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COMPANY REGISTRATION NUMBER: 13848375
EWE Holdings Limited
Financial Statements
For the period ended
31 January 2024
EWE Holdings Limited
Financial Statements
Year ended 31 January 2024
Contents
Page
Strategic report
1
Directors' report
4
Independent auditor's report to the members
7
Consolidated statement of comprehensive income
11
Consolidated statement of financial position
12
Company statement of financial position
13
Consolidated statement of changes in equity
14
Company statement of changes in equity
15
Consolidated statement of cash flows
16
Notes to the financial statements
17
EWE Holdings Limited
Strategic Report
Year ended 31 January 2024
Business review The principal activity of the group during the year was the manufacture and wholesale of agricultural machinery . We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face. These financial statements consolidate the financial statements of EWE Holdings Limited and all of its subsidiary undertakings. The results of the subsidiaries acquired during the year are included from the date that control passes. The company acquired a controlling interest in Sumo UK Limited with effect from October 2022. The results of this company are therefore included from that date. The strategic report is written from the perspective of the group as a whole. We consider our key financial performance indicators are those that communicate the financial performance and strength of the group as a whole. These include turnover, gross profit and pre-tax profit. Sumo UK Ltd continued with an improvement on the previous year's results with another good sales performance arising from solid customer demand. This was the first year that a full trading year was consolidated within the group accounts, as last year was a part consolidated year. During the year Sumo UK Ltd's turnover increased by 7% to just under £11million and gross profit increased by 15% to £4.7million. Group's pre-tax profit increased by 26% to £729,612. Worldwide agricultural prices continued to be supportive during the year, meaning farmers have been willing to add, or exchange or change machinery they use. The machinery dealer network continues to evolve as OEM suppliers seek further control of their sales outlets. Our UK dealer network has generally performed well, whereas we have had selective success in our overseas markets. In the long run we look for export parity with the UK. Factory output has grown and manufacturing technique changes are beginning to bear fruit. Our factory continues to be audited by external bodies with increased frequency and the design and production teams have responded well to legislative and regulatory changes. Following on from the change in UK government we need to be aware of how policies on farming will affect our client base. Nearer term we are experiencing a downturn in agriculture, led by a reduction in farm gate prices, rising input costs and excessive stocks. This will have a negative effect on our results for the year to January 2025. Nevertheless over the medium to long term we should continue to grow the company in our chosen markets.
Financial risk management The group's operations expose it to a variety of risks that include price risk, liquidity risk and interest rate risk. Given the size of the group, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board are implemented by the group's management. Credit risk The group has implemented policies that require appropriate credit checks on potential customers before sales are made. Liquidity risk The group actively maintains a mixture of long-term and short-term debt finance that is designed to ensure the company has sufficient available funds for operations. Interest rate risk The group has both interest-bearing assets and interest bearing liabilities. The group's exposure to interest rate risk is regularly evaluated and action would be taken to mitigate any exposure as necessary. With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside our control. Going Concern The group is in a net current assets position at the balance sheet date. The group meets its day to day working capital requirements through a combination of bank balances and trade creditors. As part of the boards assessment of going concern, forecasts have been prepared for the group covering the period to October 2025. The performance of the group is also monitored during the preparation of managements, done monthly, which are reviewed during board meetings. The most critical assumptions when assessing future cash flows are the expected level of income, gross margins and overheads. As more fully described in the strategic report above, trading conditions continue to be challenging, not helped by the general uncertainty in the UK economy as a consequence of the conflict in Ukraine. Despite this, the forecast prepared show that the group should be able to operate wholly within current facilities. Whilst recognising the inevitable uncertainties impacting the group going forward, the directors confirm that, after considering the matters set out above, they have reasonable expectation that the group has adequate resources and lending facilities, to continue in operational existence for at least twelve months following the signing of these financial statements. For these reasons, the directors continue to adopt the going concern basis in preparing the financial statements.
