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Registered number: 03998785










POSITEC (UK & IRELAND) LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
POSITEC (UK & IRELAND) LIMITED
 

COMPANY INFORMATION


Director
Don Zhendong Gao 




Registered number
03998785



Registered office
Fairfax House
20-22 London Road

Newbury

RG14 1JX




Independent auditor
James Cowper Kreston Audit
Chartered Accountants and Statutory Auditor

2 Communications Road

Greenham Business Park

Greenham

Newbury

Berkshire

RG19 6AB





 
POSITEC (UK & IRELAND) LIMITED
 

CONTENTS



Page
Strategic report
 
1 - 2
Director's report
 
3 - 4
Independent auditor's report
 
5 - 7
Statement of comprehensive income
 
8
Balance sheet
 
9
Statement of changes in equity
 
10
Statement of cash flows
 
11
Analysis of net debt
 
12
Notes to the financial statements
 
13 - 25


 
POSITEC (UK & IRELAND) LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Business review
 
The principal activity of the company is the distribution and sale of battery powered tools & technology for use by commercial landscapers alongside a range of residential outdoor power equipment and home improvements tools for the DIY market. The company is the main UK and Ireland trading arm for the Positec Group with headquarters in Suzhou, China. They develop, manufacture, supply and support the business across a range of products.
Key strategic decisions which could impact the future investments of the company are made by the director and local management in collaboration with the Positec Group leadership.
During 2023 the company saw a decrease in revenue of 13.6% to £15.8m compared to the prior year (£18.3m). The decrease in year over year performance came predominantly from the slowing of contract manufacturing orders. This downturn was significantly offset by the planned growth in satellite guided lawn mowers & commercial outdoor power equipment.
Whilst gross profit percentage of sale has declined by 0.8% from 19.3% (2022) to 18.5% 2023 due to the rising freight, material & labour costs being passed up the supply chain, the tight management of administrative and marketing activity saw an improvement in the overall operating profit £132.6k from £71.8k in 2022 to £204.3k in 2023.
The director considers the level of the business and the financial position of the balance sheet to the year-end to be satisfactory.

Principal risks and uncertainties
 
The company continued to experience challenging market conditions in the UK and Ireland during the year whilst maintaining high quality products and services to existing customers. These are not new risks but are managed via excellent relationships between the company and its customer base which has evolved through high levels of customer care and a comprehensive after sales support. The participation in such markets is often subject to uncertain economic conditions, which makes it difficult to estimate growth and as a result, future income and expenditures. Our future success depends upon our ability to develop new products that achieve market acceptance.

The company’s operations expose it to a variety of financial risks that include price risk, liquidity risk and credit risk.
 
Liquidity risks
The generation of cash is one of the company's key measurements and is closely monitored. The risk to the going concern of the company is, however, low as the weekly cash forecasting cadence empowers the wider Positec Group to foresee any necessary regional investment to support the company.

Credit risk
Credit risk arises from cash and deposit balances held with banks and financial institutions, as well as credit exposures to wholesale and retail customers. While the company has both intercompany payables and receivables, these are managed by the treasury team at Positec Group level. The company does not have a requirement for loans or overdraft facilities to support the business. The company monitors its external receivables closely, and each new customer is analysed individually for creditworthiness. The following procedures are adhered to:

• Appropriate credit checks to be performed on customers prior to sales being made
• Collection of receivable balances within agreed payment terms
• Regular reviews on the credit status of existing customers.
Price risk
The company is exposed to commodity price risk as a result of its operations. Likewise, exposure to inflation, the impact of foreign exchange and the cost of shipping containers can impact the cost of performing fixed price contracts. The company manages this on a case-by-case basis. The directors will revisit the appropriateness of this policy should the company’s operations change in size or nature.
Page 1

 
POSITEC (UK & IRELAND) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


Other risks
Third parties have claimed in the past and may claim in the future that we are infringing directly or indirectly upon their intellectual property rights, and third parties may infringe upon our intellectual property rights.
In order to remain successful, we must attract and retain key employees, and failure to do so could seriously harm the company’s brands.
The company could be negatively impacted by a security breach, through cyberattack, cyber intrusion or the threat to gain unauthorised access that causes significant disruption to our IT network and related systems. Although significant effort is made to maintain the security and integrity of our lT systems, it is virtually impossible to entirely mitigate this risk.

