Company registration number 03180316 (England and Wales)
GRAFTERS GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
GRAFTERS GROUP LIMITED
COMPANY INFORMATION
Directors
A Berman
L Berman
Company number
03180316
Registered office
Kingston House
Pierrepont Street
Bath
BA1 1LA
Auditors
Pearson May
37 Great Pulteney Street
Bath
BA2 4DA
Bankers
HSBC Bank plc
41 Southgate
Bath
BA1 1TN
GRAFTERS GROUP LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditors' report
4 - 6
Profit and loss account and retained earnings
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 25
GRAFTERS GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -
The directors present the strategic report for the year ended 30 June 2024.true
Review of the business
Business operations remain focussed in our core market of Hospitality & Leisure and our aim is to continue to develop business and increase trade levels across England & Wales.
Given the spike of trade experienced post Covid, the company has excelled in maintaining momentum resulting in matching year end 2023 sales levels to year end 2024.
The business remains cash rich and debt free (with the exception of intercompany loans).
The company's core offering comprises the supply of temporary workers representing circa 96% of sales deploying 500+ workers weekly.
Group sales remain steady post Covid although there are signs of the traditional sector slowing due to the financial crisis. As a consequence, the company is concentrating on strengthening relations in sectors such as Heathcare, Education and MOD etc.
Principal risks and uncertainties
Competition risk
The actions of the company's competitors may adversely affect performance, however the directors believe the business is well positioned in the market place and we shall strive to gain market share.
Credit risk
In a difficult financial climate there is a constant risk that debtors may default on payment. However, our shift from the traditional market to more financially stable sectors should act to reduce exposure.
Development and performance
It is the company's plan to continue to concentrate on providing an unrivalled service whilst complying with constant changes in the form of new regulations, policies and procedures.
Given the recent change of government and subsequent budget impact, we intend to consolidate and solidify prior to considering further expansion.
Key performance indicators
Given the relatively simple nature of the business model, the company's directors are of the opinion that analysis using KPIs is not necessary to gain an understanding of the development, performance or position of the business.
A Berman
Director
19 February 2025
GRAFTERS GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
The directors present their annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company is that of an employment agency in the catering industry.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £307,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
A Berman
L Berman
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
GRAFTERS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
Statement of disclosure to auditors
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditors are unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditors are aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
A Berman
Director
19 February 2025
GRAFTERS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF GRAFTERS GROUP LIMITED
- 4 -
Opinion
We have audited the financial statements of Grafters Group Limited (the 'company') for the year ended 30 June 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including 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 company's affairs as at 30 June 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditors' 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
• the information given in the strategic report and the directors' truereport 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.
GRAFTERS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF GRAFTERS GROUP LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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 an auditors' 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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We considered the nature of the company's industry to identify the principal risks of non-compliance with laws and regulations. We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and we enquired of management about their own identification and assessment of the risks of irregularities. We considered the extent to which non-compliance might have a material effect on the financial statements of the company. The key laws and regulations that had a direct effect on the amounts and disclosures in the accounts include the UK Companies Act, employment legislation and tax legislation. We determined that the principal risks were related to posting of inappropriate journal entries to increase income or reduce expenditure, and management bias in accounting estimates and judgemental areas of the financial statements.
Audit response to risks identified
In common with all audits under ISAs (UK), or in response to specific risks identified, our procedures included the following:
- Enquiry of management around actual and potential litigation and claims
- Enquiry of management to identify any instances of non-compliance with laws and regulations
- Reviewing minutes of meetings of those charged with governance
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations
- Auditing the risk of management override of controls, including through testing the appropriateness of journal entries and other adjustments, and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business
- Obtaining evidence to corroborate management estimates and judgements
- Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
GRAFTERS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF GRAFTERS GROUP LIMITED
- 6 -
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, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
In the previous accounting period the company took advantage of audit exemption under s477 of the Companies Act. Therefore the comparative financial statements are unaudited.
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 auditors' 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.
