Stancrown Limited - Limited company accounts 22.3

REGISTERED NUMBER: 02876108 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 31 December 2021

for

Stancrown Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Statement of Income and Retained Earnings

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Cash Flow Statement

11

Notes to the Consolidated Cash Flow Statement

12

Notes to the Consolidated Financial Statements

14

DIRECTORS:

Mr S L Muir

Mr R D Muir

Mr R G Muir

REGISTERED OFFICE:

Boulevard Industrial Park

Padge Road

Beeston

Nottinghamshire

NG9 2JR

REGISTERED NUMBER:

02876108 (England and Wales)

AUDITORS:

Franklins Accountancy Audit & Tax Limited

1 Pinnacle Way

Pride Park

Derby

Derbyshire

DE24 8ZS

The directors present their strategic report of the company and the group for the year ended 31 December 2021.

The parent company's directors are pleased with the financial results for the year especially given the current uncertainty in the economic landscape due to the ongoing Covid-19 pandemic, war in Ukraine and the general energy and cost of living crisis commencing.

REVIEW OF BUSINESS

Group turnover has increased by 0.59% to £13.2m, with the group gross profit margin increasing by 2.60% to 19.13%.

Overall, the group profit before tax has increased from £349k in 2020 to £446k in 2021.

At the end of the year the group had net assets of £799k (2020:£645k).

The subsidiary company has considerable financial resources and contracts with a number of customers across different geographic areas. Accordingly, we believe that the group is well placed to manage its business risks successfully and look forward to continued growth in 2022 and beyond.

ON BEHALF OF THE BOARD:

Mr R D Muir - Director

29 November 2022

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2021.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of a holding company.

DIVIDENDS

Interim dividends per share were paid as follows:

Ordinary A £1 shares

£0.46018

- 4 January 2021

£1.40932

- 6 April 2021

£1.8695

Ordinary B £1 shares

£0.8586

- 7 April 2021

Ordinary C £1 shares

£0.42824

- 8 April 2021

The directors recommend that no final dividends be paid.

The total distribution of dividends for the year ended 31 December 2021 will be £ 159,799 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

Mr S L Muir

Mr R D Muir

Mr R G Muir

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

The auditors, Franklins Accountancy Audit & Tax Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr R D Muir - Director

29 November 2022

Opinion

We have audited the financial statements of Stancrown Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2021 and of the group's 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' 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 Statement of Directors' Responsibilities set out on page three, 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 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 group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

- we identified the laws and regulations applicable to the group through discussions with the directors and from our commercial knowledge of the industry.

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation.

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting appropriate correspondence.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining accounting estimates were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

Where we identified legislation or regulation of particular relevance to the entity, in conjunction with other audit testing, we considered the sufficiency and appropriateness of audit evidence obtained regarding the compliance with that legislation, or regulation, and any consequential risk of material misstatements in the financial statements.

However it must be noted that it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

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

Collin Franklin (Senior Statutory Auditor)

for and on behalf of Franklins Accountancy Audit & Tax Limited

1 Pinnacle Way

Pride Park

Derby

Derbyshire

DE24 8ZS

29 November 2022

TURNOVER

3

13,171,067

13,093,148

Cost of sales

10,651,138

10,929,155

GROSS PROFIT

2,519,929

2,163,993

Administrative expenses

2,088,283

1,859,549

431,646

304,444

Other operating income

37,082

78,530

OPERATING PROFIT

5

468,728

382,974

Interest receivable and similar income

996

657

469,724

383,631

Interest payable and similar expenses

7

23,432

34,626

PROFIT BEFORE TAXATION

446,292

349,005

Tax on profit

8

93,993

68,322

PROFIT FOR THE FINANCIAL YEAR

352,299

280,683

Retained earnings at beginning of year

297,650

165,714

Dividends

10

(159,799

)

(112,899

)

RETAINED EARNINGS FOR THE GROUP AT END OF YEAR

490,150

333,498

Profit attributable to:

Owners of the parent

286,781

244,835

Non-controlling interests

65,518

35,848

352,299

280,683

FIXED ASSETS

Intangible assets

11

23,396

26,912

Tangible assets

12

167,433

211,501

Investments

13

-

-

190,829

238,413

CURRENT ASSETS

Stocks

14

1,435,627

1,791,171

Debtors

15

2,428,449

1,752,747

Cash at bank and in hand

60,387

35,064

3,924,463

3,578,982

CREDITORS

Amounts falling due within one year

16

3,237,752

3,085,308

NET CURRENT ASSETS

686,711

493,674

TOTAL ASSETS LESS CURRENT LIABILITIES

877,540

732,087

CREDITORS

Amounts falling due after more than one year

17

(41,892

)

(51,519

)

PROVISIONS FOR LIABILITIES

20

(36,803

)

(35,823

)

NET ASSETS

798,845

644,745

CAPITAL AND RESERVES

Called up share capital

21

208,607

208,607

Capital redemption reserve

22

3,000

3,000

Retained earnings

22

424,632

297,650

SHAREHOLDERS' FUNDS

636,239

509,257

NON-CONTROLLING INTERESTS

162,606

135,488

TOTAL EQUITY

798,845

644,745

The financial statements were approved by the Board of Directors and authorised for issue on 29 November 2022 and were signed on its behalf by:

Mr R D Muir - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

-

-

Investments

13

435,000

435,000

435,000

435,000

CURRENT ASSETS

Cash at bank

1,203

1,263

CREDITORS

Amounts falling due within one year

16

121,336

120,537

NET CURRENT LIABILITIES

(120,133

)

(119,274

)

TOTAL ASSETS LESS CURRENT LIABILITIES

314,867

315,726

CAPITAL AND RESERVES

Called up share capital

21

208,607

208,607

Retained earnings

22

106,260

107,119

SHAREHOLDERS' FUNDS

314,867

315,726

Company's profit for the financial year

158,940

166,352

The financial statements were approved by the Board of Directors and authorised for issue on 29 November 2022 and were signed on its behalf by:

Mr R D Muir - Director

Cash flows from operating activities

Cash generated from operations

1

385,380

406,455

Interest paid

(23,432

)

(34,626

)

Government grants

-

40,611

Tax paid

(46,934

)

-

Net cash from operating activities

315,014

412,440

Cash flows from investing activities

Purchase of tangible fixed assets

(22,572

)

(67,286

)

Interest received

996

657

Net cash from investing activities

(21,576

)

(66,629

)

Cash flows from financing activities

New loans in year

-

50,000

Loan repayments in year

(4,722

)

-

Minority interest dividends paid

(38,400

)

(19,200

)

Equity dividends paid

(159,799

)

(112,899

)

Net cash from financing activities

(202,921

)

(82,099

)

Increase in cash and cash equivalents

90,517

263,712

Cash and cash equivalents at beginning of year

2

(54,801

)

(318,513

)

Cash and cash equivalents at end of year

2

35,716

(54,801

)

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2021

2020

£

£

Profit before taxation

446,292

349,005

Depreciation charges

70,156

65,237

Government grants

-

(40,611

)

Finance costs

23,432

34,626

Finance income

(996

)

(657

)

538,884

407,600

Decrease/(increase) in stocks

355,544

(87,372

)

(Increase)/decrease in trade and other debtors

(675,702

)

142,286

Increase/(decrease) in trade and other creditors

166,654

(56,059

)

Cash generated from operations

385,380

406,455

2.	CASH AND CASH EQUIVALENTS

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

Year ended 31 December 2021

31.12.21

1.1.21

£

£

Cash and cash equivalents

60,387

35,064

Bank overdrafts

(24,671

)

(89,865

)

35,716

(54,801

)

Year ended 31 December 2020

31.12.20

1.1.20

£

£

Cash and cash equivalents

35,064

47,773

Bank overdrafts

(89,865

)

(366,286

)

(54,801

)

