Registered Number:
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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CONTENTS
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COMPANY INFORMATION
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STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
The Company's principal activity during the year continued to be the distribution of tools and machinery.
Turnover increased by 1.6% to £90,946,000 from £89,557,000 when compared to the previous year.
Net profit increased by 1.8% to £8,860,000 from £8,702,000. During the year, the Company continued to review its stock holding, which resulted in a reduction from £38,446,000 as at 30 April 2023 to £36,391,000 as at 30 April 2024. Care was taken to maintain excellent stock availability and a first pick rate of 99.1% (2023 – 99.6%). Research and development The Company intends to make a Research and Development claim in respect of relevant work undertaken during the year. This will include development of various aspects of the Enterprise Resource Planning (ERP) system along with its integration with other software.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
The principal strategic objective of the Company continues to be sustainable organic growth of the business to achieve and maintain a competitive advantage. This is driven by a policy of sourcing and developing quality and innovative new products, providing a consistently high standard of customer service, maintaining excellent stock availability, and investing in its workforce.
At the year end, construction of the new Product Development Centre was ongoing, with completion expected in the late Summer of 2024. During the coming year, the Company will invest further in technology to continue to improve its operations and offer the best service possible to its customers. On 1 May 2024, the Company acquired the trade and net assets of Dellonda Limited for their net book value of £3,738,000. On 1 May 2024, Sealey (UK) Limited acquired the entire share capital of Dellonda Limited. Dellonda Limited was under common control, although it was not part of the group. On 12 June 2024, the Company issued £3,000,000 Redeemable Preference shares of £1 each to a Director of the Company and shareholder of the ultimate parent undertaking for cash. Principal risks and uncertainties Business risk The Directors regularly monitor the financial performance and position of the Company by reviewing monthly management accounts, key performance indicators and other periodic reports. Treasury and financial risk The Company operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the Company’s activities. Other loans may also be used from time to time, the main purpose of which is to raise finance for the Company’s operations. In addition, the Company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from operations.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
Price risk
The Company carefully monitors all relevant raw material prices including packaging, as well as labour and shipping costs within its supply chain. This is essential as all these costs are always fluctuating and are key influencing factors on the Company’s cost base. Liquidity risk The Company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, which is increasingly relevant due to the higher interest rates seen during the year. At the same time, the directors of the Company continually monitor liquidity to ensure that the Company has adequate resources to meet the ongoing operating needs of the business. Interest rate risk From time to time, the Company may be exposed to interest rate risk on its variable rate loans. In such instances the Company uses fixed interest rate derivatives when considered necessary in order to mitigate its exposure to changes in interest rates. Foreign currency risk The Company’s principal foreign currency exposure arises from trading with overseas suppliers and customers. The Company’s policy permits but does not demand that these exposures may be hedged in order to fix the cost in GBP. The hedging activity involves the use of forward foreign exchange contracts. Credit risk All customers who wish to trade on credit terms are subject to strict credit verification procedures. All trade debtors are reviewed on a regular basis by senior management and directors, and provision is made for doubtful debts where necessary. Stock availability The key non-financial performance indicator for the business is the first pick rate. This is based on the stock of main line items which are available for immediate delivery to customers. During the year, an average of 99.1% (2023 – 99.6%) was achieved, which remains one of the highest within this business sector. Section 172(1) statement The Directors recognise their responsibility under section 172(1) of the Companies Act 2006 to promote the success of the Company for the benefit of its members and other stakeholders. This report identifies some of the Company’s key stakeholders and explains how the Directors fulfil their responsibility to them. Employees Recruiting and retaining good employees is essential to the delivery of the strategy and future growth of the business. The Company aims to empower and engage employees throughout the business, by encouraging each to solve problems at their own level. Training is provided where relevant and there is an annual ‘Personal Development Review’ process in place.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
Employees are encouraged to express their views on the Company’s operations and future developments. Regular meetings are held between managers and employees to help facilitate a free flow of information and ideas. All significant developments within the business are communicated to employees by the directors, including via email, a monthly newsletter, noticeboards and online.
