Gower View Foods Limited 31/05/2018 iXBRL

Gower View Foods Limited 31/05/2018 iXBRL

GOWER VIEW FOODS LIMITED - Company Information

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Company registration number: 05459465
Gower View Foods Limited
Financial statements
31 May 2018
Gower View Foods Limited
Contents
Directors and other information
Strategic report
Directors report
Independent auditor's report to the members
Statement of income and retained earnings
Statement of financial position
Statement of cash flows
Notes to the financial statements
Gower View Foods Limited
Directors and other information
Directors Mr J Lewis
Mr A Hughes
Mr A Evans
Mr R Davies
Secretary Mr R Davies
Company number 05459465
Registered office Plot 2, Unit B
Heol Ty Newydd
Cross Hands Food Park
Cross Hands
SA14 6RZ
Business address Plot 2, Unit B
Heol Ty Newydd
Cross Hands Food Park
Cross Hands
SA14 6RZ
Auditor Morgan Hemp
103-104 Walter Road
Swansea
SA1 5QF
Accountants Morgan Hemp
103-104 Walter Road
Swansea
SA1 5QF
Bankers HSBC
Gower View Foods Limited
Strategic report
Year ended 31 May 2018
The Directors present their strategic report for the year ended 31st May 2018.
Principal activity
The principal activity of the company is the manufacturing and packaging of food products.
Fair review of the business
The results for the year and financial position of the company are as shown in the annexed financial statements.
The directors are satisfied with the performance of the company during this period which saw the new factory unit being brought into use. The investment in the new factory is now generating orders into the production and packaging of a variety of different food products.
Principal risks and uncertainties
The principal risk and uncertainty is the impact on the food industry from the UK's decision to leave the European Union.
On an operational level the key risks is the pricing of the raw ingredients and packaging materials if any additional tariffs were introduced on material imports following Brexit. The company also relies heavily on a foreign workforce which could be effected by Government Legislation following Brexit.
Financial key performance indicators
The key performance indicators are set out below:
2018 2017 Variance
Turnover £4.06m £3.56m £0.5m
Gross Profit £2.56m £2.08m £0.48m
Gross Profit % 63.1% 58.3% 4.8%
Profit before tax £408k £101k £307k
Profit before tax % 10% 2.8% 7.2%
This report was approved by the board of directors on 18 February 2019 and signed on behalf of the board by:
Mr J Lewis
Director
Gower View Foods Limited
Directors report
Year ended 31 May 2018
The directors present their report and the financial statements of the company for the year ended 31 May 2018.
Directors
The directors who served the company during the year were as follows:
Mr J Lewis
Mr A Hughes
Mr A Evans
Mr R Davies
Dividends
The directors do not recommend the payment of a dividend.
Future developments
The company plans to maintain its relationship with its customers and suppliers and continue its expansion into the production and packaging of other dairy and food products.
Financial instruments
The company operates a number of risk management policies designed to minimise its exposure to financial risk.
Price Risk:
The company activily manages price risk through regularly monitoring prices of raw ingredients.
Credit Risk:
The company operates a number of policies and controls to minimise credit risk. All customers are subject to a credit review prior to terms being agreed.
Liquidity and cash flow risk:
The company has detailed quarterly management accounts prepared which enables the directors to monitor the cash position to ensure there is sufficient liquidity to minimise the risk of the company being unable to pay its debts as they fall due.
Disclosure of information in the strategic report.
The company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
Directors responsibilities statement
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 judgments and accounting estimates that are reasonable and prudent; 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. 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
A resolution to reappoint Morgan Hemp as auditor will be proposed at the forthcoming Annual General Meeting.
This report was approved by the board of directors on 18 February 2019 and signed on behalf of the board by:
Mr J Lewis
Director
Gower View Foods Limited
Independent auditor's report to the members of
Gower View Foods Limited
Year ended 31 May 2018
Opinion
We have audited the financial statements of Gower View Foods Limited for the year ended 31 May 2018 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). 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 auditors 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. In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 31 May 2018 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.
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 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.
Other Information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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 the audit:
- the information given in the strategic report and the directors' report 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 has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or 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, 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 the 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' responsibilities statement, 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. As part of an audit in accordance with ISAs (UK), we exercise professional judgment 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. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - 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.
