubtful debts. The group has arranged credit insurance cover, further reducing this risk exposure.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved and authorised by the
......................................... |
Slemcka (DMS) Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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 group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and 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; and |
• |
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Slemcka (DMS) Limited
Independent Auditor's Report to the Members of Slemcka (DMS) Limited
Opinion
We have audited the financial statements of Slemcka (DMS) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, 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, 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 group's and the parent company's affairs as at 31 December 2023 and of the group's 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. |
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 responsibilities for the audit of the financial statements section of our report. We are independent of the group 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's ability to continue as a going concern for a period of at least twelve months from when the financial statements were authorised.
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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
Slemcka (DMS) Limited
Independent Auditor's Report to the Members of Slemcka (DMS) Limited
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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Opinion 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
We have nothing to report in respect of the following matters where 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 its subsidiaries, 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 and returns; or |
• | certain disclosures of directors' 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 Statement of Directors' Responsibilities set out on page 6, 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.
Slemcka (DMS) Limited
Independent Auditor's Report to the Members of Slemcka (DMS) Limited
Auditor Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below: |
|
• |
enquiring of management, including obtaining and reviewing supporting documentation, concerning the group's policies and procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; detecting and responding to the risks of fraud and whether they had knowledge of any actual, suspected or alleged fraud; and the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. |
• |
we obtained an understanding of the legal and regulatory frameworks applicable to the group based on our understanding of the group, sector experience and discussions with management. The most significant considerations for the group are the Companies Act 2006, Corporate and VAT legislation, Employment Taxes, Health and Safety and the Bribery Act 2010. |
• |
discussing amongst the engagement team, who also undertook the audit testing on significant components, to assess how and where fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion, we identified potential for fraud in the following areas: management override of controls; and revenue recognition, specifically the manipulation of revenue using fraudulent journals. |
• |
we tested the appropriateness of accounting journals and other adjustments made in the preparation of the financial statements. |
• |
we reviewed the group's accounting policies for non-compliance with relevant standards. Our work also included considering significant accounting estimates for evidence of misstatement or possible bias and testing any significant transactions that appeared to be outside the normal course of business. |
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we are to become aware of it. |
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Slemcka (DMS) Limited
Independent Auditor's Report to the Members of Slemcka (DMS) Limited
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.
.................................................................................
For and on behalf of
Westwood House
78 Loughborough Road
Quorn
Leicestershire
LE12 8DX
Slemcka (DMS) Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2023
Note |
2023 |
2022 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Distribution costs |
( |
( |
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Gains on revaluation of investments |
|
|
|
Operating profit |
|
|
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
- |
( |
|
77,153 |
10,590 |
||
Profit before tax |
|
|
|
Tax on profit |
|
( |
|
Profit for the financial year |
|
|
|
Profit/(loss) attributable to: |
|||
Owners of the company |
|
|
Slemcka (DMS) Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2023
Note |
2023 |
2022 |
|
Profit for the year |
|
|
|
Unrealised surplus arising on property revaluation |
320,000 |
315,000 |
|
Deferred tax effect |
(124,822) |
(78,750) |
|
|
|
||
Total comprehensive income for the year |
|
|
|
Total comprehensive income attributable to: |
|||
Owners of the company |
|
|
Slemcka (DMS) Limited
(Registration number: 01314060)
Consolidated Balance Sheet as at 31 December 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
Investment property |
|
|
|
Other financial assets |
84,361 |
56,306 |
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
11,000 |
11,000 |
|
Revaluation reserve |
2,361,460 |
2,166,282 |
|
Other reserves |
951,074 |
586,192 |
|
Retained earnings |
10,247,369 |
10,582,951 |
|
Equity attributable to owners of the company |
13,570,903 |
13,346,425 |
|
Shareholders' funds |
13,570,903 |
13,346,425 |
Approved and authorised by the
......................................... |
Slemcka (DMS) Limited
(Registration number: 01314060)
Balance Sheet as at 31 December 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Investments |
|
|
|
Other financial assets |
117 |
117 |
|
|
|
||
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
11,000 |
11,000 |
|
Retained earnings |
343,561 |
343,659 |
|
Shareholders' funds |
354,561 |
354,659 |
The company made a profit after tax for the financial year of £199,902 (2022 - profit of £35,899).
