Company registration number 02708462 (England and Wales)
SAMUEL GRANT (LEEDS) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
SAMUEL GRANT (LEEDS) LIMITED
COMPANY INFORMATION
Directors
Mr A D S Grant
Mr M P S Grant
Mr M Harris
A J Dean
Secretary
A J Dean
Company number
02708462
Registered office
Unit 1 Orion Way
Cross Green
Leeds
West Yorkshire
LS9 0AR
Auditor
Azets Audit Services Limited
33 Park Place
Leeds
LS1 2RY
SAMUEL GRANT (LEEDS) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
SAMUEL GRANT (LEEDS) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
The directors are satisfied with the performance of the company during the year considering the lasting effects of the COVID 19 pandemic together with large supplier price rises and increases in fuel and energy costs despite this the company performed far better than predicted, they are also confident that the company will continue to thrive and exceed expectation in 2023.
2022 showed an increase of over £3.3m in turnover which is due to COVID 19 impacting the figures in 2021 and the large price rises we have had to pass across to our customers. Also, the company has won more business as a result of looking after our customers during the pandemic. This increase in turnover has therefore resulted in an increase in net profit before tax of £841K. This is a very pleasing result considering company overheads had risen by over £300k. The directors are confident that the turnover will continue to rise significantly in 2023.
Principle risks and uncertainties
The key risks to the business are yet further increases being predicted in the price of carboard and polythene. There has also been sharp rises in interest rates, energy costs and fuel with further rises being predicted.
We try and minimize the effect on our customers by ordering enough stock to delay price rises for as long as possible. We have also put measures in place to fix interest rates where possible, ensuring deliveries are planned in the most efficient way possible and that the company is on the best energy tariffs it has available to it.
The company is also exposed to the usual credit risk and cash flow associated with credit sales. This is managed very carefully through strict credit control procedures.
Market competition will always be a risk to our business, particularly online tenders, taking out the ability to promote the exceptional customer service offered by the business. We have however got an expert team of buyers who are constantly working on group deals. This therefore will keep us competitive whilst still being able to offer a service to our customers that is exceptional.
Development and performance
The directors are satisfied with the position of the company at the year-end considering the disruption caused by the COVID 19 pandemic and considerable price rises. We have managed to maintain competitive prices whilst still offering a service to our customers that is second to none. We also continue to invest heavily in technology to enable our staff to work more efficiently and ensure the business is running in the most efficient way possible. We have also re designed the company’s financial modelling to be able to react to any future COVID 19 disruption.
We have also invested in technology to enable pallet load testing for our customers to ensure their goods arrive where they need to go without being damaged. This provides yet another consultative service for our customers.
Results
Turnover for the period was £25.1m (2021 - £21.8m) operating profit was £1.9m (2021 - £1.08m).
A J Dean
Director
12 September 2023
SAMUEL GRANT (LEEDS) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company is the merchanting and distribution of packaging materials.
Results and dividends
The results for the year are set out on page 7.
Ordinary interim dividends were paid amoutning to £1,670,478. The directors do not recomend 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:
Mr A D S Grant
Mr M P S Grant
Mr M Harris
A J Dean
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
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 auditor is 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 auditor is aware of that information.
On behalf of the board
A J Dean
Director
12 September 2023
SAMUEL GRANT (LEEDS) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
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.
SAMUEL GRANT (LEEDS) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SAMUEL GRANT (LEEDS) LIMITED
- 4 -
Opinion
We have audited the financial statements of Samuel Grant (Leeds) Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 31 December 2022 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 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.
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' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
SAMUEL GRANT (LEEDS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SAMUEL GRANT (LEEDS) 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.
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.
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.
SAMUEL GRANT (LEEDS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SAMUEL GRANT (LEEDS) LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Matthew Grant (Senior Statutory Auditor)
For and on behalf of Azets Audit Services Limited
12 September 2023
Chartered Accountants
Statutory Auditor
33 Park Place
Leeds
LS1 2RY
SAMUEL GRANT (LEEDS) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
2022
2021
Notes
£
£
Turnover
3
25,111,967
21,865,946
Cost of sales
(19,177,854)
(17,160,057)
Gross profit
5,934,113
4,705,889
Administrative expenses
(4,007,705)
(3,622,865)
Operating profit
4
1,926,408
1,083,024
Interest payable and similar expenses
6
(2,880)
(609)
Profit before taxation
1,923,528
1,082,415
Tax on profit
7
(296,050)
(180,657)
Profit for the financial year
1,627,478
901,758
The statement of total comprehensive income has been prepared on the basis that all operations are continuing operations.