(318,513

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.21

Cash flow

At 31.12.21

£

£

£

Net cash

Cash at bank and in hand

35,064

25,323

60,387

Bank overdrafts

(89,865

)

65,194

(24,671

)

(54,801

)

90,517

35,716

Debt

Debts falling due within 1 year

(4,731

)

(4,907

)

(9,638

)

Debts falling due after 1 year

(45,269

)

9,627

(35,642

)

(50,000

)

4,720

(45,280

)

Total

(104,801

)

95,237

(9,564

)

1.	STATUTORY INFORMATION

Stancrown Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. These financial statements have been prepared under the historical cost convention as modified by the use of fair values for certain financial instruments in accordance with the accounting policies set out below.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that the actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements:

Stock valuations - This involves judgements as to the extent to which provisions are required to account for the risk of obsolescence.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

The group recognises turnover when the amount of turnover can be reliably measured, and it is probable that future economic benefits will flow to the entity. Turnover from the sale of goods is recognised when the risks and rewards of ownership are transferred to the customer.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 1993, is being amortised evenly over its estimated useful life of ten years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Property lease costs are being amortised evenly over their estimated useful life of ten years.

Development costs are being amortised evenly over their estimated useful life of ten years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery

-

at varying rates on cost

Motor vehicles

-

at varying rates on cost

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is determined using the most recent purchase price method. Net realisable value is based on selling price less anticipated costs to completion and selling costs.

Financial instruments

The group enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as trade and other debtors and creditors, and loans from and to related parties.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due for goods sold or services rendered in the ordinary course of business.

Trade debtors are recognised at the transaction price. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the debtor.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

Trade creditors are recognised at the transaction price.

Trade creditors are classified as current liabilities of the group. The group does not have an unconditional right, at the end of the reporting date, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

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

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

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

Hire purchase and leasing commitments

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

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Going concern

As at 31st December 2021 the group had shareholders' funds of £636,239 (2020: £509,257). The group has made a profit for the year of £352,299 after tax (2020: £280,683).

The directors have therefore considered the appropriateness of preparing the consolidated accounts on a going concern basis and have monitored performance post year end, with the group continuing to trade at a comparable level and meet all liability payments as they have fallen due. The directors do not envisage any adverse issues in respect of the future performance of the entity and have therefore prepared the financial statements on a going concern basis.

The directors continue to assess appropriateness of the going concern basis against the backdrop of the continuing impact the Ukraine war, global energy and cost of living crisis and conclude that they do not create a material uncertainty in relation to going concern.

3.

TURNOVER

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

An analysis of turnover by class of business is given below:

2021

2020

£

£

Sale of goods

13,171,067

13,093,148

13,171,067

13,093,148

An analysis of turnover by geographical market is given below:

2021

2020

£

£

United Kingdom

13,171,067

13,093,148

13,171,067

13,093,148

4.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

1,361,864

1,460,602

Social security costs

106,087

109,139

Other pension costs

105,707

78,683

1,573,658

1,648,424

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

2021

2020

Total employees

60

56

The average number of employees by undertakings that were proportionately consolidated during the year was 60 (2020 - 56 ) .

2021

2020

£

£

Directors' remuneration

189,363

156,906

Directors' pension contributions to money purchase schemes

28,602

22,531

5.	OPERATING PROFIT

The operating profit is stated after charging:

2021

2020

£

£

Other operating leases

246,888

244,000

Depreciation - owned assets

66,640

61,721

Property lease costs amortisation

1,523

1,521

Development costs amortisation

1,993

1,995

6.	AUDITORS' REMUNERATION

2021

2020

£

£

Fees payable to the company's auditors for the audit of the company's financial statements

19,030

10,970

Total audit fees

19,030

10,970

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Bank interest

2,770

1,308

Factoring interest

20,662

33,318

23,432

34,626

8.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2021

2020

£

£

Current tax:

UK corporation tax

93,013

46,934

Deferred tax

980

21,388

Tax on profit

93,993

68,322

UK corporation tax has been charged at 19 % .