GRASSROOTS WHOLESALE FOODS LTD
ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2017
PAGES FOR FILING WITH REGISTRAR
GRASSROOTS WHOLESALE FOODS LTD
COMPANY INFORMATION
Directors
S R Mellin
N J Mellin
M R Riley
A Hirst
(Appointed 18 September 2017)
M J Jackson
(Appointed 18 September 2017)
Company number
08410569 (England and Wales)
Registered office
1 Lindred Road
Lomeshaye Industrial Estate
Nelson
Lancashire
BB9 5SR
Business address
1 Lindred Road
Lomeshaye Industrial Estate
Nelson
Lancashire
BB9 5SR
GRASSROOTS WHOLESALE FOODS LTD
CONTENTS
Page
Balance sheet
1 - 2
Notes to the financial statements
3 - 9
GRASSROOTS WHOLESALE FOODS LTD
BALANCE SHEET
AS AT
31 JANUARY 2017
31 January 2017
- 1 -
2017
2016
Notes
£
£
£
£
Fixed assets
Intangible assets
21,861
25,110
Tangible assets
4
3,225,380
482,316
3,247,241
507,426
Current assets
Stocks
157,717
84,991
Debtors
5
929,944
983,623
Cash at bank and in hand
21,219
108,710
1,108,880
1,177,324
Creditors: amounts falling due within one year
6
(1,872,158)
(1,018,805)
Net current (liabilities)/assets
(763,278)
158,519
Total assets less current liabilities
2,483,963
665,945
Creditors: amounts falling due after more than one year
7
(1,540,782)
(265,567)
Provisions for liabilities
(19,492)
(63,385)
Deferred income
9
(140,660)
(14,175)
Net assets
783,029
322,818
Capital and reserves
Called up share capital
10
1,200
150
Share premium account
11
744,302
99,950
Profit and loss reserves
37,527
222,718
Total equity
783,029
322,818
The notes on pages 3 - 9 form an integral part of these financial statements.
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
GRASSROOTS WHOLESALE FOODS LTD
BALANCE SHEET (CONTINUED)
AS AT
31 JANUARY 2017
31 January 2017
- 2 -
For the financial year ended 31 January 2017 the company was entitled to exemption from audit under section 477 of the Companies Act 2006.
T
he directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.
T
he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime.
The financial statements were approved by the board of directors and authorised for issue on 6 December 2017 and are signed on its behalf by:
S R Mellin
Director
Company Registration No. 08410569
GRASSROOTS WHOLESALE FOODS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2017
- 3 -
1
Accounting policies
Company information
Grassroots Wholesale Foods Ltd is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
1 Lindred Road, Lomeshaye Industrial Estate, Nelson, Lancashire, BB9 5SR.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view. The company early adopted section 1A of FRS 102.
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.
1.2
Going concern
During the year ended 31 January 2017, the company sustained a loss before taxation of £229,084. Trading conditions have continued to be difficult in the current financial year. The directors recognise that the competitive market in which the company operates can create uncertainties with regard to the level of demand for its products.
The company meets its working capital requirements through the support of its bankers, directors and other finance providers. The company's invoice discounting facility is due for renewal in June 2018 and negotiations will take place in due course.
The directors have considered the company's profit and cash flow projections for the remainder of the current financial year and for the year ended 31 January 2019. These indicate the company needs the continued support of its directors / shareholders to service its working capital and other loan finance requirements. M R Riley, the majority shareholder in the company, has confirmed his willingness to support the company based on these projections.
For these reasons, the directors believe that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.
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
(usually on dispatch of the goods)
, 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
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
GRASSROOTS WHOLESALE FOODS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
1
Accounting policies
(Continued)
- 4 -
1.5
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:
Alterations to leasehold premises
20% straight line basis
Plant and machinery
20% straight line basis
Fixtures, fittings & equipment
20% straight line basis
Website
33% straight line basis
Motor vehicles
20% straight line basis
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
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.
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.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
A financial instrument is a contract giving rise to a financial asset (such as trade and other debtors, cash and bank balances) or a financial liability (such as trade and other creditors, bank and other loans, hire purchase and lease creditors) or an equity instrument (such as ordinary or preference shares).
Financial instruments are recognised in the company's
balance sheet
when the company becomes
a
party to the contractual provisions of the instrument.
All the company's financial instruments are basic financial instruments and are recognised at amortised cost using the effective interest method.
Amortised cost:
the original transaction value, less amounts settled, less any adjustment for impairment.
Effective interest method:
where a financial instrument falls due more than 12 months after the balance sheet date and is subject to a rate of interest which is below a market rate, the original transaction value is discounted using a market rate of interest to give the net present value of future cash flows.