Mr Richard Morgan (Senior Statutory Auditor)
For and on behalf of
Morgan Hemp
Chartered Certified Accountants and Statutory Auditors
103-104 Walter Road
Swansea
SA1 5QF
19 February 2019
Gower View Foods Limited
Statement of income and retained earnings
Year ended 31 May 2018
2018 2017
Note £ £
Turnover 4 4,064,495 3,556,424
Cost of sales ( 1,500,607) ( 1,481,266)
_______ _______
Gross profit 2,563,888 2,075,158
Administrative expenses ( 2,155,440) ( 1,978,218)
Other operating income 5 36,704 28,593
_______ _______
Operating profit 6 445,152 125,533
Other interest receivable and similar income 9 - 12
Interest payable and similar expenses 10 ( 37,073) ( 24,752)
_______ _______
Profit before taxation 408,079 100,793
Tax on profit 11 36,769 20,546
_______ _______
Profit for the financial year and total comprehensive income 444,848 121,339
_______ _______
Retained earnings at the start of the year 1,278,236 1,156,900
_______ _______
Retained earnings at the end of the year 1,723,084 1,278,239
_______ _______
All the activities of the company are from continuing operations.
Gower View Foods Limited
Statement of financial position
31 May 2018
2018 2017
Note £ £ £ £
Fixed assets
Intangible assets 12 4,233 4,536
Tangible assets 13 4,500,676 4,377,367
_______ _______
4,504,909 4,381,903
Current assets
Stocks 14 308,133 70,074
Debtors 15 646,862 516,466
Cash at bank and in hand 377,834 1,207,676
_______ _______
1,332,829 1,794,216
Creditors: amounts falling due
within one year 16 ( 1,463,805) ( 2,105,034)
_______ _______
Net current liabilities ( 130,976) ( 310,818)
_______ _______
Total assets less current liabilities 4,373,933 4,071,085
Creditors: amounts falling due
after more than one year 17 ( 2,132,790) ( 2,264,841)
Provisions for liabilities 18 ( 112,559) ( 122,505)
_______ _______
Net assets 2,128,584 1,683,739
_______ _______
Capital and reserves
Called up share capital 22 1,000 1,000
Share premium account 23 404,500 404,500
Profit and loss account 23 1,723,084 1,278,239
_______ _______
Shareholders funds 2,128,584 1,683,739
_______ _______
These financial statements were approved by the board of directors and authorised for issue on 18 February 2019 , and are signed on behalf of the board by:
Mr J Lewis Mr A Evans
Director Director
Mr A Hughes Mr R Davies
Director Director
Company registration number: 05459465
Gower View Foods Limited
Statement of cash flows
Year ended 31 May 2018
2018 2017
£ £
Cash flows from operating activities
Profit for the financial year 444,848 121,339
Adjustments for:
Depreciation of tangible assets 139,224 126,806
Amortisation of intangible assets 303 303
Government grant income ( 36,704) ( 28,593)
Other interest receivable and similar income - ( 12)
Interest payable and similar expenses 37,073 24,752
Gain/(loss) on disposal of tangible assets ( 279) ( 438)
Tax on profit ( 36,769) ( 20,546)
Accrued expenses/(income) 32,073 ( 3,012)
Changes in:
Stocks ( 238,059) ( 11,740)
Trade and other debtors ( 130,396) 839,909
Trade and other creditors 65,132 1,237,115
_______ _______
Cash generated from operations 276,446 2,285,883
Interest paid ( 37,073) ( 24,752)
Interest received - 12
Tax refunded 26,820 42,687
_______ _______
Net cash from operating activities 266,193 2,303,830
_______ _______
Cash flows from investing activities
Purchase of tangible assets ( 267,754) ( 3,429,621)
Proceeds from sale of tangible assets 5,500 7,500
_______ _______
Net cash used in investing activities ( 262,254) ( 3,422,121)
_______ _______
Cash flows from financing activities
Proceeds from borrowings - 1,724,958
Repayments of borrowings ( 870,485) -
Government grant income 36,704 28,593
_______ _______
Net cash (used in)/from financing activities ( 833,781) 1,753,551
_______ _______
Net increase/(decrease) in cash and cash equivalents ( 829,842) 635,260
Cash and cash equivalents at beginning of year 1,207,676 572,416
_______ _______
Cash and cash equivalents at end of year 377,834 1,207,676
_______ _______
Gower View Foods Limited
Notes to the financial statements
Year ended 31 May 2018
1. General information
The company is a private company limited by shares, registered in United Kingdom. The address of the registered office is Plot 2, Unit B, Heol Ty Newydd, Cross Hands Food Park, Cross Hands, SA14 6RZ.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgementsThe judgments (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:Useful economic lives of tangible assetsThe annual depreciation charge of tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed periodically.
