Company registration number 03193048 (England and Wales)
MORELOCK SIGNS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
MORELOCK SIGNS LIMITED
COMPANY INFORMATION
Directors
Mr E A Guilmartin
Dr M Yazdanpanahi
Mr M Yazdanpanahi
Secretary
Mr E A Guilmartin
Company number
03193048
Registered office
Morelock House
Strawberry Lane
Willenhall
West Midlands
WV13 3RS
Auditor
Bryden Johnson Limited
Kings Parade
Lower Coombe Street
Croydon
Surrey
CR0 1AA
MORELOCK SIGNS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Profit and loss account
9
Group statement of comprehensive income
10
Group balance sheet
11 - 12
Company balance sheet
13 - 14
Group statement of changes in equity
15
Company statement of changes in equity
16
Group statement of cash flows
17
Company statement of cash flows
18
Notes to the financial statements
19 - 38
MORELOCK SIGNS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -

The directors present the strategic report for the year ended 30 November 2023.

Review of the business

The group achieved turnover of £10,183,865 (2022 : £10,552,988) and delivered a profit before tax of £18,931 (2022 : £112,696).

 

The group's net assets were £726,921 (2022 : £735,351).

 

The directors are pleased with the group's current performance, the group continues to be in a strong financial position as at the year end and future results are expected to remain strong.

Principal risks and uncertainties

The group has demonstrated resilience in its financial performance and is approaching pre-pandemic levels. We made significant strides in adapting our operations to align with changing market demands and consumer behaviours.

 

One of the most notable developments is the launch of the group's online website, which has become a crucial platform to support growth, improve customer reach, and diversify revenue streams. The integration of data analytics tools into the website allows the group to gain valuable insights into customer preferences and purchasing patterns. This data is crucial for refining product offerings, identifying market trends, and targeted marketing efforts to further drive revenue growth.

 

 

Health and safety

The group takes its duties towards Health and Safety at work very seriously and to this end has implemented resources, responsibilities, training and practicable steps to achieve a culture which will safeguard the health, safety and welfare of all employees and visitors to the premises.

 

In this journey the group are pleased to have worked with Workplace Health Connect (in partnership with the HSE) and have been awarded their Certificate of Success.

 

Future developments

We expect in the future that our trading environment will continue to be very competitive, but nevertheless feel we are well placed in the market place and go forward with confidence.

MORELOCK SIGNS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
Key performance indicators

Revenue Growth: The customer base has expanded, with sustained demand from both long-term clients and new customers seeking the group's products. There has been an increased focus on high-demand manufacturing products, which has supported this revenue stability.

 

Gross Profit Margin: The focus will be maintaining a stable revenue stream by investing in operational efficiency, diversifying its product portfolio, and monitoring market conditions. Expanding its manufacturing capabilities, while ensuring cost-control measures, will help the company navigate any future market uncertainties and increase margin.

 

Customer Satisfaction: Conduct regular customer surveys or utilize customer feedback metrics to gauge satisfaction levels. This KPI provides insights into customer loyalty, repeat business, and the overall quality of products and services.

 

Market Share: The online platform is expected to play a more significant role in the growth strategy in the coming years. Plans are in place to expand the website’s functionality, integrate additional payment options, and further its offerings to new markets by concentrating on marketing.

 

Return on Investment (ROI): The outlook is positive in relation to the return on investment from our digital transformation initiatives, particularly through the development of the online website.

 

Employee Productivity: Continuous professional development is a priority for the business. There is a strong emphasis on employee engagement, and the increased use of digital tools and software has improved collaboration across departments.

 

Quality Assurance: Quality assurance is an ongoing process, and we have adopted a continuous improvement approach. Feedback from customers, product reviews, and performance metrics are regularly analysed, allowing us to identify areas for refinement and implement improvements across our manufacturing processes.

 

Cash Flow Management: The focus has been on capital expenditures on areas that will generate long-term value, including investment in manufacturing technology upgrades, the online platform, and enhancing customer service capabilities. These investments aim to increase operational efficiency and expand our business reach, supporting future revenue growth. We have maintained a cautious approach to leveraging debt.