Approved and authorised by the
......................................... |
Slemcka (DMS) Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023
Equity attributable to the parent company
Share capital |
Revaluation reserve |
Non-distributable reserve |
Retained earnings |
Total equity |
|
At 1 January 2023 |
|
|
|
|
|
Profit for the year |
- |
- |
- |
|
|
Other comprehensive income |
- |
|
|
( |
|
Total comprehensive income |
- |
|
|
( |
|
Dividends |
- |
- |
- |
( |
( |
At 31 December 2023 |
|
|
|
|
|
Share capital |
Revaluation reserve |
Non-distributable reserve |
Retained earnings |
Total equity |
|
At 1 January 2022 |
|
|
|
|
|
Profit for the year |
- |
- |
- |
|
|
Other comprehensive income |
- |
|
- |
- |
|
Total comprehensive income |
- |
|
- |
|
|
Dividends |
- |
- |
- |
( |
( |
At 31 December 2022 |
|
|
|
|
|
Slemcka (DMS) Limited
Statement of Changes in Equity for the Year Ended 31 December 2023
Share capital |
Retained earnings |
Total |
|
At 1 January 2023 |
|
|
|
Profit for the year |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2023 |
|
|
|
Share capital |
Retained earnings |
Total |
|
At 1 January 2022 |
|
|
|
Profit for the year |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2022 |
|
|
|
Slemcka (DMS) Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2023
Note |
2023 |
2022 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Changes in fair value of investments |
( |
( |
|
Finance income |
( |
( |
|
Finance costs |
- |
|
|
Income tax (credit)/expense |
( |
|
|
( |
|
||
Working capital adjustments |
|||
Decrease/(increase) in stocks |
|
( |
|
Decrease in debtors |
|
|
|
Increase/(decrease) in creditors |
|
( |
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Dividend income from financial assets |
|
|
|
Net cash flows from investing activities |
|
( |
|
Cash flows from financing activities |
|||
Interest paid |
- |
( |
|
Dividends paid |
( |
( |
|
Net cash flows from financing activities |
( |
( |
|
Net increase/(decrease) in cash and cash equivalents |
|
( |
|
Cash and cash equivalents at 1 January 2023 |
|
|
|
Cash and cash equivalents at 31 December 2023 |
3,324,539 |
1,970,191 |
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
The Group's functional and presentational currency is GBP.
Summary of disclosure exemptions
The company is a qualifying entity for the purposes of FRS 102 and has elected to take the exemption under paragraph 1.12(b) of FRS 102 not to present the company statement of cash flows.
Basis of consolidation
The consolidated financial statements present the results of group and its own subsidiaries ("the group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the statement of financial position, the acquiriee's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquiried operations are included in the consolidated statements of profit and loss and comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
No profit and loss account is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a profit after tax for the financial year of £199,902 (2022 - £35,899).
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Judgements
The critical judgements that the directors have made in the process of applying the group's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below: |
(i) Assessing indicators of impairment |
In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairment identified during the current financial year. |
Key sources of estimation uncertainty |
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. |
(i) Valuation of freehold land and buildings and investment property - determine the fair value of land and buildings and investment property based on the last valuation reviewed and local market conditions. |
(ii) Stock provisions - The group establishes a provision for stock that is slow-moving, obsolete, or damaged. The group has identified which stock items should be provided for given its knowledge of the relevant inventory lines. |
Revenue recognition
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebaes, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Sale of goods
- the group has transferred the significant risks and rewards of ownership to the buyer;
- the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
- the amount of turnover can be measured reliably;
- it is probable that the group will receive the consideration due under the transaction; and
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rent receivable
Rental income is credited to the profit and loss account on the accruals basis.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the future tax rate that is expected to apply to the sale of the asset is used.
Tangible assets
Tangible fixed assets under the cost model are stated at historical cost less acummulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Individual freehold properties are carried at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the statement of financial position date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in the consolidated statement of comprehensive income.
Depreciation
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight line method.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the consolidated profit and loss account.
Depreciation is provided on the following basis:
Asset class |
Depreciation method and rate |
Freehold property (excluding land) |
2% over remaining useful life |
Furniture, fittings and equipment |
25% straight line |
Motor vehicles |
25% straight line |
Plant and machinery |
10% straight line |
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Investment property
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Investments
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in listed company shares are remeasured to market value at each statement of financial position date. Gains and losses on remeasurement are recognised in the consolidated profit and loss account.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at transaction value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is determined using the first in, first out (FIFO) method.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the consolidated profit and loss account.
Creditors
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at transaction value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the consolidated profit and loss account on a straight-line basis over the period of the lease.
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Foreign currency transactions and balances
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are recognised using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated profit and loss account.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders.
Defined contribution pension obligation
The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a seperate entity. Once the contributions have been paid the group has no further payment obligations.
The contributions are recognised as an expense in the consolidated profit and loss account when they fall due. Amounts not paid are shown in creditors as a liability in the statement of financial position. The assets of the plan are held seperately from the group in independently administered funds.
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 shall be 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 on a straight line basis over their useful economic lives, which range from three to six 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.
