Company registration number 00597855 (England and Wales)
ALEXANDER CLEGHORN LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
ALEXANDER CLEGHORN LIMITED
COMPANY INFORMATION
Directors
GG Cleghorn
P Pittuck
Company number
00597855
Registered office
C/o 75 Maygrove Road
West Hampstead
London
NW6 2EG
Auditor
Goldwins Limited
75 Maygrove Road
West Hampstead
London
NW6 2EG
Business address
Newbridge Road
Tiptree
Colchester, Essex
CO5 OJA
Bankers
Barclays Bank plc
Colchester Business Centre
Colchester
Essex
CO4 4YA
ALEXANDER CLEGHORN LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
10
Statement of changes in equity
9
Statement of cash flows
11
Notes to the financial statements
12 - 25
ALEXANDER CLEGHORN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Review of the business
The results for the year are set out on page 6 and shows turnover for the year of £13,664,883 (2021: £12,758,902) and operating profit for the year of £225,958 (2021: profit £256,257). The company's directors are satisfied with the results and financial position at the year end.
Principal risks and uncertainties
The wood manufacturing sector remains highly competitive. Other than this, the principal risks to the company are customer demand and fluctuations in the cost of material purchases.
Development and performance
The directors believe that there is scope for the further development of the existing activities of the company and the cash balances held by the company are to be used for this purpose and to help fund future trading requirements.
Key performance indicators
The company uses a range of performance measures to monitor and manage the business effectively. The most significant of these are key performance indicators.
The main performance indicators for the year ended 31 December 2022 are as below:
Turnover (£) 13,664,883 (2021: £12,758,902)
Gross profit (£) 3,251,554 (2021: £2,881,382)
Other performance indicators
Other key performance indicators include like for like sales, stock cover and sales density.
Other information and explanations
There have been no events since the balance sheet date which materially affect the position of the company.
GG Cleghorn
Director
28 November 2023
ALEXANDER CLEGHORN 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 continued to be that of woodworkers and manufacturers of component parts for the 'Do it Yourself' and furniture industries.
The results for the year and the financial position at the year end were considered satisfactory by the directors who expect continued growth in the foreseeable future.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
GG Cleghorn
P Pittuck
GSG Cleghorn
(Resigned 11 August 2022)
Future developments
The aim of the directors is to maintain, expand and develop the company whenever the opportunity arises.
Auditor
Goldwins Limited were appointed auditors to the company and in accordance with section 487(2) of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
GG Cleghorn
Director
28 November 2023
ALEXANDER CLEGHORN 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.
ALEXANDER CLEGHORN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ALEXANDER CLEGHORN LIMITED
- 4 -
Opinion
We have audited the financial statements of ALEXANDER CLEGHORN LIMITED (the 'company') for the year ended 31 December 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 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.
ALEXANDER CLEGHORN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ALEXANDER CLEGHORN 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing internal audit reports.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
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.
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.
ALEXANDER CLEGHORN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ALEXANDER CLEGHORN LIMITED
- 6 -
Anthony I Benosiglio
Senior Statutory Auditor
For and on behalf of Goldwins Limited
28 November 2023
Chartered Accountants
Statutory Auditor
75 Maygrove Road
West Hampstead
London
NW6 2EG
ALEXANDER CLEGHORN LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
2022
2021
Notes
£
£
Turnover
3
13,664,883
12,758,902
Cost of sales
(10,413,329)
(9,877,520)
Gross profit
3,251,554
2,881,382
Distribution costs
(747,950)
(818,460)
Administrative expenses
(2,277,646)
(1,829,271)
Other operating income
22,606
Operating profit
4
225,958
256,257
Interest payable and similar expenses
7
(13,281)
(17,227)
Profit before taxation
212,677
239,030
Tax on profit
8
(22,920)
(52,989)
Profit for the financial year
189,757
186,041
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ALEXANDER CLEGHORN LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
£
£
Profit for the year
189,757
186,041
Other comprehensive income
-
-
Total comprehensive income for the year
189,757
186,041
ALEXANDER CLEGHORN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2021
40,000
4,733,296
4,773,296
Year ended 31 December 2021:
Profit and total comprehensive income
-
186,041
186,041
Balance at 31 December 2021
40,000
4,919,337
4,959,337
Year ended 31 December 2022:
Profit and total comprehensive income
-
189,757
189,757
Balance at 31 December 2022
40,000
5,109,094
5,149,094
ALEXANDER CLEGHORN LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
3,077,796
3,348,210
Current assets
Stocks
10
1,856,185
1,891,891
Debtors
11
2,666,331
2,618,364
Cash at bank and in hand
617,421
318,203
5,139,937
4,828,458
Creditors: amounts falling due within one year
