Company Registration No. 02708462 (England and Wales)
Samuel Grant (Leeds) Limited
Annual Report And Financial Statements
For The Year Ended 31 December 2018
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
COMPANY INFORMATION
Directors
Mr A D S Grant
Mr M P S Grant
Mr M Harris
Mr A J Dean
(Appointed 1 April 2019)
Secretary
Mr A J Dean
Company number
02708462
Registered office
Orion Way
Cross Green
Leeds
LS9 0AR
Auditors
Garbutt & Elliott Audit Limited
33 Park Place
Leeds
LS1 2RY
Bankers
Natwest Bank Plc
8 Park Row
Leeds
LS1 1QS
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 5
Statement of comprehensive income
6
Balance sheet
7
Statement of changes in equity
8
Notes to the financial statements
9 - 21
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 1 -
The directors present the strategic report for the year ended 31 December 2018.
Fair review of the business
The directors are satisfied with the performance of the company during the year and are confident that the company will continue with the upward trend in activity for the foreseeable future.
2018 showed an increase of over £3m in turnover, there was however a fall in net profit of £250k due to increased overheads as a result of using outside storage to cope with increased demand. The directors are confident that the turnover levels will continue to rise in future years.
Principal risks and uncertainties
The key risks to the business are increase in the price of oil which usually has a direct impact of the price of polymer. We try and minimize the effect on our customers by ordering sufficient quantities of stock to delay price rises for as long as possible.
The company is also exposed to the usual credit risk and cash flow associated with credit sales. This is managed very carefully through strict credit control procedures.
There is some uncertainty regarding the impact of BREXIT. The business however will source both European and UK suppliers where possible to achieve the best price and to also protect the business from a negative European reaction.
Market competition will always be a risk to our business particularly online tenders taking out the ability to promote the exceptional customer service offered by the business. We have however got an expert team of buyers who are constantly working on group deals. This therefore will keep us competitive whilst still being able to offer a service to our customers that is exceptional.
Development and performance
The directors are satisfied with the position of the company at the year end.
We have managed to maintain competitive prices whilst still offering a service to our customers that is second to none.
We have put an additional evening shift on in the warehouse to further increase our efficiency and ensure the customers’ expectations are met.
The further growth of our Samson Nano machine range has provided extensive growth in turnover and profits and has also opened doors to supply other packaging products to customers with the machines.
We have developed the machine further in 2018 to include lower profile ramps etc. to meet with our customer’s needs.
Do to the growth of the business this has led to an increase in staff costs in both the warehouse and main office.
Results
Turnover for the period was £20.1m (2017 - £16.9m) operating profit was £702k (2017 - £951k).
Mr A D S Grant
Director
30 September 2019
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2018.
Principal activities
The principal activity of the company
is the
merchanting and distribution of packaging materials.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A D S Grant
Mr M P S Grant
Mr M Harris
Mr A J Dean
(Appointed 1 April 2019)
Results and dividends
The results for the year are set out on page 6.
No Ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
The auditor, Garbutt & Elliott Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 A D S Grant
Director
30 September 2019
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 3 -
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.
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SAMUEL GRANT (LEEDS) LIMITED
- 4 -
Opinion
We have audited the financial statements of Samuel Grant (Leeds) Limited (the 'company') for the year ended 31 December 2018 which comprise 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 December 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.
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SAMUEL GRANT (LEEDS) LIMITED
- 5 -
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.
Matthew Lee Grant (Senior Statutory Auditor)
for and on behalf of Garbutt & Elliott Audit Limited
30 September 2019
Chartered Accountants
Statutory Auditor
33 Park Place
Leeds
LS1 2RY
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
- 6 -
2018
2017
Notes
£
£
Turnover
3
20,182,133
16,908,256
Cost of sales
(16,296,614)
(13,357,178)
Gross profit
3,885,519
3,551,078
Administrative expenses
(3,333,219)
(2,599,412)
Other operating income
150,000
-
Operating profit
4
702,300
951,666
Interest payable and similar expenses
6
(34)
(345)
Profit before taxation
702,266
951,321
Tax on profit
7
(126,724)
(203,538)
Profit for the financial year
575,542
747,783
The statement of total comprehensive income has been prepared on the basis that all operations are continuing operations.
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
BALANCE SHEET
AS AT
31 DECEMBER 2018
31 December 2018
- 7 -
2018
2017
Notes
£
£
£
£
Fixed assets
Tangible assets
8
669,157
793,070
Investments
9
1,104
1,104
670,261
794,174
Current assets
Stocks
10
2,604,949
2,072,673
Debtors
11
6,759,601
4,288,303
Cash at bank and in hand
352,325
34,021
9,716,875
6,394,997
Creditors: amounts falling due within one year
12
(7,031,074)
(4,408,651)
Net current assets
2,685,801
1,986,346
Total assets less current liabilities
3,356,062
2,780,520
Capital and reserves
Called up share capital
16
2
2
Profit and loss reserves
3,356,060
2,780,518
Total equity
3,356,062
2,780,520
The financial statements were approved by the board of directors and authorised for issue on 30 September 2019 and are signed on its behalf by:
Mr M P S Grant
Director
Company Registration No. 02708462
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
- 8 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2017
2
2,032,735
2,032,737
Year ended 31 December 2017:
Profit and total comprehensive income for the year
-
747,783
747,783
Balance at 31 December 2017
2
2,780,518
2,780,520
Year ended 31 December 2018:
Profit and total comprehensive income for the year
-
575,542
575,542
Balance at 31 December 2018
2
3,356,060
3,356,062
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
- 9 -
1
Accounting policies
Company information
Samuel Grant (Leeds) Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Orion Way, Cross Green, Leeds, LS9 0AR.