Key performance indicators
 
The directors consider the turnover and margin of the company to be the key performance indicators in the business. These are monitored closely by local management complimented with reviews performed by Positec headquarters the ultimate parent undertaking on a quarterly and monthly basis.

2023
2022
        £
        £
Turnover

15,826,492

18,324,303
 
Operating profit/(loss)

204,317

71,759
 
Profit/(loss) after tax

156,990

60,237
 
Shareholders funds

418,392

261,402
 
Current assets as a % of current liabilities

100%

100%
 
Average number of employees

39

29
 
Net trade receivable days

59

72
 
Net trade payable days

7

7
 


This report was approved by the board and signed on its behalf.





Don Zhendong Gao
Director

Date: 15 November 2024

Page 2

 
POSITEC (UK & IRELAND) LIMITED
 

 
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The director presents his report and the financial statements for the year ended 31 December 2023.

Director's responsibilities statement

The director is responsible for preparing the Strategic report, the Director's report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The director is 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 him to ensure that the financial statements comply with the Companies Act 2006He is 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.

Results and dividends

The profit for the year, after taxation, amounted to £156,990 (2022 - £60,237).

The director did not propose any dividend in respect of the years ended 31 December 2022 or 2023.

Director

The director who served during the year was:

Don Zhendong Gao 

Future developments

The home improvements and outdoor power equipment and power tool sector will continue to provide a profitable core business. Strategies to protect this core business and to develop and bring the next generation of products to market are integral to the Positec Group. In addition, campaigns are planned to penetrate adjacent markets with new products. Success in these areas remains key to meeting business objectives set by the directors in the strategic growth plan.

Disclosure of information to auditor

The director at the time when this Director's report is approved has confirmed that:
 
so far as he is aware, there is no relevant audit information of which the Company's auditor is unaware, and

he has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Page 3

 
POSITEC (UK & IRELAND) LIMITED
 

 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Auditor

The auditor, James Cowper Kreston Auditwill 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.
 





Don Zhendong Gao
Director

Date: 15 November 2024

Page 4

 
POSITEC (UK & IRELAND) LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF POSITEC (UK & IRELAND) LIMITED
 

Opinion


We have audited the financial statements of Positec (UK & Ireland) Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 director 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 director is responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Page 5

 
POSITEC (UK & IRELAND) LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF POSITEC (UK & IRELAND) LIMITED (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic report and the Director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Director's 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 Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Director's 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 director's 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 Director's responsibilities statement set out on page 3, the director is 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 director determines 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 director is 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 director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
POSITEC (UK & IRELAND) LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF POSITEC (UK & IRELAND) LIMITED (CONTINUED)


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:
[Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud.]


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 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 2006Our 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.





Jonathan Baillie BA (Hons) ACA FCCA (Senior Statutory Auditor)
for and on behalf of
James Cowper Kreston Audit
Chartered Accountants and Statutory Auditor
2 Communications Road
Greenham Business Park
Greenham
Newbury
Berkshire
RG19 6AB

19 November 2024
Page 7

 
POSITEC (UK & IRELAND) LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
  
15,826,492
18,324,303

Cost of sales
  
(12,901,841)
(14,795,826)

Gross profit
  
2,924,651
3,528,477

Administrative expenses
  
(2,720,334)
(3,456,718)

Operating profit
  
204,317
71,759

Tax on profit
  
(47,327)
(11,522)

Profit for the financial year
  
156,990
60,237

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 13 to 25 form part of these financial statements.

Page 8

 
POSITEC (UK & IRELAND) LIMITED
REGISTERED NUMBER: 03998785

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 9 
287,895
251,286

  
287,895
251,286

Current assets
  

Stocks
 10 
19,177,902
8,547,604

Debtors: amounts falling due within one year
 11 
4,208,330
4,930,405

Cash at bank and in hand
 12 
815,660
1,151,626

  
24,201,892
14,629,635

Creditors: amounts falling due within one year
 13 
(24,025,401)
(14,573,525)

Net current assets
  
 
 
176,491
 
 
56,110

Total assets less current liabilities
  
464,386
307,396

Provisions for liabilities
  

Deferred tax
 15 
(45,994)
(45,994)

  
 
 
(45,994)
 
 
(45,994)

Net assets
  
418,392
261,402


Capital and reserves
  

Called up share capital 
 16 
1,000
1,000

Profit and loss account
 17 
417,392
260,402

  
418,392
261,402


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Don Zhendong Gao
Director

Date: 15 November 2024

The notes on pages 13 to 25 form part of these financial statements.

