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REGISTERED NUMBER: 03816214 (England and Wales)




















Group Strategic Report, Report of the Director and

Consolidated Financial Statements

for the Year Ended 31 July 2023

for

Group Silverline Limited

Group Silverline Limited (Registered number: 03816214)






Contents of the Consolidated Financial Statements
for the Year Ended 31 July 2023




Page

Company Information 1

Group Strategic Report 2

Report of the Director 6

Statement of Director's Responsibilities 8

Report of the Independent Auditors 9

Consolidated Income Statement 12

Consolidated Other Comprehensive Income 13

Consolidated Balance Sheet 14

Company Balance Sheet 15

Consolidated Statement of Changes in Equity 16

Company Statement of Changes in Equity 17

Consolidated Cash Flow Statement 18

Notes to the Consolidated Financial Statements 19


Group Silverline Limited

Company Information
for the Year Ended 31 July 2023







DIRECTOR: D J Morris





REGISTERED OFFICE: Boundary Way
Lufton Trading Estate
Yeovil
Somerset
BA22 8HZ





REGISTERED NUMBER: 03816214 (England and Wales)

Group Silverline Limited (Registered number: 03816214)

Group Strategic Report
for the Year Ended 31 July 2023

The director presents his strategic report of the company and the group for the year ended 31 July 2023.

REVIEW OF BUSINESS
The group's aim is to increase shareholder value and the directors intend to continue with the strategy of achieving sustainable growth by focusing on expansion through awareness of the Toolstream brands whilst maintaining cost control and promoting the group's reputation of offering the best value prices to the customer. The measure to the extent by which this goal has been achieved is demonstrated by using EBITDA, as a measure of how well the money invested in the business is providing a return to shareholders. Recent results are:

EBITDA 2023 loss £12,300,000 (2022 loss £1,450,000).

In the 2021 year the sector benefitted from the working from home phenomenon. However, in the 2022 and 2023 years the group has suffered from the global supply crisis initially leading to lack of stock availability, rising shipping costs and then latterly overstocking and stretching of working capital facilities. The Ukraine war and the subsequent economic slowdown has led to a reduction in consumer demand. These headwinds have resulted in turnover reducing by 12.2% to £67,541,000 (2022 by 20.8% to £76,949,000) and as a result gross profit has reduced by 41% to £15,522,000 (2022: by 22.3% to £26,318,000).

Following completion of the trade deal with Europe, sterling recovered to normal levels against the US dollar but the war in Ukraine has resulted in the US dollar strengthening against sterling causing increased pressure on buying costs.

The group made a loss before tax of £16,815,000 (2022: loss before tax £4,563,000). This was largely caused by reduction in turnover and gross margin not covering the distribution and overhead costs. The company has continued to supply good value products to our customers, preserving tight cost controls and improving operating efficiencies.

Interest cover is -5.48x (2022: -2.80x).

PRINCIPAL RISKS AND UNCERTAINTIES

Management believe their unique offering of value for money, customer service and high product availability will allow the group to expand and take market share. The business has a broad base of diverse customers and is not reliant on any one customer or supplier.

The company has in place business continuity and disaster recovery plans throughout the business and these are periodically reviewed with areas of risk considered at monthly board meetings.

The Brexit decision brought attendant uncertainties and the company established a warehouse in Holland and formed a Dutch subsidiary to more effectively service European trade post Brexit.

Much of the company's product is paid for in US dollars and fluctuations in the exchange rate with Sterling can cause fluctuations in buying costs. These risks are minimised by operating a cautious policy in relation to buying dollars forward in respect of purchases and constant review of buying and selling prices. A significant proportion of the company's sales is denominated in euros which reduces the exposure to the US dollar/GBP foreign exchange rate on our US dollar purchases. The company is constantly reviewing pricing policy within the overall strategy of offering best value prices to the customer.

The Directors acknowledge their overall responsibility for the company's system of internal control and for reviewing its effectiveness and there are ongoing procedures in place for identifying, evaluating and managing the significant risks faced by the company.

The directors have reviewed the major risks affecting the group and the effectiveness of the system of internal control.

The overhaul of the IT function including the move to a new Finance and Operations system in March 2021, Microsoft D365, along with the implementation of our supply chain management system, Slimstock in 2022, means that the group now has a modern operating base to support the future growth of the business.


Group Silverline Limited (Registered number: 03816214)

Group Strategic Report
for the Year Ended 31 July 2023

PRINCIPAL RISKS AND UNCERTAINTIES CONT
The principal risks and uncertainties are detailed below:

Trading risk

The market for tools and associated hardware continues to be highly competitive. The company seeks to maintain and grow its business by concentrating on developing its brands further through the continual focus and improvement on quality, service and value.

The UK economy is expected to grow modestly in 2025 with inflationary pressures expected to ease, allowing interest rates to fall to around 4%.

The group sold its Scruffs brand of workwear in September 2023 and used the receipts to repay bank and creditor debt and invest in stock. However, the working capital left to fund stock was not sufficient to maintain sufficient levels of stock, being out of stock of many of our best-selling lines' resulted in lost sales and market share. We remain confident that demand for our products remains strong, the shareholder investment explained in the going concern section provides the resource to return to an optimum stock holding position.


Foreign exchange risk

The group is significantly reliant on production overseas with substantial supplies of goods denominated in US dollars and sales in Euro's. The group's policy is to manage the risk associated with purchases denominated in currencies other than Sterling by using forward foreign currency contracts.


Cash flow risk

The group monitors its cashflow requirements on a regular basis to manage liquidity. The group has financial assets and liabilities which are exposed to changes in both foreign exchange rates and market interest rates. Changes in interest rates primarily impact deposits, loans and borrowings by changing their future cash flows. The directors do not currently have a formal policy of determining how much the group's exposure should be at fixed or variable rates and the group does not use interest rate hedging instruments to reduce its exposure. However, at the time of taking new loans or borrowing the directors use their judgement to determine whether it believes that a fixed or variable rate would be more favourable for the group over the expected period to maturity. The group's significant interest bearing assets and liabilities are disclosed in notes 17 to 19.


Liability risk

The group maintains usual commercial insurance policies for a business of its type. The group undertakes an annual review of all coverage limits.



Global Supply Chain

The significant global supply chain issues reported above led to stock levels initially falling to a level where stock availability affected sales following the outbreak of war in Ukraine falling demand led to overstocks and pressure on our bank facilities as well as exceptional costs as a result of off-site storage costs and demurrage.


Group Silverline Limited (Registered number: 03816214)

Group Strategic Report
for the Year Ended 31 July 2023

SECTION 172(1) STATEMENT
Section 172 of The Companies Act 2006 states that a director of a group must act in the way it considers, in good faith, would be most likely to promote the success of the group for the benefit of its members as a whole. In doing so a director of a group must have regard (amongst other matters) to:-
(a) The likely consequences of any decision in the long term;
(b) The interests of the group's employees;
(c) The need to foster the group's business relationships with suppliers, customers and others;
(d) The impact of the group's operations on the community and the environment;
(e) The desirability of the group maintaining a reputation for high standards of business conduct; and
(f) The need to act fairly as between members of the group.

The Directors have been made aware of the additional reporting requirements introduced by the Companies Act (Miscellaneous Reporting) Regulations 2018. The following summaries how the group's Board fulfils its duties under Section 172.

Decision Making
The Board fulfils its duties to act in good faith to promote the success of the company through its implementation of the Group Strategy which states that the group's key objective is to be a trusted supplier of market-leading brands to DIY, trade and the serious hobbyist, offering great value and customer service.

The group's strategic initiatives are considered with the group's five supporting pillars in mind; deliver great product; more customers spending more; satisfied customers; great place to work; and a sustainable business.

The Board reviews and considers its various stakeholders when arriving at recommended business decisions consistent with the strategy.

