ACCOUNTS - Final Accounts

Operating profit

The operating profit is stated after charging:

REES TRADING UK LTD - Company Information

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Registered number: 07783306

REES TRADING UK LTD

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

REES TRADING UK LTD

COMPANY INFORMATION

Director	E G Rees


Company secretary	C Rees


Registered number	07783306


Registered office	Unit C
	Mochdre Industrial Estate
	Newtown
	Powys
	SY16 4LE


Independent auditors	WR Partners
	Chartered Accountants & Statutory Auditors
	Unit 10
	St Giles Business Park
	Newtown
	Powys
	SY16 3AJ

REES TRADING UK LTD

CONTENTS

	Page
Group strategic report	1 - 2
Director's report	3 - 4
Independent auditors' report	5 - 8
Consolidated statement of comprehensive income	9
Consolidated balance sheet	10 - 11
Company balance sheet	12 - 13
Consolidated statement of changes in equity	14
Company statement of changes in equity	15
Consolidated Statement of cash flows	16 - 17
Notes to the financial statements	18 - 43

REES TRADING UK LTD

GROUP STRATEGIC REPORT

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

Introduction

The shareholders and company directors are pleased to present the strategic report for the 16 month period ended 31st December 2022.

Business review

The main business activity of Rees Trading UK Ltd is contract packing and agricultural contracting. It is parent to Rees Machinery Group Ltd (RMGroup), a company that specialises in material handling, process, packaging and robotic automation.
The directors within the group have a shared commitment to delivering high quality, innovative projects to customer specification. Manufactured product is supplied globally and supported by an aftersales service team.
In 2022 the total turnover finished up at £13,152,016, near to what was forecasted within the group's planned revenue growth. That scale up remains consistent with the increased net asset figure of £4,458,603.
Cost of sales increases and a rise in administrative expense is demonstrative of the expanded resource required to facilitate bespoke projects that carried a great deal of R&D expense, and increasing costs of overheads. Within bespoke projects, there were challenges and uncertainties to overcome to achieve innovative design and deliver projects to customer specification.
The financial position of the company remains strong with a healthy balance sheet and over 2.5m in tangible assets.
Based on the level of trading, a healthy cash reserve is maintained to meet working capital requirements. For year end 2022, this is £889k.

Principal risks and uncertainties

The year 2022 and 2023 brought about a new wave of economic turbulence with increasing inflation, interest rates, inflation and an energy crisis, As a result, orders of larger cap-ex projects are held up with key sales decision making pushed back to Q3/4 2023 and some into 2024.
Sterling against USD rates remains strong which supports US trade and impacts foreign exchange favourably. Trading with European suppliers continues to steady thus providing low foreign exchange risk. Multi-currency accounts allow for timely and forecasted monetary transactions in line with currency fluctuations. Opportunities to book forward contracts for large scale projects with FX impact remain in place to mitigate risk if required.

Page 1

REES TRADING UK LTD

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

Financial and other key performance indicators

The board of directors will measure performance on the supply of systems, cost of sales and stakeholder satisfaction.
The business outlook includes evaluation of market strategy, well formulated budget and clear leadership directive.

This report was approved by the board and signed on its behalf.

E G Rees

Director

Date: 29 September 2023

Page 2

REES TRADING UK LTD

DIRECTOR'S REPORT

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

The director presents his report and the financial statements for the 16 month period ended 31 December 2022.

Director's responsibilities statement

The director is responsible for preparing the Group strategic report, the Director's report and the consolidated financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

∙select suitable accounting policies for the Group's financial statements 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 Group will continue in business.

The director is 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 the Group and to enable him to ensure that the financial statements comply with the Companies Act 2006. He is 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.

Results and dividends

The profit for the 16 month period, after taxation, amounted to £510,821 (2021 - £815,881).

During the year the Company declared dividends totalling £nil (2021 - £75,000).

Director

The director who served during the 16 month period was:

E G Rees

Future developments

A healthy sales pipeline exists for 2023, with less emphasis on the development of new product, and increased control over design to refine existing products that are already proven in the marketplace. Adoption of new skills in the sales team have enabled system sales in new markets, with products from partner companies complimentary to the RMGroup standard product range.
In order to support the delivery of future projects it will be vital to sustain the invested resource in terms of people and machinery/processes in house. The outlay is further capitalised on bespoke projects, where we gain strength as a unique single source supplier for turnkey automation solutions. Whilst we work to highlight the in-house offerings, we will re-organise departments to enable the continued delivery of a streamlined service.