Page 9

 
POSITEC (UK & IRELAND) LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2023
1,000
260,402
261,402



Profit for the year
-
156,990
156,990


At 31 December 2023
1,000
417,392
418,392


The notes on pages 13 to 25 form part of these financial statements.


STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2022
1,000
200,165
201,165



Profit for the year
-
60,237
60,237


At 31 December 2022
1,000
260,402
261,402


The notes on pages 13 to 25 form part of these financial statements.

Page 10

 
POSITEC (UK & IRELAND) LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
156,990
60,237

Adjustments for:

Depreciation of tangible assets
58,286
43,677

Taxation charge
47,327
11,522

(Increase)/decrease in stocks
(10,630,298)
187,994

Decrease/(increase) in debtors
1,013,241
(67,410)

Increase/(decrease) in creditors
67,544
(35,006)

Corporation tax (paid)/received
(41,184)
-

Net cash generated from operating activities

(9,328,094)
201,014


Cash flows from investing activities

Purchase of tangible fixed assets
(94,894)
(47,996)

Net cash from investing activities

(94,894)
(47,996)

Cash flows from financing activities

New loans from group companies
9,087,022
(400,471)

Net cash used in financing activities
9,087,022
(400,471)

Net (decrease) in cash and cash equivalents
(335,966)
(247,453)

Cash and cash equivalents at beginning of year
1,151,626
1,399,079

Cash and cash equivalents at the end of year
815,660
1,151,626


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
815,660
1,151,626

815,660
1,151,626


The notes on pages 13 to 25 form part of these financial statements.

Page 11

 
POSITEC (UK & IRELAND) LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

1,151,626

(335,966)

815,660


1,151,626
(335,966)
815,660

The notes on pages 13 to 25 form part of these financial statements.

Page 12

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Positec (UK & Ireland) Limited is a private company limited by share capital and incorporated in England and Wales. The address of the registered office is Fairfax House, 20-22 London Road, Newbury, RG14 1JX.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with 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:

 
2.2

Going concern

Whilst the company has been profitable in the current year and expects to be profitable in the foreseeable future, the company has net current assets of £176,491 (2022: asset of £56,110) at the year end but included in that is a significant amount due to other group companies of £22,159,597 (2022: £12,781,408) and is also fully reliant on that other group company for the supply of goods to be sold to customers.
 
The Director has sought assurances from the other group company that it will continue to provide financial support as is required for a period of least 12 months from the date of the approval of these financial statements. 
Based on the above and specifically given the continued support from another group company the Director believes it is appropriate to prepare the accounts on a going concern basis.  

Page 13

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Revenue

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.

Revenue from the sale of goods is typically recognised on despatch from the warehouse.
The Company also receives a commission income from the parent company which is calculated on the gross income receivable by the parent company in respect of goods sold directly to customers in the UK.

 
2.4

Tangible fixed assets

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.

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:

Short-term leasehold property
-
10%
Motor vehicles
-
20%
Fixtures and fittings
-
20%
Computer equipment
-
20%

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.

Page 14

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Finished goods include import duties and freight.
 
At each balance sheet 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.

 
2.6

Debtors

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.

 
2.7

Cash and cash equivalents

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.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.8

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares. 

 
2.9

Creditors

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.

Page 15

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

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.

 
2.11

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.12

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.13

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 16

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.14

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The directors have had to make the following estimations in preparing the financial statements:
Provisions for rebates
Included within accruals and deferred income are estimates of the amounts payable in the form of rebates to customers. The Company estimates these based upon past experiences from similar contracts and based upon agreed terms with customers that were in place at the year end.
Direct costs associated with the import of stocks
The Company estimates an appropriate level of uplift to the cost of goods purchased from China for import duty charges and applies this uplift to the cost of goods purchased during the year and included in stock in the financial statements. The uplift is estimated based on known import duty rates in force during the year.

Page 17

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Product sales
14,753,631
17,035,005

Commissions received
1,072,861
1,289,298

15,826,492
18,324,303


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
14,332,174
16,928,617

Rest of Europe
421,457
106,388

Rest of the world
1,072,861
1,289,298

15,826,492
18,324,303



5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Exchange differences
96,667
(52,293)

Other operating lease rentals
39,587
63,022


6.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor:


2023
2022
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements
21,750
20,700

Page 18

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
951,972
1,195,813

Social security costs
88,492
167,444

Cost of defined contribution scheme
75,647
90,887

1,116,111
1,454,144


The average monthly number of employees, including the director, during the year was as follows:


        2023
        2022
            No.
            No.