Examples of the Board's decision-making during the year ended 31 July 2023 included:
- the development and approval of a long-term business plan;
- exiting a warehouse that was surplus to requirements, and;
- disposing of the Scruffs brand to support the recovery of the business.

Employee Engagement
The group's employees are invaluable to its success and their importance is recognised in one of the key supporting pillars being 'great place to work'. We place great emphasis on colleague health, safety, wellbeing and engagement.

The group offers a breadth of roles, experiences and opportunities which enable colleagues to grow through coaching and development. The group encourages internal mobility and succession and is committed to creating an agile, collaborative and empowered workforce. We aim to be a responsible and fair employer with respect to colleague pay and benefits.

Examples of colleague engagement focused activity during the year included:
- regular all-colleague briefings led by the Group's directors to provide key business updates and the opportunity for colleagues to ask questions and contribute;
- senior staff and directors being visible and accessible to all colleagues; and
- Group directors proactively seeking feedback on their performance in order to bring about improvements.

Business Relationships
The Board engages with a variety of stakeholders, including principally customers, consumers, suppliers and regulators, to build long-term, effective relationships and to inform the Group's strategy. In making decisions the Board considers the potential impact on stakeholders as well as the importance of fulfilling the group's strategy and maintaining its integrity, brand and reputation.

Examples of the Board's engagement with stakeholders during 2023 include:
- direct engagement with customers by the sales team and senior management team;
- the operation of a customer service function to solve our customers' problems and obtain feedback on our products and service;
- interaction with consumers through the use of social media, brand promotions activities, monitoring product reviews and tracking net promoter scores;
- quality control audits of suppliers' factories in order to ensure compliance with manufacturing and quality standards, and to build stronger relationships with suppliers.

Community and Environment
The group recognises the importance of sustainability and environmental care and is actively working towards embedding their principles in the group's business, including product design, energy-saving initiatives, recycling, reduced use of plastics, reduced packaging and employee inductions and training. We report on carbon usage in the directors' report.


Group Silverline Limited (Registered number: 03816214)

Group Strategic Report
for the Year Ended 31 July 2023

Corporate Social Responsibility is important to the group and the board receives regular updates on this matter. Compliance with existing standards such as Waste Electrical and Electronic Equipment Regulations 2013 (as amended) is already in place and the board is actively working towards becoming compliant with ISO14001, a standard designed to help organisations improve their environmental performance. The group has increased awareness of modern slavery through annual training and has increased its focus on equality in the workplace, both of which are monitored at our suppliers' factories.

The Board is committed to leading the group in such a way that it contributes to wider society and actively supports employees to support local or national charities.

Culture and values
The group's culture continues to evolve, led by the Board and senior management team.

Customers and colleagues are at the heart of the business and the organisational culture is one of responsibility, respect and trust. Lawful conduct and fair competition are integral to its business activities and an important condition for maintaining a reputation for high standards of business conduct. The group has a people-centric philosophy with transparent, fair and simple processes that benefit all key stakeholders but particularly customers and colleagues.

Values such as collaboration, innovation, boldness and accountability can be seen in action and there is further potential across the group to define, recognise and embed its values. The group recognises and embraces the true value, including the commercial benefits, of diversity, agility, sustainability and continuous improvement throughout the organisation.

Acting fairly as between members of the group
The group is a private limited company and has a limited number of members. A shareholder agreement exists to protect the interests of the respective members and this sets out such matters as the rights and obligations of each shareholder party and corporate governance in respect of certain material matters.

FUTURE EVENTS
The company has faced difficulty recovering from the Covid-19 pandemic, which caused significant disruption to working practices, supply chain and the markets in which we operate in.

These operational and market issues continued to have a lasting impact into FY24 and resulted in a weaker trading performance. As a result of this deterioration the company has needed new investment to stabilise the business and return it to growth.

Subsequent to the 31 July 2024, the shareholders and bank have provided a package of financial support to the business which provides the necessary resources to invest in stock needed to support sales. The shareholders recognise the need to bring additional investment into the business to support growth, they plan to attract an equity investment of £5M early in 2025.

As part of the above, as detailed in note 24, the Preference shares in issue were re-designated as Ordinary shares and the A Ordinary shares were cancelled.

The financial statements have been prepared on a going concern basis, as explained in note 3 to the financial statements.

ON BEHALF OF THE BOARD:





D J Morris - Director


28 January 2025

Group Silverline Limited (Registered number: 03816214)

Report of the Director
for the Year Ended 31 July 2023

The director presents his report with the financial statements of the company and the group for the year ended 31 July 2023.

DIVIDENDS
Dividends of £nil will be distributed for the year ended 31 July 2023 (2022 - nil)

RESEARCH AND DEVELOPMENT
The group continues to design and bring to the market innovative products under the various brands that it owns.

FUTURE DEVELOPMENTS
Future developments have been described in the strategic report on page 5.

POST BALANCE SHEET EVENTS
Subsequent to the 31 July 2024 the shareholders and bank have provided a package of financial support to the business which provides the necessary resources to invest in stock needed to support sales. Additionally, the shareholders are confident in attracting new investment, a deal is expected to be completed during January 2025.

DIRECTORS
D J Morris has held office during the whole of the period from 1 August 2022 to the date of this report.

Other changes in directors holding office are as follows:

R M Wilson - resigned 30 November 2022

N F M Popplewell and R A O'Donnell ceased to be directors after 31 July 2023 but prior to the date of this report.

GOING CONCERN
The company's business activities, together with the factors likely to affect its future developments, its financial position, financial risk management objectives, details of its financial instruments and derived activities and its exposure to price, liquidity and cash flow risk are described in the strategic report on pages 2 and 3.

The financial statements have been prepared on a going concern basis, as explained in note 3 to the financial statements.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The group purchases a significant proportion of stock in US Dollars. To reduce the profit and loss impact because of GBP/USD exchange rate movements the company enters into foreign exchange forward contracts to purchase US dollars. These forward contracts aim to reduce the volatility of the forecast US Dollar purchases over the next 6 months.

DISABLED EMPLOYEES
All applications for employment by disabled persons are always fully considered whilst ensuring the aptitudes of the applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the group continues. It is the Group's policy that training, career development and promotion of disabled persons be, as far as possible, identical to that of other employees.

EMPLOYEE CONSULTATION AND INVOLVEMENT
Consultation with employees or their representatives has continued at all levels, with the aim of ensuring that views are taken into account when decisions are made that are likely to affect their interests. The Group holds quarterly meetings with the whole business and there is the opportunity to ask questions directly to the board and receive updates on ongoing initiatives that are being put into action. The main communication forum is via the Group's intranet site which posts regular news about the business as well as any vacancies within the business, there is also a platform to allow any staff member to post questions or suggestions to the business. In addition to these platforms there are other software programmes that allow easy multi-directional communication across the Group to help views to be heard and responses to be made.

STREAMLINED ENERGY AND CARBON REPORTING
During the year we took the following energy efficiency actions:



2023 2022
UK energy use (kWh) (note 1) 1,091,409 1,327,984
Greenhouse gas emissions (Tonnes CO2 equivalent) (note 2) 346,246 416,628
Intensity ratio - Emissions per kg per £1,000 sales (note 3) 6.18 6.764


Group Silverline Limited (Registered number: 03816214)

Report of the Director
for the Year Ended 31 July 2023



Note 1
UK energy use covers the warehouse and office operations owned or controlled by the group and not
those run by a third party. The shipping of our goods from our suppliers to us and from us to customers
is sub-contracted to logistic providers and therefore do not form part of these calculations.

Note 2
Greenhouse gases have been calculated at 0.281 (kg Co2/kWh) based on data from the European
Environment Agency - 2016.
Note 3 The intensity ratio has been based on emissions per £1,000 of sales for UK/Europe.