Page 3

REES TRADING UK LTD

DIRECTOR'S REPORT (CONTINUED)

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

Disclosure of information to auditors

The director at the time when this Director's report is approved has confirmed that:

∙so far as he is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

∙he 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 and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditors, WR Partners, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.

E G Rees

Director

Date: 29 September 2023

Page 4

REES TRADING UK LTD

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF REES TRADING UK LTD

Qualified Opinion

We have audited the financial statements of Rees Trading UK LTD (the 'parent Company') and its subsidiaries (the 'Group') for the 16 month period ended 31 December 2022, which comprise the Group Statement of comprehensive income, the Group and Company Balance sheets, the Group Statement of cash flows, the Group and Company Statement of changes in equity and the related notes, 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, except for the possible effects on the corresponding figures of the matter described in the basis for qualified opinion section of our report, the financial statements:

∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2022 and of the Group's profit for the 16 month period 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 qualified opinion

As reported in our opinion on the prior year's accounts, the parent Company and the Group were not required to have their financial statements audited for the year to 31 August 2020 and thus we did not observe the counting of physical stocks at the end of that year. We were unable to satisfy ourselves by alternative means concerning the stock quantities of £689,811 by using alternative audit procedures. Consequently we were unable to determine whether any adjustment to this amount at 31 August 2020 was necessary or whether there was any consequential effect on the cost of sales for the year ended 31 August 2021. This has no impact on the results reported for the 16 month period to 31 December 2022 or the balance sheet at that date.

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 United Kingdom, including the Financial Reporting Council'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 director's 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 or 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 director with respect to going concern are described in the relevant sections of this report.

Page 5

REES TRADING UK LTD

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF REES TRADING UK LTD (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The director is 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.

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the stock quantities of £689,811 held at 31 August 2020. We have concluded where the other information refers to the 2021 cost of sales or gross profit that this could be materially misstated for this reason.

Opinion 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 Director's report for the financial 16 month period for which the financial statements are prepared is consistent with the financial statements; and

∙the Group strategic report and the Director's report 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 Director's 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 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 director's remuneration specified by law are not made; or

∙we have not received all the information and explanations we require for our audit.

Page 6

REES TRADING UK LTD

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF REES TRADING UK LTD (CONTINUED)

Responsibilities of directors

As explained more fully in the Director's responsibilities statement set out on page 3, the director is 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 director determines 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 director is 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 director either intends 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 an Auditors' 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 Group 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:

The audit team obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and the Group and determined that the most significant are those that relate to the reporting framework (FRS102 and the Companies Act 2006), the relevant tax compliance regulations, employment law, Health and Safety Regulations and the EU General Data Protection Regulation (GDPR).
We understood how the Company and the Group are complying with these frameworks by making enquiries of management and those responsible for legal and compliance procedures. We also reviewed board minutes to identify any recorded instances of irregularity or non compliance that might have a material impact on the financial statements.
We assessed the susceptibility of the Company and Group's financial statements to material misstatement, including how fraud might occur by meeting with key management to understand where they considered there was susceptibility to fraud. Based on our understanding our procedures involved enquiries of management and those charged with governance, manual journal entry testing, cashbook reviews for large and unusual items and the challenge of significant accounting estimates used in preparing the financial statements

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 Auditors' report.

Page 7

REES TRADING UK LTD

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF REES TRADING UK LTD (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 Auditors' 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.

John Fletcher BA (Hons) FCA (Senior statutory auditor)

for and on behalf of

WR Partners

Chartered Accountants

Statutory Auditors

Unit 10

St Giles Business Park

Newtown

Powys

SY16 3AJ

29 September 2023

Page 8

REES TRADING UK LTD

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

	2022	2021
Note	£	£


Turnover	4	13,152,016	9,348,976
Cost of sales		(6,498,698)	(4,707,954)
Gross profit		6,653,318	4,641,022
Administrative expenses		(6,018,694)	(3,763,176)
Other operating income	5	15,933	102,242
Operating profit	6	650,557	980,088
Interest payable and similar expenses	9	(77,248)	(41,825)
Profit before taxation		573,309	938,263
Tax on profit	10	(62,488)	(122,382)
Profit for the financial 16 month period		510,821	815,881


Currency translation differences	834	-
Other comprehensive income for the 16 month period	834	-

Total comprehensive income for the 16 month period	511,655	815,881

Profit for the 16 month period attributable to:
Owners of the parent Company	510,821	815,881
	510,821	815,881

There were no recognised gains and losses for 2022 or 2021 other than those included in the consolidated statement of comprehensive income.