Sales
24
8



Administration
15
21

39
29


8.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
33,861
10,157

Adjustments in respect of previous periods
13,466
-


47,327
10,157


Total current tax
47,327
10,157

Deferred tax


Origination and reversal of timing differences
-
1,365

Total deferred tax
-
1,365


Taxation on profit on ordinary activities
47,327
11,522
Page 19

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
8.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
204,317
71,759


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
48,014
13,634

Effects of:


Fixed asset differences
(687)
(2,440)

Remeasurement of deferred tax for changes in tax rates
-
328

Total tax charge for the year
47,327
11,522


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 20

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Tangible fixed assets





Short-term leasehold property
Motor vehicles
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£



Cost or valuation


At 1 January 2023
199,762
-
68,534
194,690
462,986


Additions
-
27,502
25,608
41,784
94,894



At 31 December 2023

199,762
27,502
94,142
236,474
557,880



Depreciation


At 1 January 2023
39,952
-
19,032
152,716
211,700


Charge for the year on owned assets
16,647
3,209
9,233
29,196
58,285



At 31 December 2023

56,599
3,209
28,265
181,912
269,985



Net book value



At 31 December 2023
143,163
24,293
65,877
54,562
287,895



At 31 December 2022
159,810
-
49,502
41,974
251,286


10.


Stocks

2023
2022
£
£

Goods in transit
1,121,060
695,643

Finished goods and goods for resale
18,056,842
7,851,961

19,177,902
8,547,604



11.


Debtors

2023
2022
£
£


Trade debtors
2,562,965
3,624,529

Amounts owed by group undertakings
1,142,498
851,331

Other debtors
210,491
269,687

Prepayments and accrued income
292,376
184,858

4,208,330
4,930,405

Page 21

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.Debtors (continued)


Amounts owed by group undertakings are unsecured, repayable on demand and non-interest bearing.


12.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
815,660
1,151,626

815,660
1,151,626



13.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
239,555
271,836

Amounts owed to group undertakings
22,159,597
12,781,408

Corporation tax
28,261
22,118

Other taxation and social security
471,804
24,263

Other creditors
8,967
83,610

Accruals and deferred income
1,117,217
1,390,290

24,025,401
14,573,525


Amounts owed to group undertakings are unsecured, repayable on demand and non-interest bearing. 

Page 22

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets measured at amortised cost
3,921,554
4,745,547

Cash at bank
815,660
1,151,626

4,737,214
5,897,173


Financial liabilities


Financial liabilities measured at amortised cost
23,863,466
14,563,368


Financial assets at amortised cost compromises of trade and other debtors, accrued income and amounts owed by group undertakings.


Financial liabilities measured at amortised cost compromises of trade creditors, other creditors, accruals and amounts owed to group undertakings.


15.


Deferred taxation




2023
2022


£

£






At beginning of year
(45,994)
(44,629)


Charged to profit or loss
-
(1,365)



At end of year
(45,994)
(45,994)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(45,994)
(45,994)

(45,994)
(45,994)

Page 23

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



1,000 (2022 - 1,000) Ordinary shares of £1.00 each
1,000
1,000



17.


Reserves

Profit and loss account

This reserve represents the cumulative profit available for distribution to shareholders.


18.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £192,407 (2022: £90,887).
Total contributions payable to the fund at the balance sheet date are £nil in both 2023 and 2022.


19.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
111,024
111,024

Later than 1 year and not later than 5 years
429,067
456,203

Later than 5 years
83,888
167,776

623,979
735,003


20.


Related party transactions

The company is exempt under paragraph 33.11 of FRS 102 from disclosing related party transactions with entities that are part of the group headed by Positec Group Limited, where 100% voting rights are controlled within the group. 
Details of amounts owed to and from other group entities can be seen in notes 11 and 13. 
Remuneration of those considered to be key management personnel amounted to £450,362 (2022: £496,268).

Page 24

 
POSITEC (UK & IRELAND) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Controlling party

The ultimate parent company is Positec Group Limited, a company registered in Hong Kong.
The parent of both the largest and smallest group for which group accounts including Positec (UK & Ireland) Limited are drawn up is Positec Group Limited. Copies of these accounts are not available to the public. 
Page 25