Registered number:
04207637
Directors' Report and Financial Statements
For the Year Ended
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Company Information
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Contents
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Group Strategic Report
For the Year Ended 30 September 2019
An Operating Profit before amortization of goodwill of £608,038 was achieved in the year. This is down from £647,452 but that was in a period of “mini boom” for housing which continued for the first quarter of the year to September 2019. Good success in obtaining orders and pushing them through production has been the driver.
Goodwill amortization of £260,226 always reduces final profit but this originates from prior to 2002 and is a none-cash item. The actual net cash position was improved. Holding company long term loan repayments were successfully decreased with £545,000 repaid off the loans in the year to September 2019. The loans & goodwill relate to previous management’s involvement with venture capital prior to 2002. The business currently considers that its order book level is adequate and the business has invested in sales with an additional salesman and new web site. Trading prior to the recent Covid19 virus had been in line with budget however the virus is a major issue affecting UK industry including ourselves. It’s effect on demand is the major unknown. We have at the start of the outbreak a usefully favourable net cash in hand position and have been able to secure positive Bank support in reducing loan repayments from an originally planned much higher figure to only £80,000 in the year to December 2020 which is good. It helps free cash to cope with the virus disruption to trading as we in common with many have to realign our cost base across all levels. We have to wait for government and major UK plc housebuilders to provide a lead as to full resumption of trading on all housebuilding sites as the vast majority are currently temporarily closed. The 6.2% government living wage legislation increase from April 2020 is pushing wage inflation up on lower wages but also to cover differentials for the rest of employees. Given the current employment issues due to Coronavirus this extra cost might have been much better timed. The workforce are thanked for their continued flexibility.
The group’s principal financial instruments comprise cash, hire purchase, and intercompany borrowings. The main purpose of these financial instruments is to finance the group’s operations. The group has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations. The group does not enter into derivative transactions.
It is, and has been throughout the period under review, the group’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the group’s financial instruments are liquidity risk, and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below. Liquidity risk The group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The directors prepare forecasts which are regularly reviewed to ensure sufficient liquidity is maintained. The intercompany balances will not be repaid if the group can not afford to do so. Credit risk The group seeks to trade with recognised creditworthy third parties. It is group policy that all significant customers who wish to trade on credit terms are subject to credit vetting procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the group’s exposure to bad debts is not significant, and seeks to maintain adequate provision for disputes and doubtful debts in today’s difficult market conditions. The group where possible will obtain credit insurance for its debts.
Key performance indicators monitored by the group include turnover by employee £84,000 (2018 £87,000) and debtor days 60 days (2018 47 days).
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Group Strategic Report (continued)
For the Year Ended 30 September 2019
Market conditions short term appear steady but serving housebuilding is always prone to fluctuation further out.
This report was approved by the board on 20 May 2020
and signed on its behalf.
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Directors' Report
For the Year Ended 30 September 2019
The directors present their report and the financial statements for the year ended 30 September 2019.
The profit for the year, after taxation, amounted to £
165,349
(2018 -
£
192,367
)
.
The directors do not recommend the payment of a dividend on the ordinary shares (2018- £nil).
The directors who served during the year were:
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the
consolidated
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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙
make judgements and accounting estimates that are reasonable and prudent;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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Directors' Report (continued)
For the Year Ended 30 September 2019
Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
There have been no significant events affecting the Group since the year end.
During the year, Dains LLP were reappointed as auditors. Dains LLP have expressed their willingness to continue in office and will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
This report was approved by the board on 20 May 2020 and signed on its behalf.
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Independent Auditors' Report to the Members of Benlowe Group Holdings Limited
We have audited the financial statements of Benlowe Group Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 September 2019, which comprise the Consolidated Profit and Loss Account, the Consolidated Statement of Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated Statement of Cash Flows, the Consolidated and Company Statement of Changes in Equity
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 Group's or the parent 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.
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Independent Auditors' Report to the Members of Benlowe Group Holdings Limited (continued)
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 Auditors' 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.
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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Independent Auditors' Report to the Members of Benlowe Group Holdings Limited (continued)
As explained more fully in the Directors' Responsibilities Statement on page 3, 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 Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
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 Auditors' 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:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' Report.
This report is made solely to the Company's members
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 Auditors' 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditor
Chartered Accountants
Birmingham
20 May 2020
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Consolidated Profit and Loss Account
For the Year Ended 30 September 2019
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Consolidated Statement of Comprehensive Income
For the Year Ended 30 September 2019
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Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 20 May 2020
.
The notes on pages 15 to 34 form part of these financial statements.
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Company Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 20 May 2020
.
The notes on pages 15 to 34 form part of these financial statements.
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Consolidated Statement of Changes in Equity
For the Year Ended
30 September 2019
Consolidated Statement of Changes in Equity
For the Year Ended
30 September 2018
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Company Statement of Changes in Equity
For the Year Ended
30 September 2019
Company Statement of Changes in Equity
For the Year Ended
30 September 2018
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Consolidated Statement of Cash Flows
For the Year Ended 30 September 2019
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Notes to the Financial Statements
For the Year Ended 30 September 2019
Benlowe Group Holdings Limited is a private company incorporated in England and Wales under the Companies Act. The company is a private company limited by shares. The address of the company's registered office is shown on the company information page. The principal activities of the company and the nature of its operations are set out in the Directors' report.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements.