The Group recognises the need to be socially responsible, including the need to improve energy efficiency, and has in the year established a Corporate Social Reporting Group to evaluate our current standing with respect to matters such as energy use and to present options back to the business for ways in which we can improve our energy efficiency.

DISCLOSURE IN THE STRATEGIC REPORT
Principal risks and uncertainties have been described in the strategic report.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITOR
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group auditor are unaware, and each director has taken all steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group auditor are aware of the information.

AUDITORS
Pursuant to section 487 of the Companies Act 2006, the auditors will be deemed to be re-appointed and Saffery LLP will therefore continue in office.

ON BEHALF OF THE BOARD:





D J Morris - Director


28 January 2025

Group Silverline Limited (Registered number: 03816214)

Statement of Director's Responsibilities
for the Year Ended 31 July 2023

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 they have elected to prepare the group and parent company financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent company and of their profit or loss for that period. In preparing each of the group and parent
company financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgements and 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;
- assess the group and parent company's ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
- use the going concern basis of accounting unless they either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.

Report of the Independent Auditors to the Members of
Group Silverline Limited

Opinion
We have audited the financial statements of Group Silverline Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 July 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 group's and of the parent company affairs as at 31 July 2023 and of the group's loss for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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.

Material uncertainty relating to going concern
We draw attention to Note 3 - Going Concern in the financial statements, which indicates that there is material uncertainty relating to going concern due to the refinancing of the loan facilities along with the need to receive further investment. As stated in Note 3, the going concern status of the group is reliant on key assumptions, notably including revenue increasing to previous levels, cost savings of £1.0m per year, continued support from the bank and outside investment being obtained. This, along with other matters as set forth in Note 3, indicate that a material uncertainty exists that may cast significant doubt on the group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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.

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 director is responsible for the other information. The other information comprises the information in the Group Strategic Report, the Report of the Director and the Statement of Director's Responsibilities, but does not include the financial statements and our Report of the Auditors thereon.

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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Group Silverline Limited


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 Group Strategic Report or the Report of the Director.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept 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 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 director
As explained more fully in the Statement of Director's Responsibilities set out on page eight, 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 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 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 director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so.

Report of the Independent Auditors to the Members of
Group Silverline Limited


Auditors' 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company's financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operate.

Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006, and UK Tax legislation.

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner's review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and 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. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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 Report of the Auditors.

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 a Report of the Auditors 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.




Neil Davies (Senior Statutory Auditor)
for and on behalf of Saffery LLP
St Catherine's Court
Berkeley Place
Clifton
Bristol
BS8 1BQ

28 January 2025

Group Silverline Limited (Registered number: 03816214)

Consolidated
Income Statement
for the Year Ended 31 July 2023

2023 2022
Notes £'000 £'000 £'000 £'000

TURNOVER 4 67,542 76,949

Cost of sales 51,845 50,631
GROSS PROFIT 15,697 26,318

Distribution costs 7,375 7,249
Administrative expenses 22,553 22,845
29,928 30,094
(14,231 ) (3,776 )

Other operating income 5 11 413
OPERATING LOSS 7 (14,220 ) (3,363 )

Interest receivable and similar income 21 -
(14,199 ) (3,363 )

Interest payable and similar expenses 9 2,616 1,201
LOSS BEFORE TAXATION (16,815 ) (4,564 )

Tax on loss 10 (3,293 ) (174 )
LOSS FOR THE FINANCIAL YEAR (13,522 ) (4,390 )
Loss attributable to:
Owners of the parent (13,522 ) (4,390 )

Group Silverline Limited (Registered number: 03816214)

Consolidated
Other Comprehensive Income
for the Year Ended 31 July 2023

2023 2022
Notes £'000 £'000

LOSS FOR THE YEAR (13,522 ) (4,390 )


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

(13,522

)

(4,390

)

Total comprehensive income attributable to:
Owners of the parent (13,522 ) (4,390 )

Group Silverline Limited (Registered number: 03816214)

Consolidated Balance Sheet
31 July 2023

2023 2022
Notes £'000 £'000 £'000 £'000
FIXED ASSETS
Intangible assets 12 6,389 7,077
Tangible assets 13 6,123 6,867
Investments 14 - -
12,512 13,944

CURRENT ASSETS
Stocks 15 21,491 50,888
Debtors 16 12,502 13,530
Cash at bank and in hand 1,033 785
35,026 65,203
CREDITORS
Amounts falling due within one year 17 51,230 68,192
NET CURRENT LIABILITIES (16,204 ) (2,989 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

(3,692

)

10,955

CREDITORS
Amounts falling due after more than one
year

18

675

1,800
NET (LIABILITIES)/ASSETS (4,367 ) 9,155

CAPITAL AND RESERVES
Called up share capital 24 2,200 2,200
Merger reserve 158 158
Retained earnings (6,725 ) 6,797
SHAREHOLDERS' FUNDS (4,367 ) 9,155

The financial statements were approved by the director and authorised for issue on 28 January 2025 and were signed by:





D J Morris - Director


Group Silverline Limited (Registered number: 03816214)

Company Balance Sheet
31 July 2023

2023 2022
Notes £'000 £'000 £'000 £'000
FIXED ASSETS
Intangible assets 12 - -
Tangible assets 13 5,227 5,347
Investments 14 1 1
5,228 5,348

CURRENT ASSETS
Cash at bank 6 46

CREDITORS
Amounts falling due within one year 17 1,169 1,142
NET CURRENT LIABILITIES (1,163 ) (1,096 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

4,065

4,252

CREDITORS
Amounts falling due after more than one
year

18

(367

)

(710

)

PROVISIONS FOR LIABILITIES 23 (19 ) (19 )
NET ASSETS 3,679 3,523

CAPITAL AND RESERVES
Called up share capital 24 2,200 2,200
Retained earnings 1,479 1,323
SHAREHOLDERS' FUNDS 3,679 3,523

Company's profit/(loss) for the financial year 156 (384 )

The financial statements were approved by the director and authorised for issue on 28 January 2025 and were signed by:





D J Morris - Director


Group Silverline Limited (Registered number: 03816214)

Consolidated Statement of Changes in Equity
for the Year Ended 31 July 2023

Called up
share Retained Merger Total
capital earnings reserve equity
£'000 £'000 £'000 £'000
Balance at 1 August 2021 2,200 11,187 158 13,545
Total comprehensive income - (4,390 ) - (4,390 )
Balance at 31 July 2022 2,200 6,797 158 9,155
Total comprehensive income - (13,522 ) - (13,522 )
Balance at 31 July 2023 2,200 (6,725 ) 158 (4,367 )

Group Silverline Limited (Registered number: 03816214)

Company Statement of Changes in Equity
for the Year Ended 31 July 2023

Called up
share Retained Total
capital earnings equity
£'000 £'000 £'000
Balance at 1 August 2021 2,200 1,707 3,907

Changes in equity
Total comprehensive income - (384 ) (384 )
Balance at 31 July 2022 2,200 1,323 3,523

Changes in equity
Total comprehensive income - 156 156
Balance at 31 July 2023 2,200 1,479 3,679

Group Silverline Limited (Registered number: 03816214)

Consolidated Cash Flow Statement
for the Year Ended 31 July 2023

2023 2022
Notes £'000 £'000
Cash flows from operating activities
Cash generated from operations 30 5,812 (7,128 )
Interest paid (1,962 ) (809 )
Interest element of hire purchase payments
paid

(100

)

(36

)
Tax paid 585 (16 )
Net cash from operating activities 4,335 (7,989 )

Cash flows from investing activities
Purchase of intangible fixed assets (621 ) (1,157 )
Purchase of tangible fixed assets (63 ) (97 )
Sale of intangible fixed assets 169 26
Sale of tangible fixed assets 47 (6 )
Acquisition of business - (454 )
Interest received 21 -
Net cash from investing activities (447 ) (1,688 )

Cash flows from financing activities
Loan repayments in year (493 ) (300 )
Other loan repayments - (675 )
Capital repayments in year (859 ) (230 )
Amount introduced by directors 2,000 -
Movement in working capital bank loan (4,350 ) 10,070
Other loan finance - 1,750
Net cash from financing activities (3,702 ) 10,615

Increase in cash and cash equivalents 186 938
Cash and cash equivalents at beginning
of year

31

(8,060

)

(8,998

)

Cash and cash equivalents at end of year 31 (7,874 ) (8,060 )

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements
for the Year Ended 31 July 2023

1. GENERAL INFORMATION

The principal activity of the Group Silverline is to distribute tools to retailers in both the UK and Europe.