Matthew Rutter BSc FCA
Senior Statutory Auditor
For and on behalf of Pearson May
19 February 2025
Chartered Accountants
Statutory Auditor
37 Great Pulteney Street
Bath
BA2 4DA
GRAFTERS GROUP LIMITED
PROFIT AND LOSS ACCOUNT AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 JUNE 2024
- 7 -
2024
2023
as restated
Notes
£
£
Turnover
3
11,796,881
11,803,472
Cost of sales
(8,571,148)
(8,283,210)
Gross profit
3,225,733
3,520,262
Administrative expenses
(2,367,385)
(2,075,967)
Other operating income
74,425
35,039
Operating profit
4
932,773
1,479,334
Interest receivable and similar income
7
188,285
77,243
Fair value gains on investments
8
90,997
31,582
Profit before taxation
1,212,055
1,588,159
Tax on profit
9
(305,856)
(300,626)
Profit for the financial year
906,199
1,287,533
Retained earnings brought forward as previously reported
5,518,081
4,339,412
Effect of change in accounting policy
62,063
52,199
As restated
5,580,144
4,391,611
Dividends
10
(307,000)
(99,000)
Retained earnings carried forward
6,179,343
5,580,144
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GRAFTERS GROUP LIMITED
BALANCE SHEET
AS AT 30 JUNE 2024
30 June 2024
- 8 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
11
530
674
Tangible assets
12
45,239
45,097
Investment properties
13
632,608
601,963
Investments
14
400,501
340,149
1,078,878
987,883
Current assets
Stocks
15
3,581
1,891
Debtors falling due after more than one year
16
1,250,000
1,000,000
Debtors falling due within one year
16
2,630,252
2,244,041
Cash at bank and in hand
2,534,812
3,205,384
6,418,645
6,451,316
Creditors: amounts falling due within one year
17
(1,281,564)
(1,846,931)
Net current assets
5,137,081
4,604,385
Total assets less current liabilities
6,215,959
5,592,268
Provisions for liabilities
(35,766)
(11,274)
Net assets
6,180,193
5,580,994
Capital and reserves
Called up share capital
22
850
850
Profit and loss reserves
6,179,343
5,580,144
Total equity
6,180,193
5,580,994
The financial statements were approved by the board of directors and authorised for issue on 19 February 2025 and are signed on its behalf by:
A Berman
Director
Company Registration No. 03180316
GRAFTERS GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 30 June 2023:
Balance at 1 July 2022
850
4,339,412
4,340,262
Effect of change in accounting policy
-
52,199
52,199
As restated
850
4,391,611
4,392,461
Year ended 30 June 2023:
Profit and total comprehensive income
-
1,287,533
1,287,533
Dividends
10
-
(99,000)
(99,000)
Balance at 30 June 2023
850
5,580,144
5,580,994
Year ended 30 June 2024:
Profit and total comprehensive income
-
906,199
906,199
Dividends
10
-
(307,000)
(307,000)
Balance at 30 June 2024
850
6,179,343
6,180,193
GRAFTERS GROUP LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
2024
2023
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
186,028
1,349,929
Income taxes paid
(293,490)
(205,733)
Net cash (outflow)/inflow from operating activities
(107,462)
1,144,196
Investing activities
Purchase of tangible fixed assets
(21,108)
(40,815)
Proceeds from disposal of tangible fixed assets
466,000
Repayment of loans
(520,590)
Interest received
188,285
77,243
Net cash (used in)/generated from investing activities
(353,413)
502,428
Financing activities
Dividends paid
(307,000)
(99,000)
Net cash used in financing activities
(307,000)
(99,000)
Net (decrease)/increase in cash and cash equivalents
(767,875)
1,547,624
Cash and cash equivalents at beginning of year
3,205,384
1,657,760
Cash and cash equivalents at end of year
2,437,509
3,205,384
Relating to:
Cash at bank and in hand
2,534,812
3,205,384
Bank overdrafts included in creditors payable within one year
(97,303)
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 11 -
1
Accounting policies
Company information
Grafters Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Kingston House, Pierrepont Street, Bath, BA1 1LA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Turnover represents amounts receivable for both temporary and permanent placements. Revenue from temporary placements is recognised as the service is provided, while revenue from permanent placements is recognised when the placement begins.
1.3
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Trademarks
straight line over 10 years
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
20% reducing balance
Computer equipment
25% straight line
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 12 -
1.5
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.6
Fixed asset investments
Investments in cryptocurrency are initially measured at transaction price including transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in profit or loss.
Other investments are initially measured at cost, and are subsequently measured at historical cost less any accumulated impairment losses.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.16
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Trade debtors
An allowance for doubtful debts involves significant management judgement. Management review individual debtors based upon individual creditworthiness, current economic trends and historical bad debts on a portfolio basis.
Holiday pay accrual
Management exercise judgement in providing an accrual for holiday pay due to employees at the year end. Based on past performance, management know that not all holiday is taken by employees and therefore management provide for a reasonable estimate of the amount likely to be payable by the company.
