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Company registration number: 04994847
Eagle Foods Ltd
Financial statements
31 December 2023
Eagle Foods Ltd
Contents
Directors and other information
Strategic report
Directors report
Independent auditor's report to the members
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Eagle Foods Ltd
Directors and other information
Directors Mr Makthar Ali
Mr Ibrar Ayoub
Secretary Bashart Ali
Company number 04994847
Registered office Anteon House
Newark Road
Peterborough
PE1 5FL
Auditor Hamilton Coopers
66 Earl Street
Maidstone
ME14 1PS
Eagle Foods Ltd
Strategic report
Year ended 31 December 2023
Business Review
The business is involved in the distribution of fine meats and poultry products.
The company is well-positioned in the market with a strong focus on quality and service. By promoting its own brands and leveraging bulk purchasing, the company is likely aiming to enhance its market share and profitability. The cautious approach towards debt management is also a prudent strategy, ensuring financial stability.
The success of the company's own brand products and the optimistic outlook from the board are promising signs for future growth.
The main financial indicators during the year were as follows:
- Turnover - £13,308,932 (£16,056,487 : 2022)
- Gross Profit Margin - 17.9% (12.9% : 2022)
Principal Risk And Uncertainties
The company possesses the required management expertise to monitor and manage risk. The principal risks and uncertainties facing the company are as follows:
Price Risk
Price risk arises as a result of fluctuations in prices of meat and other food items. Management monitor this to ensure exposure is limited.
Credit Risk
Credit risk is addressed by setting credit limits to customers according to their credit rating.
Liquidity Risk
Liquidity Risk is controlled by the appropriate arrangement with its finance providers.
Financial Risk
Financial risk is due to fluctuation in foreign exchange. This is minimised by having most transactions in Sterling and monitoring closely exchange rate fluctuations as well as adjusting sale prices accordingly.
Economic Risk
Economic risk is due to the economic slowdown leading to a decline in consumer spending which will have an effect on cash flow. Management continue to promote their own brand products and build brand loyalty.
This report was approved by the board of directors on 11 October 2024 and signed on behalf of the board by:
Mr Makthar Ali
Director
Eagle Foods Ltd
Directors report
Year ended 31 December 2023
The directors present their report and the financial statements of the company for the year ended 31 December 2023.
Directors
The directors who served the company during the year were as follows:
Mr Makthar Ali
Mr Ibrar Ayoub
Dividends
Particulars of recommended dividends are detailed in note 11 to the financial statements.
Future developments
The company continues to promote is own brands of products with the future prospectus looking promising for the company.
Disclosure of information in the strategic report.
The information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 has been disclosed in th Strategic Report.
Directors responsibilities statement
The directors are responsible for preparing the strategic report, directors 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 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 judgments and accounting estimates that are reasonable and prudent; and
- 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 11 October 2024 and signed on behalf of the board by:
Mr Makthar Ali
Director
Eagle Foods Ltd
Independent auditor's report to the members of
Eagle Foods Ltd
Year ended 31 December 2023
Opinion
We have audited the financial statements of Eagle Foods Ltd (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, 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 FRS 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 loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the 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.
Other Information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and 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 has been prepared in accordance with applicable legal requirements.
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 where 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 the 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 directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Capability of the audit in detecting irregularities, including fraud.The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks.Based on our understanding of the company and industry, and through discussion with the management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to their FCA permissions and requirements. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and taxation. We communicated identified laws and regulations throughout our team and remainedalert to any indications of non-compliance throughout the audit. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure and management bias in accounting estimates and judgmental areas of the financial statements such as accrued income.Audit procedures performed by the engagement team included:- Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations and fraud; and- Assessment of identified fraud risk factors; and- Challenging assumptions and judgements made by management in its significant accounting estimates; and- Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and- Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and- Reading minutes of meetings of those charged with governance; and- Review of significant and unusual transactions and evaluation of the underlying financial rationalesupporting the transactions; and- Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation.There are inherent limitations in the audit procedures described above and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, 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 or intentional misrepresentations, or through collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. we also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 auditors 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.