 

Innovation Rate: The commitment to innovation in product design and development will be vital in maintaining competitive edge. By continuing to invest in cutting-edge technologies, new machinery and leveraging customer feedback, the focus will be able to sustain demand for its products and cater to emerging industry needs.

 

Environmental Impact: As the manufacturing sector moves towards more sustainable practices, Morelock Signs is positioning itself to meet growing consumer demand for eco-friendly products. Sustainability initiatives, such as reducing carbon emissions and improving the energy efficiency of production processes, will be important for securing long-term market viability.

Other information and explanations

In the opinion of the directors the market value of land and buildings exceeds the current net book value.

 

Research & development

Our research and development profile is continued interaction with key suppliers and continual development of new and innovative products. We continue to work closely with our trade association who keep us fully informed of any proposed changes in standards and legislation.

MORELOCK SIGNS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -

On behalf of the board

Dr M Yazdanpanahi
Director
10 March 2025
MORELOCK SIGNS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 30 November 2023.

Principal activities
The principal activity of the group is that of sign manufacture and erection.
Results and dividends

The results for the year are set out on page 9.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr E A Guilmartin
Dr M Yazdanpanahi
Mr M Yazdanpanahi
Auditor

The auditor Bryden Johnson Limited is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

MORELOCK SIGNS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 5 -
On behalf of the board
Dr M Yazdanpanahi
Director
10 March 2025
MORELOCK SIGNS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MORELOCK SIGNS LIMITED
- 6 -
Opinion

We have audited the financial statements of Morelock Signs Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 November 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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.

Emphasis of matter

We draw attention to note 20 of the financial statements, which describes a breach of the banking covenant at the year end date. Our audit opinion is not modified in this respect.

Conclusions relating to going concern

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

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information 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.

MORELOCK SIGNS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MORELOCK SIGNS LIMITED
- 7 -

Opinions on other matters prescribed by the Companies Act 2006

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

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 their 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:

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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

MORELOCK SIGNS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MORELOCK SIGNS LIMITED
- 8 -

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK taxation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management override of controls. Audit procedures performed by the engagement team included:

 

- Reviewing minutes of meetings of those charged with governance;

- Enquiry of management and those charged with governance around actual and potential litigation and claims;

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations, and

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness and testing accounting estimates (because of the risk of management bias).

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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 misrepresentation, 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 auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Neil Johnson (Senior Statutory Auditor)
For and on behalf of Bryden Johnson Limited
10 March 2025
Chartered Accountants
Statutory Auditor
Kings Parade
Lower Coombe Street
Croydon
Surrey
CR0 1AA
MORELOCK SIGNS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
10,183,865
10,552,988
Cost of sales
(7,805,763)
(8,207,244)
Gross profit
2,378,102
2,345,744
Administrative expenses
(2,160,074)
(2,041,817)
Other operating income/(expenses)
17,968
(23,408)
Operating profit
4
235,996
280,519
Interest receivable and similar income
8
39
27
Interest payable and similar expenses
9
(217,104)
(167,850)
Profit before taxation
18,931
112,696
Tax on profit
10
19,638
108,997
Profit for the financial year
38,569
221,693
Profit for the financial year is all attributable to the owners of the parent company.
MORELOCK SIGNS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
38,569
221,693
Other comprehensive income
Currency translation gain taken to retained earnings
1
2
Total comprehensive income for the year
38,570
221,695
Total comprehensive income for the year is all attributable to the owners of the parent company.
MORELOCK SIGNS LIMITED
GROUP BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
12
15,396
17,396
Other intangible assets
12
25,773
39,973
Total intangible assets
41,169
57,369
Tangible assets
13
1,903,212
2,006,368
1,944,381
2,063,737
Current assets
Stocks
16
1,767,222
1,500,083
Debtors
17
2,463,058
3,709,447
Cash at bank and in hand
168,038
94,221
4,398,318
5,303,751
Creditors: amounts falling due within one year
18
(4,682,548)
(5,586,063)
Net current liabilities
(284,230)
(282,312)
Total assets less current liabilities
1,660,151
1,781,425
Creditors: amounts falling due after more than one year
19
(801,895)
(893,099)
Provisions for liabilities
Deferred tax liability
22
131,335
152,975
(131,335)
(152,975)
Net assets
726,921
735,351
Capital and reserves
Called up share capital
24
164,773
164,773
Revaluation reserve
719,111
719,111
Capital redemption reserve
85,227
85,227
Other reserves
10,517
10,517
Profit and loss reserves
(252,707)
(244,277)
Total equity
726,921
735,351

