Company Registration No. 01274236 (England and Wales)
GEOFF NEAL LITHO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2018
GEOFF NEAL LITHO LIMITED
COMPANY INFORMATION
Directors
Mr S J Neal
Mr C D Fidge
Secretary
Mr S J Neal
Company number
01274236
Registered office
7 Pier Road
Feltham
Middlesex.
TW14 OTW
Auditor
Beatty & Co
Suites 3 and 4
63-67 Athenaeum Place
Muswell Hill
London
N10 3HL
Business address
7 Pier Road
Feltham
Middlesex.
TW14 0TW
Bankers
Barclays Bank plc
72-74 High Street
Feltham
London
TW13 4DD
GEOFF NEAL LITHO LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
GEOFF NEAL LITHO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2018
- 1 -
The directors present the strategic report for the year ended 31 October 2018.
Fair review of the business
The company
'
s turnover
increased
by over
18
%
in the year
to £1
5
,
459
,
301
(201
7
- £1
3
,
087
,
715
)
. The gross profit % fell by 1.8% and a
net profit after tax
of
£
85
,
964
(201
7
- £
182
,
195
)
was achieved. Conditions remain difficult due to the post-Brexit uncertainty. Almost all existing clients have reduced their marketing spend, particularly in high value, specialist projects. The company has not lost any existing clients and through its ongoing business strategy has won some significant new customers to build upon for the forthcoming years.
The company is fully aware of its social and corporate responsibilities, particularly with regard to environmental issues and is continually striving to reduce its carbon footprint. The company has been accredited with ISO 9001, ISO 14001 and ISO 27001 standards, the FSC trademark and has now held carbon neutral status since 2006.
Principal risks and uncertainties
The print industry remains an extremely competitive environment with constant pressure on margins.
The company
continues to adapt
as best it can
to the current market demands and requirements
as d
emonstrated by its continued
profitability
.
Development and performance
The results for the year are considered satisfactory as is the financial position at the year end.
Key performance indicators
The net profit before tax as a % of turnover
decreased to
.
61
% (£
94
,
479
/ £1
5
,
459
,
301
) compared to
1
.
93
% in 201
7
(£
252
,
872
/ £1
3
,
087
,
715
).
The gross profit % achieved was 27.7% compared to 29.5% in 2017.
Mr S J Neal
Director
30 July 2019
GEOFF NEAL LITHO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2018
- 2 -
The directors present their annual report and financial statements for the year ended 31 October 2018.
Principal activities
The principal activit
ies
of the company continued to be that of litho printing
and direct mail
.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S J Neal
Mr C D Fidge
Results and dividends
The results for the year are set out on page 7.
Interim dividends of £
384,960
(2017 - £355,600)
were paid during the year
to the parent company
.
Fixed assets
In the opinion of the directors the current open market value of the company's interests in land and buildings
is reflected in the revalued
book
amounts.
Financial instruments
Treasury operations and financial instruments
The company’s principal financial instruments include bank overdrafts and loans, the main purpose of which is to raise finance for the company’s operations. In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.
Post reporting date events
There have not been any events since the year end of such significance that require reference to in this report.
Future developments
The company shall continue to strive for greater productivity and efficiency while ensuring the business keeps up to date with all technological advances.
Auditor
The auditor, Beatty & Co, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
GEOFF NEAL LITHO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
- 3 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr S J Neal
Director
30 July 2019
GEOFF NEAL LITHO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2018
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
GEOFF NEAL LITHO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GEOFF NEAL LITHO LIMITED
- 5 -
Opinion
We have audited the financial statements of Geoff Neal Litho Limited (the 'company') for the year ended 31 October 2018 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and 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 FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 October 2018 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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 our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
GEOFF NEAL LITHO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GEOFF NEAL LITHO LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Peter Edwards (Senior Statutory Auditor)
for and on behalf of Beatty & Co
30 July 2019
Chartered Certified Accountants
Statutory Auditor
Suites 3 and 4
63-67 Athenaeum Place
Muswell Hill
London
N10 3HL
GEOFF NEAL LITHO LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2018
- 7 -
2018
2017
Notes
£
£
Turnover
3
15,459,301
13,087,715
Cost of sales
(11,168,559)
(9,218,699)
Gross profit
4,290,742
3,869,016
Distribution costs
(150,991)
(123,809)
Administrative expenses
(3,930,912)
(3,393,221)
Operating profit
4
208,839
351,986
Interest receivable and similar income
7
1,132
1,332
Interest payable and similar expenses
8
(115,492)
(100,446)
Profit before taxation
94,479
252,872
Tax on profit
9
(8,515)
(70,677)
Profit for the financial year
85,964
182,195
The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.