Group Silverline Limited is a limited liability company incorporated in England. The registered office is Boundary Way, Lufton Trading Estate, Yeovil, Somerset, BA22 8HZ.

2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3. ACCOUNTING POLICIES

Basis of preparing the financial statements
The financial statements have been prepared under the historical cost convention, as modified by the recognition of certain financial assets and liabilities at fair value, comprising derivative financial instruments.

The presentation currency of these financial statements is Sterling. All amounts in the financial statements have been rounded to the nearest £'000.

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

- The requirement of section 7 Statement of cash flows; presentation of a statement of cash flows and notes and disclosures;
- The requirement of Section 33 Related Party Disclosures paragraph 33.7.

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

3. ACCOUNTING POLICIES - continued

Basis of consolidation
The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to 31 July 2023. Unless the merger accounting method is permitted by FRS 102, the acquisition method has been adopted. Under this method, the results of the subsidiary undertakings acquired or disposed of in the year are included in the consolidated income statement from the date of acquisition or up to the date of disposal.

The company has taken the exemption from the requirements relating to the audit of individual subsidiary accounts by virtue of s479A and s479C of the Companies Act 2006 relating for its subsidiaries Powerbox International Limited and Sharelead Limited.

The company has taken advantage of the exemption in Section 408 of the Companies Act from disclosing its individual income statement.

Going concern

Subsequent to the 31 July 2023 the group entered into a strategic partnership with Greatstar United Kingdom Ltd. This agreement resulted in the sale of the Scruffs brand to Greatstar for £14M. In addition to the sale, Greatstar have awarded the group a 5-year worldwide exclusive distribution agreement for Scruffs. The sale of the Scruffs brand has allowed the group to reduce its borrowing by £6M, reduce legacy creditors by £3.4M and invest £4M in stock.

Subsequent to the 31 July 2024 the shareholders reached agreement with HSBC which has resulted in a package of financial support being made available to the business. The shareholders have made new non-interest bearing loans of £4.625M to the business, with HSBC providing a £0.5M overdraft facility on condition that the Intellectual Property held in Switzerland is transferred to the UK and forms part of the banks security. Existing shareholder loan accrued interest of £1.4M has been written off and shareholder loans subordinated to HSBC as part of this agreement. Subsequent to this investment, the majority shareholder acquired the preference shares held by the minority shareholder (25% of total equity) regaining full control of the business.

The new loans were used to bring the group's stock holding back to an appropriate level to support sales which will return the business to profit. The shareholders are supportive of the business and are aware that the business requires further investment to support growth. They are confident of attracting an equity investment of £5M early in 2025. This additional funding and a return to profit will allow the group to refinance, leveraging additional funding from its assets (property, stock and debtors). This exercise is planned to complete to complete in the Summer of 2025 and is expected to raise a further £1.5M to support working capital. Whilst the Directors are confident that the funds available will underpin the group's return to profit, the timing and uncertainty of obtaining proposed investment and the refinance means that there is material uncertainty that may cast significant doubt over the group's ability to continue as a going concern. The financial statements have been prepared on a going concern basis. The financial statements do not include the adjustments that would result if the group was unable to continue as a going concern.

As at 31 July 2024 the group had cash of £0.3M, and total assets less net current liabilities of £17.7M. In addition, the group had total outstanding loans of £23.2M. During the year ended 31 July 2024 the group made an operating profit of £0.9M as it managed low levels of cash which limited stock levels and consequently sales.

The group has produced cash flow forecasts through to 31 July 2025 which showed that the group will become profitable and remain a going concern. The forecast included the following assumptions:

i) The group returns to EBITDA profit in March 2025 and produces EBITDA profits each month thereafter in FY25.

ii) Revenue growth arises from restoring stock to levels appropriate for a wholesaler, giving customers confidence in our ability to fulfil their orders in full. We expect to be able to offer our customers 96% stock availability of our best-selling products by March 2025. This will allow us to return to 2023 revenue levels.

iii) Margins will be restored by a combination of improved product mix and targeted price increases ensuring our products remain competitive.

iv) There are forecast overhead savings of £1.0M compared to FY24. This will be achieved by cost cutting steps already taken and further actions including disposing of a surplus office building, exiting leases of two satellite offices and a staff restructure in our Chinese subsidiary.

v) The group will receive continued support from HSBC in line with the new facilities agreed in August 2024.


Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

3. ACCOUNTING POLICIES - continued
The group has looked beyond the forecast period, and in the year ending 31 July 2026 the group expects to record a profit before tax of £4.9M on sales of £60M.

After reviewing the group's forecasts and having taken steps to rebalance its cost base the Directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements. The group continues to adopt the going concern basis in preparing its financial statements.

Significant judgements and estimates
The group has applied judgement in applying accounting policies and key sources of estimation uncertainty in the following areas:

(i) Recoverability of assets

The group assumes all amounts owing from customers will be recovered in full. Where uncertainty exists as to the recovery a provision has been made for the anticipated unrecoverable amount of £2,073,000 (2022: £2,839,000).

(ii) Usability of stocks

Where there is uncertainty over the usability of the consumable stocks a provision is made to cover the estimated unrecoverable amount. The provision is £2,161,000 (2022: £907,000).

(iii) Warranty provision

The group provides a warranty from the date of purchase for 3 years for power tools and a lifetime warranty on all hand tool products, excluding fair wear and tear and mis-use for products that are registered within 30 days from purchase. The group recognises a provision on the basis of a historical return rates. This requires the director's best estimate of the costs that will be incurred based on historical trends. The warranty provision is recognised in trade debtors as part of the bad debt provision of £528,000 (2022: £437,000).

Revenue recognition
Revenue is measured at the fair value of consideration received or receivable for goods supplied (net of returns, trade discounts, allowances, value added tax and other sales related taxes) and royalties receivable.

The group recognises revenue when (a) the significant risks and returns of ownership have been transferred to the buyer, (b) the group retains no continual involvement or control over its goods, (c) the amount of revenue can be reliably measured and (d) it is probable that future economic benefits will flow to the entity.

Intangible assets
Goodwill and patents
Goodwill is stated at cost less any accumulated amortisation and accumulated impairment losses. Goodwill is allocated to cash-generating units or group of cash-generating units that are expected to benefit from the synergies of the business combination from which it arose.

Goodwill is amortised on a straight line basis over its useful life. Goodwill has no residual value. Goodwill has a residual useful economic life of 10 year, 8 years and 2 years.

Patent expenditure has been capitalised on the basis that the future economic benefits will derive from this asset.

Patents are amortised over 20 years which is deemed to be a reliable estimate of their useful life.

Research and Development
Research and development is measured at cost less accumulated amortisation and accumulated impairment losses. Research and development is amortised over 20 years which is deemed to be a reliable estimate of useful life.

Computer Software
Computer software is measured at cost less accumulated amortisation and accumulated impairment losses.
Computer software is amortised over 3 years which is deemed to be a reliable estimate of useful life.

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

3. ACCOUNTING POLICIES - continued

Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation. Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition and making the asset capable of operating as intended.

Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less estimated residual value based on prices prevailing at the date of acquisition or revaluation, of each asset evenly over its expected useful life, as follows:

Freehold property- 2% on cost
Plant and machinery- 20% on cost
Fixtures and fittings- 10-30% on cost
Motor vehicles- 20% - 33% on cost
Computer equipment- 33% on cost

No depreciation is provided on freehold land.

The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

Stocks
Stocks are stated at the lower of cost and net realisable value. Costs include all costs incurred in bringing each product to its present location and condition.

The average costing system is used to value stock. The group regularly assess its stock for indications of impairment. Where an item of stock is impaired, the identified inventory is reduced to the lower of cost and net realisable value and an impairment charge is recognised in the income statement.

Current taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. All gains and losses are included in the income statement in the period in which they arise.

Hire purchase and leasing commitments
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the profit and loss account on a straight line basis.

Operating lease agreements
Rental applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease. Lease incentives are recognised in the income statement over the term of the lease as an integral part of the lease expense.

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

3. ACCOUNTING POLICIES - continued

Pension costs and other post-retirement benefits
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Invoice discounting
Amounts due in respect of invoice discounting are separately disclosed as current liabilities. The group can use these facilities to draw down on a percentage of the value of certain sales invoices.

Interest receivable and Interest payable
Interest payable and similar expenses are recognised in profit or loss using the effective interest method, unwinding of the discount on provisions. Interest income and interest payable are recognised in profit or loss as they accrue, using the effective interest method.

Classification of financial instruments issued by the group
In accordance with Section 22 of FRS 102, financial instruments issued by the group are treated as equity only to the extent that they meet the following two conditions:

(a) they include no contractual obligations upon the group to deliver cash or other financial assets or to
exchange financial assets or financial liabilities with another party under conditions that are potentially
unfavourable to the group; and

(b) where the instrument will or may be settled in the entity's own equity instruments, it is either a
non-derivative that includes no obligation to deliver a variable number of the entity's own equity
instruments or is a derivative that will be settled by the entity exchanging a fixed amount of cash or
other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument classified takes the legal form of the entity's own shares, the amounts presented in these financial statements for called up share capital exclude amounts in relation to those shares.

Basic financial instruments

(i) Trade and other debtors / creditors

Trade and other debtors are recognised initially at transaction price less attributable transaction costs. Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of instrument for a similar debt instrument.

(ii) Interest-bearing borrowings classified as basic financial instruments

Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.

(iii) Investments in preference and ordinary shares

Investments in equity instruments are measured initially at fair value, which is normally the transaction price. Transaction costs are excluded if the investments are subsequently measured at fair value through profit and loss. Subsequent to initial recognition investments that can be measured reliably are measured at fair value with changes recognition in profit or loss. Other investments are measured at cost less impairment in profit or loss.

(iv) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the group's cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement.

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

3. ACCOUNTING POLICIES - continued

Other financial instruments
Financial instruments not considered to be basic financial instruments (Other financial instruments)

Other financial instruments not meeting the definition of Basic Financial Instruments are recognised initially at fair value. Subsequent to initial recognition other financial instruments are measured at fair value with changes recognised in profit or loss except as follows:


- investments in equity instruments that are not publicly traded and whose fair value cannot otherwise be
measured reliably shall be measured at cost less impairment; and

Derivative financial instruments

Derivative financial instruments are recognised at fair value. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss.

Related party transactions
The company discloses transactions with related parties which are not wholly owned with the same group. It does not disclose transactions with members of the same group that are wholly owned.

Business combinations
Business combinations are accounted for using the acquisition method. The cost of the acquisition is measured as the aggregate of the consideration transferred, which is measured at the acquisition date fair value. Acquisition-related costs are expensed as incurred and included in administrative expenses.

Goodwill is initially measured at cost less any accumulated impairment losses. The goodwill recognised in the year has a useful economic life of 3 years.

4. TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the group.

An analysis of turnover by geographical market is given below:

2023 2022
£'000 £'000
United Kingdom 53,842 56,363
Europe 10,033 16,272
Rest of World 3,666 4,314
67,541 76,949

5. OTHER OPERATING INCOME
2023 2022
£'000 £'000
Sundry receipts 11 413

6. EMPLOYEES AND DIRECTORS
2023 2022
£'000 £'000
Wages and salaries 11,443 12,696
Social security costs 938 1,013
Other pension costs 236 258
12,617 13,967

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

6. EMPLOYEES AND DIRECTORS - continued

The average number of employees during the year was as follows:
2023 2022

Production staff 185 176
Distribution staff 44 51
Administrative staff 52 58
Management staff 4 4
285 289

There are no key management personnel other than the directors whose emoluments are disclosed below.

2023 2022
£    £   
Directors' remuneration 461,359 601,786
Directors' pension contributions to money purchase schemes 11,278 16,165

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 3 2

Information regarding the highest paid director is as follows:
2023 2022
£    £   
Emoluments etc 262,110 249,311
Pension contributions to money purchase schemes 8,767 7,524

7. OPERATING LOSS

The operating loss is stated after charging/(crediting):

2023 2022
£'000 £'000
Other operating leases 2,879 1,214
Depreciation - owned assets 706 772
Loss on disposal of fixed assets 30 90
Goodwill amortisation 100 64
Patents and licences amortisation 224 170
Research and Development Costs amortisation 204 243
Computer software amortisation 636 664
Foreign exchange differences (887 ) (1,598 )

Included within foreign exchange differences is a charge of £450,000 (2022: credit £220,000) relating to the movement in the fair value of the year end forward foreign exchange hedging contracts as required by FRS102.

8. AUDITORS' REMUNERATION
2023 2022
£'000 £'000
Fees payable to the company's auditors and their associates for the audit
of the company's financial statements

173

88

9. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£'000 £'000
Bank loan interest 1,818 861
Other interest payable 698 304
Hire purchase 100 36
2,616 1,201

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

10. TAXATION

Analysis of the tax credit
The tax credit on the loss for the year was as follows:
2023 2022
£'000 £'000
Current tax:
UK corporation tax (199 ) (99 )
Foreign Tax & Corporation Tax
Interest - 17
Total current tax (199 ) (82 )

Deferred tax (3,094 ) (92 )
Tax on loss (3,293 ) (174 )

UK corporation tax has been charged at 21 % (2022 - 19 %).

Reconciliation of total tax credit included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£'000 £'000
Loss before tax (16,815 ) (4,564 )
Loss multiplied by the standard rate of corporation tax in the UK of 21 %
(2022 - 19 %)

(3,531

)

(867

)

Effects of:
Expenses not deductible for tax purposes 50 118
Depreciation in excess of capital allowances 105 31
Adjustments to tax charge in respect of previous periods 210 -
Deferred tax charge/(credit) due to timing difference and accelerated capital allowances
(77

)

(92

)
Loss/(Profit) on disposal of a tangible fixed asset 11 17
Non-UK corporation charge 11 17
General provisions (12 ) 22
Deferred tax on trade losses brought forward/(carried forward) (3,017 ) -
Losses c/fwd 2,957 580
Total tax credit (3,293 ) (174 )

The amalgamated standard rate of corporation tax charged for the year is 21% comprising 19% for the period 1 August 2022 to 31 March 2023 and 25% from 1 April 2023 to 31 July 2023.

11. INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

The parent company's results for the financial year 2023 was a profit of £156,000 (2022 loss £384,000).

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

12. INTANGIBLE FIXED ASSETS

Group
Patents
and Computer Research &
Goodwill Licences Software Development Total
£'000 £'000 £'000 £'000 £'000
COST
At 1 August 2022 2,573 3,530 3,437 4,608 14,148
Additions - 553 67 - 620
Disposals - - - (168 ) (168 )
At 31 July 2023 2,573 4,083 3,504 4,440 14,600
AMORTISATION
At 1 August 2022 1,731 1,269 2,446 1,625 7,071
Amortisation for year 100 224 636 204 1,164
Eliminated on
disposal

-


-

(24

)

(24

)
At 31 July 2023 1,831 1,493 3,082 1,805 8,211
NET BOOK VALUE
At 31 July 2023 742 2,590 422 2,635 6,389
At 31 July 2022 842 2,261 990 2,986 7,077


Goodwill amortisation is part of the administrative expenses total in the Income Statement.

