Green Retreats Group - Limited company accounts 23.2

REGISTERED NUMBER: 13042261 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 March 2023

for

Green Retreats Holdings Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Statement of Income and Retained Earnings

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Cash Flow Statement

11

Notes to the Consolidated Cash Flow Statement

12

Notes to the Consolidated Financial Statements

14

DIRECTORS:

M O J Bairstow

S P Ould

R C Wetherall

L P Wetherall

REGISTERED OFFICE:

Hangar 4 Westcott Venture Park

Westcott

Aylesbury

Buckinghamshire

HP18 0XB

REGISTERED NUMBER:

13042261 (England and Wales)

AUDITORS:

Just Audit Limited

Chartered Accountants and Statutory Auditors

Strelley Hall

Main Street

Strelley

Nottingham

NG8 6PE

The directors present their strategic report of the company and the group for the year ended 31 March 2023.

REVIEW OF BUSINESS

The continued effects from the end of the Coronavirus Pandemic moved us from supply chain issues to a rapid increase in inflation levels. Domestically, the pandemic, along with Brexit, was still creating a shortage of labour as the labour market available shrank. Global factors, including the war in Ukraine, saw us experience significant increases in core costs of materials resulting in significant global inflation of material and energy costs. The high levels of inflation began to be felt by our customers which saw demand for high ticket items begin to fall. Despite these challenging conditions Green Retreats have managed to see similar levels of turnover year on year. Green Retreats market position and brand allowed us to continue to take advantage of reducing consumer demand as our competitors struggle. Revenue was below forecast but remained static year on year. Margins were further eroded though which resulted in a decrease in our net profit percentage.

These three measures, turnover/orders and its growth, Lead time, operating profit, and operating profit percentage, continue to be the main key performance indicators of the business. New indicators have now been added to reflect the changing market including material usage and stock held and cash held.

Despite this, customer satisfaction levels have remained high as is evidenced by the group's 'Excellent' rating on the independent review platform, Trustpilot.

Financially, the acid test ratio decreased from 0.89 (2022). to 0.70 (2023). Cash balances remain relatively healthy, with total equity showing an decrease of £0.66 million. The Consolidated Balance Sheet on page 9 shows that the net assets of the group have decreased from £8,760,447 to £8,096,655 which the directors acknowledge needs addressing. However, they still believe that Green Retreats is in a great position to take advantage as we move forward. 2023 has seen the company concentrate on re-organisation and new products to ensure that we adapt and move forward in a stronger position.

PRINCIPAL RISKS AND UNCERTAINTIES

We continue to see stronger demand than pre covid levels for our products, however the "cost of living" crises has seen the increase in demand reduce. We strongly believe that there remains a substantial amount of pent up demand that will see us grow in future months as inflation begins to recede.

The greatest challenge will be effectively managing our cost base as we adapt to the change in demand. Supply chain issue and labour shortages as a result of decrease supply across the market still remain at the top of the risks identified. Global uncertainty and conflicts create uncertainty for consumer confidence going forward and high energy and material costs will continue to pressure our margins. However, Green Retreats position as we enter the new financial year, our relationship with our key suppliers and the work management have carried out to mitigate these risks put us in a strong position to manage these risks.

The risk of potential economic instability and additional increases in interest rates could further impact consumer confidence and may lead to higher cancellation rates and reduced demand.

There still remains a strong desire for our products driven by homeowners wishing to extend their living, office, and leisure space quickly and economically.

The overall market is more competitive, with a high number of young entrants to the market offering similar products to Green Retreats and offering discounts and incentives to maintain business. Entry into the market is relatively easy with low start-up costs, resulting in short-term disruption and confusion to potential customers as they come and go. However, we believe that our size, strong brand and financial strength will continue to differentiate us from our competition.

FUTURE DEVELOPMENTS

Maintaining our market position and managing the impact of high inflation is paramount. We continue to work with Kevin McCloud as brand ambassador which will greatly increase customer confidence and loyalty. All elements of the websites are being improved, and social media exposure, online advertising and video content will all be enhanced.

Green Retreats is in a very strong position to react and navigate the cost of living crises and once through this period will look to increase its market share with greater economies of scale, larger cash reserves and capacity to expand without increasing overhead proportionately.