GEOFF NEAL LITHO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2018
- 8 -
2018
2017
£
£
Profit for the year
85,964
182,195
Other comprehensive income
Revaluation of tangible fixed assets
-
800,574
Total comprehensive income for the year
85,964
982,769
GEOFF NEAL LITHO LIMITED
BALANCE SHEET
AS AT 31 OCTOBER 2018
31 October 2018
- 9 -
2018
2017
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,451,891
5,611,528
Current assets
Stocks
12
280,656
282,234
Debtors
13
4,777,206
3,046,148
Cash at bank and in hand
314,102
79,346
5,371,964
3,407,728
Creditors: amounts falling due within one year
14
(3,653,122)
(3,365,585)
Net current assets
1,718,842
42,143
Total assets less current liabilities
4,170,733
5,653,671
Creditors: amounts falling due after more than one year
15
(1,016,764)
(2,146,439)
Provisions for liabilities
18
(146,358)
(200,625)
Net assets
3,007,611
3,306,607
Capital and reserves
Called up share capital
21
500
500
Revaluation reserve
-
875,045
Capital redemption reserve
500
500
Profit and loss reserves
3,006,611
2,430,562
Total equity
3,007,611
3,306,607
The financial statements were approved by the board of directors and authorised for issue on 30 July 2019 and are signed on its behalf by:
Mr S J Neal
Director
Company Registration No. 01274236
GEOFF NEAL LITHO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2018
- 10 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 November 2016
500
74,471
500
2,603,967
2,679,438
Year ended 31 October 2017:
Profit for the year
-
-
-
182,195
182,195
Other comprehensive income:
Revaluation of tangible fixed assets
-
800,574
-
-
800,574
Total comprehensive income for the year
-
800,574
-
182,195
982,769
Dividends
10
-
-
-
(355,600)
(355,600)
Balance at 31 October 2017
500
875,045
500
2,430,562
3,306,607
Year ended 31 October 2018:
Profit and total comprehensive income for the year
-
-
-
85,964
85,964
Dividends
10
-
-
-
(384,960)
(384,960)
Transfers
-
-
-
875,045
875,045
Other movements
-
(875,045)
-
-
(875,045)
Balance at 31 October 2018
500
-
500
3,006,611
3,007,611
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2018
- 11 -
1
Accounting policies
Company information
Geoff Neal Litho Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
7 Pier Road, Feltham, Middlesex., TW14 OTW.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
- Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’
:
Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument;
basis
of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 26 ‘Share based Payment’
:
Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
JPO Communications Ltd
. These consolidated financial statements are available from its registered office
address.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
. This in effect is when the job has been completed and the goods have been dispatched and received by the customer. A sales invoice is raised and the revenue is recorded based on the contracted price at the time of the sale i.e. when
the amount of revenue can be measured reliably
and
it is probable that the economic benefits associated with the transaction will flow to the entity
.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
1
Accounting policies
(Continued)
- 12 -
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
1.4
Tangible fixed assets
With the exception of freehold property, property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment losses. Freehold property is stated in the balance sheet at revalued amounts, being the fair value on the date of revaluation less any subsequent depreciation and impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that with could be determined using fair values at the reporting end date.
If an asset’s carrying amount is increased as
a result of a revaluation, the increase shall be
recognised in other comprehensive income
and accumulated in equity. However, the
increase shall be recognised in profit and
l
os
s
to the extent that it reverses a revaluation
decrease of the same asset previously
recognised in profit or loss
.