13. TANGIBLE FIXED ASSETS

Group
Freehold Fixtures
land and Plant and and
property machinery fittings
£'000 £'000 £'000
COST
At 1 August 2022 7,502 3,878 1,955
Additions - 18 3
Disposals (127 ) (94 ) (130 )
At 31 July 2023 7,375 3,802 1,828
DEPRECIATION
At 1 August 2022 2,154 2,873 1,786
Charge for year 121 343 47
Eliminated on disposal (127 ) (39 ) (84 )
At 31 July 2023 2,148 3,177 1,749
NET BOOK VALUE
At 31 July 2023 5,227 625 79
At 31 July 2022 5,348 1,005 169

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

13. TANGIBLE FIXED ASSETS - continued

Group

Motor Computer
vehicles equipment Totals
£'000 £'000 £'000
COST
At 1 August 2022 145 3,261 16,741
Additions 6 36 63
Disposals (16 ) (103 ) (470 )
At 31 July 2023 135 3,194 16,334
DEPRECIATION
At 1 August 2022 80 2,981 9,874
Charge for year 19 176 706
Eliminated on disposal (16 ) (103 ) (369 )
At 31 July 2023 83 3,054 10,211
NET BOOK VALUE
At 31 July 2023 52 140 6,123
At 31 July 2022 65 280 6,867

The net carrying amount of assets held under hire purchase leases is £302,000 (2021: £260,000).
The depreciation charged in the year relating to hire purchase contracts is £153,000.

Company
Freehold Fixtures
land and and
property fittings Totals
£'000 £'000 £'000
COST
At 1 August 2022 7,500 84 7,584
Disposals (126 ) (84 ) (210 )
At 31 July 2023 7,374 - 7,374
DEPRECIATION
At 1 August 2022 2,153 84 2,237
Charge for year 121 - 121
Eliminated on disposal (127 ) (84 ) (211 )
At 31 July 2023 2,147 - 2,147
NET BOOK VALUE
At 31 July 2023 5,227 - 5,227
At 31 July 2022 5,347 - 5,347

Included within Freehold land and property are costs attributable to land of £1,179,000 (2022: £1,179,000) which is not depreciated.

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

14. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£'000
COST
At 1 August 2022
and 31 July 2023 1
NET BOOK VALUE
At 31 July 2023 1
At 31 July 2022 1

The group or the company's investments at the Balance Sheet date in the share capital of companies include the following:

Subsidiaries

Toolstream Limited
Registered office: Boundary Way, Lufton Trading Estate, Yeovil, Somerset, United Kingdom, BA22 8HZ
Nature of business: Purchase and sale of tools
%
Class of shares: holding
Ordinary (directly held) 100.00
2023 2022
£'000 £'000
Aggregate capital and reserves 767 10,396
Loss for the year (9,629 ) (2,876 )

Sharelead Limited
Registered office: 7 Oakway, Yeovil, Somerset, England, BA22 8HS, United Kingdom
Nature of business: the recycling of returns
%
Class of shares: holding
Ordinary (directly held) 100.00
2023 2022
£'000 £'000
Aggregate capital and reserves 31 52
(Loss)/profit for the year (22 ) 41

Powerbox International Limited
Registered office: Telford House, The Park, Yeovil, Somerset, England, BA20 1DY, United Kingdom
Nature of business: Procurement - now dormant
%
Class of shares: holding
Ordinary (indirectly held) 100.00
2023 2022
£'000 £'000
Aggregate capital and reserves 585 585

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

14. FIXED ASSET INVESTMENTS - continued

Powerbox AG
Registered office: Poststrasse 6, 6301 Zug, Switzerland
Nature of business: Worldwide IP brands
%
Class of shares: holding
Ordinary (directly held) 100.00
2023 2022
£'000 £'000
Aggregate capital and reserves (3,069 ) (2,423 )
Loss for the year (647 ) (106 )

Toolstream Inc
Registered office: U70 W Madison St Ste 5750 Chicago, IL
Nature of business: Distributor
%
Class of shares: holding
Ordinary (indirectly held) 100.00
2023 2022
£'000 £'000
Aggregate capital and reserves (3,139 ) (2,184 )
Loss for the year (955 ) (228 )

Bai Jai Sheng (Shanghai) Trading Limited
Registered office: Unit 305, Tower A, Boaland Plaza, No. 688 Dalian Road, Shanghai, China
Nature of business: Quality control and product support
%
Class of shares: holding
Ordinary (indirectly held) 100.00
2023 2022
£'000 £'000
Aggregate capital and reserves 550 492
Profit/(loss) for the year 58 (106 )

Toolstream B.V.
Registered office: De Keten 4, Eindhoven, 5651GJ
Nature of business: Purchase and sale of tools
%
Class of shares: holding
Ordinary 100.00
2023 2022
£'000 £'000
Aggregate capital and reserves (3,482 ) (733 )
Loss for the year (2,749 ) (733 )


Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

14. FIXED ASSET INVESTMENTS - continued


The company's subsidiaries at the balance sheet date included in the consolidated accounts are the following:


Company name

Nature of business
Class of shares
held
%
Held

Registered office





Toolstream Limited




Purchase and sale of tools




Ordinary




100%
Boundary Way,
Lufton Trading
Estate, Yeovil,
Somerset, BA22
8HZ


Toolstream B.V.


Purchase and sale of tools


Ordinary


100%
De Keten 4, 5651
GJ Eindhoven,
Netherlands



Silverline Tools
Limited




Dormant




Ordinary




100%
Boundary Way,
Lufton Trading
Estate, Yeovil,
Somerset, BA22
8HZ


Sharelead Limited


Recycling of returns


Ordinary


100%
7 Oakway, Yeovil,
Somerset, England,
BA22 8HS


Powerbox
International Limited



Dormant



Ordinary



100%
Telford House, The
Park, Yeovil,
Somerset, England,
BA20 1DY

Powerbox AG

Owns Worldwide IP of brands

Ordinary

100%
Poststrasse 6, 6301
Zug, Switzerland

Bai Jai Sheng
(Shanghai) Trading
Limited


Quality Control and Product
support



Ordinary



100%
Unit 305, Tower A,
Boaland Plaza, No.
688 Dalian, Road,
Shanghai, China


Toolstream Inc


Distributor


Ordinary


100%
SA70 W Madison St
Ste 5750 Chicago,
IL, USA




Firmstake Limited




Dormant




Ordinary




100%
Boundary Way,
Lufton Trading
Estate, Yeovil,
Somerset, BA22
8HZ


Scottool (UK)
Limited



Dormant



Ordinary



100%
Telford House, The
Park, Yeovil,
Somerset, BA20
1DY



Scottool Limited



Dormant



Ordinary



100%
Telford House, The
Park, Yeovil,
Somerset, England,
BA20 1DY



Newtool Limited



Dormant



Ordinary



100%
Telford House, The
Park, Yeovil,
Somerset, BA20
1DY



GSL Tool Limited



Dormant



Ordinary



100%
Telford House, The
Park, Yeovil,
Somerset, BA20
1DY



Dickie Dyer Limited



Dormant



Ordinary



100%
Telford House, The
Park, Yeovil,
Somerset, United
Kingdom, BA20 1DY



Powerbox IT Limited



Dormant



Ordinary



100%
Telford House, The
Park, Yeovil,
Somerset, England,
BA20 1DY

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

14. FIXED ASSET INVESTMENTS - continued





Toolspares Limited




Dormant




Ordinary




100%
Boundary Way,
Lufton Trading
Estate, Yeovil,
Somerset, BA22
8HZ




Cookstream Limited




Dormant




Ordinary




100%
Boundary Way,
Lufton Trading
Estate, Yeovil,
Somerset, BA22
8HZ



Birchwood Price
Tools Limited




Dormant




Ordinary




100%
Boundary Way,
Lufton Trading
Estate, Yeovil,
Somerset, England,
BA22 8HZ




Plumbob Limited




Dormant




Ordinary




100%
Suite B, Blackdown
House, Blackbrook
Park Avenue,
Taunton, Somerset,
England TA1 2PX

15. STOCKS

Group
2023 2022
£'000 £'000
Finished goods 21,491 50,888

The stock value includes £1,178,000 (2022: £907,000) relating to stock provisions.

16. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group
2023 2022
£'000 £'000
Trade debtors 7,497 11,248
Other debtors 88 15
Other tax debtor 214 598
VAT 351 -
Deferred tax asset 3,097 2
Prepayments and accrued income 1,255 1,667
12,502 13,530

Deferred tax asset
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Accelerated capital allowances (29 ) (120 ) - -
Tax losses carried forward 3,017 - - -
Other timing differences 108 122 - -
Deferred tax 1 - - -
3,097 2 - -

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

17. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Bank loans and overdrafts (see note 19) 24,767 29,030 351 292
Other loans (see note 19) 7,771 5,973 272 272
Hire purchase contracts (see note 20) 105 155 - -
Trade creditors 14,753 22,201 - -
Amounts owed to subsidiaries - - 401 314
Corporation tax 4 2 1 (1 )
Social security and other taxes 206 1,015 12 71
VAT - 2,293 - -
Other creditors 1,080 4,724 - -
Accruals and deferred income 2,544 2,799 132 194
51,230 68,192 1,169 1,142

The group is subject to a joint and several guarantee up to £1,300,000 in respect of H M Revenue & Customs VAT deferral scheme.

18. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Bank loans (see note 19) 481 818 367 710
Other loans (see note 19) 130 812 - -
Hire purchase contracts (see note 20) 64 170 - -
675 1,800 367 710

19. LOANS

An analysis of the maturity of loans is given below:

Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Amounts falling due within one year or on demand:
Bank overdrafts 8,907 8,845 - -
Bank loans 15,860 20,185 351 292
Related party loans 7,089 5,270 272 272
Other loans 682 703 - -
32,538 35,003 623 564
Amounts falling due between one and two years:
Bank loans - 1-2 years 387 413 273 305
Other loans - 1-2 years 130 682 - -
517 1,095 273 305
Amounts falling due between two and five years:
Bank loans - 2-5 years 94 405 94 405
Other loans - 2-5 years - 130 - -
94 535 94 405

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

19. LOANS - continued

Bank overdrafts consist of an overdraft facility, totalling £4,867,000 (2022: £4,452,000), and an invoice financing facility valued at £4,040,000 (2022: £4,393,000). The interest rates on the borrowings are 2.75% above the Bank of England base rate "ABR" (2022: 2.75% ABR) and 2.5% ABR respectively (2022: 2.5% ABR).

Bank loans of £16,341,000 (2022: £21,003,000) primarily consist of a loan against imports £15,512,000 (2022: £19,862,000) and bank loans of £718,000 (2022: £1,002,000) against the property.

The interest rate on the loan against imports was 2.55% above base (2022: 2.55% above base).

The interest rate on the loans against property was 1.55% above the ABR (2022: 1.55%).

Other loans of £7,901,000 (2022: £6,785,000) consists of:
(i) a loan from Mr J I and Mrs J C Goddard-Watts 1999 Settlement of £272,000 (2022: £272,000). The
interest rate on this loan is fixed at 5% and is repayable on demand.The loans are secured on the
freehold property of the group subject to a prior charge.
(ii) a shareholder loan of £6,817,000 (2022: £4,998,000) from a related party. This is a short-term on
demand loan carrying a 5.5% interest rate above base rate.
(iii) a loan of £812,000 (2022: £1,515,000) is secured over information system assets in the business. The
average fixed interest rate over these loans are 7.48%


The loans to the company relate to point (i) above and the property loan.

20. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Hire purchase contracts
2023 2022
£'000 £'000
Net obligations repayable:
Within one year 105 155
Between one and five years 64 170
169 325

The hire purchase agreements are non-cancellable.

Group and company
Non-cancellable operating
leases
2023 2022
£'000 £'000
Within one year 682 75
Between one and five years 130 133
In more than five years - -
812 208

The groups only operating lease was surrendered on the 25 April 2023 in agreement with both parties. No termination payment was required to be paid by the group.

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

21. SECURED DEBTS

The following secured debts are included within creditors:

Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Bank overdrafts 8,907 8,845 - -
Bank loans 16,341 21,003 718 1,002
Other loans 812 1,515 - -
Hire purchase contracts 169 325 - -
26,229 31,688 718 1,002

The bank overdraft facility includes amounts due under an invoice discounting facility. This is secured by way of a fixed and floating charge over all the group's assets.

The bank loans and overdraft facility are secured by:

(i) a Mortgage Debenture incorporating a fixed and floating charge over all current and future assets of the group including the freehold property;
(ii) a personal guarantee given by the majority shareholder, Mr James Goddard-Watts;
(iii) a life policy in respect of Mr James Goddard-Watts and Mr D Morris.

Other loans of £272,000 (2022: £272,000) are secured on the freehold property of the company (see note 19).

The hire purchase liabilities are secured on the particular assets acquired. The other loans are secured against information technology assets.

22. FINANCIAL INSTRUMENTS

Group
The Group has the following financial instruments:

2023 2022
£'000 £'000
Assets measured at fair value through profit or loss:
(i) Derivative financial instruments nil 275

Liabilities measured at fair value through profit or loss:
(i) Derivative financial instruments 175 nil



Derivative financial instruments - forward contracts
The Group enters into forward foreign currency contracts to mitigate the exchange rate risk for certain foreign currency payables.
The fair value of forward exchange contracts is based on broker quotes.
The fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (Based on government bonds).

Company
The Company has the following financial instruments:

2023 2022
£'000 £'000
Liabilities measured at fair value through profit or loss:
(i) Derivative financial instruments nil nil


Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

23. DEFERRED TAX

Company
2023 2022
£'000 £'000
Deferred tax
Accelerated capital allowances 19 19

Group
£'000
Balance at 1 August 2022 (2 )
Credit to Income Statement during year (3,094 )
Balance at 31 July 2023 (3,096 )

Company
£'000
Balance at 1 August 2022 19
Balance at 31 July 2023 19

Deferred tax is provided at 25% analysed over the following timing differences:

Group
2023 2022
£'000 £'000
Difference between accumulated depreciation and amortisation and capital
allowances and other timing differences and deferred tax losses

(3,096)


(2)

Company
2023 2022
£'000 £'000
Difference between accumulated depreciation and amortisation and capital
allowances

19


19


24. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £'000 £'000
1,650,165 Ordinary £1 1,650 1,650
550,055 Preference Shares £1 550 550
800 Ordinary "A" £0.01 - -
2,200 2,200

On the 16 January 2018, Group Silverline Limited acquired 100% of the share capital of Powerbox AG, a Swiss registered company, through the issue of 220 Ordinary Shares of £1 each. In addition, on the 16 January 2018 the Company re-designated 550,055 Ordinary Shares of £1 each to 550,055 Preference Shares of £1 each. The preference shares holders have an option to convert these shares to Ordinary shares. The result of this re-designation has left 1,650,165 Ordinary Shares remaining.

Pursuant to a management incentive scheme certain employees have subscribed for A ordinary shares of £0.01 each in the capital of the parent company and become employee shareholders of the group for the purposes of section 205A of the Employment Rights Act 1996.

