Company Registration No. SC024552 (Scotland)
GILMOUR & DEAN LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
GILMOUR & DEAN LIMITED
COMPANY INFORMATION
Directors
Gianmario Cillario
Giuseppe Cillario
Luciano Cillario
Gian Franco Cillario
Steven John Thompson
(Appointed 6 February 2020)
Company number
SC024552
Registered office
Citypoint
3rd Floor
65 Haymarket Terrace
EDINBURGH
EH12 5HD
Auditor
Johnston Carmichael LLP
227 West George Street
GLASGOW
G2 2ND
GILMOUR & DEAN LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 25
GILMOUR & DEAN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report for the year ended 31 December 2019.
Fair review of the business
The period ended 31 December 2019 proved to be another successful period in the development of the business.
Sales rose during the period to £21,710k, an increase of 14.5% from the previous year's £18,952k.
This was mainly due to strong growth across both Pressure Sensitive Labels (PSL) and Wet Glue (WG) categories. As well as the continued development and growth of existing customers the business also benefited from new high value WG business from a new customer which will continue on into 2020. There were also sales included in the PSL figures from the new digital press that was successfully installed and commissioned in 2019. This is the 2
nd
new printing technology introduced into the business since acquisition and further growth of the digital business is expected in 2020 supported by a specific digital sales strategy. The continued development and growth of the business is widely welcomed by the customer base which now has a major local presence which can support them in the supply of all labelling technologies across WG, PSL and digital.
Gross profit and net profit before tax are at very acceptable levels. Management is satisfied with the financial performance for the period.
Principal risks and uncertainties
The business acknowledges the risks around exchange rate fluctuations and has put in place processes to mitigate these risks.
As expected the business also successfully concluded an insurance claim relating to a non fault accident in 2018 and enjoyed a return to normal operations in early 2019.
With respect to COVID-19 and the associated risks and impacts, the company continues to monitor this and assess plans accordingly. As well as local management there is a wider group COVID-19 steering committee that meets weekly to determine a cohesive approach to managing the situation. The potential impact will depend on the severity and length of the UK as well as the wider Global outbreak. The key risks to our operations include:
• The impact on our customers demand linked to reduced sales through on trade volumes as a result of reduced capacity due to social distancing measures as well as potential restrictions on Global Travel Retail sales;
• Impact of additional costs of operating to accommodate increased social distancing and hygiene measures;
• Further potential outbreak of a second wave of the virus and the risk of a significant outbreak globally resulting in geographical movement restrictions; and
• The impact on our colleagues, especially those who are at high risk and need to self isolate.
In terms of mitigation of risks the company has invested heavily in PPE and additional hygiene regimes as well as altering the shift patterns across the business to ensure social distancing. The company has also worked swiftly and invested for the mid term to enable all office based staff to be able to work from home. The business has also accessed the UK job retention scheme to offset the reduction in volume as well as taking the option to defer payments of loans to help manage cash flow. A new sales strategy has been developed to work with both existing and potential new customers to allow us to on-board new business.
Despite the challenges recently raised by COVID-19 the Scotch Whisky Industry continues to see substantial investment at home and growth internationally for its products particularly for the strong industry leading brands. We are anticipating to see some disruption through 2020 as a result of COVID-19 and Brexit although the mid – long term outlook for the development of the Gilmour & Dean Eurostampa UK business remains encouraging.
GILMOUR & DEAN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
Development and performance
The business continues to build a strong platform for growth and profitability in future years. Investment continues to be made in both capital equipment and business infrastructure mainly IT but also in organisational capability through the successful recruitment of key individuals.
To support the growth of the business the company continues to invest in new machinery. During the last year we have increased our production capacity in key areas by the purchase and installation of new pieces of equipment. This investment has been across all categories WG, PSL and digital. As well as being able to service our customers the purchase of new equipment will allow us to control our overtime costs as well as limit our use of 3
rd
party service providers.
Key performance indicators
The group recognises the importance of key financial performance indicators and management monitors these on a monthly basis. The main KPIs of the business are turnover and profitability, both of which have been discussed above and are set out on page 7.
Steven John Thompson
Director
19 November 2020
GILMOUR & DEAN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
The directors present their report and financial statements for the year ended 31 December 2019.