The notes on pages 18 to 43 form part of these financial statements.

Page 9

REES TRADING UK LTD

REGISTERED NUMBER: 07783306

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2022

	31 December	31 August
	2022	2021
Note	£	£

Fixed assets
Intangible assets	12		58,112		39,413
Tangible assets	13		2,546,280		2,124,461
Investment property	15		360,000		360,000
			2,964,392		2,523,874
Current assets
Stocks	16	1,006,562		676,775
Debtors: amounts falling due within one year	17	3,886,645		2,489,958
Cash at bank and in hand	18	889,018		2,410,547
		5,782,225		5,577,280
Creditors: amounts falling due within one year	19	(2,926,451)		(2,526,250)
Net current assets			2,855,774		3,051,030
Total assets less current liabilities			5,820,166		5,574,904
Creditors: amounts falling due after more than one year	20		(1,099,710)		(1,391,914)
Provisions for liabilities
Deferred taxation	23	(261,853)		(236,042)
			(261,853)		(236,042)
Net assets			4,458,603		3,946,948

Page 10

REES TRADING UK LTD

REGISTERED NUMBER: 07783306

CONSOLIDATED BALANCE SHEET (CONTINUED)

AS AT 31 DECEMBER 2022

	31 December	31 August
	2022	2021
Note	£	£

Capital and reserves
Called up share capital	24	300	300
Capital redemption reserve	25	6	6
Investment property reserve	25	5,004	5,004
Profit and loss account	25	4,453,293	3,941,638
		4,458,603	3,946,948

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

E G Rees

Director

Date: 29 September 2023

The notes on pages 18 to 43 form part of these financial statements.

Page 11

REES TRADING UK LTD

REGISTERED NUMBER: 07783306

COMPANY BALANCE SHEET

AS AT 31 DECEMBER 2022

	31 December	31 August
	2022	2021
Note	£	£

Fixed assets
Tangible assets	13		745,844		628,547
Investments	14		200		200
Investment property	15		360,000		360,000
			1,106,044		988,747
Current assets
Stocks	16	56,252		36,969
Debtors: amounts falling due within one year	17	459,995		209,330
Cash at bank and in hand	18	41,829		126,652
		558,076		372,951
Creditors: amounts falling due within one year	19	(314,461)		(89,117)
Net current assets			243,615		283,834
Total assets less current liabilities			1,349,659		1,272,581

Creditors: amounts falling due after more than one year	20		(213,724)		(205,815)
Provisions for liabilities
Deferred taxation	23	(106,367)		(66,149)
			(106,367)		(66,149)
Net assets			1,029,568		1,000,617

Page 12

REES TRADING UK LTD

REGISTERED NUMBER: 07783306

COMPANY BALANCE SHEET (CONTINUED)

AS AT 31 DECEMBER 2022

	31 December	31 August
	2022	2021
Note	£	£

Capital and reserves
Called up share capital	24		300		300
Investment property reserve	25		5,004		5,004
Profit and loss account brought forward		995,313		1,053,860
Profit for the 16 month period		28,951		16,453
Other changes in the profit and loss account		-		(75,000)
Profit and loss account carried forward			1,024,264		995,313
			1,029,568		1,000,617

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

E G Rees

Director

Date: 29 September 2023

The notes on pages 18 to 43 form part of these financial statements.

Page 13

REES TRADING UK LTD

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

	Called up share capital	Capital redemption reserve	Investment property revaluation reserve	Profit and loss account	Total equity
	£	£	£	£	£
At 1 September 2020	300	6	5,004	3,200,757	3,206,067
Comprehensive income for the year
Profit for the year	-	-	-	815,881	815,881
Total comprehensive income for the year	-	-	-	815,881	815,881
Contributions by and distributions to owners
Dividends: Equity capital	-	-	-	(75,000)	(75,000)
Total transactions with owners	-	-	-	(75,000)	(75,000)

At 1 September 2021	300	6	5,004	3,941,638	3,946,948
Comprehensive income for the 16 month period
Profit for the 16 month period	-	-	-	510,821	510,821
Currency translation differences	-	-	-	834	834
Total comprehensive income for the 16 month period	-	-	-	511,655	511,655
Total transactions with owners	-	-	-	-	-
At 31 December 2022	300	6	5,004	4,453,293	4,458,603

The notes on pages 18 to 43 form part of these financial statements.