This report was approved by the board of directors on 25 October 2024 and signed on behalf of the board by:
Mr J T Sweeting
Director
Registered office:
Kahawa House
Elsham Wold Industrial Estate
Elsham
Brigg
DN20 0SP
EWE Holdings Limited
Directors' Report
Year ended 31 January 2024
The directors present their report and the financial statements of the group for the year ended 31 January 2024 .
Directors
The directors who served the company during the year were as follows:
Mr S D Herring
Mr J T Sweeting
Dividends
The directors do not recommend the payment of a dividend.
Future developments
The Board aims to maintain its existing management policies which have resulted in the group's successful period of trading. These policies include the intention to grow sales and maintain control over costs. The future developments of the group have been disclosed further in the Strategic Report in accordance with Companies Act s414C(11).
Financial instruments
The group's principal financial instruments comprise bank balances, trade creditors, trade debtors, hire purchase liabilities and loans to the company. The main purpose of these instruments is to raise funds for the company's operations.
Due to the nature of the financial instruments used by the group there is low exposure to price risk. The groups's approach to managing other risks applicable to the financial statements is shown below.
In respect of bank balances, the liquidity risk is managed by maintaining the balance of the group's bank account stays within agreed facilities.
In respect of loans these comprise of a loan between the parent company and the subsidiary. There is interest charged on the balance with payment due on demand. The group manages the liquidity risk by ensuring there are sufficient funds to meet the payments when required.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Directors' responsibilities statement
The directors are responsible for preparing 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 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; - 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 group'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 group's auditor is aware of that information.
This report was approved by the board of directors on 25 October 2024 and signed on behalf of the board by:
Mr J T Sweeting
Director
Registered office:
Kahawa House
Elsham Wold Industrial Estate
Elsham
Brigg
DN20 0SP
EWE Holdings Limited
Independent Auditor's Report to the Members of EWE Holdings Limited
Year ended 31 January 2024
Opinion
We have audited the financial statements of EWE Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2024 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, 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 group's and of the parent company's affairs as at 31 January 2024 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group 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. Financial statements for the year ended 31 January 2023 are unaudited.
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 group's or the parent 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 have 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 group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company financial statements are not in agreement with the accounting records 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 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 group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
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: - We have obtained an understanding of the legal and regulatory framework applicable to the company through discussions with senior management and review of the regulatory framework of any professional or membership bodies that the company is a part of. The company uses third parties to ensure that it remains up to date with changes and to review compliance with all its legal and regulatory requirements. In making our assessment of detecting irregularities, including fraud, we have discussed the issue with management who have advised that there have been no changes and the company remains compliant with its legal and regulatory requirement. Nothing has been brought to light in completing our audit work that contradicts this. - The following laws and regulations have been identified as being of significance in the context of the company; Companies Act 2006, health and safety legislation, the bribery act 2010, employment laws, data protection, environmental regulation and relevant tax laws. - In making our assessment of the susceptibility of the company's financial statements to material misstatement, we have also considered how fraud might occur. No instances of material misstatement or fraud have been noted in the audit of the accounts for the year. - All matters regarding non-compliance with laws and regulations and fraud have been communicated to all members of the audit engagement team. The engagement partner has assessed that the engagement team has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations, affected by the inherent difficulty in detecting irregularities, the effectiveness of the company's controls, and the nature, timing and extent of the audit procedures performed. 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 group's 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 group's or the parent 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 group or the parent 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. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 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 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.
Adrian Carroll FCA
(Senior Statutory Auditor)
For and on behalf of
Townends Accountants LLP
Chartered Accountants & statutory auditor
Carlisle Street
Goole
East Riding of Yorkshire
DN14 5DX
29 October 2024
EWE Holdings Limited
Consolidated Statement of Comprehensive Income
Year ended 31 January 2024
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
Note
£
£
Turnover
4
10,965,798
887,194
Cost of sales
( 6,287,475)
238,433
--------------
-------------
Gross profit
4,678,323
1,125,627
Administrative expenses
( 3,766,301)
( 1,030,260)
Impairment of investments
( 9,749,684)
-------------
-------------
Operating profit/(loss)
5
912,022
( 9,654,317)
Income from shares in group undertakings
8
9,749,684
Interest payable and similar expenses
9
( 182,410)
( 6,660)
-------------
-------------
Profit before taxation
729,612
88,707
Tax on profit
10
( 181,131)
( 73,612)
----------
--------
Profit for the financial year and total comprehensive income
548,481
15,095
----------
--------
All the activities of the group are from continuing operations.