Turnover
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer, usually on despatch of the goods; the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves. In this case, tax is recognised in other comprehensive income or directly in capital and reserves, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at a revalued amount, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are recorded at the fair value at the acquisition date.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Trademark - 5 % straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Research and development
Research expenditure is written off in the year in which it is incurred. Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met: - It is technically feasible to complete the intangible asset so that it will be available for use or sale; - There is the intention to complete the intangible asset and use or sell it; - There is the ability to use or sell the intangible asset; - The use or sale of the intangible asset will generate probable future economic benefits; - There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and - The expenditure attributable to the intangible asset during its development can be measured reliably. Expenditure that does not meet the above criteria is expensed as incurred.
Tangible assets
tangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in capital and reserves, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in capital and reserves in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in capital and reserves in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Freehold property - 2 % straight line
Property Impovements - 2 % straight line
Plant and machinery - 10 % reducing balance
Fittings fixtures and equipment - 20 % straight line
Motor vehicles - 20 % straight line
If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of tangible assets, the depreciation is revised prospectively to reflect the new estimates.
Impairment
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. When it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stocks to their present location and condition.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event; it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised in finance costs in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument.
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
2018 2017
£ £
Sale of goods 4,064,495 3,556,424
_______ _______
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
2018 2017
£ £
Government grant income 36,704 28,593
_______ _______
6. Operating profit
Operating profit is stated after charging/(crediting):
2018 2017
£ £
Amortisation of intangible assets 303 303
Depreciation of tangible assets 139,224 126,806
(Gain)/loss on disposal of tangible assets ( 279) ( 438)
Cost of stocks recognised as an expense 1,098,060 943,557
Impairment of trade debtors 2,563 (18,580)
Research and development expenditure written off 185,754 191,058
Operating lease rentals - 2,975
_______ _______
7. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2018 2017
Production staff 54 56
Administrative staff 7 7
_______ _______
61 63
_______ _______
The aggregate payroll costs incurred during the year were:
2018 2017
£ £
Wages and salaries 1,051,354 981,366
Social security costs 98,416 89,514
Other pension costs 8,279 6,589
_______ _______
1,158,049 1,077,469
_______ _______
8. Directors remuneration
The directors aggregate remuneration in respect of qualifying services was:
2018 2017
£ £
Remuneration 95,000 91,923
_______ _______
Remuneration of the highest paid directors in respect of qualifying services:
2018 2017
£ £
Aggregate remuneration 95,000 91,923
_______ _______
95,000 91,923
_______ _______
9. Other interest receivable and similar income
2018 2017
£ £
Bank deposits - 12
_______ _______
10. Interest payable and similar expenses
2018 2017
£ £
Bank loans and overdrafts 84 85
Other loans made to the company:
Other interest on other loans made to the company 36,978 24,667
Other interest payable and similar expenses 11 -
_______ _______
37,073 24,752
_______ _______
11. Tax on profit
Major components of tax income
2018 2017
£ £
Current tax:
UK current tax income ( 10,021) ( 42,687)
Adjustments in respect of previous periods ( 16,802) -
_______ _______
Deferred tax:
Origination and reversal of timing differences ( 9,946) 22,141
_______ _______
Tax on profit ( 36,769) ( 20,546)
_______ _______
Reconciliation of tax income
The tax assessed on the profit for the year is lower than (2017: lower than) the standard rate of corporation tax in the UK of 19.00 % (2017: 19.80%).