1.1
Accounting convention
These financial statements have been prepared in accordance with “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 £
1
.
The financial statements have been prepared under the historical cost convention, modified to include the valuation of investments and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
On the grounds that the company's results are consolidated into its parent, as disclosed in note 22, the company has taken advantage of the exemption conferred by section 1.11 of FRS 102 allowing it not to present a statement of cashflows as a primary note to the financial statements, as otherwise required by section 7 of FRS 102.
The company has taken advantage of the exemption under section 400 of the
Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group
.
The ultimate parent company is Samuel Grant (Holdings) Limited, which is the smallest and largest group into which these financial statements are consolidated. Samuel Grant (Holdings) Limited's registered office is Orion Way, Cross Green, Leeds, LS9 0AR.
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 sale of packaging materials, net of VAT and trade discounts.
Turnover
from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of
turnover
can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any 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:
Leasehold improvements
2.5% straight line
Plant and machinery
25% straight line
Motor vehicles
25% reducing balance
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 10 -
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
Fixed asset investments
Interests in subsidiaries
are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.6
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).
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 is estimated to be less than its carrying amount, the carrying amount of the asset 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 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
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.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials
only.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
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.
1.8
Cash and cash equivalents
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.
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 11 -
1.9
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.
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.
Trade debtors
, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
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.
The impairment loss 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.
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 12 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans
and
loans from
fellow group companies
,
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 though 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 inv
estment strategy.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
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.
1.11
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.
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 13 -
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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
1.15
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.
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 14 -
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 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Depreciation
The depreciation policy has been set according to managements' experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £228,730 (2017 - £214,851), which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
Bad debt provision
Outstanding trade debtor balances are reviewed on a line by line basis by management to identify possible amounts where a provision is required. Management closely manage the collection of trade debtors and therefore are able to identify balances where there is uncertainty about its recoverability, and determine what provision is required (if any).
Stock provision
At each reporting date an assessment is made for provisions required to recognise a fair valuation of damaged, slow moving or obsolete stock. 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 the profit or loss and provided for in the balance sheet. Reversals of impairment losses are also recognised in profit or loss when they arise.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2018
2017
£
£
Turnover
Sale of goods
20,300,292
16,976,092
Discounts
(118,159)
(67,836)
20,182,133
16,908,256
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
3
Turnover and other revenue
(Continued)
- 15 -
Turnover analysed by geographical market
2018
2017
£
£
United Kingdom
20,182,133
16,908,256
4
Operating profit
2018
2017
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(150,000)
-
Fees payable to the company's auditor for the audit of the company's financial statements
3,500
3,350
Depreciation of owned tangible fixed assets
228,730
214,851
(Profit)/loss on disposal of tangible fixed assets
(1,270)
5,109
Release of negative goodwill
(10,471)
-
Cost of stocks recognised as an expense
15,632,033
12,811,230
Operating lease charges
156,250
130,000
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2018
2017
Number
Number
Directors
3
3
Selling and distribution
20
21
Administration
28
21
51
45
Their aggregate remuneration comprised:
2018
2017
£
£
Wages and salaries
1,696,158
1,284,191
Social security costs
171,921
133,751
Pension costs
47,485
21,110
1,915,564
1,439,052
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 16 -
6
Interest payable and similar expenses
2018
2017
£
£
Other interest
34
345
34
345
7
Taxation
2018
2017
£
£
Current tax
UK corporation tax on profits for the current period
137,724
194,892
Adjustments in respect of prior periods
-
8,646
Total current tax
137,724
203,538
Deferred tax
Origination and reversal of timing differences
(11,000)
-
Total tax charge
126,724
203,538
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
702,266
951,321
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2017: 19.25%)
133,431
183,129
Tax effect of expenses that are not deductible in determining taxable profit
3,071
3,846
Adjustments in respect of prior years
-
8,646
Other adjustments
(9,778)
7,917
Taxation charge for the year
126,724
203,538
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 17 -
8
Tangible fixed assets
Leasehold improvements
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2018
174,891
985,808
96,843
1,257,542
Additions
2,000
143,109
-
145,109
Disposals
-
(40,672)
-
(40,672)
At 31 December 2018
176,891
1,088,245
96,843
1,361,979
Depreciation and impairment
At 1 January 2018
10,852
415,691
37,929
464,472
Depreciation charged in the year
4,421
205,954
18,355
228,730
Eliminated in respect of disposals
-
(380)
-
(380)
At 31 December 2018
15,273
621,265
56,284
692,822
Carrying amount
At 31 December 2018
161,618
466,980
40,559
669,157
At 31 December 2017
164,039
570,117
58,914
793,070
9
Fixed asset investments
2018
2017
Notes
£
£
Investments in subsidiaries
23
1,104
1,104
The company has not designated any financial assets that are not classified as financial assets at fair value through profit or loss.
