Registration number:
Bentham Limited
for the Year Ended 31 December 2020
Bentham Limited
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Consolidated Profit and Loss Account |
|
Consolidated Balance Sheet |
|
Balance Sheet |
|
Consolidated Statement of Changes in Equity |
|
Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Statement of Cash Flows |
|
Notes to the Financial Statements |
Bentham Limited
Company Information
Directors |
Mr R I Matthews Mr L Feierabend Ms L E Mead |
Registered office |
|
Auditors |
|
Bentham Limited
Strategic Report for the Year Ended 31 December 2020
The directors present their strategic report for the year ended 31 December 2020.
Principal activity
The principal activity of the group is mail order business supplies.
Fair review of the business
Group profit for the year was £869,900 (2019 : £765,834) and reserves carried forward were £1,173,500 (2019 : £2,624,100).
Trading in the business categories where the group is active continued to be extremely competitive. This, coupled with the global pandemic, has led to a small decrease in turnover, however maintaining a gross profit margin of 25% is considered a good result. Operating profit significantly increased to £1,078,165 through use of the Coronavirus Job Retention Scheme and a reduction in marketing spend during the pandemic.
A result of the group's stringent credit control procedures was that bad debts were once again negligible. The group strives to take as many orders as possible on a payment before dispatch basis to maintain liquidity. Group cash reserves remain strong in spite of the continuation of quarterly MBO repayments, decreasing from £1.92m to £1.04m. The Group deemed it unnecessary to apply for any Government backed loans. The directors consider the results to be highly satisfactory given the difficult trading conditions. The group continues to be very profitable through efforts made to maintain turnover and rigorously control costs of goods and overheads.
The group's key financial and other performance indicators during the year were as follows:
Unit |
2020 |
2019 |
|
Turnover |
£ |
9,301,662 |
10,920,703 |
Gross margin |
£ |
2,342,869 |
2,746,122 |
Operating profit |
£ |
1,078,165 |
933,342 |
Cash at bank |
£ |
1,039,385 |
1,923,993 |
Debtors |
£ |
621,039 |
651,440 |
Turnover
Turnover fell by 15% from 2019 to 2020. This was largely to be expected after the country was placed in multiple lockdowns, resulting in many businesses temporarily closing, or operating at reduced capacity, especially in the public sector. The private consumer brand has decreased due to the trend away from printing and towards using paperless technology.
Gross margin
Gross margins have been maintained at a strong level. There has been particular focus on finding new suppliers for printer consumables. For hardware products, batch deals are only purchased if it is believed a reasonable return can be made. The group continues to focus on higher margin products, whilst addressing any obsolete stock issues.
Cash at bank and debtors
The group prides itself in not needing banking facilities. This is achieved by strong credit control and rigorous monitoring of cash flow. We are pleased to report that group cash balances remain strong, in spite of servicing the scheduled MBO repayments, which have remained on track.
Bentham Limited
Strategic Report for the Year Ended 31 December 2020 (continued)
Principal risks and uncertainties
Economic environment
The office consumables industry is intensely competitive and actions of competitors, including manufacturers of products we sell, can negatively affect our business. Competition has been primarily on price, product availability, speed of delivery and credit availability. Generally pricing is aggressive in the industry and we expect pricing pressures to continue.
Staff retention
The success of our business is dependant, to a large extent, on the efforts and abilities of key members of staff, particularly the senior members. The policy of the group is to provide senior members of staff with benefits which are competitive to other leading companies, as well as to provide them with fulfilment opportunities for their future careers. This has been demonstrated by the progression of senior managers to becoming the current owners, and the results prove this strategy to be successful.
Approved by the
Director
Bentham Limited
Directors' Report for the Year Ended 31 December 2020
The directors present their report and the consolidated financial statements for the year ended 31 December 2020.
Directors of the group
The directors who held office during the year were as follows:
Financial instruments
Objectives and policies
Financial
The group's principal financial instruments comprise bank balances, cash and short term deposits, as well as trade creditors and debtors. The main purpose of these financial instruments is to manage the group's funding and liquidity requirements.
Price risk, credit risk, liquidity risk and cash flow risk
The principal financial risks to which the group is exposed are those of price, liquidity, foreign currency and credit. Each of these is managed in accordance with board approved policies, as set out below.
Price risk
Changes in the industry and the economic environment can adversely affect demand for the products we sell. Net sales can be dependant on demand for specific product categories. The increase in computer hardware products means items need to be sold quickly in order to avoid their reducing in value as technology advances rapidly.