Page 14

REES TRADING UK LTD

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

	Called up share capital	Investment property revaluation reserve	Profit and loss account	Total equity
	£	£	£	£
At 1 September 2020	300	5,004	1,053,860	1,059,164
Comprehensive income for the year
Profit for the year	-	-	16,453	16,453
Total comprehensive income for the year	-	-	16,453	16,453
Contributions by and distributions to owners
Dividends: Equity capital	-	-	(75,000)	(75,000)
Total transactions with owners	-	-	(75,000)	(75,000)

At 1 September 2021	300	5,004	995,313	1,000,617
Comprehensive income for the year
Profit for the 16 month period	-	-	28,951	28,951
Total comprehensive income for the 16 month period	-	-	28,951	28,951
Total transactions with owners	-	-	-	-
At 31 December 2022	300	5,004	1,024,264	1,029,568

The notes on pages 18 to 43 form part of these financial statements.

Page 15

REES TRADING UK LTD

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

			31 December	31 August
			2022	2021
			£	£

Cash flows from operating activities
Profit for the financial 16 month period	510,821	815,881
Adjustments for:
Amortisation of intangible assets	28,998	30,522
Depreciation of tangible assets	428,296	347,617
Loss on disposal of tangible assets	(113,648)	(19,368)
Interest paid	77,248	41,825
Taxation charge	62,488	122,382
(Increase)/decrease in stocks	(329,787)	13,036
(Increase)/decrease in debtors	(1,343,817)	255,515
Increase/(decrease) in creditors	211,752	(417,229)
Corporation tax received/(paid)	4,207	(51,712)
Foreign exchange differences	834	-
Net cash generated from operating activities	(462,608)	1,138,469

Cash flows from investing activities
Purchase of intangible fixed assets	(10,964)	(51,156)
Purchase of tangible fixed assets	(1,019,954)	(712,533)
Sale of tangible fixed assets	246,754	87,238
HP interest paid	(23,106)	(9,620)
Net cash from investing activities	(807,270)	(686,071)

Page 16

REES TRADING UK LTD

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

		31 December	31 August
		2022	2021
		£	£


Cash flows from financing activities
New secured loans	-	371,928
Repayment of loans	(191,140)	-
Repayment of/new finance leases	(6,369)	118,344
Dividends paid	-	(75,000)
Interest paid	(54,142)	(32,205)
Net cash used in financing activities	(251,651)	383,067
Net (decrease)/increase in cash and cash equivalents	(1,521,529)	835,465
Cash and cash equivalents at beginning of 16 month period	2,410,547	1,575,082
Cash and cash equivalents at the end of 16 month period	889,018	2,410,547

Cash and cash equivalents at the end of 16 month period comprise:
Cash at bank and in hand	889,018	2,410,547
	889,018	2,410,547

Page 17

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

1.	General information

Rees Trading UK Limited, 07783306, is a private company limited by shares, incorporated in England and Wales, with its registered office and principal place of business at Unit C, Mochdre Industrial Estate, Newtown, Powys, SY16 4LE.
The principal activity of the Company is contract packaging in the agricultural industry and property development.
The principal activities of the Group is the supply of a wide range of manual and automated packaging machinery and systems.
The financial statements represent the 16 month period to 31 December 2022, whereas the comparatives relate to a period of 12 months. As a result, the comparatives are not entirely comparable.

2.Accounting policies

2.1

Basis of preparation of financial statements

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 Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

Parent Company disclosure exemptions

In preparing the separate financial statements of the parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:

∙No disclosures have been given for the aggregate remuneration of the key management personnel of the parent Company as their remuneration is included in the totals for the Group as a whole.

The following principal accounting policies have been applied:

Page 18

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


	2.2	Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS102 "The Financial Reporting Standard applicable in the UK and Republic or Ireland":
- the requirements of Section 7 Statement of Cash Flows;
- the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
- the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included within the consolidated financial statements.

2.3

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 September 2015.