EWE Holdings Limited
Consolidated Statement of Financial Position
31 January 2024
2024
2023
Note
£
£
Fixed assets
Intangible assets excluding negative goodwill
4,310
14,719
Negative goodwill
( 118,520)
( 132,065)
----------
----------
Intangible assets
11
( 114,210)
( 117,346)
Tangible assets
12
2,782,237
2,687,565
-------------
-------------
2,668,027
2,570,219
Current assets
Stocks
14
4,047,105
2,764,613
Debtors
15
603,205
789,267
Cash at bank and in hand
77,037
201,013
-------------
-------------
4,727,347
3,754,893
Creditors: amounts falling due within one year
17
1,977,938
1,490,516
-------------
-------------
Net current assets
2,749,409
2,264,377
-------------
-------------
Total assets less current liabilities
5,417,436
4,834,596
Creditors: amounts falling due after more than one year
18
19,180
25,343
Provisions
20
154,762
114,240
-------------
-------------
Net assets
5,243,494
4,695,013
-------------
-------------
Capital and reserves
Called up share capital
23
4,679,918
4,679,918
Profit and loss account
24
563,576
15,095
-------------
-------------
Shareholders funds
5,243,494
4,695,013
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 25 October 2024 , and are signed on behalf of the board by:
Mr J T Sweeting
Director
Company registration number: 13848375
EWE Holdings Limited
Company Statement of Financial Position
31 January 2024
2024
2023
Note
£
£
Fixed assets
Tangible assets
12
2,100,000
2,100,000
Investments
13
2,076,380
2,076,380
-------------
-------------
4,176,380
4,176,380
Current assets
Debtors
15
724,943
553,538
Cash at bank and in hand
39,938
----------
----------
764,881
553,538
Creditors: amounts falling due within one year
17
78,368
11,525
----------
----------
Net current assets
686,513
542,013
-------------
-------------
Total assets less current liabilities
4,862,893
4,718,393
Provisions
20
41,028
41,028
-------------
-------------
Net assets
4,821,865
4,677,365
-------------
-------------
Capital and reserves
Called up share capital
23
4,679,918
4,679,918
Profit and loss account
24
141,947
( 2,553)
-------------
-------------
Shareholders funds
4,821,865
4,677,365
-------------
-------------
The profit for the financial year of the parent company was £ 144,500 (2023: £ 2,553 loss).
These financial statements were approved by the board of directors and authorised for issue on 25 October 2024 , and are signed on behalf of the board by:
Mr J T Sweeting
Director
Company registration number: 13848375
EWE Holdings Limited
Consolidated Statement of Changes in Equity
Year ended 31 January 2024
Called up share capital
Profit and loss account
Total
£
£
£
At 14 January 2022
Profit for the year
15,095
15,095
----
--------
--------
Total comprehensive income for the year
15,095
15,095
Issue of shares
14,887,324
14,887,324
Reduction of capital
( 10,207,406)
( 10,207,406)
--------------
--------
--------------
Total investments by and distributions to owners
4,679,918
4,679,918
At 31 January 2023
4,679,918
15,095
4,695,013
Profit for the year
548,481
548,481
--------------
----------
--------------
Total comprehensive income for the year
548,481
548,481
--------------
----------
--------------
At 31 January 2024
4,679,918
563,576
5,243,494
--------------
----------
--------------
EWE Holdings Limited
Company Statement of Changes in Equity
Year ended 31 January 2024
Called up share capital
Profit and loss account
Total
£
£
£
At 14 January 2022
Loss for the year
( 2,553)
( 2,553)
----
-------
-------
Total comprehensive income for the year
( 2,553)
( 2,553)
Issue of shares
14,887,324
14,887,324
Reduction of capital
( 10,207,406)
( 10,207,406)
--------------
-------
--------------
Total investments by and distributions to owners
4,679,918
4,679,918
At 31 January 2023
4,679,918
( 2,553)
4,677,365
Profit for the year
144,500
144,500
--------------
----------
--------------
Total comprehensive income for the year
144,500
144,500
--------------
----------
--------------
At 31 January 2024
4,679,918
141,947
4,821,865
--------------
----------
--------------
EWE Holdings Limited
Consolidated Statement of Cash Flows
Year ended 31 January 2024
2024
2023
Note
£
£
Cash flows from operating activities
Profit for the financial year
548,481
15,095
Adjustments for:
Depreciation of tangible assets
107,855
27,073
Amortisation of intangible assets
(3,136)
(177)
Impairment of intangible assets
( 866,348)
