Company Registration No. 01274236 (England and Wales)
GEOFF NEAL LITHO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2020
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 - 26
GEOFF NEAL LITHO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2020
- 1 -
The directors present the strategic report for the year ended 31 October 2020.
Fair review of the business
The company
'
s turnover
decreased
by
just over 30
%
in the year and a n
et
loss
after tax
of
£
93,281
was incurred
(201
9
- £
234
,
974 profit
)
. The Covid-19 pandemic and the economic shutdown has had a significant impact on the company's operations. Turnover in the initial three months of lockdown from April 2020 to June 2020 dropped by approximately 60% from the November 2019 to March 2020 average level. Despite the financial support from the government furlough job retention scheme the company regrettably had to reduce staff levels. Seventeen staff were made redundant from July to October 2020. To safeguard the cash reserves the company drew down a £1m Coronavirus Business Interruption Loan in July 2020.
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.
Trading conditions were already very challenging before the Covid-19 crisis. Sales for the financial year ended 31 October 2020 achieved approximately 70% of pre-Covid levels. It is difficult to predict how long it will take for customer demand to return once the Covid restrictions begin to lift.
Development and performance
The results for the year are considered satisfactory as is the financial position at the year end.
Key performance indicators
The directors assess the performance of the business using a variety of key performance indicators, including the measurement of turnover and profit and liquid funds.
The company delivered the following for the year:
Turnover £10,440,912 (2019: £15,055,717).
Gross profit % of 26.69% (2019: 27.45%).
Profit/loss before taxation £183,292 loss (2019: £141,052 profit).
At the year end, there was a cash balance of £1,318,485 (2019: £531,598) and bank loan finance of £1,000,000 (2019: £nil).
Other information and explanations
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.
Mr S J Neal
Director
28 July 2021
GEOFF NEAL LITHO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2020
- 2 -
The directors present their annual report and financial statements for the year ended 31 October 2020.
Principal activities
The principal activit
ies
of the company continued to be that of litho printing
and direct mail
.
Results and dividends
The results for the year are set out on page 7.
Interim dividends of £
374,875
(2019 - £374,830)
were paid during the year
to the parent company
.
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
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.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board. All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Research and development
The company continues to carry out research and development work to improve and increase automation of the print process.
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 2020
- 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
28 July 2021
GEOFF NEAL LITHO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2020
- 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;
-
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 2020 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 2020 and of its loss 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.
Material uncertainty
relating to going concern
We draw attention to the going concern note in Accounting policies section of the financial statements, which describes the directors' assessment of the current and future effects of the Covid-19 pandemic on the company and the implications for its ability to continue as a going concern and the steps the directors are taking to mitigate the risk. These conditions indicate that a material uncertainty exists that may cast doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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: https://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 2021
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 2020
- 7 -
2020
2019
Notes
£
£
Turnover
3
10,440,912
15,055,717
Cost of sales
(7,653,277)
(10,922,051)
Gross profit
2,787,635
4,133,666
Distribution costs
(109,239)
(147,175)
Administrative expenses
(3,400,303)
(3,771,548)
Other operating income
615,002
Operating (loss)/profit
4
(106,905)
214,943
Interest receivable and similar income
7
445
804
Interest payable and similar expenses
8
(76,832)
(74,695)
(Loss)/profit before taxation
(183,292)
141,052
Tax on (loss)/profit
9
90,011
93,922
(Loss)/profit for the financial year
(93,281)
234,974
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 2020
- 8 -
2020
2019
£
£
(Loss)/profit for the year
(93,281)
234,974
Other comprehensive income
-
-
Total comprehensive income for the year
(93,281)
234,974
GEOFF NEAL LITHO LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2020
31 October 2020
- 9 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,886,887
2,113,393
Current assets
Stocks
12
231,763
342,341
Debtors
13
3,343,583
5,124,587
Cash at bank and in hand
1,318,725
531,774
4,894,071
5,998,702
Creditors: amounts falling due within one year
14
(2,460,485)
(4,243,604)
Net current assets
2,433,586
1,755,098
Total assets less current liabilities
4,320,473
3,868,491
Creditors: amounts falling due after more than one year
15
(1,748,453)
(827,477)
Provisions for liabilities
Deferred tax liability
18
172,421
173,259
(172,421)
(173,259)
Net assets
2,399,599
2,867,755
Capital and reserves
Called up share capital
20
500
500
Capital redemption reserve
500
500
Profit and loss reserves
2,398,599
2,866,755
Total equity
2,399,599
2,867,755
The financial statements were approved by the board of directors and authorised for issue on 28 July 2021 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 2020
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 November 2018
500
500
3,006,611
3,007,611
Year ended 31 October 2019:
Profit and total comprehensive income for the year
-
-
234,974
234,974
Dividends
10
-
-
(374,830)
(374,830)
Balance at 31 October 2019
500
500
2,866,755
2,867,755
Year ended 31 October 2020:
Loss and total comprehensive income for the year
-
-
(93,281)
(93,281)
Dividends
10
-
-
(374,875)
(374,875)
Balance at 31 October 2020
500
500
2,398,599
2,399,599
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2020
- 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 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’
:
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.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
1
Accounting policies
(Continued)
- 12 -
1.2
Going concern
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.
