Company Registration No. 04697936 (England and Wales)
MCCALLS SPECIAL PRODUCTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
MCCALLS SPECIAL PRODUCTS LIMITED
COMPANY INFORMATION
Director
Mr P B Hoy
Secretary
Mr P B Hoy
Company number
04697936
Registered office
Caxton Way
Dinnington
Sheffield
S25 3QE
Auditor
BHP LLP
2 Rutland Park
Sheffield
S10 2PD
MCCALLS SPECIAL PRODUCTS LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
MCCALLS SPECIAL PRODUCTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 1 -
The director presents the strategic report for the year ended 31 December 2020.
Fair review of the business
Trading conditions during 2020 have been tough with the Covid19 outbreak causing severe disruption to home and overseas markets. The forced shutdown of many sites and businesses worldwide has affected the business in 2020. Despite the effects of Covid19 the company has performed well in overseas markets such as India and Australia and benefited from some large infrastructure projects
Despite tough competition and margin pressures the directors consider 2020 a successful year, sales are decreased 19.6% from 2019 levels. Operating profit is 2.6% in 2020 compared to 3.6% in 2019 the company generated a pre-tax profit of £232,518 the company has a healthy balance sheet with shareholders funds increasing from £5,413,101 to £5,583,361
The director has no plans for any large capital equipment purchases in the foreseeable future but remains open to take advantage of any business opportunity which may present itself. The business strategy remains consistent with previous years.
Principal risks and uncertainties
The business is particularly sensitive to fluctuating exchange rates and steel prices the company has managed volatile scrap and in most cases is able to pass on increased costs. Due to Covid19 shipping costs have decreased our competitiveness overseas and increased the costs of our raw materials this is a constant threat and will continue most likely into 2022.
It is likely that we will face much of the same challenges in 2022, that is rising steel prices and shipping costs, however we are optimistic that the worldwide construction market is robust and there are many projects planned and opportunities in the coming year.
Mr P B Hoy
Director
23 December 2021
MCCALLS SPECIAL PRODUCTS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
The director presents his annual report and financial statements for the year ended 31 December 2020.
Principal activities
The principal activity of the company continued to be the design and manufacture of high strength bars and fittings for ground engineering, tension structures and facade applications.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £9,065. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr P B Hoy
Auditor
BHP were appointed as auditor to the company and is deemed to be reappointed under section 487(2) of the Companies Act 2006
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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. He is 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.
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.
MCCALLS SPECIAL PRODUCTS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 3 -
On behalf of the board
Mr P B Hoy
Director
23 December 2021
MCCALLS SPECIAL PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MCCALLS SPECIAL PRODUCTS LIMITED
- 4 -
Opinion
We have audited the financial statements of McCalls Special Products Limited
(the 'company')
for the year ended 31 December 2020 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows 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 2020 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
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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 director's
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 director's report have been prepared in accordance with applicable legal requirements.
MCCALLS SPECIAL PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MCCALLS SPECIAL PRODUCTS 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 director's
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
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, the director is 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 director determines 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
director is
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
director
either
intends
to liquidate the company or to cease operations, or has 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
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focused on laws and regulations, relevant to the company, which could give rise to a material misstatement in the financial statements. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management, review of company minutes and legal expenses. There are inherent limitations in the audit procedures described and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
MCCALLS SPECIAL PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MCCALLS SPECIAL PRODUCTS LIMITED
- 6 -
As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
A further description of our responsibilities is available 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.