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

MORELOCK SIGNS LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT 30 NOVEMBER 2023
30 November 2023
- 12 -
The financial statements were approved by the board of directors and authorised for issue on 10 March 2025 and are signed on its behalf by:
10 March 2025
Dr M  Yazdanpanahi
Director
Company registration number 03193048 (England and Wales)
MORELOCK SIGNS LIMITED
COMPANY BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
12
25,773
39,973
Tangible assets
13
1,707,918
1,803,407
Investments
14
231,690
231,690
1,965,381
2,075,070
Current assets
Stocks
16
1,180,896
949,643
Debtors
17
2,039,163
2,774,953
Cash at bank and in hand
130,841
58,855
3,350,900
3,783,451
Creditors: amounts falling due within one year
18
(3,294,828)
(3,724,147)
Net current assets
56,072
59,304
Total assets less current liabilities
2,021,453
2,134,374
Creditors: amounts falling due after more than one year
19
(764,397)
(859,827)
Provisions for liabilities
Deferred tax liability
22
131,335
152,975
(131,335)
(152,975)
Net assets
1,125,721
1,121,572
Capital and reserves
Called up share capital
24
164,773
164,773
Revaluation reserve
719,111
719,111
Capital redemption reserve
85,227
85,227
Profit and loss reserves
156,610
152,461
Total equity
1,125,721
1,121,572

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £51,149 (2022 - £170,961 profit).