12
(2,410,877)
(2,403,781)
Net current assets
2,729,060
2,424,677
Total assets less current liabilities
5,806,856
5,772,887
Creditors: amounts falling due after more than one year
13
(307,074)
(485,782)
Provisions for liabilities
Deferred tax liability
15
350,688
327,768
(350,688)
(327,768)
Net assets
5,149,094
4,959,337
Capital and reserves
Called up share capital
17
40,000
40,000
Profit and loss reserves
18
5,109,094
4,919,337
Total equity
5,149,094
4,959,337
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 28 November 2023 and are signed on its behalf by:
GG Cleghorn
Director
Company registration number 00597855 (England and Wales)
ALEXANDER CLEGHORN LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
704,826
28,192
Interest paid
(13,281)
(17,227)
Income taxes paid
(1,343)
Net cash inflow from operating activities
691,545
9,622
Investing activities
Purchase of tangible fixed assets
(217,657)
(353,148)
Net cash used in investing activities
(217,657)
(353,148)
Financing activities
Payment of finance leases obligations
(174,671)
(170,726)
Net cash used in financing activities
(174,671)
(170,726)
Net increase/(decrease) in cash and cash equivalents
299,217
(514,252)
Cash and cash equivalents at beginning of year
318,203
796,804
Cash and cash equivalents at end of year
617,421
318,203
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
1
Accounting policies
Company information
ALEXANDER CLEGHORN LIMITED is a private company limited by shares incorporated in England and Wales. The registered office is C/o 75 Maygrove Road, West Hampstead, London, NW6 2EG.
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
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 goods and services net of VAT.
Revenue 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 revenue 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:
Land and buildings Freehold
2% Straight line basis
Long leasehold property
2% Straight line basis
Cabins
4% Straight line basis
Plant and machinery
8.5% Straight line basis
Fixtures, fittings & equipment
20% Straight line basis
Motor vehicles
20% Straight line basis
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.
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.5
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). 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.
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 (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) 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.
1.6
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.
1.7
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.
1.8
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.
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
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.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
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, 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.
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
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.
1.9
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
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.
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.11
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.
1.12
Retirement benefits
Contribution in respect of the company's defined contribution pension scheme are charged to the profit and loss account for the year in which they are payable to the scheme. Differences between contributions payable and contribution actually paid in the year are as either accruals or prepayments at the year end.
1.13
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 leases asset are consumed.
1.14
Government grants
Grants received for the purchase of Boilers are deducted from the purchase price of the related assets and with a consequent reduction in the annual charge for depreciation.
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 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.
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Sales
13,664,883
12,758,902
2022
2021
£
£
Other revenue
Grants received
-
22,606
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
9,528
356
Government grants
-
(22,606)
Fees payable to the company's auditor for the audit of the company's financial statements
10,500
9,600
Depreciation of owned tangible fixed assets
404,459
453,266
Depreciation of tangible fixed assets held under finance leases
83,611
83,611
Operating lease charges
10,832
9,832
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Works
72
65
Sales and administration
21
21
Distribution
4
4
Total
97
90
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
3,270,848
2,658,051
Social security costs
338,003
247,465
Pension costs
96,955
90,390
3,705,806
2,995,906
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
433,495
135,523
Company pension contributions to defined contribution schemes
29,330
30,207
462,825
165,730
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2021 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
195,424
88,529
7
Interest payable and similar expenses
2022
2021
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
13,281
17,227
8
Taxation
2022
2021
£
£
Deferred tax
Origination and reversal of timing differences
22,920
52,989
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
8
Taxation
(Continued)
- 19 -
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