Principal activities
The principal activity of the company is the printing of high quality labels.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Gianmario Cillario
Giuseppe Cillario
Luciano Cillario
Giovanni Paolo Di Vita
(Resigned 6 February 2020)
Gian Franco Cillario
Steven John Thompson
(Appointed 6 February 2020)
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed subject to any material departure disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
GILMOUR & DEAN LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 4 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Steven John Thompson
Director
19 November 2020
GILMOUR & DEAN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GILMOUR & DEAN LIMITED
- 5 -
Opinion
We have audited the financial statements of Gilmour & Dean Limited (the 'company') for the year ended 31 December 2019 which comprise the profit and loss account, the balance sheet, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
GILMOUR & DEAN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GILMOUR & DEAN LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters
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, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
GILMOUR & DEAN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GILMOUR & DEAN LIMITED
- 7 -
Auditor's responsibilities for the audit of the financial statements (continued)
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
James Hamilton (Senior Statutory Auditor)
for and on behalf of Johnston Carmichael LLP
26 November 2020
Chartered Accountants
Statutory Auditor
227 West George Street
GLASGOW
G2 2ND
GILMOUR & DEAN LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 8 -
2019
2018
Notes
£
£
Turnover
3
21,709,575
18,952,025
Cost of sales
(17,354,667)
(15,699,169)
Gross profit
4,354,908
3,252,856
Administrative expenses
(3,680,109)
(2,910,513)
Other operating income
3
799,119
364,449
Operating profit
4
1,473,918
706,792
Interest payable and similar expenses
7
(252,937)
(184,538)
Profit before taxation
1,220,981
522,254
Taxation
8
(231,565)
(97,510)
Profit for the financial year
21
989,416
424,744
Total comprehensive income for the year
989,416
424,744
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GILMOUR & DEAN LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2019
31 December 2019
- 9 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
9
9,783,468
9,236,390
Current assets
Stocks
10
3,518,690
2,576,349
Debtors
11
7,776,048
6,603,299
Cash at bank and in hand
529,255
408,968
11,823,993
9,588,616
Creditors: amounts falling due within one year
12
(10,447,661)
(9,114,683)
Net current assets
1,376,332
473,933
Total assets less current liabilities
11,159,800
9,710,323
Creditors: amounts falling due after more than one year
13
(5,819,014)
(5,394,309)
Provisions for liabilities
16
(696,005)
(537,774)
Deferred income
18
(201,000)
(323,875)
Net assets
4,443,781
3,454,365
Capital and reserves
Called up share capital
20
100,000
100,000
Profit and loss reserves
21
4,343,781
3,354,365
Total equity
4,443,781
3,454,365
The financial statements were approved by the board of directors and authorised for issue on 19 November 2020 and are signed on its behalf by:
Steven John Thompson
Director
Company Registration No. SC024552
GILMOUR & DEAN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2018
100,000
2,929,621
3,029,621
Year ended 31 December 2018:
Profit and total comprehensive income for the year
-
424,744
424,744
Balance at 31 December 2018
100,000
3,354,365
3,454,365
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
989,416
989,416
Balance at 31 December 2019
100,000
4,343,781
4,443,781
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 11 -
1
Accounting policies
Company information
Gilmour & Dean Limited is a limited company domiciled and incorporated in Scotland.
The registered office is
Citypoint, 65 Haymarket Terrace, Edinburgh, EH12 5HD.
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. The principal accounting policies adopted are set out below.
This 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
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
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
f
low 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 financial statements of the company are consolidated in the financial statements of
Unicorn Graphics Limited.
These consolidated financial statements are available from its registered office,
Citypoint, 65 Haymarket Terrace, Edinburgh, EH12 5HD.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future.
The directors have assessed the Company's cash flow forecast and existing funding facilities in making the going concern assessment.
Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the 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.
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 12 -
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.
Other income, including insurance receipts, are recognised when it is virtually certain the income will be received.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and machinery
4 to 12 years
Motor vehicles
4 years
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 the profit and loss account.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible 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
the profit and loss account.
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) prior years. A reversal of an impairment loss is recognised immediately in
the profit and loss account.
1.6
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.
Work in progress is valued at the lower of cost and net realisable value, and includes direct expenditure and an appropriate proportion of fixed and variable overheads.
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 13 -
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
the
profit
and
loss
account
. Reversals of impairment losses are also recognised in
the
profit
and
loss
account
.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
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.
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 trade and other
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
.
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 the profit and loss account.
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 the profit and loss account.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans
and
loans from
fellow group companies
are
initially recognised at transaction price
.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 15 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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 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
s
asset are consumed.
1.14
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.
1.15
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 are included in the profit and loss account for the period.
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Stock valuation (2019: £3,518,690 ((2018: £2,576,349))
The cost of stock is determined by deducting margins earned from selling prices. Judgement is applied to elements of excess stock, and whether these items retain value. Excess stock older than one year is fully written off, whilst excess stock less than one year old is written down by 75%.