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

24. CALLED UP SHARE CAPITAL - continued

Ordinary
All shares shall rank pari passu in all respects save as for set out below. One a show of hands, each holder of Ordinary Shares and each holder of Preference Shares shall be entitled to one vote each ( provided that if a person holds both Ordinary Shares and Preference Shares, such person shall only be entitled to one vote). On a poll, each holder of Ordinary Shares and each holder of Preference Shares shall be entitled to one vote for each Ordinary Share and one vote for each Preference Share held. Each Ordinary Share is entitled pari passu with each Preference Share to dividend payments or any other distribution. On a winding up, following the initial aggregate amount of £25,000,000 being paid pro-rate to the holders of Preference Share, the holders of Ordinary Shares and the holders of A Ordinary Shares shall be entitled to a distribution as more particularly set out in the articles of association. The Ordinary Shares are not redeemable.

Preference
All shares shall rank pari passu in all respects save as for set out below and in the articles of association. On a show of hands, each holder of Preference Shareholders and each holder of Ordinary Shares shall be entitled to one vote each (provided that if a person holds both Preference Shares and Ordinary Shares, such persons shall only be entitled to one vote). On a poll, each holder of Preference Shares and each holder of Ordinary Shares shall be entitled to one vote for each Preference Share and one vote for each Ordinary Share held. Each Preference Share is entitled pari passi with each Ordinary Share to dividend payments or any other distribution. The holders of Preference Shares are entitled to require conversion of the Preference Shares into Ordinary Shares at any time and on winding up the holders of Preference Shares shall receive an aggregate amount of £25,000,000 pro-rata between each holder of Preference Shares ahead of any amounts being received by the holders of Ordinary Shares or A Ordinary Shares. The Preference Share are not redeemable.

Subsequent to the 31 July 2024 year end, as part of a restructuring of the company on the 20 September 2024, the company re-designated the 550,055 Preference Shares of £1 each to 550,055 Ordinary Shares of £1 each. The result of this re-designation has left 2,200,220 Ordinary Shares remaining.

A Ordinary Shares
All Shares shall rank pari passu in all respects save as for set out below and in the articles of association. The A Ordinary Shares carry no voting rights. The A Ordinary Shares carry no rights to dividend payments or any other distribution. On a winding up, following the initial aggregate amount of £25,000,000 being paid pro-rata to the holders of Preference Shares, the holders of Ordinary Shares and the holders of A Ordinary Shares shall be entitled to a distribution as more particularly set out in the articles of association. The A Ordinary Shares are not redeemable.

Subsequent to the 31 July 2024 year end, as part of a restructuring of the company on the 20 September 2024, the company bought back and cancelled the 800 A ordinary shares of £0.01 each for their par value of £8.

25. PENSION COMMITMENTS

The group made defined pension contributions in respect of its employees amounting to £237,000 (2022: £260,000) during the year. Contributions unpaid at the year end were £53,000 (2022: £38,000).

26. ULTIMATE PARENT COMPANY

Group Silverline Limited is regarded by the directors as being the company's ultimate parent company.
The consolidated financial statements of Group Silverline Limited which include Toolstream Limited are available to the public and may be obtained from Companies House.

27. RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

The Group has taken advantage of the exemption provided by FRS102 33.1A, where disclosure is not required to be given of transactions entered into between two or more members of the a group, as 100% of whose voting rights are controlled by the Group.

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

27. RELATED PARTY DISCLOSURES - continued

Key Management
There are no key management personnel other than the directors whose emoluments are disclosed in note 6.

During the year there was a management charge of £1,089,000 (2022: £1,089,000) from the parent company in respect of Group Silverline Director services provided to Toolstream.

Mr J I and Mrs J C Goddard-Watts 1999 Settlement
A trust in which Mr James Goddard-Watts is a trustee.

The company received a loan of £500,000 from this Trust in June 2003. The loan is secured on the business premises and interest at 5% is payable to the Trust quarterly in arrears. Interest of £14,000 (2022: £14,000) is included in the profit and loss account.

On 31 January 2023, the Mr JI & Mrs JC Goddard-Watts 1999 Settlement was formally wound up. Its assets including the loan of £272,000 due from Group Silverline Limited were assigned to a bare Trust in the names of James Goddard-Watts and Charlotte Harding for the benefit of their younger children who were the remaining beneficiaries of the Mr JI & Mrs JC Goddard-Watts 1999 Settlement at 31 January 2023.

2023 2022
£'000 £'000
Amount due to related party at the balance sheet date 272 272


Mr James Goddard-Watts
The majority shareholder of the group.

During the year interest has been charged by Mr J Goddard-Watts to the company at rates of 5.5% above the Bank of England base rate. This amounted to £732,000 (2022: £241,000).

2023 2022
£'000 £'000
Amount due to related party at the balance sheet date included within Other
loans

6,817

4,929

28. POST BALANCE SHEET EVENTS

Subsequent to the 31 July 2024 the shareholders and bank have provided a package of financial support to the business which provides the necessary resources to invest in stock needed to support sales. Additionally, the shareholders are confident in attracting new investment, a deal is expected to be completed during January 2025.

As part of the above, as detailed in note 24, the Preference shares in issue were re-designated as Ordinary shares and the A Ordinary shares were cancelled.

29. ULTIMATE CONTROLLING PARTY

The ultimate controlling party is Mr James Goddard-Watts.

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023

30. RECONCILIATION OF LOSS FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

2023 2022
£'000 £'000
Loss for the financial year (13,522 ) (4,390 )
Loss on disposal of fixed assets 30 90
Depreciation and Amortisation 1,872 1,911
Increase/(Decrease) in provisions - (89 )
Finance costs 2,616 1,201
Finance income (21 ) -
Taxation (3,293 ) (174 )
(12,318 ) (1,451 )
Decrease/(increase) in stocks 29,397 (21,303 )
Decrease in trade and other debtors 4,051 7,381
(Decrease)/increase in trade and other creditors (15,318 ) 8,245
Cash generated from operations 5,812 (7,128 )

31. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 July 2023
31.7.23 1.8.22
£'000 £'000
Cash and cash equivalents 1,033 785
Bank overdrafts (8,907 ) (8,845 )
(7,874 ) (8,060 )
Year ended 31 July 2022
31.7.22 1.8.21
£'000 £'000
Cash and cash equivalents 785 4,578
Bank overdrafts (8,845 ) (13,576 )
(8,060 ) (8,998 )


32. ANALYSIS OF CHANGES IN NET DEBT

At 1.8.22 Cash flow At 31.7.23
£'000 £'000 £'000
Net cash
Cash at bank and in hand 785 248 1,033
Bank overdrafts (8,845 ) (62 ) (8,907 )
(8,060 ) 186 (7,874 )
Debt
Finance leases (325 ) 156 (169 )
Debts falling due within 1 year (26,158 ) 2,527 (23,631 )
Debts falling due after 1 year (1,630 ) 1,019 (611 )
(28,113 ) 3,702 (24,411 )
Total (36,173 ) 3,888 (32,285 )

Group Silverline Limited (Registered number: 03816214)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 July 2023


33. BUSINESS COMBINATION

Acquisition of King Dick Tools
On the 8 March 2022, the group acquired the King Dick Tools brand and assets.

Details of the assets recognised as a result of the acquisition is as follows:

£'000

Current assets
Stock 396
Other debtors 60
Net Assets Acquired 456

Goodwill arising on acquisition 498

Total consideration 954

Paid on Completion 500
Deferred consideration (incl in other creditors) 454
Total consideration 954

The goodwill arising on the acquisition will be written down over the useful economic life of 10 years.

On the 8 March 2022, £500,000 was paid on acquisition. The first deferred consideration payment of £254,000 was paid in March 2023 and the balance of £200,000 is due to be paid in March 2024.

34. RESERVES

The merger reserve is a capital contribution reserve created on the merger of the Powerbox AG group with the Group Silverline group in 2018.