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 January 2018 & 31 December 2018
1,104
Carrying amount
At 31 December 2018
1,104
At 31 December 2017
1,104
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 18 -
10
Stocks
2018
2017
£
£
Finished goods and goods for resale
2,604,949
2,072,673
11
Debtors
2018
2017
Amounts falling due within one year:
£
£
Trade debtors
4,418,020
4,153,430
Amounts owed by group undertakings
2,133,875
-
Other debtors
77,148
13,925
Prepayments and accrued income
113,558
114,948
6,742,601
4,282,303
Deferred tax asset (note 14)
17,000
6,000
6,759,601
4,288,303
12
Creditors: amounts falling due within one year
2018
2017
Notes
£
£
Bank loans and overdrafts
13
2,929,030
511,500
Trade creditors
2,679,761
2,434,919
Amounts owed to group undertakings
875,702
745,752
Corporation tax
137,724
194,892
Other taxation and social security
351,314
324,056
Other creditors
-
150,000
Accruals and deferred income
57,543
47,532
7,031,074
4,408,651
13
Loans and overdrafts
2018
2017
£
£
Bank overdrafts
-
511,500
Bank finance
2,929,030
-
2,929,030
511,500
Payable within one year
2,929,030
511,500
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
13
Loans and overdrafts
(Continued)
- 19 -
The bank overdraft is secured against properties held by the parent company, and through cross company guarantees as noted in note 18.
Bank finance is secured against trade debtors balances to which they relate.
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2018
2017
Balances:
£
£
Decelerated capital allowances
17,000
6,000
2018
Movements in the year:
£
Liability/(Asset) at 1 January 2018
(6,000)
Credit to profit or loss
(11,000)
Liability/(Asset) at 31 December 2018
(17,000)
The deferred tax asset set out above is expected to reverse within five years and relates to the utilisation of decelerated capital allowances against future expected profits of the same period.
15
Retirement benefit schemes
2018
2017
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
47,485
21,110
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.
16
Share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
2 Ordinary shares of £1 each
2
2
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 20 -
17
Acquisition of a business
On 11 April 2018 the company acquired the trade and assets of European Packaging Distributors Limited.
Fair Value
£
Total identifiable net assets
376,906
Goodwill
(10,471)
Total consideration
366,435
Satisfied by:
£
Cash
366,435
Negative goodwill of £10,471 generated from the acquisition has been released into the profit and loss account during the year.
18
Financial commitments, guarantees and contingent liabilities
The company, jointly with other group undertakings, guarantees the bank indebtedness of all group undertakings. The total contingent liability of the company relating to bank indebtedness at the balance sheet date amounted to £nil (2017 - £nil).
In addition to the above, the company, jointly with other group undertakings, guarantees the loan indebtedness of the ultimate parent company Samuel Grant (Holdings) Limited. This charge is second behind the bank guarantee subject to the loan note agreement. The total contingent liability of the company relating to this loan at the balance sheet date amounted to £nil (2017 - £1,781,250).
19
Operating lease commitments
Lessee
The operating leases represent
non-cancellable
leases
of motor vehicles and machinery, with the average term of leases being for 4 years.
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
103,087
136,541
Between two and five years
157,257
273,771
260,344
410,312
SAMUEL GRANT (LEEDS) LIMITED
Samuel Grant (Leeds) Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 21 -
20
Directors' remuneration
2018
2017
£
£
Remuneration for qualifying services
135,284
83,418
Company pension contributions to defined contribution schemes
1,708
789
21
Related party transactions
Guarantees have been provided to group companies as identified in note 18.
Details of outstanding balances as at the year end are given in notes 11 and 12.
22
Ultimate controlling party
The company's immediate parent company is Samuel Grant Group Limited, a company registered in England and Wales.
The ultimate parent company is Samuel Grant (Holdings) Limited, a company registered in England and Wales with a registered office of Orion Way, Cross Green, Leeds, LS9 0AR. Samuel Grant (Holdings) Limited is the smallest and largest group into which Samuel Grant (Leeds) Limited is consolidated.
In the opinion of the directors, there is no ultimate controlling party.
23
Subsidiaries
Details of the company's subsidiaries at 31 December 2018 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
Able Packaging Group Limited
England and Wales
Dormant
Ordinary
100.00
The investments in subsidiaries are all stated at cost.
The registered office of the subsidiary is Orion Way, Cross Green, Leeds, LS9 0AR.
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