Shaws Since 1897 Limited
Registered number: 09386571
Directors' report and audited
financial statements
For the year ended 31 December 2023
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SHAWS SINCE1897 LIMITED
COMPANY INFORMATION
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E John-Featherby (appointed 30 April 2024)
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Chartered Accountants & Statutory Auditor
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SHAWS SINCE1897 LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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SHAWS SINCE1897 LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their Strategic Report for the year ended 31 December 2023.
Shaws Since 1897 Limited designs, manufactures and markets luxury heavy fireclay kitchen and bathroom ware and accessories. The Company is committed to UK manufacturing and through the benefit of complete vertical integration it is able to control all aspects of the manufacturing process in order to deliver an industry leading level of quality and design.
The Company manufactures high quality products for selected third parties alongside its own ranges of Shaws branded products. Shaws products are sold through distributors and retailers worldwide.
Shaws Since 1897 is owned by Fortune Brands Innovations, Inc. (NYSE:FBIN). Fortune Brands is a home and security products company built on industry leading brands and innovative products in the plumbing, outdoor and security markets. Shaws forms part of Fortune Brands Water Innovations Group where its brand sits alongside Moen, Perrin & Rowe, ROHL, Riobel, Aqualisa and Victoria & Albert Baths.
Sales for the year to 31st December 2023 were £8,152,720 (year to 31st December 2022: £8,484,641) reduction of 3.9%.
There has been significant recovery in the construction and home renovation markets allowing the business to recover from the effects of the global pandemic in 2020.
During 2023 the Company continued to build its capacity and capability to expand into new geographic markets and develop new product ranges in order to leverage the global nature of the group.
During 2024 Shaws will continue to leverage its place within Fortune Brands Innovations, Water Innovations to access new markets and maximise benefits arising from economy of scale, whilst remaining true to its commitment to UK manufacturing, class leading innovation and quality. There are significant challenges presented by geopolitical unrest and post COVID supply chain issues affecting the business in 2022, the Company’s place within the global organisation will allow the business to robustly mitigate these challenges.
Principal risks and uncertainties
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Aside from the generic risks of exposure to economic, regulatory and political risk in each of our markets. The principal risks facing the Company continue to be exposure to the volatility in foreign exchange rates and the ongoing uncertainties regarding the UK’s exit from the European Union. Aside from the generic risks of exposure to economic, regulatory, and political risk in each of our markets. The principal risks facing the Company continue to be exposure to continued disruption to the global economy due to ongoing invasion of Ukraine by Russian Forces. The latter has driven high inflation and energy prices in most global markets.
We attempt to mitigate these risks as best as possible through the use of both currency and commodity forward contracts. The Company’s financial risk strategy remains broadly to make neither a profit nor a loss from exposure to currency and interest rate risks.
Full detail of the Company's financial risk management is included in the Director's Report on page 4.
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SHAWS SINCE1897 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Financial key performance indicators
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Turnover for the year was £8,152,720 (year to 31st December 2022: £8,484,641). The gross loss for the year was £2,297,751 (year to 31st December 2022: loss of £441,894) or -28.2% (2022: -5.2%). The result of the year ended 31st December 2023 was a loss of £5,931,622 (year to 31st December 2022: £2,073,758).
This report was approved by the board and signed on its behalf.
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SHAWS SINCE1897 LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements 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 to 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.
The loss for the year, after taxation, amounted to £5,931,622 (2022 -loss £2,073,758).
The directors who served during the year were:
S Geary (resigned 13 December 2023)
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B K Crawford (resigned 8 March 2024)
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C M Phyfer (resigned 30 November 2023)
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SHAWS SINCE1897 LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Going concern
The directors, having assessed the responses of the directors of the Company’s parent Fortune Brands Water Innovations Group to their enquiries have no reason to believe that a material uncertainty exists that may cast significant doubt about the ability of Shaws Since 1897 Limited to continue as a going concern.
On the basis of their assessment of the Company’s financial position and of the enquiries made of the directors of Fortune Brands Water Innovations Group, the Company’s directors have a reasonable expectation that the Company will be able to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The directors have relied on the ongoing support of the parent group in making their assessment.
Economic impact of global events
UK businesses are currently facing many uncertainties such as the consequences of environmental sustainability and geopolitical events such as the Russian invasion of Ukraine. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that the greatest impact on the business expected to be from the economic ripple effect on the global economy. The directors have taken account of these potential impacts in their going concern assessment.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the directors are aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the directors have taken all the steps that ought to have been taken as directors in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The auditor, Forvis Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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SHAWS SINCE1897 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SHAWS SINCE1897 LIMITED
Opinion
We have audited the financial statements of Shaws Since 1897 Limited (the ‘Company’) for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity 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 contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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SHAWS SINCE1897 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SHAWS SINCE1897 LIMITED
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of 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 have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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SHAWS SINCE1897 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SHAWS SINCE1897 LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 intend either to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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.
Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
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SHAWS SINCE1897 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SHAWS SINCE1897 LIMITED
In addition, we evaluated the directors' and 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 manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the cut-off assertion), and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of the audit 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.
John Daly (Senior Statutory Auditor)
for and on behalf of
Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
One St. Peter's Square
Manchester
M2 3DE
17 October 2024
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SHAWS SINCE1897 LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Exceptional administrative expenses
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Interest payable and similar expenses
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Loss for the financial year
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There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.
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There was no other comprehensive income for 2023 (2022: £NIL).
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The notes on pages 12 to 27 form part of these financial statements.
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SHAWS SINCE1897 LIMITED
REGISTERED NUMBER: 09386571
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital contribution reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 16 October 2024.
The notes on pages 12 to 27 form part of these financial statements.