Liquidity risk
In respect of bank balances, liquidity risk is managed by closely monitoring movements and maintaining positive balances on accounts. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and regular monitoring of amounts outstanding for both credit and time limits. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Bentham Limited
Directors' Report for the Year Ended 31 December 2020 (continued)
Currency risk
The UK’s ongoing exit from the EU may lead to price increases on purchases by the group. As this pressure should apply to the whole industry, there will most likely be a general increase in prices so margins shouldn’t be greatly affected. The group’s high gross margins also mean there is scope to absorb some of the increase if needed. Sterling has had a difficult year. This has been offset by more products being sourced in the UK, rather than from the Far East. Imports in US Dollars are becoming an increasingly small proportion of purchases.
Credit risk
The group's exposure to credit risk is managed by using payment with order, only offering credit to schools and other companies with strong ratings. The group uses credit checks to verify the credit risk of each company on an individual basis.
Going concern
The directors have reviewed likely future developments and remain of the opinion that there is no reason to believe that the group will have to cease trading as a result of inadequate financial resources, or any other foreseeable event, within a period of at least twelve months from the date of approving the financial statements. The directors therefore continue to adopt the going concern basis of accounting in preparing the financial statements.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved by the
Director
Bentham Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual 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 of 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 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 departures disclosed and explained in the financial statements; and |
• |
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 and in accordance with FRS 102. 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.
Bentham Limited
Independent Auditor's Report to the Members of Bentham Limited
Opinion
We have audited the financial statements of Bentham Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2020, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• |
give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2020 and of the group's 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. |
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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 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.
Bentham Limited
Independent Auditor's Report to the Members of Bentham Limited (continued)
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• |
adequate accounting records have not been kept 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. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 6], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Bentham Limited
Independent Auditor's Report to the Members of Bentham Limited (continued)
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Procedures to identify risks:
- enquiring of management concerning the group's procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
- discussing among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion, we identified potential for fraud in the following areas: timing of recognition of sales and purchases and their related stock movements, posting of unusual journals; and
- obtaining an understanding of the legal and regulatory frameworks that the group operates in, focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the group. The key laws we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.
The procedures to respond to risks identified included:
- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations discussed above;
- enquiring of management, concerning actual and potential litigation and claims;
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
- reviewing correspondence with HMRC;
- testing the timing and matching of income and expense transactions relating to stock movements either side of the year end; and
- in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgments made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Bentham Limited
Independent Auditor's Report to the Members of Bentham Limited (continued)
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.
For and on behalf of
Church House
Church Street
Somerset
BA20 1HB
Bentham Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2020
Note |
2020 |
2019 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
|
- |
|
Operating profit |
|
|
|
Other interest receivable and similar income |
|
|
|
Profit before tax |
|
|
|
Tax on profit |
( |
( |
|
Profit for the financial year |
|
|
|
Profit/(loss) attributable to: |
|||
Owners of the company |
|
|
The group has no recognised gains or losses for the year other than the results above.
Bentham Limited
(Registration number: 04026676)
Consolidated Balance Sheet as at 31 December 2020
Note |
2020 |
2019 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
1,000 |
1,000 |
|
Profit and loss account |
1,172,500 |
2,624,100 |
|
Equity attributable to owners of the company |
1,173,500 |
2,625,100 |
|
Shareholders' funds |
1,173,500 |
2,625,100 |
Approved and authorised by the
Director
Bentham Limited
(Registration number: 04026676)
Balance Sheet as at 31 December 2020
Note |
2020 |
2019 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
1,000 |
1,000 |
|
Profit and loss account |
1,172,500 |
2,624,100 |
|
Shareholders' funds |
1,173,500 |
2,625,100 |
The company made a profit after tax for the financial year of £869,900 (2019 - profit of £843,727).