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

MORELOCK SIGNS LIMITED
COMPANY BALANCE SHEET (CONTINUED)
AS AT 30 NOVEMBER 2023
30 November 2023
- 14 -
The financial statements were approved by the board of directors and authorised for issue on 10 March 2025 and are signed on its behalf by:
10 March 2025
Dr M  Yazdanpanahi
Director
Company registration number 03193048 (England and Wales)
MORELOCK SIGNS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 15 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
£
£
Balance at 1 December 2021
164,773
719,111
85,227
10,517
(445,972)
533,656
(1,679)
531,977
Year ended 30 November 2022:
Profit for the year
-
-
-
-
221,693
221,693
-
221,693
Other comprehensive income:
Currency translation differences
-
-
-
-
2
2
-
2
Total comprehensive income
-
-
-
-
221,695
221,695
-
221,695
Dividends
11
-
-
-
-
(20,000)
(20,000)
-
(20,000)
Purchase of shares in subsidiary from non-controlling interest
-
-
-
-
(1,679)
(1,679)
1,679
-
Other movements
-
-
-
-
1,679
1,679
-
1,679
Balance at 30 November 2022
164,773
719,111
85,227
10,517
(244,277)
735,351
-
0
735,351
Year ended 30 November 2023:
Profit for the year
-
-
-
-
38,569
38,569
-
38,569
Other comprehensive income:
Currency translation differences
-
-
-
-
1
1
-
1
Total comprehensive income
-
-
-
-
38,570
38,570
-
38,570
Dividends
11
-
-
-
-
(47,000)
(47,000)
-
(47,000)
Balance at 30 November 2023
164,773
719,111
85,227
10,517
(252,707)
726,921
-
0
726,921
MORELOCK SIGNS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 16 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 December 2021
164,773
719,111
85,227
1,501
970,612
Year ended 30 November 2022:
Profit and total comprehensive income for the year
-
-
-
170,960
170,960
Dividends
11
-
-
-
(20,000)
(20,000)
Balance at 30 November 2022
164,773
719,111
85,227
152,461
1,121,572
Year ended 30 November 2023:
Profit and total comprehensive income
-
-
-
51,149
51,149
Dividends
11
-
-
-
(47,000)
(47,000)
Balance at 30 November 2023
164,773
719,111
85,227
156,610
1,125,721
MORELOCK SIGNS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 17 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
29
734,588
389,263
Interest paid
(217,104)
(182,850)
Corporation taxes paid
4,478
(1,046)
Net cash inflow from operating activities
521,962
205,367
Investing activities
Purchase of intangible assets
-
(20,000)
Purchase of tangible fixed assets
(68,967)
(91,566)
Proceeds on disposal of tangible fixed assets
15,698
-
Issue/Repayment of loans
75,380
(28,975)
Interest received
39
27
Net cash generated from/(used in) investing activities
22,150
(140,514)
Financing activities
Repayment of loans
(45,298)
(249,204)
Repayment/Issue of finance leases obligations
(78,252)
26,377
Dividends paid to equity shareholders
(47,000)
(20,000)
Net cash used in financing activities
(170,550)
(242,827)
Net increase/(decrease) in cash and cash equivalents
373,562
(177,974)
Cash and cash equivalents at beginning of year
(729,345)
(551,371)
Cash and cash equivalents at end of year
(355,783)
(729,345)
Relating to:
Cash at bank and in hand
168,038
94,221
Bank overdrafts included in creditors payable within one year
(523,821)
(823,566)
MORELOCK SIGNS LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 18 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
255,665
511,473
Interest paid
(129,962)
(103,055)
Net cash inflow from operating activities
125,703
408,418
Investing activities
Purchase of tangible fixed assets
(23,340)
(81,252)
Purchase of non-controlling interest
-
0
(20,000)
Receipts/Repayments of loans
76,647
(28,975)
Interest received
39
27
Net cash generated from/(used in) investing activities
53,346
(130,200)
Financing activities
Repayment of bank loans
7,810
(296,385)
Payment/Receipt of finance leases obligations
(67,874)
50,252
Dividends paid to equity shareholders
(47,000)
(20,000)
Net cash used in financing activities
(107,063)
(266,133)
Net increase in cash and cash equivalents
71,986
12,085
Cash and cash equivalents at beginning of year
58,855
46,770
Cash and cash equivalents at end of year
130,841
58,855
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 19 -
1
Accounting policies
Company information

Morelock Signs Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Morelock House, Strawberry Lane, Willenhall, West Midlands, WV13 3RS.

 

The group consists of Morelock Signs Limited and all of its subsidiaries.

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 the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Morelock Signs Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in associates.

 

All financial statements are made up to 30 November 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.4
Going concern

The financial statements have been prepared on the going concern basis, which assumes that the Company will continue to trade for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements and will be able to meet its debts as they fall due.

 

As with any business, the company relies upon the availability of working capital and generation of profits and cash in future to meet its liabilities as they fall due.

 

The directors believe that the company has the ongoing support of the bank which will enable the company to continue to operate as a going concern. At the date of approval of these financial statements, such support has been provided and they believe that it will continue for a period of at least twelve months form the date of the signing of the accounts.

1.5
Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

 

Sale of goods

 

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

 

 

Rendering of services

 

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

 

reliably; and

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.7
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:

Patents
20% Reducing balance
1.8
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:

Land and buildings Freehold
Nil
Plant and machinery
20% Straight Line/20% Reducing Balance
Fixtures, fittings & equipment
20% Straight Line
Computer equipment
33.3% Straight Line
Motor vehicles
25% Straight Line/20% 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 recognised in the profit and loss account.

Freehold land and assets are not depreciated on the basis that repairs expenditure is incurred to maintain the condition of the asset. Which is at least equivalent to what depreciation would have been.