John Warner (Senior Statutory Auditor)
For and on behalf of BHP LLP
23 December 2021
Chartered Accountants
Statutory Auditor
2 Rutland Park
Sheffield
S10 2PD
MCCALLS SPECIAL PRODUCTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
- 7 -
2020
2019
Notes
£
£
Turnover
3
8,935,552
11,109,058
Cost of sales
(7,008,669)
(8,799,530)
Gross profit
1,926,883
2,309,528
Distribution costs
(740,142)
(1,073,469)
Administrative expenses
(1,121,895)
(836,901)
Other operating income
168,299
Operating profit
4
233,145
399,158
Interest receivable and similar income
7
31,944
6,554
Interest payable and similar expenses
8
(32,571)
(39,780)
Profit before taxation
232,518
365,932
Tax on profit
9
(53,193)
(44,741)
Profit for the financial year
179,325
321,191
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MCCALLS SPECIAL PRODUCTS LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2020
31 December 2020
- 8 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,126,783
3,207,450
Investments
12
1,000
1,000
3,127,783
3,208,450
Current assets
Stocks
15
1,952,432
2,510,892
Debtors
16
3,035,976
2,633,864
Investments
17
150,000
Cash at bank and in hand
921,386
145,241
5,909,794
5,439,997
Creditors: amounts falling due within one year
18
(2,185,833)
(2,163,580)
Net current assets
3,723,961
3,276,417
Total assets less current liabilities
6,851,744
6,484,867
Creditors: amounts falling due after more than one year
19
(1,205,783)
(1,012,766)
Provisions for liabilities
Deferred tax liability
21
62,600
59,000
(62,600)
(59,000)
Net assets
5,583,361
5,413,101
Capital and reserves
Called up share capital
23
31,147
31,147
Revaluation reserve
156,298
156,298
Capital redemption reserve
1,640
1,640
Other reserves
1,333,335
1,333,335
Profit and loss reserves
4,060,941
3,890,681
Total equity
5,583,361
5,413,101
The financial statements were approved and signed by the director and authorised for issue on 23 December 2021
Mr P B Hoy
Director
Company Registration No. 04697936
MCCALLS SPECIAL PRODUCTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
- 9 -
Share capital
Revaluation reserve
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2019
31,147
156,298
1,640
1,333,335
3,581,951
5,104,371
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
-
-
-
321,191
321,191
Dividends
10
-
-
-
-
(12,461)
(12,461)
Balance at 31 December 2019
31,147
156,298
1,640
1,333,335
3,890,681
5,413,101
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
-
-
179,325
179,325
Dividends
10
-
-
-
-
(9,065)
(9,065)
Balance at 31 December 2020
31,147
156,298
1,640
1,333,335
4,060,941
5,583,361
MCCALLS SPECIAL PRODUCTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 10 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
729,066
663,290
Interest paid
(32,571)
(39,780)
Income taxes refunded/(paid)
150,736
(42,632)
Net cash inflow from operating activities
847,231
580,878
Investing activities
Proceeds on disposal of investments
150,000
Receipts arising from loans made
(321,765)
45,082
Interest received
31,944
6,554
Net cash (used in)/generated from investing activities
(139,821)
51,636
Financing activities
Repayment of bank loans
77,800
(520,336)
Dividends paid
(9,065)
(12,461)
Net cash generated from/(used in) financing activities
68,735
(532,797)
Net increase in cash and cash equivalents
776,145
99,717
Cash and cash equivalents at beginning of year
145,241
45,524
Cash and cash equivalents at end of year
921,386
145,241
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 11 -
1
Accounting policies
Company information
McCalls Special Products Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Caxton Way, Dinnington, Sheffield, S25 3QE.
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 certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have considered the potential impact on the company of the Covid-19 pandemic and do not believe that any impact will be significant. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue 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:
Freehold buildings
2% straight line per annum
Plant and machinery
10 - 20% straight line per annum
Motor vehicles
25% straight line per annum
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
.
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 12 -
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities 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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
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). 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.
1.7
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.
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 13 -
1.8
Cash at bank and in hand
Cash at bank and in hand
are basic financial assets
and
include cash in hand, deposits held at call with banks, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
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.
Impairment of financial assets
Financial assets
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.
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 14 -
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.
Basic financial liabilities
Basic financial liabilities, including
creditors and
bank loans 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.
1.10
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
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.
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 15 -
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.
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
.
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.
1.15
Government grants
Grants received in relation to the government's Coronavirus Job Retention Scheme have been recognised within other operating income. The grant is accounted for on the accruals basis once the related payroll return has been submitted.