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Turnover |
The analysis of the group's turnover for the year by market is as follows:
2023 |
2022 |
|
UK |
|
|
Rest of world |
|
|
|
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2023 |
2022 |
|
Government grants |
|
|
Rents |
|
|
|
|
Operating (loss)/profit |
Arrived at after charging/(crediting):
2023 |
2022 |
|
Depreciation |
|
|
Foreign exchange losses/(gains) |
|
( |
Operating lease - property |
|
|
Other interest receivable and similar income |
2023 |
2022 |
|
Interest income on bank deposits |
|
|
Dividend income from financial assets |
714 |
637 |
|
|
Interest payable and similar expenses |
2023 |
2022 |
|
Interest on bank overdrafts and borrowings |
- |
|
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2023 |
2022 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Redundancy costs |
|
- |
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2023 |
2022 |
|
Distribution |
|
|
Administration and support |
|
|
Management |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2023 |
2022 |
|
Remuneration |
|
|
Group contributions to defined contribution pension schemes |
|
|
301,678 |
276,960 |
During the year the number of directors who were receiving benefits was as follows:
2023 |
2022 |
|
Accruing benefits under money purchase pension scheme |
|
|
In respect of the highest paid director:
2023 |
2022 |
|
Remuneration |
|
|
The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £Nil (2022 - £Nil).
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Auditors' remuneration |
2023 |
2022 |
|
Audit of these financial statements |
27,500 |
20,000 |
Other fees to auditors |
||
Accounting and taxation services |
|
|
35,000 |
26,500 |
Taxation |
Tax charged/(credited) in the consolidated profit and loss account
2023 |
2022 |
|
Current taxation |
||
UK corporation tax |
|
|
UK corporation tax adjustment to prior periods |
( |
( |
18,665 |
49,244 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
( |
Arising from changes in tax rates and laws |
- |
|
Total deferred taxation |
( |
( |
Tax (receipt)/expense in the income statement |
( |
|
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2022 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2023 |
2022 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Effect of revenues exempt from taxation |
( |
( |
Effect of expense not deductible in determining taxable profit |
|
|
Effect of tax losses |
|
- |
Deferred tax credit |
( |
( |
Tax increase/(decrease) from effect of capital allowances and depreciation |
|
( |
Tax decrease from other short-term timing differences |
( |
( |
Other tax effects for reconciliation between accounting profit and tax expense (income) |
|
- |
Total tax (credit)/charge |
( |
|
Deferred tax
Group
Deferred tax assets and liabilities
2023 |
Asset |
Liability |
Accelerated capital allowances |
- |
|
Capital gains |
- |
|
- |
|
2022 |
Asset |
Liability |
Accelerated capital allowances |
- |
|
Capital gains |
- |
|
- |
|
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Tax relating to items recognised in other comprehensive income or equity - group
2023 |
2022 |
|
Deferred tax related to items recognised as other comprehensive income |
|
|
Intangible assets |
Group
Goodwill |
Total |
|
Cost or valuation |
||
At 1 January 2023 |
|
|
At 31 December 2023 |
|
|
Amortisation |
||
At 1 January 2023 |
- |
- |
At 31 December 2023 |
- |
- |
Carrying amount |
||
At 31 December 2023 |
|
|
At 31 December 2022 |
|
|
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Tangible assets |
Group
Freehold land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Plant and machinery |
Total |
|
Cost or valuation |
|||||
At 1 January 2023 |
|
|
|
|
|
Revaluations |
|
- |
- |
- |
|
Additions |
- |
|
- |
|
|
Disposals |
- |
- |
- |
( |
( |
At 31 December 2023 |
|
|
|
|
|
Depreciation |
|||||
At 1 January 2023 |
- |
|
|
|
|
Charge for the year |
- |
|
- |
|
|
Eliminated on disposal |
- |
- |
- |
( |
( |
At 31 December 2023 |
- |
|
|
|
|
Carrying amount |
|||||
At 31 December 2023 |
|
|
- |
|
|
At 31 December 2022 |
|
|
- |
|
|
Included within the net book value of land and buildings above is £5,560,000 (2022 - £5,240,000) in respect of freehold land and buildings.
Revaluation
The fair value of the group's buildings was revalued as at
Had this class of asset been measured on a historical cost basis, the carrying amount would have been £
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Investment properties |
Group
2023 |
|
At 1 January 2023 |
|
Fair value adjustments |
|
At 31 December 2023 |
|
The investment property was valued by Holt Commercial, Chartered Surveyors as at 31 March 2024, and is stated on the basis of open market value. The historical cost and net book value of the investment property amounts to £731,559 (2022 - £731,559).