The directors have considered relevant information, including budgets and forecasts and the impact of subsequent events in making their assessment of going concern, particularly the Covid-19 pandemic which has had a significant impact on the company's operations. The company drew down a £1m CBILS loan during the year and will continue to avail of the support provided by the furlough job retention scheme and any other reliefs that may become available.
Although the forecasts take account of the matters above, the full impact of Covid-19, the level of government support and the underlying trading assumptions used in forecasting are uncertain and could be subject to significant variation. The directors have therefore concluded that these circumstances give rise to a material uncertainty' However based on their assessments and measures that could be undertaken to mitigate the current adverse impacts and the current resources available, the directors continue to adopt the going concern basis in preparing the annual report and accounts.
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
.
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
P
lant and equipment
is
stated at cost less accumulated depreciation and any recognised impairment losses.
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:
Plant and machinery
10-25% Reducing balance/Straight line
Fixtures, fittings & equipment
25% Reducing balance/Straight line
Motor vehicles
25% Reducing balance/Straight line
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
.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
1
Accounting policies
(Continued)
- 13 -
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.
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 and cash equivalents
Cash and cash equivalents
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.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
1
Accounting policies
(Continued)
- 14 -
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 2020
1
Accounting policies
(Continued)
- 15 -
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
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.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
1
Accounting policies
(Continued)
- 16 -
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.
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.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
1
Accounting policies
(Continued)
- 17 -
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2020
2019
£
£
Turnover analysed by class of business
Sales of goods
10,440,912
15,055,717
2020
2019
£
£
Other significant revenue
Interest income
445
804
Grants received
615,002
The grant income above includes £580,002 of furlough claims under the government Coronavirus Job Retention Scheme and £10,000 of bank loan fees and £25,000 of interest in respect of the Coronavirus Business Interruption Loan Scheme which has been met by the government.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
- 18 -
4
Operating (loss)/profit
2020
2019
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Government grants
(615,002)
Fees payable to the company's auditor for the audit of the company's financial statements
19,000
19,000
Depreciation of owned tangible fixed assets
311,668
300,303
Depreciation of tangible fixed assets held under finance leases
248,738
239,760
Profit on disposal of tangible fixed assets
(108,274)
Operating lease charges
135,958
103,220
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Sales, production and administration
73
84
2020
2019
£
£
Wages and salaries
3,023,560
4,067,284
Social security costs
276,116
393,053
Pension costs
72,101
84,951
3,371,777
4,545,288
6
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
136,263
153,550
Company pension contributions to defined contribution schemes
1,314
1,104
137,577
154,654
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2019 - 1).
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
- 19 -
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Interest on bank deposits
445
804
8
Interest payable and similar expenses
2020
2019
£
£
Interest on bank overdrafts and loans
27,915
1,887
Other interest on financial liabilities
5,722
Interest on finance leases and hire purchase contracts
43,195
72,808
76,832
74,695
9
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
(89,173)
(58,041)
Adjustments in respect of prior periods
(62,782)
Total current tax
(89,173)
(120,823)
Deferred tax
Origination and reversal of timing differences
(838)
26,901
Total tax credit
(90,011)
(93,922)
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
9
Taxation
(Continued)
- 20 -
The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
(Loss)/profit before taxation
(183,292)
141,052
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
(34,825)
26,800
Tax effect of expenses that are not deductible in determining taxable profit
4,776
6,126
Tax effect of utilisation of tax losses not previously recognised
(14,860)
Unutilised tax losses carried forward
(1,349)
Adjustments in respect of prior years
(62,782)
Effect of change in corporation tax rate
17,218
Group relief
3,902
14,860
Research and development tax credit
(63,864)
(79,935)
Taxation credit for the year
(90,011)
(93,922)
10
Dividends
2020
2019
£
£
Interim paid
374,875
374,830
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
- 21 -
11
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 November 2019
4,885,201
486,756
26,669
5,398,626
Additions
333,900
333,900
At 31 October 2020
5,219,101
486,756
26,669
5,732,526
Depreciation and impairment
At 1 November 2019
2,816,140
452,883
16,210
3,285,233
Depreciation charged in the year
545,730
10,627
4,049
560,406
At 31 October 2020
3,361,870
463,510
20,259
3,845,639
Carrying amount
At 31 October 2020
1,857,231
23,246
6,410
1,886,887
At 31 October 2019
2,069,061
33,873
10,459
2,113,393
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2020
2019
£
£
Plant and machinery
1,563,959
1,536,209
Fixtures, fittings & equipment
17,508
23,876
Motor vehicles
10,458
1,581,467
1,570,543
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
2020
2019
£
£
Raw materials and consumables
118,562
79,447
Work in progress
113,201
262,894
231,763
342,341
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
- 22 -
13
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
1,456,979
2,859,360
Corporation tax recoverable
89,173
120,824
Amounts owed by group undertakings
1,614,847
1,617,360
Other debtors
23,273
427,881
Prepayments and accrued income
159,311
99,162
3,343,583
5,124,587
14
Creditors: amounts falling due within one year
2020
2019
Notes
£
£
Bank loans
16
39,065
Obligations under finance leases
17
360,774
348,144
Trade creditors
1,586,064
3,055,721
Taxation and social security
60,272
88,192
Other creditors
98,631
411,791
Accruals and deferred income
315,679
339,756
2,460,485
4,243,604
Finance leases and hire purchase contracts are secured on the specific assets financed. Included in other creditors above is £82,800 in respect of a finance arrangement for various items of Kodak and Nela equipment. The liability is secured on the assets concerned.