Finished goods stock which is older than one year is written off with the loss recognised in the profit and loss account. Items may be excluded from write off if the directors believe that there is reasonable certainty that the item will be sold.
Useful lives of tangible assets (2019: £9,783,468 (2018: £9,236,390))
The estimated useful lives of assets are outlined in note 1.4, and are based on historical experience and the periods over which management believe that future economic benefits will be derived.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2019
2018
£
£
Turnover analysed by class of business
Sale of goods
21,709,575
18,952,025
2019
2018
£
£
Other significant revenue
Grants received
122,875
169,625
Insurance proceeds
676,244
194,824
799,119
364,449
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
3
Turnover and other revenue
(Continued)
- 17 -
2019
2018
£
£
Turnover analysed by geographical market
United Kingdom
19,741,498
16,625,445
EU
1,936,012
2,290,810
USA
32,065
35,770
21,709,575
18,952,025
4
Operating profit
2019
2018
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(151,250)
73,594
Government grants
(122,875)
(169,625)
Fees payable to the company's auditor for the audit of the company's financial statements
13,998
11,350
Depreciation of owned tangible fixed assets
1,260,898
929,260
Loss on disposal of tangible fixed assets
8,642
-
Impairment of stocks recognised or reversed
404,577
433,122
Operating lease charges
168,495
170,474
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Direct factory staff
127
108
Other administrative staff
32
28
159
136
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
5,704,824
4,998,798
Social security costs
524,573
475,919
Pension costs
128,486
90,487
6,357,883
5,565,204
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 18 -
6
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
127,305
322,757
Company pension contributions to defined contribution schemes
2,884
10,000
130,189
332,757
There is only one director remunerated through the company and so the above figures represent the highest paid director.
7
Interest payable and similar expenses
2019
2018
£
£
Interest on bank overdrafts and loans
248,515
179,767
Interest on finance leases and hire purchase contracts
4,422
517
Interest payable to group undertakings
-
4,254
252,937
184,538
8
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
73,334
-
Adjustments in respect of prior periods
-
(3,257)
Total current tax
73,334
(3,257)
Deferred tax
Origination and reversal of timing differences
158,231
100,335
Adjustment in respect of prior periods
-
432
Total deferred tax
158,231
100,767
Total tax charge
231,565
97,510
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
8
Taxation
(Continued)
- 19 -
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:
2019
2018
£
£
Profit before taxation
1,220,981
522,254
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
231,986
99,228
Tax effect of expenses that are not deductible in determining taxable profit
18,322
12,289
Adjustments in respect of prior years
(1,225)
(2,825)
Group relief
-
(620)
Adjustment to deferred tax in respect of changes to tax rates
(18,760)
(11,804)
Fixed asset differences
1,242
1,242
Taxation charge for the year
231,565
97,510
9
Tangible fixed assets
Plant and machinery
Motor vehicles
Total
£
£
£
Cost
At 1 January 2019
14,527,773
27,912
14,555,685
Additions
1,931,821
-
1,931,821
Disposals
(280,511)
(16,414)
(296,925)
At 31 December 2019
16,179,083
11,498
16,190,581
Depreciation and impairment
At 1 January 2019
5,300,486
18,809
5,319,295
Depreciation charged in the year
1,258,023
2,875
1,260,898
Eliminated in respect of disposals
(156,665)
(16,415)
(173,080)
At 31 December 2019
6,401,844
5,269
6,407,113
Carrying amount
At 31 December 2019
9,777,239
6,229
9,783,468
At 31 December 2018
9,227,287
9,103
9,236,390
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
9
Tangible fixed assets
(Continued)
- 20 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2019
2018
£
£
Plant and machinery
1,826,202
1,216,681
10
Stocks
2019
2018
£
£
Raw materials and consumables
662,136
492,242
Work in progress
262,476
424,140
Finished goods and goods for resale
2,594,078
1,659,967
3,518,690
2,576,349
11
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
3,470,172
2,352,473
Corporation tax recoverable
-
3,257
Amounts owed by group undertakings
3,661,529
3,778,904
Other debtors
2,010
4,430
Prepayments and accrued income
642,337
464,235
7,776,048
6,603,299
The directors of Gilmour & Dean Limited have confirmed that they will not seek repayment of the amount due from group companies for at least twelve months from the date of signing the financial statements.
