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Registered number: 02088118
LECICO PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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CONTENTS
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Directors' Responsibilities Statement
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present the Strategic Report for Lecico PLC for the year ended 31 December 2021.
The profit for the year amounted to £484,328 (2020 - £149,727).
Net assets amounted to £4,043,394 (2020 - £3,559,066).
Business Environment
The bathroom market in the UK continues to be competitive, with many companies pursuing aggressive pricing offers to retain market share.
Consolidation in the merchant market has concentrated buying power into fewer organisations. National merchant groups have entered partnerships directly with suppliers making pricing much more competitive.
Strategy
The key objective of the Company is to build a recognised mid-market bathroom brand known for design, creativity, quality, performance, innovation, customer relationships and its people. This is being achieved through consistency, flexibility, understanding our customers’ needs and ambitions, delivering first class products and services and creating an open, respectful, proud and positive culture.
During 2020 amd majority of 2021 most countries of the world, including the United Kingdom, were exposed to the outbreak of the novel Coronavirus disease (COVID-19). This had a widespread impact on most sectors of the UK economy however the building and construction sectors in which the Company operates have to date, been affected to a lesser extent than many others. This, coupled with the fact that the business was able to continue trading throughout, has limited the overall impact on the business.
Whilst it is likely that the pandemic will continue to have a limited impact on the Company’s 2022 business plan, its profitability and its cash flows, the Management Team have had to take steps to counter this risk and limit its impact on its financial position and support its ability to continue as a going concern. The business has secured additional banking facilities to ensure it has adequate working capital to meets its liabilities as they fall due. The Company also has access to funding from its parent company in Egypt, and an agreement to assist with short term liquidity issues, albeit neither of these are expected to be utilised in the forecasts.
Without clarity on the duration of the pandemic, it is difficult to determine the full impact on the business. Both revenue and operating profit levels reached all-time highs during the year and the outlook for 2022 remains positive with a good order bank and stock levels. Based on the above and the business plan and forecast for 2022, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence going forward. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.
Price sensitivity and customer loyalty
The market in which we operate remains competitive. There is risk around our ability to remain price competitive and secure new customers as well as retain existing ones.
Covid-19 pandemic
As included in Note 2.2, there is uncertainty around the impact that Covid-19 will have on our business. Management are monitoring the situation carefully to mitigate any impact on the business.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Currency risk
The Company operates internationally and is subject to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and the Euro. The Company does not hedge any transactions, and foreign exchange differences on retranslation of foreign assets and liabilities are recognised in the Statement of Comprehensive Income.
Interest rate risk
The Company finances its operations through a mixture of intercompany debt, shareholders’ funds and where necessary invoice financing. The Company mixes the duration of its deposits to reduce the impact of interest rate fluctuations.
Key performance indicators
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The following key performance indicators are used by the board to control and monitor the business.
The slight movement in the current ratio stems from overall reductions of amounts owed to the parent company, Lecico Egypt SAE, whilst the gross margin remained in line with 2019 and budget expectation.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their report and the financial statements for the year ended 31 December 2021.
The principal activity of the Company is that of the sale of Lecico bathroom products in the UK.
The profit for the year, after taxation, amounted to £484,328 (2020 - £149,727).
No dividends were paid or proposed during the year (2020 - £Nil).
The directors who served during the year were:
Management has developed a five year strategic plan to continue to grow and develop the business. The core strategy remains around recruiting and retaining a skilled team to deliver the high levels of customer service our customers are accustomed to, whilst expanding the product offering to allow further growth of market share in the contract and specification divisions.
Qualifying third party indemnity provisions
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The Company has granted an indemnity to one or more of its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provision remains in force as at the date of approving the Directors' Report.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post reporting date events
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There have been no significant events affecting the Company since the year end.
The auditor, Nexia Smith & Williamson, was appointed during the year and will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
This report was approved by the board and signed on its behalf.
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DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent; and
∙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 to 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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LECICO PLC
Opinion
We have audited the financial statements of Lecico PLC (the 'Company') for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows, the Analysis of Net Debt and the 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 FRS 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 2021 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the 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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LECICO PLC (CONTINUED)
Other information
The other information comprises the information included in the Annual Report and financial statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report and financial statements. 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.