SAMUEL GRANT (LEEDS) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 8 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
623,535
721,701
Investments
10
1,104
1,104
624,639
722,805
Current assets
Stocks
11
4,155,131
4,113,654
Debtors
12
10,655,904
9,448,753
Cash at bank and in hand
8,226
417
14,819,261
13,562,824
Creditors: amounts falling due within one year
14
(10,253,932)
(9,141,711)
Net current assets
4,565,329
4,421,113
Total assets less current liabilities
5,189,968
5,143,918
Provisions for liabilities
Deferred tax liability
15
74,000
47,950
(74,000)
(47,950)
Net assets
5,115,968
5,095,968
Capital and reserves
Called up share capital
17
2
2
Profit and loss reserves
5,115,966
5,095,966
Total equity
5,115,968
5,095,968
The financial statements were approved by the board of directors and authorised for issue on 12 September 2023 and are signed on its behalf by:
A J Dean
Director
Company Registration No. 02708462
SAMUEL GRANT (LEEDS) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2021
2
4,194,208
4,194,210
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
901,758
901,758
Balance at 31 December 2021
2
5,095,966
5,095,968
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
1,627,478
1,627,478
Dividends
8
-
(1,607,478)
(1,607,478)
Balance at 31 December 2022
2
5,115,966
5,115,968
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
1
Accounting policies
Company information
Samuel Grant (Leeds) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 1 Orion Way, Cross Green, Leeds, LS9 0AR.
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 £1.
The financial statements have been prepared under the historical cost convention, modified to include the valuation of investments and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
The immediate parent company is Samuel Grant Group Limited and the ultimate parent company is Samuel Grant (Holdings) Ltd, which is the smallest and largest group into which these financial statements are consolidated. Samuel Grant (Holdings) Limited's registered office is Orion Way, Cross Green, Leeds, LS9 0AR.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for sale of packaging materials, net of VAT and trade discounts.
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 11 -
Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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:
Leasehold improvements
2.5% straight line
Plant and machinery
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.
1.5
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials only.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and 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.
1.8
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.
1.9
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.
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.
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.10
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.
1.11
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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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 leases asset are consumed.
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.15
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.
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Depreciation
The depreciation policy has been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £225,428 (2021 - £208,213), which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
Bad debt provision
Outstanding trade debtor balances are reviewed on a line by line basis by management to identify possible amounts where a provision is required. Management closely manage the collection of trade debtors and therefore are able to identify balances where there is uncertainty about its recoverability, and determine what provision is required (if any).
Stock provision
At each reporting date an assessment is made for provisions required to recognise a fair valuation of damaged, slow moving or obsolete stock. 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 the profit or loss and provided for in the balance sheet. Reversals of impairment losses are also recognised in profit or loss when they arise.
3
Turnover
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Sale of goods
25,189,054
21,926,255
Discounts
(77,087)
(60,309)
25,111,967
21,865,946
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Turnover
(Continued)
- 16 -
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
25,111,967
21,865,946
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
12,206
12,778
Depreciation of owned tangible fixed assets
225,428
208,213
(Profit)/loss on disposal of tangible fixed assets
(14,615)
394
Operating lease charges
154,375
130,000
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Directors
4
4
Selling and distribution
22
21
Administration
30
29
Total
56
54
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
1,802,239
1,899,301
Social security costs
202,152
198,209
Pension costs
98,303
90,397
2,102,694
2,187,907
6
Interest payable and similar expenses
2022
2021
£
£
Other interest on financial liabilities
2,880
609
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
7
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
270,000
163,033
Deferred tax
Origination and reversal of timing differences
8,175
17,624
Changes in tax rates
17,875
Total deferred tax
26,050
17,624
Total tax charge
296,050
180,657
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:
2022
2021
£
£
Profit before taxation
1,923,528
1,082,415
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
365,470
205,659
Tax effect of expenses that are not deductible in determining taxable profit
2,180
887
Effect of change in corporation tax rate
17,875
Group relief
(69,437)
(28,124)
Other adjustments
(20,038)
2,235
Taxation charge for the year
296,050
180,657
8
Dividends
2022
2021
£
£
Interim paid
1,607,478
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
9
Tangible fixed assets
Leasehold improvements
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2022
181,423
1,703,183
192,371
2,076,977
Additions
160,505
79,453
239,958
Disposals
(389,816)
(56,866)
(446,682)
At 31 December 2022
181,423
1,473,872
214,958
1,870,253
Depreciation and impairment
At 1 January 2022
28,639
1,202,784
123,853
1,355,276
Depreciation charged in the year
4,535
188,690
32,203
225,428
Eliminated in respect of disposals
(285,719)
(48,267)
(333,986)
At 31 December 2022
33,174
1,105,755
107,789
1,246,718
Carrying amount
At 31 December 2022
148,249
368,117
107,169
623,535
At 31 December 2021
152,784
500,399
68,518
721,701
10
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
21
1,104
1,104
The company has not designated any financial assets that are not classified as financial assets at fair value through profit or loss.