15
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Bank loans and overdrafts
16
960,935
Obligations under finance leases
17
621,118
827,477
Other creditors
166,400
1,748,453
827,477
Finance leases and hire purchase contracts are secured on the specific assets financed. Included in other creditors above is £166,400 in respect of a finance arrangement for various items of Kodak and Nela equipment. The liability is secured on the assets concerned.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
15
Creditors: amounts falling due after more than one year
(Continued)
- 23 -
The total amount included in creditors which falls due after five years (ie liabilities that will not be fully repaid within 5 years) is as follows:
Payable by instalments
1,000,000
-
The above is the total creditor amount owing, not the element that will be repaid after 5 years.
16
Loans and overdrafts
2020
2019
£
£
Bank loans
1,000,000
Payable within one year
39,065
Payable after one year
960,935
The CBILS long-term bank loan is secured by a charge over a Heidelberg XL106 printing press.
At the Balance Sheet date the company had one long term bank loan with Close Brothers. The details are as follows:
Loan balance Repayment date Interest rate Repayments
£ 1,000,000 2026 (6 yr loan) Fixed for 6 years 9.99% Monthly
17
Finance lease obligations
2020
2019
Future minimum lease payments due under finance leases:
£
£
Within one year
420,614
405,718
In two to five years
669,312
884,272
1,089,926
1,289,990
Less: future finance charges
(108,034)
(114,369)
981,892
1,175,621
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
17
Finance lease obligations
(Continued)
- 24 -
Finance lease payments represent rentals payable by the company for certain items of plant and machinery or other fixed assets. 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. 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2020
2019
Balances:
£
£
Accelerated capital allowances
172,421
174,608
Tax losses
-
(1,349)
172,421
173,259
2020
Movements in the year:
£
Liability at 1 November 2019
173,259
Credit to profit or loss
(838)
Liability at 31 October 2020
172,421
The deferred tax liability set out above is expected to reverse by £72,412 in the next financial year and relates to accelerated capital allowances that are expected to mature within the same period.
19
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
72,101
84,951
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.
20
Share capital
2020
2019
2020
2019
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
500
500
500
500
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
- 25 -
21
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:
2020
2019
£
£
Within one year
607
55,905
Between two and five years
280,142
115,897
In over five years
39,744
18,425
320,493
190,227
22
Related party transactions
Remuneration of key management personnel
The directors are regarded as the key management personnel. Directors' remuneration is disclosed in another note.
Transactions with related parties
The director Mr S. Neal owns a 50% stake in the companies listed below and is also a director of each of the entities. The balances and trading transactions with Geoff Neal Litho Ltd during the year is as follows:
Sale of goods Purchase of goods Trade Debtor Trade Creditor
or services or services balance at balance at
in period in period year end year end
(including Vat) (including Vat)
£ £ £ £
Evoteam Ltd 392,638 1,123,854 69,959 102,556
(shares held via S&S
Printing & Finishing Ltd)
Greywell Press Ltd 25,722 197,645 8,663 41,085
Print Unlimited Ltd - 85,675 - -
Standard trading terms and conditions apply to the above transactions and there is no security attaching to the outstanding balances.
GEOFF NEAL LITHO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2020
- 26 -
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') was owed £1,617,360 by JPO Communications Ltd ('JPO'). During the year the net repayments on the loan were £2,514, leaving a balance owing to GNL of £1,614,847 at 31 October 2020. This is an unsecured non-interest bearing loan repayable on demand.
Rent of £63,562 (2019 - £124,080) was paid during the year by GNL to JPO in respect of the occupation of the business premises owned by JPO.
Guarantees and Security
Geoff Neal Litho Ltd continues to give a cross guarantee to Barclays Bank plc in respect of a bank loan facility owing by JPO Communications Ltd which was taken out in 2018 to finance the purchase of the business premises at 7 & 11 Pier Road.
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