Income from shares in group undertakings
( 9,749,684)
Other interest receivable and similar income
(6,325)
(1,288)
Interest payable and similar expenses
182,410
6,660
Loss on disposal of tangible assets
1,303
Tax on profit
181,127
73,612
Changes in:
Stocks
( 1,282,492)
( 767,656)
Trade and other debtors
186,062
( 84,484)
Trade and other creditors
328,908
( 561,259)
-------------
--------------
Cash generated from operations
244,193
( 11,908,456)
Interest paid
( 182,410)
( 6,660)
Interest received
6,325
1,288
Tax (paid)/received
( 94,372)
60,564
----------
--------------
Net cash used in operating activities
( 26,264)
( 11,853,264)
----------
--------------
Cash flows from investing activities
Purchase of tangible assets
( 223,830)
( 4,875,557)
Proceeds from sale of tangible assets
20,000
2,775,000
Acquisition of subsidiaries
( 15,158,660)
Proceeds from disposals of subsidiaries
14,887,324
Dividends received
9,749,684
----------
--------------
Net cash (used in)/from investing activities
( 203,830)
7,377,791
----------
--------------
Cash flows from financing activities
Proceeds from issue of ordinary shares
14,887,324
Proceeds from borrowings
109,068
Payments of finance lease liabilities
( 55,535)
( 3,432)
Reduction of share capital
( 10,207,406)
----------
--------------
Net cash from financing activities
53,533
4,676,486
----------
--------------
Net (decrease)/increase in cash and cash equivalents
( 176,561)
201,013
Cash and cash equivalents at beginning of year
201,013
----------
----------
Cash and cash equivalents at end of year
16
24,452
201,013
----------
----------
EWE Holdings Limited
Notes to the Financial Statements
Year ended 31 January 2024
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Kahawa House, Elsham Wold Industrial Estate, Elsham, Brigg, DN20 0SP.
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
(a) 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.
(b) Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102: (a) No cash flow statement has been presented for the company.
(c) Consolidation
The financial statements consolidate the financial statements of EWE Holdings Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
(d) Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other 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 as follows: Property, plant and equipment The company's accounting policy for tangible fixed assets is set out in the notes below. Estimated useful lives of plant and equipment are based on management's judgement and historical experience with similar assets . Goodwill, Research and Development The company's accounting policy for intangible fixed assets is set out in the notes below. Estimated useful lives of goodwill, research and development are based on management's judgement and historical experience with similar assets . Bad debts Provision is made for debts that are not considered to be recoverable. The provision is based on management experience of previous years' recoverability of trade debtors and is applied to the amounts of outstanding debt. Stock provisions Provision is made for old and obsolete stocks following review by management who are sufficiently knowledgeable to identify where the net present value of stock is lower than cost .
(e) Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods 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. Income from rents receivable is recognised in accordance with the agreed terms of the relevant lease agreements.
(f) Current and deferred tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, 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 be paid or recovered 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 .
(g) 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 the profit and loss account.
(h) Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years. Negative goodwill arises when the cost of a business combination is less that the fair value of the interest in the identifiable assets, liabilities and contingent liabilities acquired. The amount up to the fair value of the non-monetary assets acquired is credited to profit or loss in the period in which those non-monetary assets are recovered. Negative goodwill in excess of the fair values of the non-monetary assets acquired is credited to profit or loss in the periods expected to benefit, which the directors consider to be 10 years.