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SHAWS SINCE1897 LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Capital contribution reserve
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Comprehensive income for the year
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Total comprehensive income for the year
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At 1 January 2023 (as previously stated)
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Prior year adjustment - correction of error
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At 1 January 2023 (as restated)
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 12 to 27 form part of these financial statements.
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Shaws Since 1897 Limited ("the Company") is a private limited company, limited by shares and incorporated in the United Kingdom, registered number 09386571. The address of the registered office is Higher Waterside, Waterside, Darwen, BB3 3NX.
The principal activity of Shaws Since 1897 Limited is the manufacturing of taps and valves as well as other furniture.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The directors, having assessed the responses of the directors of the Company’s parent Fortune Brands Water Innovations Group to their enquiries have no reason to believe that a material uncertainty exists that may cast significant doubt about the ability of Shaws Since 1897 Limited to continue as a going concern.
On the basis of their assessment of the Company’s financial position and of the enquiries made of the directors of Fortune Brands Water Innovations Group, the Company’s directors have a reasonable expectation that the Company will be able to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The directors have relied on the ongoing support of the parent group in making their assessment.
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company 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.
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Comprehensive Income over its useful economic life.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. The useful life of Goodwill is assessed as 20 years.
Tangible fixed assets under the cost model are stated at historical cost less accumulated 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.
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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 profit or loss.
Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the period of the lease.
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Impairment of fixed assets and goodwill
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Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
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 based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
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 profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
- 16 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP, rounded to the nearest £.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
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 measured 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 profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
- 17 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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Critical judgements in applying the Company's accounting policies
The critical judgements that the directors have made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
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) Recoverability of debt
Bad debt provisions are deemed to be an area of judgement as it is at management's discretion whether debts are provided against.
(ii) Useful lives of fixed assets
The valuation of depreciation is determined by management based on the estimated useful economic lives of tangible assets and any residual value of those assets.
(iii) Stock provision
The valuation of stock is deemed to be an area of judgement due to management deciding upon the value of any provisions against stock at the year end.
Analysis of turnover by country of destination:
- 18 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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During the year exceptional costs of £1,951,313 were incurred in respect of a group reorganisation.
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The operating loss is stated after charging:
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Other operating lease rentals
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During the year, the Company obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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- 19 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Staff costs were as follows:
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The average monthly number of employees, including directors, during the year was 114 (2022 -111).
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Interest payable and similar expenses
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- 20 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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Effect of changes in tax rates
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2022 -higher than) the standard rate of corporation tax in the UK of 23.52% (2022 -19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 -19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Adjustments to tax charge in respect of prior periods
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Remeasurement of deferred tax for changes in tax rates
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Movement in deferred tax not recognised
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Other differences leading to an increase (decrease) in the tax charge
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Total tax charge for the year
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Factors that may affect future tax charges
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The rate of corporation tax in the United Kingdom has increased from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.
- 21 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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At 1 January 2023 (as previously stated)
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Prior year reclassification
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At 1 January 2023 (as restated)
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Transfers between classes
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At 31 December 2022 (as restated)
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During the year there has been an impairment charge as a result of a group reorganisation.
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Raw materials and consumables
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Work in progress (goods to be sold)
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Finished goods and goods for resale
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- 23 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are repayable on demand.
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are repayable on demand.
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- 24 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Creditors: Amounts falling due after more than one year
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Amounts owed to group undertakings
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Amounts owed to group undertakings are interest free and repayable on demand.
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Group reorganisation costs
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Charged to profit or loss
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Allotted, called up and fully paid
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3 (2022 -3) Ordinary shares of £1.00 each
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3,000 (2022 -3,000) Ordinary A shares of £1.00 each
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3,000 (2022 -3,000) Ordinary B shares of £1.00 each
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4,309 (2022 -4,309) Ordinary C shares of £1.00 each
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All classes of Ordinary shares have full voting and distribution rights, they are all non-redeemable.
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- 25 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
The share premium account comprises amounts paid in excess of the nominal value of issued share capital.
Capital contribution reserve
The capital contribution reserve arises from share options granted by Fortune Brands Home & Security. Inc, the ultimate parent company, to employees of Shaws Since 1897 Limited.
Merger Reserve
The balance of the merger reserve represents the fair value of the consideration given in excess of net book value of assets acquired as a result of the transfer of trade, assets and liabilities from Shaws of Darwen Limited. This has arisen due to the principles of merger accounting being applied.
Profit & loss account
The balance of the profit & loss account represents the accumulated profits of the Company less any distributed dividends.
A prior year adjustment has been noted in respect of prior period expenditure which was incorrectly recognised in the current year. This resulted in a decrease to cost of sales in the prior year of £365,142 and a resulting decrease in reserves brought forward of £365,142.
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Commitments under operating leases
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At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The Company is a 100% subsidiary of Fortune Brands Innovations, Inc. (formerly Fortune Brands Home & Security Inc.), a company incorporated in the United States of America. The Company has taken advantage of the exemption under FRS 102 Section 33 not to disclose transactions with other group companies. This is on the grounds that 100% of the voting rights in the Company are controlled within the Group, the Company's results are controlled within that Group and the Company's results are included within the consolidated financial statements.
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- 26 -
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SHAWS SINCE1897 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company's immediate parent company is Fortune Brands Global Plumbing International S.a.r.l., a company incorporated in Luxembourg.
The Company's ultimate parent company and controlling party is Fortune Brands Innovations, Inc. (formerly Fortune Brands Home & Security Inc.) a company incorporated in the United States of America. Copies of Fortune Brands Innovations, Inc.'s consolidated financial statements can be obtained from 520 Lake Cook Road, Suite 300, Deerfield, Illinois, USA, IL60015.
- 27 -
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