 

Although this accounting policy is in accordance with FRS 102, it is a departure from the general requirement of the Companies Act 2006 for all tangible assets to be depreciated. In the opinion of the directors compliance with the standard is necessary for the financial statements to give a true and fair view. Depreciation or amortisation is only one of many factors reflected in the annual valuation and the amount of this which might otherwise have been changed cannot be separately identified or quantified.

1.9
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.10
Impairment of fixed assets

At each reporting period end date, the group 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

1.11
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.

1.12
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.

1.13
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 23 -
Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

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.

1.14
Equity instruments

Equity instruments issued by the group 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 group.

1.15
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 group’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 if, and only if, there is 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.

MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 24 -
1.16
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.

1.17
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.18
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

1.19
Foreign exchange

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

 

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

 

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.

 

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 25 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

Amounts recoverable on contracts

The group applies for contractual revenue on an application basis. Management exercise judgement in making provision against applications with regard to potential disagreements in the stage of completion or disputed contractual sums.

Bad debt provision

The debtors ledger is reviewed and specific provisions are made against customer balances that the senior management team believe may not be recovered in full. The level of provision is based on management's knowledge of the circumstances surrounding the non-payment of the receivable and the likelihood of receiving future payment. The year end provision is considered to be sufficient in light of our knowledge of the year end debtors.

Stock provisions

The stock listing is reviewed and specific provisions are made against old and slow moving stocks. The rates at which these are provided for are judgements made by the directors to give as accurate a valuation of the stock as they possibly can.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
5,114,444
5,688,242
Rest of Europe
5,069,421
4,864,746
10,183,865
10,552,988
2023
2022
£
£
Other revenue
Interest income
39
27
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 26 -
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange (gains)/losses
(1,233)
39,728
Depreciation of owned tangible fixed assets
168,344
178,059
Profit on disposal of tangible fixed assets
(11,262)
-
Amortisation of intangible assets
16,200
12,597
Operating lease charges
73,971
117,551
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
15,000
10,000
Audit of the financial statements of the company's subsidiaries
16,516
7,543
31,516
17,543
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Monthly & weekly
85
94
55
56

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
2,579,380
2,559,604
1,247,665
1,270,616
Social security costs
245,104
276,027
99,546
135,725
Pension costs
37,897
42,829
21,660
26,388
2,862,381
2,878,460
1,368,871
1,432,729
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 27 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
26,667
133,333
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
39
27
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
39
27
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
96,796
71,078
Interest on invoice finance arrangements
105,580
79,483
202,376
150,561
Other finance costs:
Interest on finance leases and hire purchase contracts
14,611
17,289
Other interest
117
-
Total finance costs
217,104
167,850
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(1,642)
3,670
Adjustments in respect of prior periods
(47,174)
-
0
Total current tax
(48,816)
3,670
Deferred tax
Origination and reversal of timing differences
29,178
(112,667)
Total tax credit
(19,638)
(108,997)
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
10
Taxation
(Continued)
- 28 -

The actual credit 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:

2023
2022
£
£
Profit before taxation
18,931
112,696
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022: 19.00%)
4,356
21,412
Tax effect of expenses that are not deductible in determining taxable profit
6,660
3,954
Tax effect of utilisation of tax losses not previously recognised
(21,231)
(28,654)
Permanent capital allowances in excess of depreciation
(805)
67,904
Amortisation on assets not qualifying for tax allowances
3,268
4,503
Research and development tax credit
(50,106)
-
0
Other movements
3,949
(3,740)
Deferred tax asset
34,271
(174,376)
Taxation credit
(19,638)
(108,997)
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Interim paid
47,000
20,000
12
Intangible fixed assets
Group
Goodwill
Patents
Total
£
£
£
Cost
At 1 December 2022 and 30 November 2023
20,000
71,000
91,000
Amortisation and impairment
At 1 December 2022
2,604
31,027
33,631
Amortisation charged for the year
2,000
14,200
16,200
At 30 November 2023
4,604
45,227
49,831
Carrying amount
At 30 November 2023
15,396
25,773
41,169
At 30 November 2022
17,396
39,973
57,369
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
12
Intangible fixed assets
(Continued)
- 29 -
Company
Patents
£
Cost
At 1 December 2022 and 30 November 2023
71,000
Amortisation and impairment
At 1 December 2022
31,027
Amortisation charged for the year
14,200
At 30 November 2023
45,227
Carrying amount
At 30 November 2023
25,773
At 30 November 2022
39,973
13
Tangible fixed assets
Group
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 December 2022
1,500,000
1,232,211
23,326
34,022
256,236
3,045,795
Additions
9,065
40,740
14,275
-
0
4,887
68,967
Disposals
-
0
(16,646)
-
0
-
0
-
0
(16,646)
Exchange adjustments
-
0
952
-
0
-
0
478
1,430
At 30 November 2023
1,509,065
1,257,257
37,601
34,022
261,601
3,099,546
Depreciation and impairment
At 1 December 2022
-
0
907,096
10,273
20,612
101,446
1,039,427
Depreciation charged in the year
-
0
115,730
5,699
5,306
41,609
168,344
Eliminated in respect of disposals
-
0
(12,210)
-
0
-
0
-
0
(12,210)
Exchange adjustments
-
0
513
-
0
-
0
260
773
At 30 November 2023
-
0
1,011,129
15,972
25,918
143,315
1,196,334
Carrying amount
At 30 November 2023
1,509,065
246,128
21,629
8,104
118,286
1,903,212
At 30 November 2022
1,500,000
325,115
13,053
13,410
154,790
2,006,368
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
13
Tangible fixed assets
(Continued)
- 30 -
Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the Statement of Financial Position date.

Fair values are determined from market based evidence normally undertaken by professionally qualified valuer's.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

The net book value of tangible fixed assets includes £277,394 (2022 : £335,370), in respect of assets held under finance lease or hire purchase contracts. The depreciation charge in respect of such assets amounted to £103,854 (2022 : £93,071).
Company
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 December 2022
1,500,000
923,933
23,326
30,701
108,504
2,586,464
Additions
9,065
-
0
14,275
-
0
-
0
23,340
At 30 November 2023
1,509,065
923,933
37,601
30,701
108,504
2,609,804
Depreciation and impairment
At 1 December 2022
-
0
734,471
10,273
17,293
21,020
783,057
Depreciation charged in the year
-
0
80,698
5,699
5,306
27,126
118,829
At 30 November 2023
-
0
815,169
15,972
22,599
48,146
901,886
Carrying amount
At 30 November 2023
1,509,065
108,764
21,629
8,102
60,358
1,707,918
At 30 November 2022
1,500,000
189,462
13,053
13,408
87,484
1,803,407
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
13
Tangible fixed assets
(Continued)
- 31 -

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the Statement of Financial Position date.

 

Fair values are determined from market based evidence normally undertaken by professionally qualified valuer's.

 

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 

The net book value of tangible fixed assets includes £145,599 (2022 : £195,504), in respect of assets held under finance lease or hire purchase contracts. The depreciation charge in respect of such assets amounted to £69,972 (2022 : £55,701).

14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
231,690
231,690
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 December 2022 and 30 November 2023
231,690
Carrying amount
At 30 November 2023
231,690
At 30 November 2022
231,690
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 32 -
15
Subsidiaries

Morelock lnstallations Limited

The company owns 100% of the ordinary share capital of Morelock Installations Limited, a company registered in England and Wales and domiciled in England. The principal activity of the the company was that of the manufacture and sale of commercial and traffic signage and other equipment to the road contracting industry. It's registered office is Morelock House, Strawberry Lane, Willenhall, West Midlands, WV13 3RS.

 

In accordance with section 479A of the Companies Act 2006 Morelock Installations Limited, company number 07614648, has taken advantage of the audit exemption of its individual accounts for the year ended 30 November 2023, as Morelock Signs Limited has guaranteed all of its liabilities.