Using our position has seen us expand our product offering to include a lower cost and a self install products as we continue to build on our brand. We believe this positions us to capture more of the available market as we target cost conscious customers as well as quality conscience customers.

Green Retreats forecast for 2023/2024 is for revenue and profit to reduce before stabilising later in the financial year.

ON BEHALF OF THE BOARD:

M O J Bairstow - Director

19 December 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2023.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the manufacture and installation of garden offices and studio.

DIVIDENDS

The total distribution of dividends for the year ended 31 March 2023 will be £ 2,237,875 .

Dividends proposed after the balance sheet date but before these financial statements were authorised for issue totalled £400,315.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

M O J Bairstow

S P Ould

R C Wetherall

L P Wetherall

ENGAGEMENT WITH EMPLOYEES

We have an experienced, diverse and dedicated workforce which we recognise as a key asset of our business. Therefore, it is important that we continue to create the right environment to encourage and create opportunities for individuals and teams to realise their potential. To this end we ensure a personal relationship with our employees ensuring agile working patterns and opportunity to share ideas and make a difference through diversity and inclusion.

DISCLOSURE IN THE STRATEGIC REPORT

The group has chosen in accordance with Companies Act 2006, Section 414C(11) to set out in the group's strategic report information to be contained in the Report of the Directors.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-

select suitable accounting policies and then apply them consistently;

-

make judgements and accounting estimates that are reasonable and prudent;

-

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company' sand the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

Just Audit Limited were appointed as auditors to the group and, in accordance with Section 485 of the Companies Act 2006, a resolution proposing that they be reappointed will be put at a General Meeting.

ON BEHALF OF THE BOARD:

M O J Bairstow - Director

19 December 2023

Opinion

We have audited the financial statements of Green Retreats Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-

give a true and fair view of the state of the group's and of the parent company's affairs as at 31 March 2023 and of the group's profit for the year then ended;

-

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

-	certain disclosures of directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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 gained an understanding of the legal and regulatory framework applicable to the parent company and the group and the industry in which it operates and considered the risk of acts by the parent company and the group that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above and, the further removed non compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

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

Use of our report

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

David Fletcher BA BFP FCA (Senior Statutory Auditor)

for and on behalf of Just Audit Limited

Chartered Accountants and Statutory Auditors

Strelley Hall

Main Street

Strelley

Nottingham

NG8 6PE

19 December 2023

TURNOVER

4

35,806,262

35,162,841

Cost of sales

22,563,530

20,542,132

GROSS PROFIT

13,242,732

14,620,709

Administrative expenses

11,090,872

9,240,578

2,151,860

5,380,131

Other operating income

-

23,757

OPERATING PROFIT

6

2,151,860

5,403,888

Interest receivable and similar income

2,529

461

2,154,389

5,404,349

Interest payable and similar expenses

7

68,072

42,615

PROFIT BEFORE TAXATION

2,086,317

5,361,734

Tax on profit

8

512,234

1,195,223

PROFIT FOR THE FINANCIAL YEAR

1,574,083

4,166,511

Retained earnings at beginning of year

1,770,692

-

Dividends

10

(2,237,875

)

(2,395,819

)

RETAINED EARNINGS FOR THE GROUP AT END OF YEAR

1,106,900

1,770,692

Profit attributable to:

Owners of the parent

1,574,083

4,166,511

FIXED ASSETS

Intangible assets

11

6,647,250

7,478,156

Tangible assets

12

3,329,710

2,437,310

Investments

13

-

-

9,976,960

9,915,466

CURRENT ASSETS

Stocks

14

2,016,609

1,950,872

Debtors

15

3,452,117

3,427,510

Cash at bank

1,654,755

3,806,290

7,123,481

9,184,672

CREDITORS

Amounts falling due within one year

16

7,274,969

8,110,857

NET CURRENT (LIABILITIES)/ASSETS

(151,488

)

1,073,815

TOTAL ASSETS LESS CURRENT LIABILITIES

9,825,472

10,989,281

CREDITORS

Amounts falling due after more than one year

17

(1,477,444

)

(2,107,686

)

PROVISIONS FOR LIABILITIES

21

(251,373

)

(121,148

)

NET ASSETS

8,096,655

8,760,447

CAPITAL AND RESERVES

Called up share capital

22

981

981

Other reserves

23

6,988,774

6,988,774

Retained earnings

23

1,106,900

1,770,692

SHAREHOLDERS' FUNDS

8,096,655

8,760,447

The financial statements were approved by the Board of Directors and authorised for issue on 19 December 2023 and were signed on its behalf by:

R C Wetherall - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

-

-

Investments

13

6,208,519

6,208,519

6,208,519

6,208,519

CURRENT ASSETS

Debtors

15

32

32

CREDITORS

Amounts falling due within one year

16

343,750

2,062,500

NET CURRENT LIABILITIES

(343,718

)

(2,062,468

)

TOTAL ASSETS LESS CURRENT LIABILITIES

5,864,801

4,146,051

CAPITAL AND RESERVES

Called up share capital

22

981

981

Retained earnings

23

5,863,820

4,145,070

SHAREHOLDERS' FUNDS

5,864,801

4,146,051

Company's profit for the financial year

3,956,625

6,540,889

The financial statements were approved by the Board of Directors and authorised for issue on 19 December 2023 and were signed on its behalf by:

R C Wetherall - Director

Cash flows from operating activities

Cash generated from operations

1

4,538,681

7,456,349

Interest paid

(45,885

)

(20,135

)

Interest element of hire purchase payments paid

(22,187

)

(22,480

)

Tax paid

(744,746

)

(967,646

)

Net cash from operating activities

3,725,863

6,446,088

Cash flows from investing activities

Purchase of tangible fixed assets

(1,467,745

)

(706,077

)

Sale of tangible fixed assets

233,985

197,684

Cash acquired with subsidiary

-

5,723,684

Purchase of subsidiary

-

(2,082,537

)

Repayment of loan from related company

-

550,000

Loan made to related company

(300,600

)

-

Interest received

2,529

461

Net cash from investing activities

(1,531,831

)

3,683,215

Cash flows from financing activities

Loan notes repaid

(1,718,750

)

(2,062,500

)

Bank loan repayments in year

(400,000

)

(333,333

)

Hire purchase capital repayments in year

(592,137

)

(558,304

)

Amount withdrawn by directors

(550,112

)

(973,057

)

Equity dividends paid

(1,084,568

)

(2,395,819

)

Net cash from financing activities

(4,345,567

)

(6,323,013

)

(Decrease)/increase in cash and cash equivalents

(2,151,535

)

3,806,290

Cash and cash equivalents at beginning of year

2

3,806,290

-

Cash and cash equivalents at end of year

2

1,654,755

3,806,290

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

Period

25/11/20

Year Ended

to

31/3/23

31/3/22

£

£

Profit before taxation

2,086,317

5,361,734

Depreciation charges

1,982,253

1,790,047

Profit on disposal of fixed assets

(189,970

)

(181,866

)

Finance costs

68,072

42,615

Finance income

(2,529

)

(461

)

3,944,143

7,012,069

Increase in stocks

(65,737

)

(508,624

)

(Increase)/decrease in trade and other debtors

(327,202

)

843,769

Increase in trade and other creditors

987,477

109,135

Cash generated from operations

4,538,681

7,456,349

2.	CASH AND CASH EQUIVALENTS

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

Year ended 31 March 2023

31/3/23

1/4/22

£

£

Cash and cash equivalents

1,654,755

3,806,290

Period ended 31 March 2022

31/3/22

25/11/20

£

£

Cash and cash equivalents

3,806,290

-

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1/4/22

Cash flow

changes

At 31/3/23

£

£

£

£

Net cash

Cash at bank

3,806,290

(2,151,535

)

1,654,755

3,806,290

(2,151,535

)

1,654,755

Debt

Finance leases

(1,215,346

)

592,137

(620,017

)

(1,243,226

)

Debts falling due

within 1 year

(2,395,833

)

1,718,750

-

(677,083

)

Debts falling due

after 1 year

(1,333,333

)

400,000

-

(933,333

)

(4,944,512

)

2,710,887

(620,017

)

(2,853,642

)

Total

(1,138,222

)

559,352

(620,017

)

(1,198,887

)

4.	MAJOR NON-CASH TRANSACTIONS

Non cash changes relate to new finance leases entered into with a capital value at inception of the lease for £620,017.

Of the total dividends declared in the year of £2,237,875, amounts totalling £1,153,307 were credited to the Directors' loan account and not paid.