2.4

Going concern

After reviewing budgets and forecasts the directors are confident that the company can continue trading for at least the next 12 months and that therefore the going concern basis is appropriate.

Page 19

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

2.5

Foreign currency translation

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 except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

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

Page 20

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

2.6

Revenue

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

Sale of goods

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

∙the Group has transferred the significant risks and rewards of ownership to the buyer;

∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of revenue can be measured reliably;

∙it is probable that the Group 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.

Rendering of services

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

∙the amount of revenue can be measured reliably;

∙it is probable that the Group will receive the consideration due under the contract;

∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and

∙the costs incurred and the costs to complete the contract can be measured reliably.

2.7

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.

Page 21

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

2.8

Finance costs

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.

2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the 16 month period in which they are incurred.

2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

Page 22

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

2.11

Current and deferred taxation

The tax expense for the 16 month period 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 balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet 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;

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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 balance sheet date.

2.12

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life.

Other intangible assets

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.

Page 23

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

2.13

Tangible fixed assets

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.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.

Depreciation is provided on the following basis:

Plant and machinery	-	25%
Motor vehicles	-	25%
Fixtures and fittings	-	25%

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.

The director believes the residual value of the freehold property is similar to that of the cost and therefore deprecation is not applied.

2.14

Investment property

Investment property is carried at fair value determined annually by the director and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.

2.15

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 24

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

2.16

Stocks

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 balance sheet 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.

2.17

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.18

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

2.19

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.20

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.

Page 25

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

2.21

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.

2.22

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 26

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

3.	Judgements in applying accounting policies and key sources of estimation uncertainty

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 and Group's accounting policies.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Company and Group make estimates and assumptions concerning the future. The resulting accounting estimates, will by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
Long Term Contracts
Judgement is particularly applied in estimating the completion stage and expected outcomes of long term contracts.

Turnover

The whole of the turnover is attributable to the principal activities of the Group.

All turnover arose within the United Kingdom.

5.	Other operating income
		2022	2021
		£	£

Government grants receivable	15,933	102,242
	15,933	102,242

Fees payable to the Group's auditors for the audit of the financial statements	14,550	13,650
Exchange differences	17,770	14,139
(Profit)/loss on sale of tangible assets	(113,648)	(19,368)

Page 27

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

7.	Employees
	Staff costs, including director's remuneration, were as follows:

Group 31 December	Group 31 August	Company 31 December	Company 31 August
2022	2021	2022	2021
£	£	£	£


Wages and salaries	3,355,415	2,079,879	234,538	82,606
Social security costs	350,758	217,112	11,504	6,527
Cost of defined contribution scheme	69,761	42,991	3,045	1,712
	3,775,934	2,339,982	249,087	90,845

The average monthly number of employees, including the director, during the 16 month period was as follows:

	Group	Group	Company	Company
	2022	2021	2022	2021
	No.	No.	No.	No.

Directors	5	4	1	1
Staff	66	49	5	4

	71	53	6	5

8.	Director's remuneration
		2022	2021
		£	£

Director's emoluments	40,000	30,000
Group contributions to defined contribution pension schemes	950	713
	40,950	30,713

During the 16 month period retirement benefits were accruing to 1 director (2021 - 1) in respect of defined contribution pension schemes.

Page 28

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

9.	Interest payable and similar expenses
		2022	2021
		£	£

Bank interest payable	54,138	29,757
Finance leases and hire purchase contracts	23,106	9,620
Other interest payable	4	2,448
	77,248	41,825

Corporation tax
Current tax on profits for the year	45,243	61,324
Adjustments in respect of previous periods	-	(15,240)
	45,243	46,084

Total current tax	45,243	46,084

Deferred tax
Origination and reversal of timing differences	17,245	25,854
Changes to tax rates	-	50,444
Total deferred tax	17,245	76,298


	Taxation on profit on ordinary activities	62,488	122,382

Page 29

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

10.Taxation (continued)

Profit on ordinary activities before tax

573,309

938,264

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)	108,929	178,270
Effects of:
Non-tax deductible amortisation of goodwill and impairment	5,510	712
Expenses not deductible for tax purposes	3,180	-
Differences in tax rates	(27,065)	7,258
Changes to tax rates	-	50,444
Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge	-	(110,622)
Book profit on chargeable assets	(21,073)	(3,680)
Overseas tax adjustments	(6,993)	-
Total tax charge for the 16 month period/year	62,488	122,382

Factors that may affect future tax charges

As of 1 April 2023, the main rate of Corporation Tax increased from 19% to 25% for Companies in the UK with profits in excess of £250,000.