 

Rennicks Signs Ireland Limited

The company owns 100% of the ordinary share capital of Rennicks Signs lreland Limited, a company registered and domiciled in Republic of Ireland. The principal activity of the company is that of the manufacture and sale of commercial and traffic signage and other equipment to the road contracting industry. It's registered office is 23A Second Avenue, Cookstown Industrial Estate, Tallaght, Dublin 24.

Details of the company's subsidiaries at 30 November 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Morelock Installations Limited
United Kingdom
Ordinary shares
100.00
Rennicks Signs Ireland Limited
Republic of Ireland
Ordinary shares
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Morelock Installations Limited
(79,165)
(95,461)
Rennicks Signs Ireland Limited
(69,713)
64,111
16
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
1,239,183
1,005,606
1,180,896
949,643
Finished goods and goods for resale
528,039
494,477
-
0
-
0
1,767,222
1,500,083
1,180,896
949,643
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 33 -
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,758,302
2,595,336
807,408
1,272,718
Gross amounts owed by contract customers
246,493
323,082
-
0
-
0
Corporation tax recoverable
46,188
1,849
41,272
-
0
Amounts owed by group undertakings
-
-
964,696
1,085,008
Other debtors
61,835
159,195
316
80,347
Prepayments and accrued income
226,683
455,609
61,914
139,052
2,339,501
3,535,071
1,875,606
2,577,125
Deferred tax asset (note 22)
123,557
174,376
123,557
157,828
2,463,058
3,709,447
1,999,163
2,734,953
Amounts falling due after more than one year:
Amounts owed by group undertakings
-
-
40,000
40,000
Total debtors
2,463,058
3,709,447
2,039,163
2,774,953
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
1,442,049
1,727,270
819,893
752,262
Obligations under finance leases
21
54,174
101,044
35,607
67,873
Trade creditors
1,885,244
1,865,428
1,370,425
1,249,712
Other taxation and social security
200,575
266,089
50,148
122,657
Other creditors
1,040,425
1,467,090
983,002
1,402,774
Accruals and deferred income
60,081
159,142
35,753
128,869
4,682,548
5,586,063
3,294,828
3,724,147
19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
719,235
779,057
719,235
779,057
Obligations under finance leases
21
82,660
114,042
45,162
80,770
801,895
893,099
764,397
859,827
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
19
Creditors: amounts falling due after more than one year
(Continued)
- 34 -

Details of security on bank loans can be found at note 20.

 

Obligations under finance lease and hire purchase contracts are secured against the assets to which they relate.

20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
1,637,463
1,682,761
1,539,128
1,531,319
Bank overdrafts
523,821
823,566
-
0
-
0
2,161,284
2,506,327
1,539,128
1,531,319
Payable within one year
1,442,049
1,727,270
819,893
752,262
Payable after one year
719,235
779,057
719,235
779,057

Bank loans are secured by the Bank, HSBC Bank PLC by a debenture including: fixed charge over all present freehold and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and First Floating Charge over all assets and undertaking both present and future dated 13 June 2018. Interest is charged on the loans at rates of 2.72% above base rate and 3.9%.

 

During 2020, the company secured a Coronavirus Business Interruption Loan on 17 June 2020 for £745,000. This is repayable 5 years from the date of the drawdown on the loan and has an interest rate of 3.99% per annum over the Bank of England Base Rate. No repayment of capital are due within the first 12 months of the loan and during this period interest is covered by the UK government.

 

All amounts falling due after more than 5 years are repayable monthly by instalments.

 

There is also an unlimited multilateral guarantee dated 13 June 2018 between Morelock Signs Limited and Morelock installations Limited.

The banking facilities for the loans across the group are subject to a banking covenant. The results for the financial period did not meet the covenant requirements. We note that the banking facilities were not and have not been withdrawn as a result of this breach. Management figures provided for the year ending 30 November 2024 show that the covenants are no longer in breach.