Investment property valuation
The investment property has been valued by the directors at the year end on the basis of open market value.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sales of services
11,796,881
11,803,472
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
11,796,881
11,803,472
2024
2023
£
£
Other revenue
Interest income
188,285
77,243
Grants received
-
1,503
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 16 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
383
1,869
Government grants
-
(1,503)
Fees payable to the company's auditors for the audit of the company's financial statements
12,000
Depreciation of owned tangible fixed assets
20,315
17,620
Loss/(profit) on disposal of tangible fixed assets
651
(181,997)
Amortisation of intangible assets
144
144
Operating lease charges
207,019
210,829
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Temporary workers
555
501
Internal workers
49
48
Total
604
549
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
9,970,754
9,466,935
Pension costs
150,858
121,249
10,121,612
9,588,184
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
15,816
15,841
Company pension contributions to defined contribution schemes
12,000
12,000
27,816
27,841
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 17 -
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
111,096
25,531
Other interest income
77,189
51,712
Total income
188,285
77,243
8
Changes in fair value of investments
2024
2023
£
£
Fair value gains/(losses) on financial instruments
Gain on financial assets held at fair value through profit or loss
60,352
21,718
Other gains/(losses)
Changes in the fair value of investment properties
30,645
9,864
90,997
31,582
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
281,364
293,490
Deferred tax
Origination and reversal of timing differences
24,492
7,136
Total tax charge
305,856
300,626
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
9
Taxation
(Continued)
- 18 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
1,212,055
1,588,159
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
303,014
325,507
Tax effect of expenses that are not deductible in determining taxable profit
1,136
1,863
Gains not taxable
(17,878)
Tax effect of utilisation of tax losses not previously recognised
(4,070)
Effect of change in corporation tax rate
2,355
Other permanent differences
(678)
Tax on assets not recognised under capital allowances
9,367
Unrealised gains not taxable
(7,661)
(6,473)
Taxation charge for the year
305,856
300,626
10
Dividends
2024
2023
£
£
Interim paid
307,000
99,000
11
Intangible fixed assets
Trademarks
£
Cost
At 1 July 2023 and 30 June 2024
1,442
Amortisation and impairment
At 1 July 2023
768
Amortisation charged for the year
144
At 30 June 2024
912
Carrying amount
At 30 June 2024
530
At 30 June 2023
674
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 19 -
12
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 July 2023
22,783
157,159
10,399
190,341
Additions
5,446
15,537
125
21,108
Disposals
(3,607)
(1,383)
(4,990)
At 30 June 2024
28,229
169,089
9,141
206,459
Depreciation and impairment
At 1 July 2023
12,206
123,972
9,066
145,244
Depreciation charged in the year
3,206
16,739
370
20,315
Eliminated in respect of disposals
(3,539)
(800)
(4,339)
At 30 June 2024
15,412
137,172
8,636
161,220
Carrying amount
At 30 June 2024
12,817
31,917
505
45,239
At 30 June 2023
10,577
33,187
1,333
45,097
13
Investment property
2024
£
Fair value
At 1 July 2023
601,963
Net gains or losses through fair value adjustments
30,645
At 30 June 2024
632,608
The investment property has been valued by the directors as at 30 June 2024 on the basis of open market value. No depreciation is provided in respect of this investment property.
If investment properties were stated on an historical cost basis rather than a fair value basis, the amounts would have been included as follows:
2024
2023
£
£
Cost
539,900
539,900
Accumulated depreciation
-
-
Carrying amount
539,900
539,900
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 20 -
14
Fixed asset investments
2024
2023
£
£
Unlisted investments
400,501
340,149
Investments in cryptocurrency are measured at fair value of £123,511 (2023 - £63,159).
Other investments are measured at historical cost less any accumulated impairment losses.
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 July 2023
340,149
Valuation changes
60,352
At 30 June 2024
400,501
Carrying amount
At 30 June 2024
400,501
At 30 June 2023
340,149
15
Stocks
2024
2023
£
£
Finished goods and goods for resale
3,581
1,891
16
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,731,842
1,929,489
Other debtors
579,754
40,121
Prepayments and accrued income
318,656
274,431
2,630,252
2,244,041
2024
2023
Amounts falling due after more than one year:
£
£
Amount due from related parties
1,250,000
1,000,000
Total debtors
3,880,252
3,244,041
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 21 -
17
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18
97,303
Trade creditors
44,758
43,139
Corporation tax
281,364
293,490
Other taxation and social security
526,015
737,921
Other creditors
83,231
261,547
Accruals and deferred income
248,893
510,834
1,281,564
1,846,931
18
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
97,303
Payable within one year
97,303
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
11,310
11,274
Revaluations
24,456
-
35,766
11,274
2024
Movements in the year:
£
Liability at 1 July 2023
11,274
Charge to profit or loss
24,492
Liability at 30 June 2024
35,766
The deferred tax liability set out above relates to accelerated capital allowances, revaluations on investment properties and gains on investments and is expected to mature over a period greater than 12 months.
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 22 -
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
150,858
121,249
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share-based payment transactions
The company operates an Enterprise Management Incentive Scheme. The following options have been granted under this scheme:
1. Options to acquire 45 £1 ordinary shares were granted on 26 April 2019. These options may be exercised in the event of a share sale or listing, otherwise they will lapse on 26 April 2029, or earlier if certain events set out in the Scheme rules occur. The exercise price has been set at £930 per share. As at 30 June 2024, none of the above options have lapsed.