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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 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.
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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.
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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 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 Directors’ Responsibilities Statement set out on page 5, 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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LECICO PLC (CONTINUED)
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the Company’s legal and regulatory framework through enquiry of management of their understanding of the relevant laws and regulations, the company’s policies and procedures regarding compliance and how they identify, evaluate and rectify any instances of noncompliance. We also drew on our existing understanding of the Company’s industry and regulation.
We understand the Company complies with requirements of the framework through:
∙The directors’ close involvement in the day-to-day running of the business, meaning that any litigation or claims would come to their attention directly; and
∙The engagement of external experts to ensure ongoing tax compliance and to assist with the preparation of the statutory accounts.
In the context of the audit, we have considered those laws and regulations which determine the form and content of the financial statements, which are central to the Company’s ability to conduct business and where failure to comply could result in material penalties.
We have identified the following laws and regulations as being of significance in the context of the Company:
∙The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were with regard to the manipulation of the financial statements through manual journals and incorrect recognition of revenue. This was communicated to the other members of the engagement team who were not present at the discussion.
The procedures carried out to gain evidence in the above areas included:
∙Testing of revenue transactions to underlying documentation; and
∙Testing of manual journal entries, selected based on specific risk assessments applied based on the client processes and controls surrounding manual journals.
This description forms part of our auditor’s report.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LECICO PLC (CONTINUED)
Use of our report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Stephen Drew (Senior Statutory Auditor)
for and on behalf of
Nexia Smith & Williamson
Chartered Accountants
Statutory Auditor
3rd Floor
9 Colmore Row
Birmingham
B3 2BJ
19 March 2022
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
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Interest payable and similar expenses
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Profit for the financial year
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There was no other comprehensive income for 2021 (2020 - £Nil).
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The notes on pages 15 to 29 form part of these financial statements.
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LECICO PLC
REGISTERED NUMBER:02088118
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 29 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
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Comprehensive income for the year
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Comprehensive income for the year
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
Cash flows from operating activities
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Profit for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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(Increase)/decrease in stocks
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Increase in amounts owed by groups
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Increase/(decrease) in creditors
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Decrease in amounts owed to groups
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Net cash used in operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Insurance proceeds for fixed assets
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Net cash used in investing activities
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Cash flows from financing activities
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Net movement in invoice financing
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Net cash generated from financing activities
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Net increase/(decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2021
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Bank loans due after 1 year
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Bank loans due within 1 year
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Lecico PLC is a public company, limited by shares, domiciled and incorporated in England and Wales (registered number: 02088118). The registered office address is Unit 2D, Viking Industrial Estate, Hudson Road, Bedford, Bedfordshire, MK41 0QB.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Directors have taken steps to limit COVID-19's impact on its financial position and support its ability to continue as a going concern. The business has secured additional banking facilities to ensure it has adequate working capital to meets its liabilities as they fall due. The Company also has access to funding from its parent company in Egypt, and an agreement to assist with short term liquidity issues, should the need arise.
Both revenue and operating profit levels reached all-time highs during the year and the outlook for 2022 remains positive with a good order bank and high stock levels. Based on the above and the business plan and forecast for 2022, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence going forward. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.
The directors have made an assessment in preparing these financial statements as to whether the Company is a going concern and have concluded that there are no material uncertainties that may cast doubt on the Company's ability to continue as a going concern.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Sale of goods
Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The Company sells a range of bathroom products in the wholesale market. Sale of goods are recognised on delivery to the wholesaler, when the wholesaler has full description over the channel and price to sell the product and there is no unfulfilled obligation that could affect the wholesaler's acceptance of the product. Delivery occurs when the goods have been shipped to the location specified by the wholesaler.
Goods sold to wholesalers are often sold with volume rebates and also with the provision for the wholesale customer to return the faulty goods. Sales are measured at the prices specified in the sales contract, net of estimated volume rebates and returns. Volume rebates are assessed based on monthly, quarterly or annual purchases. Accumulated experience is used to estimate and provide for the discounts and returns.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Grants of a revenue nature are recognised in profit or loss in the same period as the related expenditure.
Other operating income is the total amount receivable by the Company for services provided net of VAT. Services include the provision of storage space.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is provided on the following bases:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument.