GRASSROOTS WHOLESALE FOODS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
1
Accounting policies
(Continued)
- 5 -
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
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.
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.
D
eferred 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
reserves
, in which case the deferred tax is also dealt with in
reserves.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.11
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account 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 income 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 asset are consumed.
1.12
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred
. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
GRASSROOTS WHOLESALE FOODS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
- 6 -
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 55 (2016 - 37).
3
Intangible fixed assets
Goodwill
£
Cost
At 1 February 2016 and 31 January 2017
32,400
Amortisation and impairment
At 1 February 2016
7,290
Amortisation charged for the year
3,249
At 31 January 2017
10,539
Carrying amount
At 31 January 2017
21,861
At 31 January 2016
25,110
4
Tangible fixed assets
Alterations to leasehold premises
Plant and machinery
Fixtures, fittings & equipment
Website
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 February 2016
96,055
351,965
55,069
112,781
24,425
640,295
Additions
1,691,940
1,166,669
159,881
15,631
4,500
3,038,621
Disposals
-
(75,756)
-
-
(6,250)
(82,006)
At 31 January 2017
1,787,995
1,442,878
214,950
128,412
22,675
3,596,910
Depreciation and impairment
At 1 February 2016
22,952
87,802
19,982
23,649
3,593
157,978
Depreciation charged in the year
26,741
133,478
40,960
40,478
8,082
249,739
Eliminated in respect of disposals
-
(31,536)
-
-
(4,651)
(36,187)
At 31 January 2017
49,693
189,744
60,942
64,127
7,024
371,530
Carrying amount
At 31 January 2017
1,738,302
1,253,134
154,008
64,285
15,651
3,225,380
At 31 January 2016
73,103
264,163
35,086
89,132
20,832
482,316
GRASSROOTS WHOLESALE FOODS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
- 7 -
5
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
615,931
957,301
Other debtors
294,753
18,836
Prepayments and accrued income
19,260
7,486
929,944
983,623
6
Creditors: amounts falling due within one year
2017
2016
£
£
Bank loans and overdrafts
100,000
-
Obligations under hire purchase contracts
73,677
29,042
Trade creditors
1,444,123
866,754
Corporation tax
1
1
Other taxation and social security
32,850
26,082
Other creditors
11,496
6,808
Accruals and deferred income
210,011
90,118
1,872,158
1,018,805
The bank loan is secured by a fixed and floating charge over all of the property or undertaking of the company.
The hire purchase creditors are secured on the assets to which they relate.
7
Creditors: amounts falling due after more than one year
2017
2016
£
£
Bank loans and overdrafts
350,000
-
Obligations under hire purhcase contracts
220,860
65,567
Other borrowings
969,922
200,000
1,540,782
265,567
The bank loan is secured by a fixed and floating charge over all of the property or undertaking of the company.
The hire purchase creditors are secured on the assets to which they relate.
Other borrowings are loans from M R Riley, a director and shareholder of the company, which are unsecured.
GRASSROOTS WHOLESALE FOODS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
- 8 -
8
Provisions for liabilities
2017
2016
£
£
Deferred tax liabilities
19,492
63,385
19,492
63,385
9
Government grants
During the year, the company received grants towards capital expenditure of £140,000. There are no unfulfilled conditions or other contingencies attaching to the grants, nor have there been any other forms of government assistance from which the company has directly benefitted.
2017
2016
£
£
At beginning of year
14,175
-
Grant received during the year
140,000
17,117
Amortisation in the year
(16,938)
(2,942)
At end of year
140,660
14,175
10
Called up share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
759 A ordinary shares of £1 each
759
45
210 B ordinary shares of £1 each
210
50
210 C ordinary shares of £1 each
210
50
21 D ordinary shares of £1 each
21
5
1,200
150
On 26 January 2017, the company issued 144 A ordinary, 160 B ordinary, 160 C ordinary and 16 D ordinary £1 shares at par.
On 30 January 2017, the company issued 570 A ordinary £1 shares at a premium of £1,130.44 above the par value.
GRASSROOTS WHOLESALE FOODS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
- 9 -
11
Share premium account
2017
2016
£
£
At beginning of year
99,950
99,950
Issue of new shares
644,352
-
At end of year
744,302
99,950
12
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2017
2016
£
£
166,667
-
13
Directors' transactions
Interest free loans have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
S R Mellin - Expenditure
-
-
6,473
(3,564)
2,909
N J Mellin - Expenditure
-
-
7,217
(1,134)
6,083
-
13,690
(4,698)
8,992
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