Asim Malik FCA (Senior Statutory Auditor)
For and on behalf of
Hamilton Coopers
Chartered Accountant and & Statutory Auditors
66 Earl Street
Maidstone
ME14 1PS
11 October 2024
Eagle Foods Ltd
Statement of comprehensive income
Year ended 31 December 2023
2023 2022
Note £ £
Turnover 4 13,308,932 16,056,487
Cost of sales ( 10,921,956) ( 13,985,033)
_______ _______
Gross profit 2,386,976 2,071,454
Distribution costs ( 177,050) ( 98,668)
Administrative expenses ( 2,301,432) ( 1,631,290)
Other operating income 5 18,149 15,600
_______ _______
Operating (loss)/profit 6 ( 73,357) 357,096
Interest payable and similar expenses 9 ( 142,259) ( 67,653)
(Loss)/profit before taxation ( 215,616) 289,443
Tax on (loss)/profit 10 ( 138,882) ( 411,395)
_______ _______
Loss for the financial year ( 354,498) ( 121,952)
_______ _______
Revaluation of tangible assets - 2,180,787
_______ _______
Total comprehensive income for the year ( 354,498) 2,058,835
_______ _______
All the activities of the company are from continuing operations.
Eagle Foods Ltd
Statement of financial position
31 December 2023
2023 2022
Note £ £ £ £
Fixed assets
Tangible assets 12 4,051,152 3,983,820
_______ _______
4,051,152 3,983,820
Current assets
Stocks 13 2,699,335 3,498,881
Debtors 14 2,963,241 3,330,387
Cash at bank and in hand 45,962 55,042
_______ _______
5,708,538 6,884,310
Creditors: amounts falling due
within one year 16 ( 4,242,901) ( 4,861,668)
_______ _______
Net current assets 1,465,637 2,022,642
_______ _______
Total assets less current liabilities 5,516,789 6,006,462
Creditors: amounts falling due
after more than one year 17 ( 562,182) ( 743,350)
Provisions for liabilities 18 ( 577,953) ( 411,960)
_______ _______
Net assets 4,376,654 4,851,152
_______ _______
Capital and reserves
Called up share capital 22 140,000 140,000
Revaluation reserve 1,669,818 1,792,451
Profit and loss account 2,566,836 2,918,701
_______ _______
Shareholders funds 4,376,654 4,851,152
_______ _______
These financial statements were approved by the board of directors and authorised for issue on 11 October 2024 , and are signed on behalf of the board by:
Mr Makthar Ali
Director
Company registration number: 04994847
Eagle Foods Ltd
Statement of changes in equity
Year ended 31 December 2023
Called up share capital Revaluation reserve Profit and loss account Total
£ £ £ £
At 1 January 2022 140,000 - 2,762,317 2,902,317
Loss for the year ( 121,952) ( 121,952)
Other comprehensive income for the year:
Revaluation of tangible assets 2,180,787 2,180,787
Tax relating to components of other comprehensive income ( 388,336) 388,336 -
_______ _______ _______ _______
Total comprehensive income for the year - 1,792,451 266,384 2,058,835
Dividends paid and payable ( 110,000) ( 110,000)
_______ _______ _______ _______
Total investments by and distributions to owners - - ( 110,000) ( 110,000)
_______ _______ _______ _______
At 31 December 2022 and 1 January 2023 140,000 1,792,451 2,918,701 4,851,152
Loss for the year ( 354,498) ( 354,498)
Other comprehensive income for the year:
Tax relating to components of other comprehensive income ( 122,633) 122,633 -
_______ _______ _______ _______
Total comprehensive income for the year - ( 122,633) ( 231,865) ( 354,498)
Dividends paid and payable ( 120,000) ( 120,000)
_______ _______ _______ _______
Total investments by and distributions to owners - - ( 120,000) ( 120,000)
_______ _______ _______ _______
At 31 December 2023 140,000 1,669,818 2,566,836 4,376,654
_______ _______ _______ _______
Eagle Foods Ltd
Statement of cash flows
Year ended 31 December 2023
2023 2022
Note £ £
Cash flows from operating activities
Loss for the financial year ( 354,498) ( 121,952)
Adjustments for:
Depreciation of tangible assets 98,532 104,776
Fair value adjustment of investment property - ( 5,000)
Interest payable and similar expenses 142,259 67,653
Gain/(loss) on disposal of tangible assets ( 2,713) 3,529
Tax on loss/profit 138,882 411,395
Accrued expenses/(income) 4,281 4,875
Changes in:
Stocks 799,546 ( 787,225)
Trade and other debtors 363,246 282,094
Trade and other creditors 96,725 250,131
_______ _______
Cash generated from operations 1,286,260 210,276
Interest paid ( 142,259) ( 67,653)
Tax paid ( 62,716) ( 36,131)
_______ _______
Net cash from operating activities 1,081,285 106,492
_______ _______
Cash flows from investing activities
Purchase of tangible assets ( 191,728) ( 37,669)
Proceeds from sale of tangible assets 28,577 6,500
_______ _______
Net cash used in investing activities ( 163,151) ( 31,169)
_______ _______
Cash flows from financing activities
Proceeds from borrowings ( 181,168) ( 199,640)
Equity dividends paid ( 120,000) ( 110,000)
_______ _______
Net cash used in financing activities ( 301,168) ( 309,640)
_______ _______
Net increase/(decrease) in cash and cash equivalents 616,966 ( 234,317)
Cash and cash equivalents at beginning of year 15 (792,997) (558,680)
_______ _______
Cash and cash equivalents at end of year 15 ( 176,031) ( 792,997)
_______ _______
Eagle Foods Ltd
Notes to the financial statements
Year ended 31 December 2023
1. General information
The company is a private company limited by shares, registered in England & Wales. The address of the registered office is Anteon House, Newark Road, Peterborough, PE1 5FL.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Turnover
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves. In this case, tax is recognised in other comprehensive income or directly in capital and reserves, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to profit or loss.