Trade and other debtors and creditors are classified as basic financial instruments and measured on initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the Company will not be able to collect all amounts due.
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and bank overdrafts which are an integral part of the Company’s cash management.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial liabilities and equity instruments issued by the Company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Interest bearing bank loans, overdrafts and other loans which meet the criteria to be classified as basic financial instruments are initially recorded at the present value of cash payable to the bank, which is ordinarily equal to the proceeds received net of direct issue costs. These liabilities are subsequently measured at amortised cost, using the effective interest rate method.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Judgements in applying accounting policies and key sources of estimation uncertainty
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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 judgements, estimates and assumptions are evaluated at each reporting date and are based on historical experience as adjusted for current market conditions and other factors. Management makes estimates and assumptions concerning the future in preparing the financial statements and the actual results will not always reflect the accounting estimates made.
Dilpidation provision
Management estimate is required in making the assessment of the future cost of entering into lease agreements. Management have estimated the future costs and then performed a present value calculation to determine the provision in the financial statements.
All turnover arose within the United Kingdom and Republic of Ireland and is attributable to the principal activity of the Company.
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Government grants receivable
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The Company claimed £4,819 (2020 - £299,446) in the form of CJRS grants in the year.
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The operating profit is stated after charging:
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Research & development charged as an expense
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements
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Fees payable to the Company's auditor and its associates in respect of:
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Management and administration
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Warehouse and distribution
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 2 directors (2020 - 2) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £109,704 (2020 - £123,975).
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The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £23,100 (2020 - £6,481).
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Interest payable and similar expenses
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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Effect of tax rate change on opening balance
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Taxation on profit on ordinary activities
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2020 - lower than) the standard rate of corporation tax in the UK of 19% (2020 -19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Adjustments to tax charge in respect of prior periods
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Remeasurement of deferred tax for changes in tax rates
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Deferred tax not recognised
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Total tax charge for the year
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Factors that may affect future tax charges
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Finance Act 2021 includes legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. The full anticipated effect of these changes is reflected in the above deferred tax balances.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Finished goods and goods for resale
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings represent balances which are repayable on demand and incur no interest charge.
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Creditors: Amounts falling due within one year
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Bank loans payable within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings represent trading balances which are repayable on demand and incur no interest charge.
In the year the Company held an import line facility with a maximum facility of £750,000. Total amount drawn down at the 31 December 2021 is £489,983 (2020: £Nil).
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Creditors: Amounts falling due after more than one year
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Bank loans payable in more than one year
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The £100,000 term loan drawn in 2020 is repayable over a 5-year period on a straight-line basis which includes interest of 2.5% per annum.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Fixed asset timing differences
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Short-term timing differences
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Charged to profit or loss
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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250,000 Ordinary shares of £1.00 each
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Allotted, called up and fully paid
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150,000 Ordinary shares of £1.00 each
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The ordinary shares entitle the holder to receive notice of, attend and vote at general meeting of the Company and on a poll to note vote for each ordinary share held.
The shares hold preferences or restrictions on the distribution of dividends and the repayment of capital.
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Profit and loss account
This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £72,255 (2020 - £65,121). Contributions totalling £13,398 (2020 - £Nil) were payable to the fund at the reporting date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Commitments under operating leases
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At 31 December the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Later than 1 year and not later than 5 years
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Related party transactions
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The Company has taken advantage of the exemption in FRS 102 Section 33.1A to not disclose transactions with wholly owned group entities.
All directors and certain senior employees who have authority and responsibility for planning, directing, and controlling activities of the Company are considered to be key management personnel. Total remuneration (including employers national insurance) in respect of these individuals was £472,153 (2020 - £516,182).
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The immediate parent undertaking is Lecico (UK) Limited, a company registered in England and Wales.
The ultimate parent undertaking is Lecico Egypt S.A.E., a company registered in Egypt.
The largest and smallest group of undertakings for which group accounts for the year ended 31 December 2021 have been drawn up, is that headed by Lecico Egypt S.A.E.. The registered office address of Lecico Egypt S.A.E. is LECICO EGYPT S.A.E P.O. BOX 358, ALEXANDRIA, EGYPT. Copies of the group accounts are available from www.lecicoegypt.com.
There is no ultimate controlling party.
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