	Dividends on ordinary share capital	-	75,000
		-	75,000

Page 30

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

	Patents	Computer software	Goodwill	Total
	£	£	£	£
Cost
At 1 September 2021	2,325	51,156	350,000	403,481
Additions - internal	-	10,964	-	10,964
Reclassified from tangible fixed assets	-	64,355	-	64,355
At 31 December 2022	2,325	126,475	350,000	478,800
Amortisation
At 1 September 2021	1,279	12,789	350,000	364,068
Charge for the 16 month period on owned assets	310	28,688	-	28,998
Reclassified from tangible fixed assets	-	27,622	-	27,622
At 31 December 2022	1,589	69,099	350,000	420,688
Net book value
At 31 December 2022	736	57,376	-	58,112
At 31 August 2021	1,046	38,367	-	39,413

Page 31

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

13.	Tangible fixed assets
	Group

	Freehold property	Plant and machinery	Motor vehicles	Fixtures and fittings	Total
	£	£	£	£	£
Cost or valuation
At 1 September 2021	1,016,645	1,700,718	495,020	256,120	3,468,503
Additions	96,463	586,956	247,164	89,371	1,019,954
Disposals	-	(260,400)	(70,940)	(3,239)	(334,579)
Reclassified to intangible fixed assets	-	-	-	(64,355)	(64,355)
At 31 December 2022	1,113,108	2,027,274	671,244	277,897	4,089,523
Depreciation
At 1 September 2021	-	959,541	248,799	135,702	1,344,042
Charge for the 16 month period on owned assets	-	137,129	54,163	43,176	234,468
Charge for the 16 month period on financed assets	-	115,035	71,701	7,092	193,828
Disposals	-	(146,064)	(52,983)	(2,426)	(201,473)
Reclassified to intangible fixed assets	-	-	-	(27,622)	(27,622)
At 31 December 2022	-	1,065,641	321,680	155,922	1,543,243
Net book value
At 31 December 2022	1,113,108	961,633	349,564	121,975	2,546,280
At 31 August 2021	1,016,645	741,177	246,221	120,418	2,124,461

Page 32

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

13.Tangible fixed assets (continued)


Plant and machinery	411,071	299,118
Motor vehicles	163,770	150,315
Furniture, fittings and equipment	14,185	21,277
	589,026	470,710

Page 33

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

	Company

	Freehold property	Plant and machinery	Motor vehicles	Fixtures and fittings	Total
	£	£	£	£	£
Cost or valuation
At 1 September 2021	303,352	745,076	20,145	5,224	1,073,797
Additions	6,812	290,268	13,250	175	310,505
Disposals	-	(221,100)	-	-	(221,100)
At 31 December 2022	310,164	814,244	33,395	5,399	1,163,202
Depreciation
At 1 September 2021	-	436,050	5,616	3,585	445,251
Charge for the 16 month period on owned assets	-	82,272	9,260	605	92,137
Charge for the 16 month period on financed assets	-	5,742	-	-	5,742
Disposals	-	(125,772)	-	-	(125,772)
At 31 December 2022	-	398,292	14,876	4,190	417,358
Net book value
At 31 December 2022	310,164	415,952	18,519	1,209	745,844
At 31 August 2021	303,352	309,027	14,529	1,639	628,547


Plant and machinery	195,484	17,227
	195,484	17,227

Page 34

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

14.	Fixed asset investments

	Company

		Investments in subsidiary companies
		£
	Cost or valuation
	At 1 September 2021	200
	At 31 December 2022	200

Subsidiary undertakings
The following were subsidiary undertakings of the Company:
Name	Registered office	Class of shares	Holding

Rees Machinery Group Limited	Unit C, Mochdre Industrial Estate, Newtown, Powys, SY16 4LE	Ordinary	100%
Rees Contract Maintenance Limited (Dormant)	Unit C, Mochdre Industrial Estate, Newtown, Powys, SY16 4LE	Ordinary	100%
RMGroup LLC	1209 Orange Street, Wilmington, 19081. U.S.A.	Ordinary	100%

Rees Contract Maintenance Limited was dormant throughout the period and is therefore not included in the consolidated financial statements.
RMGroup LLC is an indirect subsidiary of the Company.