The decrease of an asset’s carrying amount
as a result of revaluation shall be recognised
in other comprehensive income to the extent
of any previously recognised revaluation
increase accumulated in equity, in respect of
that asset. If a revaluation decrease exceeds
the accumulated revaluation gains
accumulated in equity in respect of that
asset, the excess shall be recognised in profit
or loss.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
Nil
Land and buildings Leasehold
Nil
Plant and machinery
10-25% Reducing balance/Straight line
Fixtures, fittings & equipment
25% Reducing balance/Straight line
Motor vehicles
25% Reducing balance/Straight line
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
1
Accounting policies
(Continued)
- 13 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash at bank and in hand
Cash at bank and in hand
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
1
Accounting policies
(Continued)
- 15 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The most material accounting estimate in the financial statements is depreciation. When assessing the depreciation method and rate to apply, the directors estimate the useful life and residual value of the assets. The outcome of historic disposals of similar assets is a key source of information when making assumptions and judgements.
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.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
- 16 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2018
2017
£
£
Turnover analysed by class of business
Sales of goods
15,459,301
13,055,540
Consultancy income
-
32,175
15,459,301
13,087,715
2018
2017
£
£
Other significant revenue
Interest income
1,132
1,332
4
Operating profit
2018
2017
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
19,000
17,000
Depreciation of owned tangible fixed assets
149,629
178,852
Depreciation of tangible fixed assets held under finance leases
433,186
433,092
(Profit)/loss on disposal of tangible fixed assets
(1,000)
12,125
Cost of stocks recognised as an expense
7,037,843
6,223,937
Operating lease charges
87,161
23,711
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2018
2017
Number
Number
Sales, production and administration
83
79
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
5
Employees
(Continued)
- 17 -
2018
2017
£
£
Wages and salaries
4,070,724
3,785,398
Social security costs
393,484
350,106
Pension costs
64,384
28,680
4,528,592
4,164,184
6
Directors' remuneration
2018
2017
£
£
Remuneration for qualifying services
135,835
186,996
Company pension contributions to defined contribution schemes
633
1,413
136,468
188,409
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2017 - 2).
7
Interest receivable and similar income
2018
2017
£
£
Interest income
Interest on bank deposits
1,132
1,332
8
Interest payable and similar expenses
2018
2017
£
£
Interest on bank overdrafts and loans
13,624
25,667
Interest on finance leases and hire purchase contracts
101,868
74,779
115,492
100,446
9
Taxation
2018
2017
£
£
Current tax
UK corporation tax on profits for the current period
62,782
51,659
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
9
Taxation
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
(54,267)
19,018
Total tax charge
8,515
70,677
The corporation tax changed from 20% to 19% on 1 April 2017.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2018
2017
£
£
Profit before taxation
94,479
252,872
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2017: 19.00%)
17,951
48,046
Tax effect of expenses that are not deductible in determining taxable profit
5,045
4,062
Effect of change in corporation tax rate
-
1,101
Group relief
-
(1,161)
Permanent capital allowances in excess of depreciation
4,188
(40)
Deferred tax on land & buildings
(18,669)
18,669
Taxation charge for the year
8,515
70,677
10
Dividends
2018
2017
£
£
Interim paid
384,960
355,600
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
- 19 -
11
Tangible fixed assets
Land and buildings Freehold
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 November 2017
850,000
1,750,000
5,294,900
454,905
25,075
8,374,880
Additions
-
-
3,629
3,356
16,194
23,179
Disposals
(850,000)
(1,750,000)
-
-
(14,600)
(2,614,600)
At 31 October 2018
-
-
5,298,529
458,261
26,669
5,783,459
Depreciation and impairment
At 1 November 2017
-
-
2,315,009
427,852
20,492
2,763,353
Depreciation charged in the year
-
-
560,821
17,688
4,306
582,815
Eliminated in respect of disposals
-
-
-
-
(14,600)
(14,600)
At 31 October 2018
-
-
2,875,830
445,540
10,198
3,331,568
Carrying amount
At 31 October 2018
-
-
2,422,699
12,721
16,471
2,451,891
At 31 October 2017
850,000
1,750,000
2,979,891
27,054
4,583
5,611,528
The carrying value of land and buildings comprises:
2018
2017
£
£
Freehold
-
850,000
Long leasehold
-
1,750,000
-
2,600,000
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2018
2017
£
£
Plant and machinery
2,247,849
2,729,224
Motor vehicles
14,507
-
2,262,356
2,729,224
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
11
Tangible fixed assets
(Continued)
- 20 -
During the year the company transferred t
he buildings 7 and 11 Pier Road
t
o
JPO Communications Ltd, its parent company for
£
2
,
600
,000
, split £1,750,000 and £850,000 respectively as per the professional independent valuation obtained in September 2017.