Investments |
Group
Details of undertakings
Details of the investments (including principal place of business) in which the group holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2023 |
2022 |
|||
Subsidiary undertakings |
||||
|
Elan House, Park Lane, Castle Vale, Birmingham, B35 6LJ |
|
|
|
|
42nd Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong |
|
|
|
|
Elan House, Park Lane, Castle Vale, Birmingham, B35 6LJ |
|
|
|
* indicates direct investment of the company
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Subsidiary undertakings
Lloyd Pascal & Co. Limited The principal activity of Lloyd Pascal & Co. Limited is |
Lloyd Pascal (Hong Kong) Limited The principal activity of Lloyd Pascal (Hong Kong) Limited is |
House and Homestyle Limited The principal activity of House and Homestyle Limited is |
Company
2023 |
2022 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2023 |
|
Carrying amount |
|
At 31 December 2023 |
|
At 31 December 2022 |
|
Other financial assets |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Non-current financial assets |
||||
Investments in listed shares |
|
|
|
|
|
|
|
|
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Stocks |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Finished goods and goods for resale |
|
|
- |
- |
Goods in transit |
|
|
- |
- |
|
|
- |
- |
Debtors |
Group |
Company |
|||
Current |
2023 |
2022 |
2023 |
2022 |
Trade debtors |
|
|
- |
- |
Other debtors |
|
|
|
|
Prepayments |
|
|
- |
- |
|
|
|
|
Cash and cash equivalents |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Cash on hand |
|
|
- |
- |
Cash at bank |
|
|
|
|
Short-term deposits |
|
|
- |
- |
|
|
|
|
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Creditors |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Due within one year |
||||
Trade creditors |
|
|
- |
- |
Social security and other taxes |
|
|
- |
- |
Outstanding defined contribution pension costs |
|
|
- |
- |
Accruals |
|
|
- |
- |
Income tax liability |
19,106 |
51,337 |
- |
- |
|
|
- |
- |
Provisions for liabilities |
Group
Deferred tax |
Total |
|
At 1 January 2023 |
|
|
Increase in existing provisions |
|
|
At 31 December 2023 |
|
|
|
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Contributions totalling £
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Share capital |
Allotted, called up and fully paid shares
2023 |
2022 |
|||
No. |
£ |
No. |
£ |
|
|
|
11,000 |
|
11,000 |
The ordinary shares carry voting rights but no fixed right to income.
Reserves |
Group
Capital redemption reserve
The capital redemption reserve represents the nominal value of shares bought back by the company from third parties.
Revaluation reserve
The revaluation reserve represents the cumulative increase in fair value of land and buildings used within the business.
Non-distributable reserve
The non-distributable reserve represents the cumulative increase in fair value of investment property.
Retained earnings
Retained earnings represents cumulative profits and losses retained in current and previous periods.
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Analysis of changes in net debt |
Group
At 1 January 2023 |
Financing cash flows |
Foreign exchange movements |
At 31 December 2023 |
|
Cash and cash equivalents |
||||
Cash |
1,970,191 |
1,453,957 |
(99,609) |
3,324,539 |
|
||||
|
|
( |
|
Related party transactions |
Group
During the year, amounts totalling £5,753 (2022 - £7,062) were paid to a close family member of a director in respect of administrative duties. Total net expenses of £56,685 had been claimed by directors and close family members. At 31st December 2023, expenses were owed to directors and close family members of £796.
During the year gross salary and pension amounting to £254,777 (2022 - £243,831) were paid to close family members of the directors.
The group has taken advantage of the exemption permitted by Section 33 Related Party Disclosures not to provide disclosures of transactions enetered into with other wholly owned members of the group.
Company
Amounts due from directors |
2023 |
At 1 January 2023 |
At 31 December 2023 |
C. M. Bates |
||
Directors' loan |
|
|
K. J. Bates |
||
Directors' loan |
|
|
Slemcka (DMS) Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
2022 |
At 1 January 2022 |
At 31 December 2022 |
C. M. Bates |
||
Directors' loan |
|
|
K. J. Bates |
||
Directors' loan |
|
|
Other transactions with directors |
Dividends totalling £200,000 (2022: £200,000) were paid to the directors in the year.
Financial instruments |
Group
Categorisation of financial instruments
2023 |
2022 |
|
Financial assets measured at fair value through the profit and loss account comprise of cash and cash equivalents and listed investments. |
3,408,900 |
2,026,497 |
Financial assets that are debt instruments measured at amortised cost comprise trade debtors and other debtors. |
|
|
Financial liabilities measured at amortised cost comprise trade creditors, other creditors and accruals. |
(784,602) |
(788,996) |
Company
Categorisation of financial instruments
2023 |
2022 |
|
Financial assets measured at fair value through the profit and loss account comprise of cash and cash equivalents. |
1,923 |
2,021 |
Financial assets that are debt instruments measured at amortised cost comprise trade debtors, other debtors and amounts owed by group undertakings. |
305,271 |
305,271 |
Ultimate controlling party |
The directors consider there to be no individual ultimate controlling party.