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 21 -
12
Creditors: amounts falling due within one year
2019
2018
Notes
£
£
Bank loans and overdrafts
14
4,110,376
3,832,819
Obligations under finance leases
15
321,057
256,583
Other borrowings
14
461,119
297,207
Trade creditors
4,111,292
3,692,151
Corporation tax
73,341
-
Other taxation and social security
725,862
491,517
Other creditors
91,262
1,564
Accruals and deferred income
553,352
542,842
10,447,661
9,114,683
Obligations under hire purchase contracts are secured on the assets to which they relate.
Bank loans and overdrafts are secured by a bond and floating charge over the assets of the company and those of its immediate parent undertaking.
13
Creditors: amounts falling due after more than one year
2019
2018
Notes
£
£
Bank loans and overdrafts
14
4,776,555
4,434,211
Obligations under finance leases
15
1,042,459
960,098
5,819,014
5,394,309
Obligations under hire purchase contracts are secured on the assets to which they relate.
Bank loans and overdrafts are secured by a bond and floating charge over the assets of the company and those of its immediate parent undertaking.
Amounts included above which fall due after five years are as follows:
Payable by instalments
500,000
700,000
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 22 -
14
Loans and overdrafts
2019
2018
£
£
Bank loans
6,729,649
5,891,924
Bank overdrafts
2,157,282
2,375,106
Loans from group undertakings
461,119
297,207
9,348,050
8,564,237
Payable within one year
4,571,495
4,130,026
Payable after one year
4,776,555
4,434,211
The long-term loans are secured by a bond and floating charge over the assets of the company and those of its immediate parent undertaking.
Bank loans are repayable over 5 to 10 years and are charged at a market rate of interest.
Loans from fellow group undertakings are charged at a market rate of interest.
15
Finance lease obligations
2019
2018
Future minimum lease payments due under finance leases:
£
£
Within one year
352,706
256,583
In two to five years
1,084,804
960,098
1,437,510
1,216,681
Less: future finance charges
(73,994)
-
1,363,516
1,216,681
Finance lease payments represent rentals payable by the company 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 6 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
16
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
17
696,005
537,774
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 23 -
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2019
2018
Balances:
£
£
Fixed asset timing difference
699,506
540,050
Short term and other deductions
(3,501)
-
Other timing differences
-
(2,276)
696,005
537,774
2019
Movements in the year:
£
Liability at 1 January 2019
537,774
Charge to profit or loss
158,231
Liability at 31 December 2019
696,005
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so.
18
Government grants
2019
2018
£
£
Arising from government grants
201,000
323,875
201,000
323,875
19
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
128,486
90,487
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.
Creditors totalling £5,000 (2018: £28,408) were payable to the fund at the year end and included in creditors.
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 24 -
20
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
100,000 Ordinary shares of £1 each
100,000
100,000
21
Profit and loss reserves
Profit and loss reserves represent accumulated comprehensive income.
22
Operating lease commitments
Lessee
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:
2019
2018
£
£
Within one year
48,767
67,139
Between two and five years
4,066
39,837
52,833
106,976
23
Events after the reporting date
Post year end there has been significant uncertainty in the UK and Global economies arising from the on-going impact and disruption of Covid-19. The company has performed assessments considering the impact of Covid-19 on the potential financial and operational risks to the business. The directors remain satisfied that the company can continue to pay liabilities as they fall due for at least 12 months from the date of approval of these financial statements. Covid-19 is a non-adjusting balance sheet event to the company as it does not provide more information about circumstances that existed at the year end.
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sale of goods
Purchase of goods
2019
2018
2019
2018
£
£
£
£
Entities with control, joint control or significant influence over the company
100,830
70,618
2,166,382
1,458,867
GILMOUR & DEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
24
Related party transactions
(Continued)
- 25 -
Interest on group loans
2019
2018
£
£
Entities with control, joint control or significant influence over the company
-
4,254
In addition to the above, the company incurred fees of £35,099 (2018: £36,254) in relation to fees in respect of a guarantee from an entity with control over the company.
The following amounts were outstanding at the reporting end date:
Amounts owed to related parties
2019
2018
£
£
Entities with control, joint control or significant influence over the company
461,119
297,207
461,119
297,207
The company has taken advantage of the exemption within FRS 102 Section 33 paragraph 33.1A from the requirement to disclose transactions with other wholly owned companies in the same group.
25
Ultimate controlling party
The immediate parent undertaking is Unicorn Graphics Limited, a company registered in Scotland and of the same address as Gilmour & Dean Limited.
The ultimate parent undertaking at the balance sheet date was Eurostampa S.p.A,. a company registered in Italy.
Eurostampa S.p.A. is the largest group and Unicorn Graphics Limited is the smallest group for which group accounts are prepared. Copies of the group accounts can be obtained by writing to the registered office.
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