Page 35

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

15.	Investment property
	Group and Company

		Freehold investment property
		£
	Valuation
	At 1 September 2021	360,000
	At 31 December 2022	360,000

All of the Group's investment property is held in the Parent company

The 2022 valuations were made by the director, on an open market value for existing use basis.

					31 December	31 August
					2022	2021
					£	£

Revaluation reserves
At 1 September 2021	5,004	5,004
At 31 December 2022	5,004	5,004

16.	Stocks
		Group 31 December	Group 31 August	Company 31 December	Company 31 August
		2022	2021	2022	2021
		£	£	£	£

Raw materials and consumables	950,310	639,806	-	-
Finished goods and goods for resale	56,252	36,969	56,252	36,969
	1,006,562	676,775	56,252	36,969

The difference between purchase price or production cost of stocks and their replacement cost is not material.

Page 36

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

17.

Debtors

Group 31 December	Group 31 August	Company 31 December	Company 31 August
2022	2021	2022	2021
£	£	£	£


Trade debtors	1,489,989	847,010	84,032	15,105
Amounts owed by group undertakings	-	-	-	50
Other debtors	1,317,024	671,316	279,201	117,571
Prepayments and accrued income	988,766	933,636	5,896	38,608
Tax recoverable	82,300	37,996	82,300	37,996
Deferred taxation	8,566	-	8,566	-
	3,886,645	2,489,958	459,995	209,330

18.	Cash and cash equivalents
		Group 31 December	Group 31 August	Company 31 December	Company 31 August
		2022	2021	2022	2021
		£	£	£	£

Cash at bank and in hand	889,018	2,410,547	41,829	126,652
	889,018	2,410,547	41,829	126,652

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REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

19.	Creditors: Amounts falling due within one year
		Group 31 December	Group 31 August	Company 31 December	Company 31 August
		2022	2021	2022	2021
		£	£	£	£

Bank loans	167,029	158,774	44,553	43,878
Trade creditors	948,674	914,020	18,057	12,961
Amounts owed to group undertakings	-	-	140,770	-
Corporation tax	153,614	59,860	44,304	13,776
Other taxation and social security	111,758	213,226	1,906	2,889
Obligations under finance lease and hire purchase contracts	267,927	181,487	57,783	7,439
Other creditors	10,890	11,045	439	2,208
Accruals and deferred income	1,266,559	987,838	6,649	5,966
	2,926,451	2,526,250	314,461	89,117

Bank loans are secured upon the freehold property, stock and investment property of the Group. Obligations under finance lease and hire purchase contracts are secured upon the assets to which they relate.
The amount of £10,000 (2021: £2,397) included in creditors due within one year is subject to a UK Government guarantee. The facility is provided through the Bounce Back Loan Scheme (BBLS), managed by the British Business Bank on behalf of and with the financial backing of the Secretary of State for Business, Energy and Industrial Strategy. The BBLS guarantee is provided to the lender.

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REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

20.	Creditors: Amounts falling due after more than one year
		Group 31 December	Group 31 August	Company 31 December	Company 31 August
		2022	2021	2022	2021
		£	£	£	£

Bank loans	857,236	1,056,631	142,625	199,977
Net obligations under finance leases and hire purchase contracts	242,474	335,283	71,099	5,838
	1,099,710	1,391,914	213,724	205,815

Bank loans are secured upon the freehold property, stock and investment property of the Group. Obligations under finance lease and hire purchase contracts are secured upon the assets to which they relate.
The amount of £25,000 (2021: £38,333) included in creditors falling due after one year is subject to a UK Government guarantee. The facility is provided through the Bounce Back Loan Scheme (BBLS), managed by the British Business Bank on behalf of and with the financial backing of the Secretary of State for Business, Energy and Industrial Strategy. The BBLS guarantee is provided to the lender.

21.