2018 2017
£ £
Profit before taxation 408,079 100,793
_______ _______
Profit multiplied by rate of tax 77,535 19,957
Adjustments in respect of prior periods ( 16,802) -
Effect of expenses not deductible for tax purposes 582 560
Effect of capital allowances and depreciation ( 48,339) ( 7,965)
Effect of revenue exempt from tax ( 6,974) ( 5,664)
Utilisation of tax losses 3,110 -
R & D Enhanced Relief ( 45,881) ( 27,434)
_______ _______
Tax on profit ( 36,769) ( 20,546)
_______ _______
12. Intangible assets
Development costs Patents, trademarks & licences Total
£ £ £
Cost
At 1 June 2017 and 31 May 2018 286,336 6,050 292,386
_______ _______ _______
Amortisation
At 1 June 2017 286,336 1,514 287,850
Charge for the year - 303 303
_______ _______ _______
At 31 May 2018 286,336 1,817 288,153
_______ _______ _______
Carrying amount
At 31 May 2018 - 4,233 4,233
_______ _______ _______
At 31 May 2017 - 4,536 4,536
_______ _______ _______
13. Tangible assets
Freehold property Long leasehold property Plant and machinery Fixtures, fittings and equipment Motor vehicles Total
£ £ £ £ £ £
Cost
At 1 June 2017 3,087,931 57,678 2,100,661 130,360 2,000 5,378,630
Additions 24,387 - 237,477 5,890 - 267,754
Disposals - - ( 9,174) - - ( 9,174)
_______ _______ _______ _______ _______ _______
At 31 May 2018 3,112,318 57,678 2,328,964 136,250 2,000 5,637,210
_______ _______ _______ _______ _______ _______
Depreciation
At 1 June 2017 - 11,175 873,605 116,416 67 1,001,263
Charge for the year - 1,154 132,871 4,799 400 139,224
Disposals - - ( 3,953) - - ( 3,953)
_______ _______ _______ _______ _______ _______
At 31 May 2018 - 12,329 1,002,523 121,215 467 1,136,534
_______ _______ _______ _______ _______ _______
Carrying amount
At 31 May 2018 3,112,318 45,349 1,326,441 15,035 1,533 4,500,676
_______ _______ _______ _______ _______ _______
At 31 May 2017 3,087,931 46,503 1,227,056 13,944 1,933 4,377,367
_______ _______ _______ _______ _______ _______
14. Stocks
2018 2017
£ £
Finished goods 308,133 70,074
_______ _______
15. Debtors
2018 2017
£ £
Trade debtors 571,987 428,174
Prepayments and accrued income 42,127 42,745
Other debtors 32,748 45,547
_______ _______
646,862 516,466
_______ _______
16. Creditors: amounts falling due within one year
2018 2017
£ £
Bank loans and overdrafts 123,576 123,576
Trade creditors 232,778 140,610
Accruals and deferred income 126,089 94,016
Social security and other taxes 23,289 22,643
Director loan accounts 176,855 951,993
Other creditors 781,218 772,196
_______ _______
1,463,805 2,105,034
_______ _______
17. Creditors: amounts falling due after more than one year
2018 2017
£ £
Bank loans and overdrafts 1,325,070 1,420,417
Accruals and deferred income 807,720 844,424
_______ _______
2,132,790 2,264,841
_______ _______
18. Provisions
Deferred tax (note 19) Total
£ £
At 1 June 2017 122,505 122,505
Additions ( 9,946) ( 9,946)
_______ _______
At 31 May 2018 112,559 112,559
_______ _______
19. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2018 2017
£ £
Included in provisions (note 18) 112,559 122,505
_______ _______
The deferred tax account consists of the tax effect of timing differences in respect of:
2018 2017
£ £
Accelerated capital allowances 112,559 122,505
_______ _______
20. Employee benefits
The amount recognised in profit or loss in relation to defined contribution plans was £ 8,279 (2017: £ 6,589 ).
21. Government grants
The amounts recognised in the financial statements for government grants are as follows:
2018 2017
£ £
Recognised in creditors:
Deferred government grants due within one year 36,704 36,704
Deferred government grants due after more than one year 807,720 844,424
_______ _______
844,424 881,128
_______ _______
Recognised in other operating income:
Government grants recognised directly in income 36,704 28,593
_______ _______
22. Called up share capital
Issued, called up and fully paid
2018 2017
No £ No £
Ordinary shares shares of £ 1.00 each 1,000 1,000 1,000 1,000
_______ _______ _______ _______
23. Reserves
Profit and loss account:This reserve records retained earnings and accumulated losses.Share premium account:This reserve records the amount above the nominal value received for shares sold, less transaction costs.
24. Related party transactions
Included in creditors at the year ended 31st May 2018, is a balance owed by the company to the connected company Gower View (Dairy Processing) Ltd of £nil (2017: £206).Included in creditors at the year ended 31st May 2018, is a balance owed to the directors of £176,854 (2017: £951,992).Included in creditors is an amount owed to the connected company, Andrew Evans Painting Contractors Ltd, of £777,623 (2017: £768,873).
25. Controlling party
The company is under the control of the directors who own 100% of the share capital.