Approved and authorised by the
Director
Bentham Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2020
Equity attributable to the parent company
Share capital |
Profit and loss account |
Total |
Total equity |
|
At 1 January 2020 |
|
|
|
|
Profit for the year |
- |
|
|
|
Total comprehensive income |
- |
|
|
|
Dividends |
- |
( |
( |
( |
At 31 December 2020 |
|
|
|
|
Share capital |
Profit and loss account |
Total |
Total equity |
|
At 1 January 2019 |
|
|
|
|
Profit for the year |
- |
|
|
|
Total comprehensive income |
- |
|
|
|
Dividends |
- |
( |
( |
( |
At 31 December 2019 |
|
|
|
|
Bentham Limited
Statement of Changes in Equity for the Year Ended 31 December 2020
Share capital |
Profit and loss account |
Total |
|
At 1 January 2020 |
|
|
|
Profit for the year |
- |
|
|
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2020 |
|
|
|
Share capital |
Profit and loss account |
Total |
|
At 1 January 2019 |
|
|
|
Profit for the year |
- |
|
|
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2019 |
|
|
|
Bentham Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2020
Note |
2020 |
2019 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance income |
( |
( |
|
Income tax expense |
|
|
|
|
|
||
Working capital adjustments |
|||
Decrease in stocks |
|
|
|
Decrease in trade debtors |
|
|
|
Increase/(decrease) in trade creditors |
|
( |
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Dividends paid |
( |
( |
|
Net (decrease)/increase in cash and cash equivalents |
( |
|
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
1,039,385 |
1,923,993 |
Bentham Limited
Statement of Cash Flows for the Year Ended 31 December 2020
Note |
2020 |
2019 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance income |
( |
( |
|
Income tax expense |
|
|
|
|
|
||
Working capital adjustments |
|||
Decrease in stocks |
|
|
|
Decrease in trade debtors |
|
|
|
Increase/(decrease) in trade creditors |
|
( |
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Proceeds from sale of subsidiaries |
- |
|
|
Acquisitions of tangible assets |
( |
( |
|
Net cash flows from investing activities |
( |
|
|
Cash flows from financing activities |
|||
Dividends paid |
( |
( |
|
Net (decrease)/increase in cash and cash equivalents |
( |
|
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
1,039,384 |
1,923,992 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
These financial statements are prepared in Sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to 31 December 2020.
No profit and loss account is presented for Bentham Limited as permitted by section 408 of the Companies Act 2006.
Inter-company transactions, balances and unrealised gains on transactions between the Company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
2 |
Accounting policies (continued) |
Going concern
The directors have reviewed likely future developments and remain of the opinion that there is no reason to believe that the group will have to cease trading as a result of inadequate financial resources, or any other foreseeable event, within a period of at least twelve months from the date of approving the financial statements. The directors therefore continue to adopt the going concern basis of accounting in preparing the financial statements.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of Value Added Tax, returns, rebates and discounts and after eliminating sales within the company.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group's activities.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
2 |
Accounting policies (continued) |
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Leasehold improvements |
Over the period of the lease |
Equipment, fixtures and fittings |
15% per annum, straight line basis |
Computer equipment |
33% per annum, straight line basis |
Plant and machinery |
20% per annum, straight line basis |
Goodwill and other intangibles
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Intellectual property is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Amortisation is based on the expected useful life of the asset.
Amortisation
Asset class |
Amortisation method and rate |
Goodwill |
20% per annum, straight line basis |
Intellectual property |
20% per annum, straight line basis |
Inventories
Stocks are stated at the lower of cost and estimated selling price. Cost is determined using the average cost method.
The cost of finished goods comprises costs that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its estimated selling price; the impairment loss is recognised immediately in profit or loss.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Defined contribution pension obligation
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
2 |
Accounting policies (continued) |
Financial instruments
Classification
Basic financial instruments are defined as one of the following:
- cash
- a debt instrument (such as accounts receivable and payable)
- commitment to receive a loan that satisfy certain criteria
- investments in non-convertible preference shares, and non puttable ordinary shares.
All other financial instruments are classed as other financial instruments and treated accordingly.
Recognition and measurement
Research and development
Expenditure on research and development is written off against profits in the year in which it is incurred.
Revenue |
The analysis of the group's revenue for the year from continuing operations is as follows:
2020 |
2019 |
|
Sale of goods |
|
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2020 |
2019 |
|
Miscellaneous other operating income |
|
- |
Operating profit |
Arrived at after charging/(crediting)
2020 |
2019 |
|
Depreciation expense |
|
|
Foreign exchange gains |
( |
( |
Operating lease expense - property |
|
|
Operating lease expense - other |
850 |
11,900 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
Government grants |
The amount of grants recognised in the financial statements was £397,542
(2019 - £Nil).