2. Options to acquire 50 £1 ordinary shares were granted on 18 July 2023. These options may be exercised in the event of a share sale or listing, otherwise they will lapse on 18 July 2033, or earlier if certain events set out in the Scheme rules occur. The exercise price has been set at £750 per share. As at 30 June 2024, 5 of the above options have lapsed.
Number of share options
Weighted average exercise price
2024
2023
2024
2023
Number
Number
£
£
Outstanding at 1 July 2023
95
95
835.00
835.00
Forfeited
(5)
750.00
Outstanding at 30 June 2024
90
95
840.00
835.00
Exercisable at 30 June 2024
Liabilities and expenses
The directors are of the opinion that the grant of these options does not give rise to a material share based payment charge to be accounted for in accordance with Section 26 of FRS 102. During the year, the company recognised total share-based payment expenses of £nil (2023 - £nil) which related to equity settled share based payment transactions.
The total carrying amount at the end of the year for liabilities arising from share based payment transactions is £nil (2023 - £nil).
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 23 -
22
Share capital
2024
2023
£
£
Ordinary share capital
Issued and fully paid
765 ordinary shares of £1 each
765
765
85 A ordinary shares of £1 each
85
85
850
850
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
78,724
76,077
Between two and five years
55,775
132,200
134,499
208,277
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Debtors falling due within one year includes a balance of £19,448 (2023 - £16,055) owed by Grafters Property Limited, a company controlled by A Berman.
Debtors falling due after more than one year includes an intercompany loan account balance of £1,250,000 (2023 - £1,000,000) owed by Grafters Property Limited. Interest is charged on this loan at 1% above the Bank of England base rate (2023 - 2% above the Bank of England base rate). During the year interest of £71,563 (2023 - £51,712) was charged.
During the year the company was charged rent totalling £79,167 (2023 - £80,000) by Grafters Property Limited. Creditors falling due within one year includes an accrual of £Nil (2023 - £13,333) in respect of this rent.
During the year, the company was also charged for insurance and service charges totalling £8,032 (2023 - £2,174) by Grafters Property Limited.
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 24 -
25
Directors' transactions
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Directors Loan Account
2.25
(99,724)
921,736
5,577
(307,000)
520,589
(99,724)
921,736
5,577
(307,000)
520,589
This loan is unsecured and repayable on demand. The maximum overdrawn balance during the year was £746,958.
26
Ultimate controlling party
The company is controlled by A Berman who owns 90% of the issued share capital of the company.
27
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
906,199
1,287,533
Adjustments for:
Taxation charged
305,856
300,626
Investment income
(188,285)
(77,243)
Loss/(gain) on disposal of tangible fixed assets
651
(181,997)
Fair value gain on investment properties
(30,645)
(9,864)
Amortisation and impairment of intangible assets
144
144
Depreciation and impairment of tangible fixed assets
20,315
17,620
Other gains and losses
(60,352)
(21,718)
Movements in working capital:
(Increase)/decrease in stocks
(1,690)
316
Increase in debtors
(115,621)
(28,706)
(Decrease)/increase in creditors
(650,544)
63,218
Cash generated from operations
186,028
1,349,929
28
Analysis of changes in net funds
1 July 2023
Cash flows
30 June 2024
£
£
£
Cash at bank and in hand
3,205,384
(670,572)
2,534,812
Bank overdrafts
-
(97,303)
(97,303)
3,205,384
(767,875)
2,437,509
GRAFTERS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 25 -
29
Prior period adjustment
Changes to the balance sheet
Adjustment at 1 Jul 2022
Adjustment at 30 Jun 2023
£
£
Fixed assets
Tangible assets
(539,900)
-
Investment properties
592,099
9,864
Net assets
52,199
9,864
Capital and reserves
Profit and loss reserves
52,199
9,864
During the year ended 30 June 2022 the use of the company's property in Barbados changed when the company began letting the property. The directors consider that from this point it is more appropriate to recognise the property as an investment property instead of a freehold property. Accordingly, a prior period adjustment has been made to reclassify the property as an investment property in the year ended 30 June 2022. Subsequently the investment property has been recognised at fair value at the reporting date resulting in an uplift in value on the company's balance sheet.
Changes to the profit and loss account
Adjustment
Period ended 30 June 2023
£
Amounts written off investments
9,864
Profit for the financial period
9,864
Adjustment
Period ended 30 June 2022
£
Amounts written off investments
52,199
Profit for the financial period
52,199
The above prior period adjustments have been made to reflect the changes in fair value of the investment property at 30 June 2022 and 30 June 2023 in the prior year profit and loss accounts.
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