1.	STATUTORY INFORMATION

Green Retreats Holdings Ltd is a private limited company, limited by shares, registered in England and Wales. The registered office is Hangar 4 Westcott Venture Park, Westcott, Aylesbury, Buckinghamshire, HP18 0XB. The registered number is 13042261.

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention except in respect of the consolidated accounts where certain assets are adjusted to fair value.

The presentation currency is the Pound Sterling.

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:

-

Only one reconciliation of the number of shares outstanding at the beginning and end of the period has been presented as the reconciliations for the group and the parent company would be identical;

-

No cashflow statement has been presented for the company.

Going Concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group and the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis in preparing the financial statements.

Basis of consolidation

The consolidated financial statements present the results of the company and its subsidiaries ("the group") as if they formed a single entity. Profits or losses on intra-group transactions are eliminated in full. On acquisition of a subsidiary, all of the subsidiary's assets and liabilities which exist at the date of acquisition are recorded at their fair values reflecting their condition at the time.

Goodwill arising on consolidation, representing the excess of the fair values of the identifiable net assets acquired over the fair value of consideration given, is capitalised and amortised in the periods that the non-monetary assets acquired are realised.

Uniform group accounting policies are used for determining the amounts to be included in the consolidated financial statements.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs.

Tangible fixed assets

Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows:

Leasehold buildings

12.5% straight line

Plant and machinery

25% straight line

Motor vehicles

20% straight line

Fixtures and fittings

25% straight line

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost, and subsequently stated at cost less any accumulated impairment losses.

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

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

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

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

Leased assets

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the group's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term.

Pension costs and other post-retirement benefits

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

Creditors

Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Supply chain issues eased during the year but labour shortages continued to impact our ability to increase our capacity. However, we moved into a high inflation period which has had an effect on the demand for our products. However, we have tightened our margins, reduced our working capital requirements and cost base to cover any further future shocks. As such, the directors believe that we have reduced the impact so have prepared the accounts on the going concern basis.

The potential continued impacts of Brexit and the Coronavirus, such as supply chain, have been considered and in the opinion of the directors these risks have been managed and kept to a minimum.

No other individual judgement is considered to have a significant impact upon the financial statements, apart from those involving estimations, which are detailed below:

Goodwill

On consolidation, the directors estimated the fair value of the acquired assets and liabilities. The excess of the fair value of consideration above the fair value of the acquired assets and liabilities is recognised as goodwill on consolidation. This is regularly reviewed for impairment based on the trading position. Goodwill is being amortised evenly over 10 years as it is not possible to estimate its useful economic life.

Depreciation

Depreciation of property, plant and equipment - Residual values of fixed assets were calculated in a time of supply chain issues which could have inflated market values. We are now moving past these issues which may devalue future residual values in future years.

4.

TURNOVER

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

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

Period

25/11/20

Year Ended

to

31/3/23

31/3/22

£

£

Sales of goods and services

35,806,262

35,162,841

35,806,262

35,162,841

An analysis of turnover by geographical market is given below:

Period

25/11/20

Year Ended

to

31/3/23

31/3/22

£

£

United Kingdom

35,806,262

35,162,841

35,806,262

35,162,841

5.	EMPLOYEES AND DIRECTORS

Period

25/11/20

Year Ended

to

31/3/23

31/3/22

£

£

Wages and salaries

9,342,821

8,471,064

Social security costs

1,001,237

833,183

Other pension costs

141,540

103,893

10,485,598

9,408,140

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

Period

25/11/20

Year Ended

to

31/3/23

31/3/22

Administration

43

41

Development

2

6

Distribution

10

10

Manufacturing

177

158

Marketing

8

7

Sales

46

46

286

268

Period

25/11/20

Year Ended

to

31/3/23

31/3/22

£

£

Directors' remuneration

719,254

922,717

Information regarding the highest paid director is as follows:

Period

25/11/20

Year Ended

to

31/3/23

31/3/22

£

£

Emoluments etc

186,643

241,480

6.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

Period

25/11/20

Year Ended

to

31/3/23

31/3/22

£

£

Hire of plant and machinery

74,205

38,321

Other operating leases

820,140

580,505

Depreciation - owned assets

711,504

454,604

Depreciation - assets on hire purchase contracts

439,843

504,536

Profit on disposal of fixed assets

(94,985

)

(90,933

)

Goodwill amortisation

830,906

830,906

Audit services

21,000

25,000