Other interest receivable and similar income |
2020 |
2019 |
|
Interest income on bank deposits |
|
|
Other finance income |
- |
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2020 |
2019 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Other employee expense |
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2020 |
2019 |
|
Administration and support |
|
|
Sales |
|
|
Distribution |
|
|
|
|
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
Directors' remuneration |
The directors' remuneration for the year was as follows:
2020 |
2019 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
207,676 |
187,228 |
During the year the number of directors who were receiving benefits and share incentives was as follows:
2020 |
2019 |
|
Accruing benefits under money purchase pension scheme |
|
|
Auditors' remuneration |
2020 |
2019 |
|
Audit of these financial statements |
13,027 |
12,028 |
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
- |
4,250 |
|
|
|
Other fees to auditors |
||
All other non-audit services |
- |
|
Taxation |
Tax charged/(credited) in the income statement
2020 |
2019 |
|
Current taxation |
||
UK corporation tax |
|
|
UK corporation tax adjustment to prior periods |
- |
|
211,161 |
174,255 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
11 |
Taxation (continued) |
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2019 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2020 |
2019 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Effect of revenues exempt from taxation |
- |
( |
Effect of expense not deductible in determining taxable profit (tax loss) |
|
- |
Tax decrease from effect of capital allowances and depreciation |
( |
( |
Tax decrease arising from group relief |
- |
( |
Other tax effects for reconciliation between accounting profit and tax expense (income) |
- |
|
Total tax charge |
|
|
Tangible assets |
Group
Land and buildings |
Furniture, fittings and equipment |
Total |
|
Cost or valuation |
|||
At 1 January 2020 |
|
|
|
Additions |
- |
|
|
At 31 December 2020 |
|
|
|
Depreciation |
|||
At 1 January 2020 |
|
|
|
Charge for the year |
- |
|
|
At 31 December 2020 |
|
|
|
Carrying amount |
|||
At 31 December 2020 |
- |
|
|
At 31 December 2019 |
- |
|
|
Included within the net book value of land and buildings above is £Nil (2019 - £Nil) in respect of short leasehold land and buildings.
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
12 |
Tangible assets (continued) |
Company
Land and buildings |
Furniture, fittings and equipment |
Total |
|
Cost or valuation |
|||
At 1 January 2020 |
|
|
|
Additions |
- |
|
|
At 31 December 2020 |
|
|
|
Depreciation |
|||
At 1 January 2020 |
|
|
|
Charge for the year |
- |
|
|
At 31 December 2020 |
|
|
|
Carrying amount |
|||
At 31 December 2020 |
- |
|
|
At 31 December 2019 |
- |
|
|
Included within the net book value of land and buildings above is £Nil (2019 - £Nil) in respect of short leasehold land and buildings.
Investments |
Company
2020 |
2019 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2020 |
|
Carrying amount |
|
At 31 December 2020 |
|
At 31 December 2019 |
|
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
13 |
Investments (continued) |
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
||||
2020 |
2019 |
||||||
Subsidiary undertakings |
|||||||
|
England and Wales |
|
|
|
IJT Direct Limited, based in England and Wales, is dormant.
Another subsidiary, IJT Direct Limited, based in Jersey, was dissolved in December 2019, but its trading figures up to the date of dissolution are included in the group profit and loss account for the year ended 31 December 2019.
Stocks |
Group |
Company |
|||
2020 |
2019 |
2020 |
2019 |
|
Other inventories |
|
|
|
|
Debtors |
Group |
Company |
|||
2020 |
2019 |
2020 |
2019 |
|
Trade debtors |
|
|
|
|
Other debtors |
|
- |
|
- |
Prepayments |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
Group |
Company |
|||
2020 |
2019 |
2020 |
2019 |
|
Cash on hand |
|
|
|
|
Cash at bank |
|
|
|
|
Short-term deposits |
|
|
|
|
|
|
|
|
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
Creditors |
Group |
Company |
|||
2020 |
2019 |
2020 |
2019 |
|
Due within one year |
||||
Trade creditors |
|
|
|
|
Social security and other taxes |
|
|
|
|
Outstanding defined contribution pension costs |
|
- |
|
- |
Other payables |
|
|
|
|
Accrued expenses |
|
|
|
|
Income tax liability |
94,251 |
53,523 |
94,251 |
53,523 |
|
|
|
|
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to
£
Contributions totalling
£
Share capital |
Allotted, called up and fully paid shares
2020 |
2019 |
|||
No. |
£ |
No. |
£ |
|
|
|
1,000 |
|
1,000 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
Obligations under leases and hire purchase contracts |
Group
Operating leases
The total of future minimum lease payments is as follows:
2020 |
2019 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
Later than five years |
|
- |
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Company
Operating leases
The total of future minimum lease payments is as follows:
2020 |
2019 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
Later than five years |
|
- |
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Dividends |
2020 |
2019 |
|||
£ |
£ |
|||
Interim dividend of £2,321.50 (2019 - £440.00) per ordinary share |
2,321,500 |
440,000 |
||
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
Commitments |
Group
Other financial commitments
The total amount of other financial commitments not provided in the financial statements as at 31 December 2020 was £
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
The most senior parent entity producing publicly available financial statements is