1.16
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 director is 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 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
2020
2019
£
£
Turnover analysed by class of business
Sales
8,935,552
11,109,058
Grants received
162,299
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
3
Turnover and other revenue
(Continued)
- 16 -
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
1,321,399
1,715,408
Europe
3,548,099
4,220,812
Rest of the World
4,066,054
5,172,838
8,935,552
11,109,058
4
Operating profit
2020
2019
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(6,888)
11,839
Government grants
(162,299)
Fees payable to the company's auditor for the audit of the company's financial statements
21,860
21,220
Depreciation of owned tangible fixed assets
80,667
81,702
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Administration and Support
32
31
Production
39
39
Total
71
70
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
2,246,157
2,348,535
Social security costs
196,436
168,873
Pension costs
78,462
107,949
2,521,055
2,625,357
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 17 -
6
Director's remuneration
2020
2019
£
£
Remuneration for qualifying services
295,994
220,421
Company pension contributions to defined contribution schemes
17,211
50,409
313,205
270,830
Remuneration disclosed above include the following amounts paid to the highest paid director:
2020
2019
£
£
Remuneration for qualifying services
295,994
220,421
Company pension contributions to defined contribution schemes
17,211
50,409
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Other interest income
31,944
6,554
8
Interest payable and similar expenses
2020
2019
£
£
Other interest
32,571
39,780
9
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
86,520
82,929
Adjustments in respect of prior periods
(36,927)
(35,388)
Total current tax
49,593
47,541
Deferred tax
Origination and reversal of timing differences
3,600
(2,800)
Total tax charge
53,193
44,741
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
9
Taxation
(Continued)
- 18 -
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:
2020
2019
£
£
Profit before taxation
232,518
365,932
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
44,178
69,527
Tax effect of expenses that are not deductible in determining taxable profit
28,678
859
Change in unrecognised deferred tax assets
42
(772)
Adjustments in respect of prior years
(36,927)
(35,388)
Permanent capital allowances in excess of depreciation
10,276
10,276
Effect of change in deferred tax rates
6,946
239
Taxation charge for the year
53,193
44,741
10
Dividends
2020
2019
£
£
Final paid
9,065
12,461
11
Tangible fixed assets
Freehold buildings
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2020 and 31 December 2020
3,495,000
291,781
92,266
3,879,047
Depreciation and impairment
At 1 January 2020
316,568
285,452
69,577
671,597
Depreciation charged in the year
63,312
1,166
16,189
80,667
At 31 December 2020
379,880
286,618
85,766
752,264
Carrying amount
At 31 December 2020
3,115,120
5,163
6,500
3,126,783
At 31 December 2019
3,178,432
6,329
22,689
3,207,450
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 19 -
12
Fixed asset investments
2020
2019
Notes
£
£
Investments in subsidiaries
13
1,000
1,000
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2020 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
McCalls SP Ltd
England & Wales
Ordinary Shares
100.00
14
Financial instruments
2020
2019
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
-
150,000
15
Stocks
2020
2019
£
£
Raw materials and consumables
489,407
1,026,902
Work in progress
87,755
36,250
Finished goods and goods for resale
1,375,270
1,447,740
1,952,432
2,510,892
16
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
1,998,476
1,931,813
Amounts owed by group undertakings
49,507
Other debtors
897,361
612,032
Prepayments and accrued income
90,632
90,019
3,035,976
2,633,864
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 20 -
17
Current asset investments
2020
2019
£
£
Unlisted investments
150,000
18
Creditors: amounts falling due within one year
2020
2019
Notes
£
£
Bank loans
20
174,562
289,779
Trade creditors
996,982
769,752
Amounts owed to group undertakings
1,000
1,000
Corporation tax
247,870
47,541
Other taxation and social security
41,615
44,987
Other creditors
487,164
759,431
Accruals and deferred income
236,640
251,090
2,185,833
2,163,580
Included within other creditors is an invoice discounting balance of £377,857 (2019: £734,376) which is secured on the debts concerned.
19
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Bank loans and overdrafts
20
1,205,783
1,012,766
20
Loans and overdrafts
2020
2019
£
£
Bank loans
1,380,345
1,302,545
Payable within one year
174,562
289,779
Payable after one year
1,205,783
1,012,766
The bank borrowings are all secured by a cross guarantee between the company and McCalls SP Limited.
There is a legal charge over the property owned by the company in respect of the term loan in addition to the security described above.
Interest on bank borrowings is charged at 1.80% above Base Rate.
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 21 -
21
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
62,600
59,000
2020
Movements in the year:
£
Liability at 1 January 2020
59,000
Charge to profit or loss
3,600
Liability at 31 December 2020
62,600
22
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
78,462
107,949
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.
23
Share capital
2020
2019
2020
2019
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
31,147
31,147
31,147
31,147
24
Operating lease commitments
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
14,460
2,460
Between two and five years
22,920
7,380
37,380
9,840
MCCALLS SPECIAL PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 22 -
25
Directors' transactions
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Mr P B Hoy -
2.50
288,319
903,401
5,394
(587,030)
610,084
288,319
903,401
5,394
(587,030)
610,084
26
Cash generated from operations
2020
2019
£
£
Profit for the year after tax
179,325
321,191
Adjustments for:
Taxation charged
53,193
44,741
Finance costs
32,571
39,780
Investment income
(31,944)
(6,554)
Depreciation and impairment of tangible fixed assets
80,667
81,702
Movements in working capital:
Decrease in stocks
558,460
945,975
(Increase)/decrease in debtors
(80,347)
508,885
Decrease in creditors
(62,859)
(1,272,430)
Cash generated from operations
729,066
663,290
27
Analysis of changes in net debt
1 January 2020
Cash flows
31 December 2020
£
£
£
Cash at bank and in hand
145,241
776,145
921,386
Borrowings excluding overdrafts
(1,302,545)
(77,800)
(1,380,345)
(1,157,304)
698,345
(458,959)
2020-12-31
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