Tangible assets
tangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in capital and reserves, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in capital and reserves in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in capital and reserves in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Freehold property - 1 % straight line
25% and 33.3% reducing balance - 25% and 33.3% Reducing balance
Motor vehicles - 25 % reducing balance
If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of tangible assets, the depreciation is revised prospectively to reflect the new estimates.
Land and buildings are included in the balance sheet at open market value based on external valuation dated March 2022. Depreciation is not provided for land. While this treatment is a departure from the provision of the Companies Act 2006, however directors believes this departure is necessary to show true and fair view of the financial position of the company.
Investment property
Investment property is measured initially at cost, which includes purchase price and any directly attributable expenditure. Investment property is revalued to its fair value at each reporting date and any changes in fair value are recognised in profit or loss.
Impairment
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. When it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stocks to their present location and condition.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event; it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised in finance costs in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets or either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised in finance costs in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2023 2022
£ £
Sale of goods 13,308,932 16,056,487
_______ _______
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
2023 2022
£ £
Rental income 15,188 15,600
Other operating income 2,961 -
_______ _______
18,149 15,600
_______ _______
6. Operating loss/profit
Operating loss/profit is stated after charging/(crediting):
2023 2022
£ £
Depreciation of tangible assets 98,532 104,776
(Gain)/loss on disposal of tangible assets ( 2,713) 3,529
Fair value adjustments to investment property - ( 5,000)
Impairment of trade debtors 791,113 18,360
Foreign exchange differences - ( 441)
Fees payable for the audit of the financial statements 10,250 10,000
_______ _______
7. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023 2022
Management 3 3
Administrative 10 11
Warehouse 20 20
_______ _______
33 34
_______ _______
The aggregate payroll costs incurred during the year were:
2023 2022
£ £
Wages and salaries 611,699 528,035
Social security costs 39,698 29,711
Other pension costs 4,829 4,298
_______ _______
656,226 562,044
_______ _______
8. Directors remuneration
The directors aggregate remuneration in respect of qualifying services was:
2023 2022
£ £
Remuneration 26,295 22,195
_______ _______
9. Interest payable and similar expenses
2023 2022
£ £
Bank loans and overdrafts 84,382 63,784
Other loans made to the company:
Factoring loans 45,638 -
Other interest 7,154 -
Other interest payable and similar expenses 5,085 3,869
_______ _______
142,259 67,653
_______ _______
10. Tax on loss/profit
Major components of tax expense
2023 2022
£ £
UK current tax income/expense ( 27,111) 27,111
_______ _______
Deferred tax:
Origination and reversal of timing differences 165,993 384,284
_______ _______
Tax on loss/profit 138,882 411,395
_______ _______
Reconciliation of tax expense
The tax assessed on the loss/profit for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 19.00 % (2022: 19.00%).