(i) Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably .
(j) Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
over 10 years
Research & Development
-
over 3 to 10 years
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
(k) Research and development
Research expenditure is written off in the period in which it is incurred. Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met: - It is technically feasible to complete the intangible asset so that it will be available for use or sale; - There is the intention to complete the intangible asset and use or sell it; - There is the ability to use or sell the intangible asset; - The use or sale of the intangible asset will generate probable future economic benefits; - There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and - The expenditure attributable to the intangible asset during its development can be measured reliably. Expenditure that does not meet the above criteria is expensed as incurred.
(l) Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
(m) 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:
Plant and machinery
-
15% to 35% reducing balance and 33% straight line
(n) Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
(o) Impairment of fixed assets
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 .
(p) 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 stock to its present location and condition. Work in progress is valued on the basis of direct costs plus attributable labour. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.
(q) Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
(r) 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 as a finance cost in profit or loss in the period it arises.
(s) Financial instruments
A financial asset or a financial liability is recognised only when the entity 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. Other financial instruments 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. 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 are 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 .
(t) 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.
4. Turnover
Turnover arises from:
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
£
£
Sale of goods
10,965,798
887,194
--------------
----------
The turnover is attributable to the one principal activity of the group. An analysis of turnover by the geographical markets that substantially differ from each other is given below:
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
£
£
United Kingdom
8,776,367
709,755
Overseas
2,189,431
177,439
--------------
----------
10,965,798
887,194
--------------
----------
5. Operating profit/(loss)
Operating profit or loss is stated after charging/crediting:
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
£
£
Amortisation of intangible assets
( 3,136)
( 178)
Depreciation of tangible assets
107,855
27,073
Impairment of intangible assets recognised in:
Cost of sales
(866,348)
Loss on disposal of tangible assets
1,303
Impairment of trade debtors
20,191
547
Foreign exchange differences
25,674
3,851
----------
----------
6. Auditor's remuneration
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
£
£
Fees payable for the audit of the financial statements
4,800
625
-------
----
7. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2024
2023
No.
No.
Production staff
51
47
Administrative staff
2
3
Management staff
2
4
----
----
55
54
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
£
£
Wages and salaries
2,013,944
435,062
Social security costs
202,833
43,567
Other pension costs
42,100
5,276
-------------
----------
2,258,877
483,905
-------------
----------
8. Income from shares in group undertakings
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
£
£
Dividends from group undertakings
9,749,684
----
-------------
9. Interest payable and similar expenses
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
£
£
Interest on obligations under finance leases and hire purchase contracts
175,890
6,338
Other interest payable and similar charges
6,520
322
----------
-------
182,410
6,660
----------
-------
10. Tax on profit
Major components of tax expense
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
£
£
Current tax:
UK current tax expense
140,609
33,812
Deferred tax:
Origination and reversal of timing differences
40,522
39,800
----------
--------
Tax on profit
181,131
73,612
----------
--------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2023: higher than) the standard rate of corporation tax in the UK of 24 % (2023: 19 %).
Period from
Year to
14 Jan 22 to
31 Jan 24
31 Jan 23
£
£
Profit on ordinary activities before taxation
729,612
88,707
----------
--------
Profit on ordinary activities by rate of tax
175,107
32,824
Effect of expenses not deductible for tax purposes
6,024
40,788
----------
--------
Tax on profit
181,131
73,612
----------
--------
11. Intangible assets
Group
Goodwill
Research & developm't
Total
£
£
£
Cost
At 1 February 2023 and 31 January 2024
( 936,799)
719,143
( 217,656)
----------
----------
----------
Amortisation
At 1 February 2023
( 804,734)
704,424
( 100,310)
Charge for the year
( 13,545)
10,409
( 3,136)
----------
----------
----------
At 31 January 2024
( 818,279)
714,833
( 103,446)
----------
----------
----------
Carrying amount
At 31 January 2024
( 118,520)
4,310
( 114,210)
----------
----------
----------
At 31 January 2023
( 132,065)
14,719
( 117,346)
----------
----------
----------
The company has no intangible assets.