11
Stocks
2022
2021
£
£
Finished goods and goods for resale
4,155,131
4,113,654
12
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
4,673,482
4,289,451
Amounts owed by group undertakings
5,871,545
5,019,659
Other debtors
2,399
18,725
Prepayments and accrued income
108,478
120,918
10,655,904
9,448,753
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
13
Loans and overdrafts
2022
2021
£
£
Bank overdrafts
3,410,913
2,869,838
Payable within one year
3,410,913
2,869,838
Bank loans and overdrafts of £3,410,913 (2021 - £2,869,838) are secured against properties held by the parent company, and through cross company guarantees as noted in note 18.
Bank finance is secured against trade debtors balances to which they relate.
14
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans and overdrafts
13
3,410,913
2,869,838
Trade creditors
2,817,221
2,930,691
Amounts owed to group undertakings
2,818,324
2,620,878
Corporation tax
188,483
163,033
Other taxation and social security
668,593
294,899
Accruals and deferred income
350,398
262,372
10,253,932
9,141,711
Bank loans and overdrafts are secured as detailed in note 13.
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Decelerated capital allowances
74,000
47,950
2022
Movements in the year:
£
Liability at 1 January 2022
47,950
Charge to profit or loss
8,175
Effect of change in tax rate - profit or loss
17,875
Liability at 31 December 2022
74,000
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
15
Deferred taxation
(Continued)
- 20 -
The UK corporation tax rate was 19% throughout the year.
The UK budget on 3 March 2021 announced the intention to increase the tax rate from the current rate of 19% to 25%, with effect from April 2023. As this change had not been substantively enacted by the balance sheet date, the impact is not included in these financial statements. Therefore, deferred tax balances at the reporting date are measured at 25% (2021 - 19%)
16
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
98,303
90,397
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.
17
Share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
2 Ordinary shares of £1 each
2
2
18
Financial commitments, guarantees and contingent liabilities
The company, jointly with other group undertakings, guarantees the bank indebtedness of all group undertakings. The total contingent liability of the company relating to bank indebtedness at the balance sheet date amounted to £394,140 (2021 - £346,202).
19
Operating lease commitments
Lessee
The operating leases represent non-cancellable leases of motor vehicles and machinery, with the average term of leases being for 4 years.
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:
2022
2021
£
£
Within one year
313,268
75,079
Between two and five years
655,946
141,871
969,214
216,950
SAMUEL GRANT (LEEDS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
20
Ultimate controlling party
The company's immediate parent company is Samuel Grant Group Limited, a company registered in England and Wales.
The ultimate parent company is Samuel Grant (Holdings) Ltd, a company registered in England and Wales with a registered office of Orion Way, Cross Green, Leeds, LS9 0AR. Samuel Grant (Holdings) Limited is the smallest and largest group into which Samuel Grant (Leeds) Limited is consolidated.
In the opinion of the directors, there is no ultimate controlling party.
21
Subsidiaries
These financial statements are separate company financial statements for Samuel Grant (Leeds) Limited.
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Able Packaging Group Limited
England and Wales
Dormant
Ordinary
100.00
The investments in subsidiaries are all stated at cost.
The registered office of the subsidiary is Orion Way, Cross Green, Leeds, LS9 0AR.
22
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
124,850
140,234
Company pension contributions to defined contribution schemes
3,522
3,517
128,372
143,751
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021: 1)
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