Registered number:
00957040
ADHESIVE SPECIALITIES LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 MARCH 2020
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ADHESIVE SPECIALITIES LIMITED
REGISTERED NUMBER:
00957040
BALANCE SHEET
AS AT
31 MARCH 2020
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The
financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
................................................
Mr A Nicholson
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The notes on pages 2 to 11 form part of these financial statements.
Page 1
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Adhesive Specialities Limited is a private company limited by share capital and incorporated in England and Wales. The address of the registered office and principal place of business is Tickitape House, 31 Bone Lane, Newbury, Berkshire RG14 SSH.
2.
Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of
Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The following principal accounting policies have been applied:
Whilst the company has remained profitable during the year and has net assets at the year end the Covid-19 pandemic has presented significant challenges to business. Post year end the directors have taken action, including the draw down of a loan under the CBILS scheme, in order to ensure that the company can continue to trade as a going concern for the foreseeable future. The directors have also prepared budgets and cash flow forecasts which demonstrate that the company has sufficient working capital in order to continue to trade for a period of at least 12 months from the date of approval of these financial statements. The company is subject to certain financial covenants in respect of its bank borrowings and the forecasts prepared continue to show the company trading within the requirements of these covenants. Based upon this information the directors believe that it is appropriate for the financial statements to be prepared on a going concern basis.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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 Company has transferred the significant risks and rewards of ownership to the buyer;
∙
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙
the amount of revenue can be measured reliably;
∙
it is probable that the Company will receive the consideration due under the transaction; and
∙
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Page 2
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
Accounting policies (continued)
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.
The estimated useful lives range as follows:
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, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
The Company has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 01 April 2018 to continue to be charged over the period to the first market rent review rather than the term of the lease.
Page 3
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
Accounting policies (continued)
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 outbasis. 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.
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.
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Cash and cash equivalents
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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.
The Company 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.
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.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
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 4
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
Accounting policies (continued)
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Leased assets: the Company as lessee
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company 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 Company 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 5
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the 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; and
∙
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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The average monthly number of employees, including directors, during the year was
37
(2019 -
41
)
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Page 6
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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At 1 April 2019 (as restated)
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Charge for the year on owned assets
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At 31 March 2019 (as restated)
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Page 7
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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At 1 April 2019 (as previously stated)
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At 1 April 2019 (as restated)
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Charge for the year on owned assets
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At 31 March 2019 (as restated)
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Page 8
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Amounts owed by group undertakings
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Prepayments and accrued income
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Included within debtors are amounts of £1,977,730 (2019: £1,926,738) which are due from the parent company. Whilst these amounts are repayable on demand the directors do not consider the amounts to be recoverable in the immediate short term and that the balances will be repaid over a number of years. The directors believe that in the long term the balance is recoverable in full and therefore no provision has been made against these amounts owed by the parent company.
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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Included within other creditors is an amount of £850,937 (2019: £935,576) relating to the invoice discounting facility for trade debts. The facility agreement is secured by a fixed charge over the book debts and a floating charge over the asssets and undertakings of the company.
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Page 9
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Short term timing differences
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Allotted, called up and fully paid
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1,200,000
(2019 -
1,200,000
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Ordinary shares
shares of £
1.00
each
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A prior year adjustment has been made to correctly account for items of stock that were prepaid in the prior year. This resulted in an increase in cost of sales and a decrease in prepayments of £37,500 in the prior year. The impact on opening reserves is £37,500 as a result of this adjustment.
A further prior year adjustment was made in respect of capitalised software costs. These had previously been classified as Computer Equipment in tangible fixed assets, and have been reclassified to Computer Software in ingangible assets.
The effect of the restatement is a movement of £43,087 of cost from computer equipment to computer software. There was no accumulated depreciation at the previous year end because the assets were not in , therefore there was no movement of depreciation or amortisation.
The overall impact on net book value and profit is £nil.
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Related party transactions
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Transactions with the parent company have not been disclosed. This is because the company has taken advantage of the exemption availabe under FRS 102 paragraph 33.5 in respect of 100% owned subsidiaries.
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Page 10
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ADHESIVE SPECIALITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Post balance sheet events
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Post year end the company drew down on a CBILS loan for a total of £400,000. As part of this refinancing the company repaid an existing term loan of £132,000 and as a result the net increase in bank borrowings was £268,000. The bank loan is repayable over a period of 24 months and interest is charged at LIBOR plus 2.5%.
The ultimate parent company at the balance sheet date is AS (Tapes) Limited.
The parent of the smallest and largest group for which group accounts including Adhesive Specialities Limited are drawn up is AS Tapes Limited. Copies of these accounts may be obtained from the registered office.
The auditor's report on the financial statements for the year ended 31 March 2020 was unqualified.
The audit report was signed on
29 September 2020
by
Jonathan Baillie BA (Hons) FCCA ACA
(Senior Statutory Auditor) on behalf of
James Cowper Kreston
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Page 11
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