Impairment and amortisation of negative goodwill are included in cost of sales. Amortisation of development costs is included in administrative expenses.
12. Tangible assets
Group
Freehold property
Plant and machinery
Total
£
£
£
Cost
At 1 February 2023
2,100,000
2,515,051
4,615,051
Additions
223,830
223,830
Disposals
( 204,000)
( 204,000)
-------------
-------------
-------------
At 31 January 2024
2,100,000
2,534,881
4,634,881
-------------
-------------
-------------
Depreciation
At 1 February 2023
1,927,486
1,927,486
Charge for the year
107,855
107,855
Disposals
( 182,697)
( 182,697)
-------------
-------------
-------------
At 31 January 2024
1,852,644
1,852,644
-------------
-------------
-------------
Carrying amount
At 31 January 2024
2,100,000
682,237
2,782,237
-------------
-------------
-------------
At 31 January 2023
2,100,000
587,565
2,687,565
-------------
-------------
-------------
Company
Freehold property
£
Cost
At 1 February 2023 and 31 January 2024
2,100,000
-------------
Depreciation
At 1 February 2023 and 31 January 2024
-------------
Carrying amount
At 31 January 2024
2,100,000
-------------
At 31 January 2023
2,100,000
-------------
The company acquired freehold property by way of a dividend in specie from a subsidiary company .
13. Investments
The group has no investments.
Company
Shares in group undertakings
£
Cost
At 1 February 2023 and 31 January 2024
2,076,380
-------------
Impairment
At 1 February 2023 and 31 January 2024
-------------
Carrying amount
At 1 February 2023 and 31 January 2024
2,076,380
-------------
At 31 January 2023
2,076,380
-------------
Subsidiaries, associates and other investments
Details of the investments in which the parent company has an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Sumo Uk Ltd., Redgates, Melbourne, York, YO42 4RG
Ordinary
100
14. Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
2,711,766
1,603,865
Work in progress
897,421
707,549
Finished goods and goods for resale
437,918
453,199
-------------
-------------
----
----
4,047,105
2,764,613
-------------
-------------
----
----
An impairment loss of £ 101,720 (2023: £ 31,165 ) was recognised in cost of sales on respect of a provision against slow moving and obsolete stock.
15. Debtors
Group
Company
2024
2023
2024
2023
£
£
£
£
Trade debtors
536,201
443,488
Amounts owed by group undertakings
474,765
471,851
Prepayments and accrued income
67,004
68,754
2,162
Other debtors
277,025
248,016
81,687
----------
----------
----------
----------
603,205
789,267
724,943
553,538
----------
----------
----------
----------
Trade debtors are stated after provision for impairments of £nil (2023: £8,039)
16. Cash and cash equivalents
Cash and cash equivalents comprise the following:
2024
2023
£
£
Cash at bank and in hand
77,037
201,013
Bank overdrafts
( 52,585)
--------
----------
24,452
201,013
--------
----------
17. Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans and overdrafts
52,585
Trade creditors
1,305,820
1,012,662
Accruals and deferred income
322,745
315,135
6,500
2,500
Corporation tax
140,609
94,376
45,706
9,025
Social security and other taxes
80,117
54,140
24,000
Obligations under finance leases and hire purchase contracts
73,900
14,203
Other creditors
2,162
2,162
-------------
-------------
--------
--------
1,977,938
1,490,516
78,368
11,525
-------------
-------------
--------
--------
Hire purchase liabilities as noted above are secured on the associated asset. The bank overdraft is secured by a fixed and floating charge over the assets of the company.
18. Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Obligations under finance leases and hire purchase contracts
19,180
25,343
--------
--------
----
----
Hire purchase liabilities as noted above are secured on the associated asset .
19. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Not later than 1 year
73,900
14,203
Later than 1 year and not later than 5 years
19,180
25,343
--------
--------
----
----
93,080
39,546
--------
--------
----
----
20. Provisions
Group
Deferred tax (note 21)
£
At 1 February 2023
114,240
Charge against provision
40,522
----------
At 31 January 2024
154,762
----------
Company
Deferred tax (note 21)
£
At 1 February 2023
41,028
--------
At 31 January 2024
41,028
--------
21. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Included in provisions (note 20)
154,762
114,240
41,028
41,028
----------
----------
--------
--------
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2024
2023
2024
2023
£
£
£
£
Accelerated capital allowances
113,734
73,212
Revaluation of tangible assets
41,028
41,028
41,028
41,028
----------
----------
--------
--------
154,762
114,240
41,028
41,028
----------
----------
--------
--------
The reversal of deferred tax liabilities in the year commencing 1 February 2024 is not expected to be material.
22. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 42,100 (2023: £ 5,276 ).
23. Called up share capital
Authorised share capital
2024
2023
No.
£
No.
£
Ordinary S shares of £ 1 each
2,355,518
2,355,518
2,355,518
2,355,518
Ordinary J shares of £ 1 each
2,324,400
2,324,400
2,324,400
2,324,400
-------------
-------------
-------------
-------------
4,679,918
4,679,918
4,679,918
4,679,918
-------------
-------------
-------------
-------------
Issued, called up and fully paid
2024
2023
No.
£
No.
£
Ordinary S shares of £ 1 each
2,355,518
2,355,518
2,355,518
2,355,518
Ordinary J shares of £ 1 each
2,324,400
2,324,400
2,324,400
2,324,400
-------------
-------------
-------------
-------------
4,679,918
4,679,918
4,679,918
4,679,918
-------------
-------------
-------------
-------------
The issued share capital arose following a share for share exchange with the shareholders of Elsham Wold Estates Limited which completed on 4 April 2022. On 17 October 2022 the Ordinary shares were re-designated into 7,394,166 Ordinary J and 7,493,158 Ordinary S shares. On 17 October 2022, 5,069,766 of the issued J Shares were cancelled, in exchange for the transfer of specified assets to a company controlled by the shareholder of the J shares. On the same day, 5,137,640 of the issued S shares were cancelled in exchange for the transfer of the entire share capital of Elsham Wold Estates Limited to a company controlled by the shareholder of the S shares . As at the year end date, the holders of ordinary S and ordinary J shares are entitled to one vote per share at meetings of the Company. Dividends can be declared at different times and at different rates on the S and J shares. The S shares give rights to exercise control over the S share assets and the J shares give rights to exercise control of the J share assets as defined in the company Articles of Association.
24. Reserves
Profit and loss account This reserve records retained earnings and accumulated losses.
25. Analysis of changes in net debt
At 1 Feb 2023
Cash flows
At 31 Jan 2024
£
£
£
Cash at bank and in hand
201,013
(123,976)
77,037
Bank overdrafts
(52,585)
(52,585)
Debt due within one year
(14,203)
(59,697)
(73,900)
Debt due after one year
(25,343)
6,163
(19,180)
----------
----------
--------
161,467
( 230,095)
( 68,628)
----------
----------
--------
26. Related party transactions
Group
Key management personnel include all persons that have authority and responsibility for planning, directing and controlling the activities of the company. The total compensation paid to key management personnel for services provided to the group was £ 172,309 (2023: £ 161,652 ).
Company
The company has taken advantage of the exemptions provided in FRS 102 from reporting transactions between wholly owned members of the group.
27. Controlling party
The ultimate controlling party of EWE Holdings Limited is Mr S D Herring .
EWE Holdings Limited
Notes to the Financial Statements (continued)
Year ended 31 January 2024
28. Business combination
On 16 October 2022, EWE Holdings Limited acquired 100 per cent of the issued share capital of Sumo UK Limited. Sumo UK Limited is incorporated in the UK, trading as a manufacturer and wholesaler of agricultural machinery. The cost of the acquisition was £2,076,380 for net assets of £3,078,179. This created negative goodwill of £1,001,799.
The negative goodwill was impaired in 2023 for the amount up to the fair value of the non-monetary assets acquired in the period in which those non-monetary assets are recovered, this value was £866,348. The remaining of the balance will be amortised over a 10 year period.