21
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
54,174
101,044
35,607
67,873
In two to five years
82,660
114,042
45,162
80,770
136,834
215,086
80,769
148,643
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
21
Finance lease obligations
(Continued)
- 35 -

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Accelerated capital allowances
40,069
61,709
-
-
Tax losses
-
-
123,557
174,376
Revaluations
91,266
91,266
-
-
131,335
152,975
123,557
174,376
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Company
£
£
£
£
Accelerated capital allowances
40,069
61,709
-
-
Tax losses
-
-
123,557
157,828
Revaluations
91,266
91,266
-
-
131,335
152,975
123,557
157,828
Group
Company
2023
2023
Movements in the year:
£
£
Asset at 1 December 2022
(21,401)
(4,853)
Charge to profit or loss
29,179
12,631
Liability at 30 November 2023
7,778
7,778

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period. The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 36 -
23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
37,897
42,829

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
107,117
107,117
107,117
107,117
Ordinary A Shares of £1 each
16,473
16,473
16,473
16,473
Ordinary B Shares of £1 each
41,183
41,183
41,183
41,183
164,773
164,773
164,773
164,773
25
Operating lease commitments
Lessee

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

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
51,989
69,661
-
4,640
Between two and five years
207,954
194,328
-
-
259,943
263,989
-
4,640
26
Related party transactions

The company has taken advantage of the exemption available in FRS 102 section 33.1A from disclosing transactions with other wholly owned subsidiaries of Morelock Signs Limited.

 

Key management personnel

All directors of Morelock Signs Limited are considered to be key management personnel of the group.

Total compensation paid in respect of these individuals can be found at note 7.

MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 37 -
27
Directors' transactions

At the balance sheet date, included within other creditors due within one year are amounts owed by the group of £337,549 (2022: £183,267) to Mr. E Gilmartin, a director.

 

At the balance sheet date, included within other creditors due within one year are amounts owed by the group of £40,521 (2022: £42,772 debtor) to Dr. M Yazdanpanahi, a director.

 

At the balance sheet date, included within other debtors due within one year are amounts owed to the group of £NIL (2022: £25,585) from Mr. M Yazdanpanahi, a director.

 

All directors' loans are interest free.

28
Controlling party

The ultimate controlling party is Mr E A Guilmartin.

29
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
38,569
221,693
Adjustments for:
Taxation credited
(19,638)
(108,997)
Finance costs
217,104
182,850
Investment income
(39)
(27)
Gain on disposal of tangible fixed assets
(11,262)
-
Amortisation and impairment of intangible assets
16,200
12,597
Depreciation and impairment of tangible fixed assets
168,344
178,059
Foreign exchange difference
(656)
(12,122)
Movements in working capital:
Increase in stocks
(267,139)
(230,053)
Decrease/(increase) in debtors
1,164,529
(644,932)
(Decrease)/increase in creditors
(571,424)
790,195
Cash generated from operations
734,588
389,263
MORELOCK SIGNS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 38 -
30
Cash generated from operations - company
2023
2022
£
£
Profit for the year after tax
51,149
170,960
Adjustments for:
Taxation credited
(28,642)
(96,119)
Finance costs
129,962
103,055
Investment income
(39)
(27)
Amortisation and impairment of intangible assets
14,200
9,993
Depreciation and impairment of tangible fixed assets
118,829
127,319
Movements in working capital:
Increase in stocks
(231,253)
(131,980)
Decrease/(increase) in debtors
666,143
(272,067)
(Decrease)/increase in creditors
(464,684)
600,339
Cash generated from operations
255,665
511,473
31
Analysis of changes in net debt - group
1 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
94,221
73,817
168,038
Bank overdrafts
(823,566)
299,745
(523,821)
(729,345)
373,562
(355,783)
Borrowings excluding overdrafts
(1,682,761)
45,298
(1,637,463)
Obligations under finance leases
(215,086)
78,252
(136,834)
(2,627,192)
497,112
(2,130,080)
32
Analysis of changes in net debt - company
1 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
58,855
71,986
130,841
Borrowings excluding overdrafts
(1,531,319)
(7,809)
(1,539,128)
Obligations under finance leases
(148,643)
67,874
(80,769)
(1,621,107)
132,051
(1,489,056)
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