During the year, employee turnover was 13.3% (2023 – 8.7%). Customers The Directors recognise that the Company’s customers are key to its continued success, therefore a high emphasis is placed on providing exceptional levels of customer service and on maintaining good relationships with customers. The Directors actively engage with new and existing customers to understand their real and perceived needs. This has helped to drive various aspects of the Company’s strategy and operations, including in customer service, providing quality and competitively priced products, maintaining good stock availability and in development of the product range. Suppliers The Company works closely with its suppliers, as it relies on them to provide products and services which meet stringent quality and performance requirements. Engagement is at an operational level on a day-to-day basis to ensure the Company’s expectations are met from a quality and delivery perspective and at director level in relation to more strategic discussions. The Directors ensure the Company interacts ethically with its suppliers and adheres to commercially agreed payment terms. Our community and the environment The Company is a significant local employer and large business therefore the Directors recognise it has an important role to play as an employer, neighbour and active participant in the local community. The Directors regularly meet with community leaders to maintain relationships and to ensure their views are considered. The Company also recognises the need to operate responsibly in relation to the environment and natural resources. Therefore, it is committed to reducing its environmental impact as an integral part of its business strategy and operating methods. During the year, the Company has continued to replace vehicles used by the sales team with hybrid vehicles to further reduce its carbon footprint. This is evidenced in the reduction in consumption in fuel for transport compared to last year, detailed in the following section.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
The annual quantity of emissions (tonnes) of carbon dioxide equivalent, resulting from activities for which the Company is responsible are as follows:
- the combustion of gas - 0.0 tC02e/year (2023 - 0.0 tC02e/year) - the consumption of fuel for the purposes of transport - 98.3 tC02e/year (2023 - 122.4 tC02e/year) - the purchase of electricity by the Company for its own use, including for the purposes of transport -198.3 tC02e/year (2023 - 186.7 tC02e/year) The annual quantity of energy consumed from activities for which the Company is responsible was 1,771,562 kWh/year (2023 – 1,834,295 kWh/year). The above figures have been calculated by a third-party business of energy and environmental consulting engineers. Electricity and gas consumption were based on a data set collated from invoices internally by the Company as part of its utilities monitoring strategy, whilst mileage figures were used to calculate energy and emissions from fleet vehicles. Gross calorific values were used except for mileage energy calculations. The Company continues to take measures to reduce its carbon footprint and improve energy efficiency, some of which are discussed in the previous section. The Company utilises the following key ratio to express total annual emissions in relation to total occupied floorspace of the business: Total tonnes of carbon dioxide per ‘000 square meter floor area = 6.29 tCO2e/year per m2 (2023 – 8.84 tCO2e/year per m2.) Equal opportunities The Company is an equal opportunity employer and is fully committed to a policy of treating all its employees and job applicants equally. During the year, training was provided to all employees on equality and diversity awareness. Full consideration is given to applications for employment based on experience, skills, knowledge and ability to adequately perform the role. Where existing employees become disabled, it is the Company’s policy wherever practical to provide continuing employment under normal terms and conditions, as well as provide training, career development and promotion wherever appropriate. Regulatory bodies The Company aims to maintain the highest standards of conduct with each of the regulatory bodies it engages with. The Directors support a principled and moral approach to doing business, which is embedded in the culture of the Company. We have several policies in place including our zero tolerance to unethical matters such as bribery and corruption, along with maintaining transparent and fair policies with each of our stakeholders. The Company website details its compliance with the Modern Slavery legislation and provides information on our Gender Pay report.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
This report was approved by the Board of Directors on 27 November 2024 and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
The Directors present their report and the financial statements for the year ended 30 April 2024.
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £6,335,000 (2023 - £7,059,000).
The Directors do not recommend the payment of a dividend (2023 - £NIL).
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JACK SEALEY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
The Directors who served during the year and to the date of this report, were:
The Directors' indemnity insurance is part of a standalone policy paid for by the Company. The policy was in force during the year and to the date of this report.
Details of the Company's future developments and subsequent events, research and development activities, policies in respect of disabled employees, employee involvement, financial risk management objectives and policies, use of financial instruments, the key risks to which it is exposed, energy usage and carbon emissions, and fostering relationships with employees, customers, suppliers and other stakeholders are included in the Strategic Report.
Change of auditor
On 28 March 2024 our auditor, SB Audit LLP, merged with Sumer Auditco Limited. Accordingly SB Audit LLP formally resigned as the Company's auditor with the directors duly appointing Sumer Auditco Limited to fill the vacancy arising. The auditor, Sumer Auditco Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the Board of Directors on
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF JACK SEALEY LIMITED
We have audited the financial statements of Jack Sealey Limited (the 'Company') for the year ended 30 April 2024, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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.
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
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JACK SEALEY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF JACK SEALEY LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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.
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.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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JACK SEALEY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF JACK SEALEY LIMITED (CONTINUED)
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 identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial experience and through discussions and enquiries of Directors and management. During the engagement team briefing, the outcomes of these discussions were shared with the team, as well as consideration as to where and how fraud may occur in the Company. The following laws and regulations were identified as being of significance to the Company: • Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards and UK Company Law and Taxation. • Those laws and regulations considered to have an indirect effect on the financial statements. These include ensuring that the Company's products comply with the EU Machinery Directive and have the required CE (European Conformity) marking, health and safety, GDPR, and employment law. Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the Company complies with such regulations; enquiries of management and those charged with governance concerning any actual or potential litigation or claims, inspection of relevant legal documentation, review of Board minutes, testing the appropriateness of journal entries and the performance of analytical review to identify any unexpected movements in account balances which may be indicative of fraud. There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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.