2023 2022
£ £
(Loss)/profit before taxation ( 215,616) 289,443
_______ _______
(Loss)/profit multiplied by rate of tax ( 40,967) 54,994
Effect of expenses not deductible for tax purposes 1,021 832
Effect of capital allowances and depreciation ( 20,501) 10,401
Utilisation of tax losses 33,336 ( 39,116)
Origination and reversal of timing differences 165,993 384,284
_______ _______
Tax on loss/profit 138,882 411,395
_______ _______
11. Dividends
Equity dividends
2023 2022
£ £
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year) 120,000 110,000
_______ _______
12. Tangible assets
Freehold property Plant and machinery Motor vehicles Total
£ £ £ £
Cost
At 1 January 2023 3,800,000 1,344,862 342,447 5,487,309
Additions - 147,968 43,760 191,728
Disposals - - ( 125,021) ( 125,021)
_______ _______ _______ _______
At 31 December 2023 3,800,000 1,492,830 261,186 5,554,016
_______ _______ _______ _______
Depreciation
At 1 January 2023 35,700 1,246,595 221,194 1,503,489
Charge for the year 35,700 30,439 32,393 98,532
Disposals - - ( 99,157) ( 99,157)
_______ _______ _______ _______
At 31 December 2023 71,400 1,277,034 154,430 1,502,864
_______ _______ _______ _______
Carrying amount
At 31 December 2023 3,728,600 215,796 106,756 4,051,152
_______ _______ _______ _______
At 31 December 2022 3,764,300 98,267 121,253 3,983,820
_______ _______ _______ _______
HSBC has a legal charge on the freehold property in order to secure company borrowing's.
Investment property
Included within the above is investment property measured at fair value as follows:
£
At 1 January 2023 and 31 December 2023 230,000
_______
The cost of the investment property before fair value revaluation is £309,064.
13. Stocks
2023 2022
£ £
Finished goods and goods for resale 2,699,335 3,498,881
_______ _______
14. Debtors
2023 2022
£ £
Trade debtors 1,381,507 2,388,434
Amounts owed by undertakings in which the company has a participating interest 1,171,710 919,720
Prepayments and accrued income 17,724 22,233
Other debtors 392,300 -
_______ _______
2,963,241 3,330,387
_______ _______
15. Cash and cash equivalents
2023 2022
£ £
Cash at bank and in hand 45,962 55,042
Bank overdrafts ( 221,993) ( 848,039)
_______ _______
( 176,031) ( 792,997)
_______ _______
16. Creditors: amounts falling due within one year
2023 2022
£ £
Bank loans and overdrafts 461,993 1,088,039
Trade creditors 2,618,462 3,616,602
Accruals and deferred income 31,952 31,571
Corporation tax 1,186 91,013
Social security and other taxes 10,833 19,464
Other creditors 1,118,475 14,979
_______ _______
4,242,901 4,861,668
_______ _______
Included in bank loans and overdrafts are amounts in the sum of £221,993 ( Dec 2022 : £848,039) in respect of bank overdraft.The balance of £240,000 (Dec 2022 :£240,000) is in respect of secured bank loans due within one year.
17. Creditors: amounts falling due after more than one year
2023 2022
£ £
Bank loans and overdrafts 562,182 743,350
_______ _______
HSBC has a legal charge on the freehold property in order to secure company borrowing's.
18. Provisions
Deferred tax (note 19) Total
£ £
At 1 January 2023 411,960 411,960
Additions 122,633 122,633
Charges against provisions 43,360 43,360
_______ _______
At 31 December 2023 577,953 577,953
_______ _______
19. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023 2022
£ £
Included in provisions (note 18) 577,953 411,960
_______ _______
The deferred tax account consists of the tax effect of timing differences in respect of:
2023 2022
£ £
Revaluation of tangible assets 510,969 388,336
Provisions 66,984 23,624
_______ _______
577,953 411,960
_______ _______
20. Employee benefits
The amount recognised in profit or loss in relation to defined contribution plans was £ 4,829 (2022: £ 4,298 ).
21. Financial instruments
The carrying amount for each category of financial instrument is as follows:
2023 2022
£ £
Financial assets that are debt instruments measured at amortised cost
Trade debtors 1,381,507 2,388,434
Other debtors 392,300 -
Cash at bank and in hand 45,962 55,042
_______ _______
1,819,769 2,443,476
_______ _______
Financial liabilities measured at amortised cost
Bank and other loans 1,024,175 1,831,389
Trade creditors 2,618,462 3,616,602
Other creditors 1,118,475 14,979
_______ _______
4,761,112 5,462,970
_______ _______
22. Called up share capital
Issued, called up and fully paid
2023 2022
No £ No £
Ordinary shares shares of £ 1.00 each 140,000 140,000 140,000 140,000
_______ _______ _______ _______
23. Analysis of changes in net debt
At 1 January 2023 Cash flows At 31 December 2023
£ £ £
Cash and cash equivalents 55,042 (9,080) 45,962
Bank overdrafts (848,039) 626,046 (221,993)
Debt due within one year (240,000) - (240,000)
Debt due after one year (743,350) 181,168 (562,182)
_______ _______ _______
( 1,776,347) 798,134 ( 978,213)
_______ _______ _______