Loans

Group
Included within bank loans is a mortgage balance repayable by monthly instalments, which is expected to be repaid in full by March 2035. Interest is charged on the loan at a rate of 4.3% per annum.
Also Included within bank loans is a business loan balance repayable by monthly instalments, which is expected to be repaid in full by March 2035. Interest is charged on the loan at a rate of 4.7% per annum.
Within bank loans is a Coronavirus Business Interruption Loan Scheme (CBILS) loan which is repayable by monthly instalments and expected to be repaid in full by December 2026. Interest is charged on the loan at a rate of 3.4% per annum.
Company
Included within bank loans is a mortgage balance repayable by monthly instalments, which is expected to be repaid in full by June 2024. Interest is charged on the loan at 3.07% over the base rate per annum.
Also Included within bank loans is a loan balance repayable by monthly instalments, which is expected to be repaid in full by May 2030. Interest is charged on the loan at 2.5% over the base rate per annum.
Within bank loans is a Bounce Back Loan which is repayable by monthly instalments and expected to be repaid in full by June 2026. Interest is charged on the loan at a rate of 2.5% per annum.

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REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

21.Loans (continued)

Group 31 December	Group 31 August	Company 31 December	Company 31 August
2022	2021	2022	2021
£	£	£	£

Amounts falling due within one year
Bank loans	167,029	158,774	44,553	43,878
	167,029	158,774	44,553	43,878
Amounts falling due 1-2 years
Bank loans	158,469	197,748	34,994	46,470
	158,469	197,748	34,994	46,470
Amounts falling due 2-5 years
Bank loans	337,323	545,824	60,343	91,988
	337,323	545,824	60,343	91,988
Amounts falling due after more than 5 years
Bank loans	361,444	313,059	47,288	61,519
	361,444	313,059	47,288	61,519
	1,024,265	1,215,405	187,178	243,855

22.	Hire purchase and finance leases
	Minimum lease payments under hire purchase fall due as follows:
		Group 31 December	Group 31 August	Company 31 December	Company 31 August
		2022	2021	2022	2021
		£	£	£	£

Within one year	267,927	181,487	57,783	7,439
Between 1-5 years	242,474	335,283	71,099	5,838
	510,401	516,770	128,882	13,277

Page 40

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

23.	Deferred taxation
	Group

		2022
		£

	At beginning of year	(236,042)
	Charged to profit or loss	(17,245)
	At end of year	(253,287)

Company

		2022
		£

	At beginning of year	(66,149)
	Charged to profit or loss	(31,652)
	At end of year	(97,801)

Group 31 December	Group 31 August	Company 31 December	Company 31 August
2022	2021	2022	2021
£	£	£	£

Accelerated capital allowances	(261,853)	(236,042)	(106,367)	(66,149)
Tax losses carried forward	8,566	-	8,566	-
	(253,287)	(236,042)	(97,801)	(66,149)

Comprising:
Asset - due within one year	8,566	-	8,566	-
Liability	(261,853)	(236,042)	(106,367)	(66,149)
	(253,287)	(236,042)	(97,801)	(66,149)

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REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

Allotted, called up and fully paid

300 (2021 - 300) Ordinary shares of £1.00 each	300	300

25.

Reserves

Investment property revaluation reserve

The investment property revaluation reserve represents the accumulated surplus on the revaluation of the Company's investment property.

Profit and loss account

The profit and loss account represents the accumulated profit of the Company since incorporation less distributions made to shareholders.

26.	Analysis of net debt

		At 1 September 2021	Cash flows	New finance leases	At 31 December 2022
		£	£	£	£

Cash at bank and in hand	2,410,547	(1,521,529)	-	889,018
Debt due after 1 year	(1,056,631)	199,395	-	(857,236)
Debt due within 1 year	(159,215)	(8,252)	-	(167,467)
Finance leases	(516,770)	171,970	(165,600)	(510,400)
	677,931	(1,158,416)	(165,600)	(646,085)

27.	Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £69,761 (2021: £42,991).
Contributions totalling £10,890 (2021: £8,819) were payable to the fund at the balance sheet date and are included in creditors.

Page 42

REES TRADING UK LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2022

28.

Related party transactions

Exemption has been taken from disclosing related party transactions with wholly owned group companies.
During the year the Group made purchases of £97,530 (2021: £420,128) from Atlanta Packaging Company Limited, of which M Tucker is a mutual Director with the subsidiary company, Rees Machinery Group Limited. At the year end £19,728 (2021: £39,265) was due to the Company.
During the year the Group made purchases of £109,493 (2021: £57,477) from Tucker Trading Limited, of which M Tucker is a mutual Director with the subsidiary company, Rees Machinery Group Limited. At the year end £nil (2021: £9,330) was due to the Company.
At the year end the Group was owed £915,000 (2021: £500,000) from Base 24 Limited, of which E Rees is a Director.

Page 43