The combined historical cost
of the properties i
s £1,724,955 split £1,036,129 and £688,826 respectively.
No
depreciat
ion was provided for
on the grounds the depreciation charge would be immaterial. The
revaluation reserve of £875,045 has been transferred to profit and loss reserves as it has now been realised.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
2018
2017
£
£
Cost
-
1,724,955
Accumulated depreciation
-
-
Carrying value
-
1,724,955
Finance leases or hire purchase contracts are secured on the specific assets financed. The book value of the assets secured is disclosed above.
12
Stocks
2018
2017
£
£
Raw materials and consumables
100,919
94,156
Work in progress
179,737
188,078
280,656
282,234
13
Debtors
2018
2017
Amounts falling due within one year:
£
£
Trade debtors
3,037,600
2,900,254
Amounts owed by group undertakings
1,602,000
-
Other debtors
64,074
64,776
Prepayments and accrued income
73,532
81,118
4,777,206
3,046,148
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
- 21 -
14
Creditors: amounts falling due within one year
2018
2017
Notes
£
£
Bank loans and overdrafts
16
-
93,419
Obligations under finance leases
17
505,162
567,727
Other borrowings
16
-
12,500
Trade creditors
2,706,963
2,306,179
Corporation tax
62,782
51,659
Other taxation and social security
94,688
95,309
Other creditors
18,578
7,872
Accruals and deferred income
264,949
230,920
3,653,122
3,365,585
15
Creditors: amounts falling due after more than one year
2018
2017
Notes
£
£
Bank loans and overdrafts
16
-
635,806
Obligations under finance leases
17
1,016,764
1,510,633
1,016,764
2,146,439
16
Loans and overdrafts
2018
2017
£
£
Bank loans
-
729,225
Loans from group undertakings
-
12,500
-
741,725
Payable within one year
-
105,919
Payable after one year
-
635,806
The long-term bank loans were repaid during the year.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
- 22 -
17
Finance lease obligations
2018
2017
Future minimum lease payments due under finance leases:
£
£
Within one year
576,705
668,805
In two to five years
1,120,961
1,503,310
In over five years
-
181,699
1,697,666
2,353,814
Less: future finance charges
(175,740)
(275,454)
1,521,926
2,078,360
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is approx. 4.5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Provisions for liabilities
2018
2017
Notes
£
£
Deferred tax liabilities
19
146,358
200,625
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2018
2017
Balances:
£
£
Accelerated capital allowances
146,358
181,956
Land & Buildings
-
18,669
146,358
200,625
2018
Movements in the year:
£
Liability at 1 November 2017
200,625
Credit to profit or loss
(54,267)
Liability at 31 October 2018
146,358
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
19
Deferred taxation
(Continued)
- 23 -
The deferred tax liability set out above is expected to reverse by £76,867 in the next financial year and relates to accelerated capital allowances that are expected to mature within the same period.
20
Retirement benefit schemes
2018
2017
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
64,384
28,680
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
500 Ordinary shares of £1 each
500
500
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2018
2017
£
£
Within one year
15,550
336
Between two and five years
12,438
57,429
27,988
57,765
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2018
- 24 -
23
Ultimate controlling party
The parent company of Geoff Neal Litho Limited is JPO Communications Ltd and its registered office is 7 Pier Road, Feltham, Middlesex,TW14 0TW. The parent company is owned and controlled by its directors, Mr. S. Neal and Mrs. C. Neal.
JPO Communications Ltd prepares consolidated group accounts. The only subsidiary of the group is Geoff Neal Litho Ltd.
Parent undertaking
At the start of the year Geoff Neal Litho Ltd ('GNL') owed £12,500 to JPO Communications Ltd ('JPO'). During the year GNL sold its business premises consisting of 7 and 11 Pier Road to JPO for £2,600,000. Net payments of £985,500 were made during the year by JPO leaving a balance owing to GNL of £1,602,000 at 31 October 2018. This is an unsecured non-interest bearing loan repayable on demand.
Rent of £51,700 was paid during the year by GNL to JPO in respect of the occupation of the above premises.
Guarantees and Security
Geoff Neal Litho Ltd has given a cross guarantee to Barclays Bank plc in respect of a loan drawn by JPO Communications Ltd to finance the purchase of the above properties.
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