The directors present the strategic report for the year ended 31 August 2021.
The principal activity of the group continued to be the recycling of wood waste and manufacture of animal bedding.
There have not been any significant changes to the group's principal activities during the year under review. The directors are not aware, at the date of this report, of any likely changes to the principal activities in the next year.
Turnover for the group has remained consistent at £28,692,852 (2020: £28,695,555) which the directors are satisfied with given the economic impact of the Coronavirus pandemic.
Gross profit margins have decreased slightly by 0.77% to 12.88% (2020: 13.65%). This has arisen as the group has experienced increased prices of raw materials, wages, packaging and fuel throughout the year.
Overall a profit before tax of £527,142 was reported for 2021 and the directors are satisfied with these results.
As at the 31 August 2021, the group had net assets of £9,684,187 (2020: £9,508,130) which the directors believe places the group in a strong and stable financial position.
The group categorises risk into the following categories:
Strategic Risk
The group ensures that it carefully maintains stock of raw material on each site to meet the demands of all customers. Due to the FPP directives of the Environment Agency, stock holding remains the single most important consideration for all suppliers in this sector, our ability to service all contracts whilst working within guidelines, remains the main focus for the group.
Concentration Risk
The group is in constant contact with markets, and ensures all new opportunities are explored. The diversity of the group's activities ensure there is no reliance on any particular sector.
Financial Risk
Cash flow is vital and being able to service its liabilities whilst continuing to invest and grow is pivotal to all activities. The careful management of stock and full utilisation of assets that have been purchased over the preceding 3 years is seen as key to cash management.
Operational Risk
The group continues to invest in its staff via professional training programmes, to ensure that site operations continue in a smooth and consistent format. These are augmented by the ISO9001, ISO14001 and ISO18001 accreditations which were achieved during previous years.
Compliance
The group treats its compliance responsibility obligations appropriately and has established a robust framework to ensure compliance with all relevant legislation. The group is in regular dialogue with all regulatory bodies at all of its sites and constantly monitors the impact of its operations on the local environment.
Coronavirus
The group continues to implement steps to protect against the worst effects of Covid-19. This includes eliminating unnecessary meetings and travel, investment in assets in case employees need to work from home, implementing improved hygiene processes and protecting the group's liquidity. During the year, a number of non-essential staff were furloughed and the group utilised government financial support schemes by deferring tax payments to protect the group's liquidity. The group is monitoring developments daily and is confident it has the resources to manage the situation effectively and is keeping its costs base as flexible as possible to help manage fluctuations in demand.
Key performance indicators ('KPI's) are monitored on a regular basis by the Directors and senior management team.
The KPI's used by the group to monitor its overall financial performance and position can be summarised as follows:
2021 2020
Turnover £28,692,852 £28,695,555
Gross profit margin 12.88% 13.65%
EBITDA £2,683,507 £3,237,314
Net assets £9,684,187 £9,508,130
The group will continue to provide recycling of wood waste and manufacture of animal bedding.
The group has sufficient financial resources in place to execute its strategy and continue to develop into the future.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 August 2021.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £193,200. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Cowgill Holloway LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Plevin Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2021 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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).
Basis for opinion
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 group and parent 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 directors' 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 group's and parent 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 directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information 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 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.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report or the directors' r eport . 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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
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 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 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 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 identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation . We identified the following areas as those most likely to have such an effect: laws related to health and safety, employment and data protection as well as environmental regulations, as monitored by the Environment Agency.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:
Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud
Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud
Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged 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.
Use of our 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.
As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £490,123 (2020 - £702,065 profit).
Plevin Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales . The registered office is Cheshire Street, Mossley, Ashton Under Lyne, OL5 9NG.
The group consists of Plevin Holdings Limited and all of its subsidiaries.
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. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ : Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income ;
Section 33 ‘Related Party Disclosures’ : Compensation for key management personnel .
The consolidated group financial statements consist of the financial statements of the parent company Plevin Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates .
All financial statements are made up to 31 August 2021 . Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The group and company is in a net current liabilities position. The directors have considered the future profitability of the wider group and its ability to continue as a going concern, and have prepared profit and cash flow forecasts for the next 12 months. This forecast includes an invoice discounting facility and bank overdraft which are reviewed on a rolling basis. Based on these projections and the items above, the directors are satisfied that, for the foreseeable future, the company can meet its projected working capital requirements. Implicit within these projections is the assumption that the invoice discounting facility and bank overdraft described above will be renewed on terms materially consistent with those currently in place. Consequently, the financial statements have been prepared on a going concern basis.
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 relating to receipt of waste wood from customers for processing is recognised on the date the risk and reward of the wood has transferred to the company, typically on receipt of the goods at one of the company's operating sites or on collection from a customer site. Revenue relating to the sale of finished goods and processed material is recognised on the date the risk and reward of the inventory passes to the customer, typically on delivery to a customer site or on collection by the customer from one of the company's operating sites.
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 recognised in the profit and loss account .