212,677
239,030
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
40,409
45,416
Tax effect of expenses that are not deductible in determining taxable profit
5,072
4,327
Tax effect of utilisation of tax losses not previously recognised
(69,033)
(116,675)
Unutilised tax losses carried forward
13,408
69,033
Depreciation on assets not qualifying for tax allowances
92,733
102,007
Deferred tax
22,920
52,989
Capital allowances
(82,589)
(104,108)
Taxation charge for the year
22,920
52,989
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
9
Tangible fixed assets
Land and buildings Freehold
Long leasehold property
Cabins
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 January 2022
432,090
466,604
18,677
9,189,655
278,384
167,456
10,552,866
Additions
148,391
69,266
217,657
At 31 December 2022
432,090
466,604
18,677
9,338,046
347,650
167,456
10,770,523
Depreciation and impairment
At 1 January 2022
149,795
261,826
18,519
6,431,093
187,368
156,056
7,204,657
Depreciation charged in the year
7,442
9,332
146
419,298
48,052
3,800
488,070
At 31 December 2022
157,237
271,158
18,665
6,850,391
235,420
159,856
7,692,727
Carrying amount
At 31 December 2022
274,853
195,446
12
2,487,655
112,230
7,600
3,077,796
At 31 December 2021
282,295
204,778
158
2,758,563
91,016
11,400
3,348,210
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Tangible fixed assets
(Continued)
- 21 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2022
2021
£
£
Plant and machinery
732,827
816,438
Depreciation charge for the year in respect of leased assets
83,611
83,611
10
Stocks
2022
2021
£
£
Raw materials and consumables
1,754,780
1,851,713
Work in progress
101,405
40,178
1,856,185
1,891,891
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
17,005
29,295
Corporation tax recoverable
11,287
11,287
Other debtors
2,389,373
2,360,414
Prepayments and accrued income
248,666
217,368
2,666,331
2,618,364
The company sells most of its sales invoices to a factoring company, HSBC Invoice Finance (UK) Limited. All the risks and rewards of ownership of the debts are transferred to the HSBC Invoice Finance (UK) Limited. As long as the terms and conditions of the agreement with the bank are not breached there is no recourse to the company. The invoice ledger balance at the year end owed by HSBC Invoice Finance (UK) Limited is included in other debtors.
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
12
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Obligations under finance leases
14
178,708
174,671
Trade creditors
1,420,510
1,706,040
Taxation and social security
498,932
283,884
Other creditors
62,101
Accruals and deferred income
250,626
239,186
2,410,877
2,403,781
13
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Obligations under finance leases
14
307,074
485,782
14
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
485,782
660,453
Hire purchase and finance lease payments represent rentals payable over a fixed period by the company for items of plant and machinery. Ownership is transferred at the end of the period.
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:
£
£
ACAs
350,688
327,768
2022
Movements in the year:
£
Liability at 1 January 2022
327,768
Charge to profit or loss
22,920
Liability at 31 December 2022
350,688
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
16
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
96,955
90,390
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
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
40,000
40,000
40,000
40,000
18
Profit and loss reserves
Called-up share capital – represents the nominal value of shares that have been issued.
Profit and loss account – includes all current and prior period retained profits and losses.
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
5,000
5,000
Between two and five years
17,748
3,358
22,748
8,358
20
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2022
2021
£
£
Aggregate compensation
462,823
165,730
Transactions with related parties
During the year the company entered into the following transactions with related parties:
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
20
Related party transactions
(Continued)
- 24 -
Purchases
Purchases
2022
2021
£
£
Related company
2,140,299
2,994,518
Rent
2022
2021
£
£
Other related parties
6,000
5,000
The company purchased goods from the related company on normal commercial terms. The company paid rent to the other related party in accordance with a lease agreement.
The following amounts were outstanding at the reporting end date:
2022
2021
Amounts due to related parties
£
£
Other related parties
27,128
20,928
2022
2021
Amounts due from related parties
£
£
Related company
376,379
214,538
21
Cash generated from operations
2022
2021
£
£
Profit for the year after tax
189,757
186,041
Adjustments for:
Taxation charged
22,920
52,989
Finance costs
13,281
17,227
Depreciation and impairment of tangible fixed assets
488,070
536,877
Movements in working capital:
Decrease/(increase) in stocks
35,706
(679,258)
Increase in debtors
(47,967)
(281,780)
Increase in creditors
3,059
196,096
Cash generated from operations
704,826
28,192
ALEXANDER CLEGHORN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
22
Analysis of changes in net funds/(debt)
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
318,203
299,218
617,421
Obligations under finance leases
(660,453)
174,671
(485,782)
(342,250)
473,889
131,639
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