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JACK SEALEY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF JACK SEALEY LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditor
Fitzroy House
Crown Street
Suffolk
IP1 3LG
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
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BALANCE SHEET
AS AT 30 APRIL 2024
The financial statements were approved and authorised for issue by the Board and were signed on its behalf on
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
Jack Sealey Limited (the "Company") is a private company limited by shares and incorporated and domiciled in England and Wales. The address of the registered office is 820 The Crescent, Colchester Business Park, Colchester, Essex CO4 9YQ. The principal place of business is Kempson Way, Suffolk Business Park, Bury St Edmunds, Suffolk, IP32 7AR.
2.Accounting policies
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:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
• the requirements of Section 7 Statement of Cash Flows; • the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); • the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); • the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; and • the requirements of Section 33 Related Party Disclosures paragraph 33.7. This information is included in the consolidated financial statements of Sealey (UK) Limited as at 30 April 2024 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
2.Accounting policies (continued)
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed five years. Capitalised software development expenditure relates to expenses incurred in the development of software systems for internal use. The amortisation period in respect of the capitalised development expenditure is on a straight line basis over 4 years.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
2.Accounting policies (continued)
Land and assets under construction are not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method or reducing balance method. The estimated useful lives range as follows:
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 either selling and distribution expenses or administrative expenses. 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 the Statement of Comprehensive Income.
Defined contribution pension scheme
The Company operates a defined contribution scheme for its employees. A defined contribution scheme 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 the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in other creditors as a liability in the Balance Sheet. The assets of the scheme are held separately from the Company in independently administered funds.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
2.Accounting policies (continued)
Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
2.Accounting policies (continued)
initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
2.Accounting policies (continued)
Short term deposits are investments that mature between 95 days and 12 months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Share capital classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form. Shares which are redeemable at the request of the holders and provide them with a right to receive dividends are recognised as liabilities.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only. The provision for stock is calculated as the value of each stock line at the year end stock less the purchases within the last 12 months, which is not expected to be sold within the next 24 months based on sales within the last 12 months. New stock lines which have been added within the last 12 months are not included in the calculation. The amortisation period for capitalised software development expenditure is estimated to be over a straight line basis of 4 years. This is in accordance with FRS 102 section 18.2 which states that the life of an intangible asset should not exceed 10 years. The fair value of the foreign currency forward contracts has been taken as the mark-to-market values calculated by the provider using data sourced from an independent financial market data provider using mid-market end-of-day data as of the close of business on 30 April 2024.
The whole of the turnover is attributable to the principal activity of the Company.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
12.Taxation (continued)
It was announced in the March 2021 budget that the main rate of corporation tax will increase from 19% to 25% for financial years from 2023. Accordingly, deferred tax assets and liabilities have been measured at 25% in these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
Barclays Bank Plc has provided the Company with a guarantee of £2,000 (2023 - £2,000) in respect of deferred customs duties. This is secured by fixed and floating charges over the Company's assets.
On 21 May 2021 the Company entered into a guarantee and indemnity with Investec Bank Plc. The Company has unconditionally guaranteed all existing and future liabilities owed by a company under common control to Investec Bank Plc. There were no liabilities at the Balance Sheet date (2023 - £Nil).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately 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 £1,143,000 (2023 - £860,000). Contributions amounting to £90,000 (2023 - £99,000) were payable to the fund at the balance sheet date and included within other creditors.
27.Other financial commitments
At 30 April 2024 the Company had foreign currency forward contracts to buy up to USD $16.9m at exchange rates against GB pounds of between 1.26 and 1.30 US dollars. The foreign currency forward contracts mature at various dates until 30 July 2025. The actual commitment could be lower if certain conditions are met.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
29.Share capital (continued)
On 28 April 2023, the Company issued 10,000,000 Redeemable Preference shares of £1 each for repayment of other loans amounting to £10,000,000. On 31 October 2023, the Company issued a further 3,000,000 Redeemable Preference shares of £1 each for cash.
The Redeemable Preference shares do not provide any voting rights. They are redeemable at the request either of the holder or the Company. However, they cannot be redeemed within two years of the issue date. The shares provide the right to a variable annual dividend. The shareholders and Company must agree the amount in writing within six months of each financial year end.
Profit and loss account
On 12 June 2024, the Company issued £3,000,000 Redeemable Preference shares of £1 each to a Director of the Company and shareholder of the ultimate parent undertaking for cash.
The immediate and ultimate parent undertaking is Sealey (UK) Limited.
J L Sealey, a Director, is the ultimate controlling party by virtue of his majority shareholding in Sealey (UK) Limited. The largest and smallest group for which the Company's results are included is headed by Sealey (UK) Limited. Copies of the consolidated financial statements of Sealey (UK) Limited are publicly available from Companies House, Crown Way, Cardiff CF14 3UZ.
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