Freehold land is not depreciated.
Equity in vest ments are measured at fair value through profit or loss , except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably , which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I n the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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 m ethod 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, 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.
Financial assets, other than those held at fair value through profit and loss , are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors , bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease d asset are consumed.
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.
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.
Profit and loss reclassification
During the year, certain employee's wages and salaries, social security costs and pension contributions have been represented within administrative expenses rather than cost of sales. These reclassifications have increased the gross profit reported for 2020 by £345,141 and increased administrative expenses by the same amount. This reclassification has had no affect on previously stated retained profits or net assets.
In the application of the group’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 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.
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.
The useful economic life of tangible fixed assets has to be estimated by the director of the group to ensure and appropriate depreciation charge is recognised each year.
The useful economic life of goodwill has to be estimated by the director of the group to ensure an appropriate amortisation charge is recognised each year.
Given the nature of the stock, significant judgement is made by management in both assessing the quantity of stock held at the year-end and the costing of stock. Management use their historical experience and other relevant factors to make their best estimate.
An exceptional provision was made during the year ended 31 August 2019 for a notice of fine, following a fire at one of the group's sites. The fine and costs imposed were under appeal at the date of approval of the 2019 financial statements and as such the provision made was based on the directors best estimate in-line with legal opinion sought. The appeal was subsequently withdrawn and as such an additional provision was made during the year ended 31 August 2020 to reflect the total fine payable.
Government grants received in the year related to claims made for the Coronavirus Job Retention Scheme and the release of deferred capital grants received in previous years, as outlined in Note 25.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2020 - 2).
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:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Freehold land and buildings included in group and company summaries above includes £5,049,355 (2020: £5,049,355) of freehold land which is not depreciated.
Details of the company's subsidiaries at 31 August 2021 are as follows:
Registered office addresses (all UK unless otherwise indicated):
The bank loan is secured by legal charges over properties held by the company.
Obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
Included within other creditors is an amount of £2,598,793 (2020: £2,420,104) in respect of an invoice discounting facility. This is secured over the debts to which it relates.
Included within other borrowings is an amount of £ N il (2020: £211,547) secured by legal charges over properties held by related parties.
The bank loan is secured by legal charges over properties held by the company.
Obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
Included within other borrowings is £1,000 (2020: £1,000) in respect of redeemable preference shares which carry a fixed annual cumulative preference dividend of £182 per share, hence included as a liability.
Bank loans are repayable within 5 years of the balance sheet date and interest is charged at 2% p,a. above the Bank of England base rate.
Other loans represent amounts due to one of the company's directors. There is no fixed repayment date, but all amounts due must be repaid by the final repayment date of 28 February 2029 and interest is charged at 5%.
The company is also party to a cross company guarantee given to the company's bankers between the company, R. Plevin & Sons Limited and Snowflake Animal Bedding Ltd.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years, although one lease entered into during the year has a term of 7 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
An exceptional provision was made during the year ended 31 August 2019 of £140,000, as outlined in Note 4, with an additional amount of £90,000 provided for during the year ended 31 August 2020. The total fine payable of £230,000 was payable over 10 instalments, of which the final 3 payments were made during the current year.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
T he deferred tax liability set out above is expected to reverse and relates to accelerated capital allowances that are expected to mature.
Deferred income is included in the financial statements as follows:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The ordinary share carry one vote per share and rights to dividends and rights to distribution on wind up.
Each preference share carries a fixed annual cumulate preference dividend of £182 per share but no voting rights.
The company has entered into an unlimited cross guarantee covering the borrowings of all g roup companies in favour of Barclays Bank PLC. At the balance sheet date the potential added liability for the company under these cross guarantees is £2,598,793 (2020: £2,420,104).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
The company has taken advantage of the exemption available in accordance with F inancial Reporting Standard, section 33, not to disclose transactions entered into between two or more members of a group, where any subsidiary party to the transaction is wholly owned.
M Plevin and R Plevin, close family members of the company directors, both hold £500 (2020: £500) preference shares each. Dividends on redeemable preferences shares (deemed interest) amounted to £91,000 (2020: £91,000) each. As at 31 August 2021 the group is owed £30,901 (2020: £38,040) from M & R Plevin, as included in other debtors. During the year, interest of £592 (2020: £1.965) was charged on overdrawn shareholder loan accounts.
During the year, the group paid rent of £99,996 (2020: £99,996) to R. Plevin & Sons Limited Directors Pension Fund. At the balance sheet date, £323,578 (2020: £323,578) was owed to R. Plevin & Sons Limited Directors Pension Fund. The loan does not carry any interest and has no fixed repayment date.
Dividends totalling £193,200 (2020 - £207,200) were paid in the year in respect of shares held by the company's directors.
Included within other long term loans is £560,584 (2020: £588,688) of fixed interest loans owed to S Plevin, a director of all companies within the group. The loan carries interest at 5% per annum. Loan note interest of £29,463 (2020: £34,335) was paid during the year.