The Group and Company's functional and presentational currency is GBP. The functional statements are rounded to the nearest £.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Profit and Loss Account from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 October 2015.
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Notes to the Financial Statements
For the Year Ended 30 September 2019
2.
Accounting policies (continued)
As described in the strategic report, the directors currently consider that the group's order book level is adequate and the business has invested in sales with an additional salesman and new web site. Trading prior to the recent Covid-19 virus had been in line with budget however the virus is a major issue affecting UK industry including ourselves. It’s effect on demand is the major unknown. We have at the start of the outbreak a usefully favourable net cash in hand position.
The group has been able to secure positive Bank support in reducing loan repayments from an originally planned much higher figure to only £80,000 in the year to December 2020 which is good. It helps free cash to cope with the virus disruption to trading as we in common with many have to realign our cost base across all levels. As a consequence of this, the loan repayment terms and banking covenants now agreed are believed by the Board to be achievable. The directors have prepared cash flow forecasts through to 31 March 2021, incorporating the revised agreed bank loan repayment profile and making certain assumptions concerning the renewal of the bank facilities in March 2021, which demonstrates that the group continues to be able to meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements. With the above taken in to account, the Directors consider that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated Profit and Loss Account over its useful economic life.
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Notes to the Financial Statements
For the Year Ended 30 September 2019
2.
Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Consolidated Profit and Loss Account.
Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted averagebasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
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Notes to the Financial Statements
For the Year Ended 30 September 2019
2.
Accounting policies (continued)
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The cost of the Group's shares held by the ESOP is deducted from equity in the Group and Company balance sheets under the heading ESOP share reserve. Any cash received by the ESOP on disposal of the shares it holds is also recognised directly in equity. Other assets and liabilities of the ESOP (including borrowings) are recognised as assets and liabilities of the Group.
Finance costs are charged to the Consolidated Profit and Loss Account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Rentals paid under operating leases are charged to the Consolidated Profit and Loss Account on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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Notes to the Financial Statements
For the Year Ended 30 September 2019
2.
Accounting policies (continued)
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated Profit and Loss Account when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Balance Sheet date.
All borrowing costs are recognised in the Consolidated Profit and Loss Account in the year in which they are incurred.
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Consolidated Profit and Loss Account in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
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Notes to the Financial Statements
For the Year Ended 30 September 2019
2.
Accounting policies (continued)
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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Notes to the Financial Statements
For the Year Ended 30 September 2019
In the application of the group's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 those estimates.
The estimate and underlying assumptions are reviewed on an ongoing basis. Revisions to the 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 revision and future periods if the revision affects both current and future periods. Critical judgements in applying the groups accounting policies The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the directors have made in the process of applying the group's accounting policies and that the most significant effect on the amounts recognised in the financial statements. Depreciation and residual values The directors have reviewed the asset lives and associated residual values of all fixed asset classes, and in particular, the useful economic life and residual values of plant and machinery, and have concluded that asset lives and residual values are appropriate. Trade debtors The total carrying value of trade debtors are net of impairment losses on trade debtors. A different assessment of the recoverability of the balance, with reference to either the abilitiy or willingness of the customer to pay, may result in different values being determined. Goodwill The Group establishes a reliable estimate of the useful life of goodwill arising on business combinations. This estimate is based on a variety of factors such as the expected use of the acquired business, the expected usual life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.
The whole of the turnover is attributable to the group's principal activity.
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Notes to the Financial Statements
For the Year Ended 30 September 2019
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Notes to the Financial Statements
For the Year Ended 30 September 2019
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Notes to the Financial Statements
For the Year Ended 30 September 2019
10.
Taxation (continued)
There were no factors that may affect future tax charges.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements. The profit after tax of the parent Company for the year was £
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Notes to the Financial Statements
For the Year Ended 30 September 2019
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Notes to the Financial Statements
For the Year Ended 30 September 2019
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Notes to the Financial Statements
For the Year Ended 30 September 2019
13.
Tangible fixed assets (continued)
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Notes to the Financial Statements
For the Year Ended 30 September 2019
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Notes to the Financial Statements
For the Year Ended 30 September 2019
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Notes to the Financial Statements
For the Year Ended 30 September 2019
Security
Hire purchase agreements are secured on the assets to which they relate to.
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Notes to the Financial Statements
For the Year Ended 30 September 2019
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Notes to the Financial Statements
For the Year Ended 30 September 2019
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Notes to the Financial Statements
For the Year Ended 30 September 2019
Share premium account
The share premium reserve represents the premium arising on the issue of equity, net of issue expenses.
Capital redemption reserve
The capital redemption reserve represents the par value of own shares purchased by the company.
ESOP reserve The other reserves arises in connection with the Employee Share Ownership Plan (ESOP) trust. The reserves represents the consideration paid for the company's own shares.
Profit and loss account
The profit and loss reserve represents the cumulative profits and losses, net of paid dividends and other adjustments.
The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund.
The pension cost charge represents contributions payable by the group to the fund and amounted to £147,419 (2018 - £145,229). At the year end the amount of contributions outstanding was £8,125 (2018 - £9,628).
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Notes to the Financial Statements
For the Year Ended 30 September 2019
There is no controlling party.
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