Bolt Building Supplies Limited - Limited company accounts 18.2

REGISTERED NUMBER: 01293560 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 30 June 2018

for

Bolt Building Supplies Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Statement of Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

DIRECTORS:

J R Harlow

P V J Harlow

R V D Harlow

D Poli

S G Burgess

SECRETARY:

D Poli

REGISTERED OFFICE:

c/o Harlow Bros Limited

Hathern Road

Long Whatton

Loughborough

Leicestershire

LE12 5DE

REGISTERED NUMBER:

01293560 (England and Wales)

SENIOR STATUTORY AUDITOR:

Christopher David Hutton FCCA

AUDITORS:

Charnwood Accountants & Business Advisors LLP

Statutory Auditor

The Point

Granite Way

Mountsorrel

Loughborough

Leicestershire

LE12 7TZ

The directors present their strategic report for the year ended 30 June 2018.

REVIEW OF BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of our business during the

year and its position at the year end.

Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and

uncertainties we face.

The Company is a wholly-owned subsidiary of Harlow Bros Holdings Ltd. The principal activities of the company for the

year under review are that of a timber and building material distributor and manufacturer. We provide products to a wide

range of customers within the house building and construction sector and look to create value at the various stages of the

selling process.

Results and performance

The results of company for the year, as set out on pages 10 to 23.

Our customers appear to be trading well and remain positive for the immediate future with sales orders set to continue to

improve after the year end. The directors are hopeful that the company's core businesses activities will continue to show

improvements.

Turnover has decreased as we review our product offering and tailor it to ensure profitability is maximised. This is apparent

from the maintenance of gross margin over the year. Actions have been taken to improve the efficiency and focus of our

operations and we are hopeful that this and the refocus of our products will show positive results by July 2020 - as with any

exercise like this there is a time lag until results are realised. The company has made a considerable effort to control its costs

post year end and has continued to invest in all areas of the business and improving the customer experience to ensure that

we remain competitive whilst offering quality products and customer service.

We continue to develop our range of certified Forest Stewardship Council (FSC) and Programme for the Endorsement of

Forest Certification (PEFC) products. To ensure we sustainable quality products we assess all suppliers continually.

All trading divisions have targets and goals set over the short and medium term to ensure that they monitor opportunities for

growth and to mitigate threats throughout the year, whilst reviewing their working practices to continually improve service

levels to our customers. We continue to invest in our depot premises and staff to enable us to expand and enhance our

product offering across the full range of our products and services.

Staff numbers have increased this year. We are always looking to continually improve their knowledge and identify their

training needs. This includes investment in trainees, which are important to ensure that we have new talent coming through

the business, and continued investment in internal systems to manage the growing workforce needs.

Overall we are disappointed with the current years trading results with the reduction in the value of shareholders' funds of the

company and we have taken action to turn these results around. We are confident that this will improve as we take positive

steps towards developing the business across the groups core business areas.

PRINCIPAL RISKS AND UNCERTAINTIES

The process of risk management is applied through a combination of policies, procedures and internal controls. All policies

are subject to Board approval and ongoing review by management. Compliance with regulation, legal and ethical standards

is a high priority for the company to ensure they are compliant and able to continue trading successfully.

The finance team is responsible for ensuring that effective internal controls exist to manage the financial risks and that these

controls operate effectively for the benefit of the business.

We the directors endeavour to identify the risks that the company faces on a day to day basis. This is to ensure we have the

financial strength and operational capacity to support the growth of the business. The current risk factors below are those

that are considered by the board to be material to the company. However, we also recognise that we operate in a fast paced

commercial environment which is constantly evolving, where new risks may appear or immaterial risks may become more

important, and the directors will develop appropriate strategies as these risks appear.

Competitive market pressure is an ongoing risk for the company. To mitigate this risk the company strives to understand its

customers' requirements, markets and competitors, to ensure we continue to provide quality products and seek expansion by

organic growth. Given the potential economic volatility seen in our core business markets, we are continuously monitoring

trends and looking for ways in which to be more efficient and improve our working capital requirements. The production of

regular financial information helps the board to identify and assess current trends.

Parts of our business, such as timber raw material purchasing, are affected by fluctuations in price and supply of key

materials, although purchasing policies and practices in place seek to mitigate, where practicable, such risks.

The decision to leave the European Union has not yet had a significant impact on the business or operations so far, the

company's relationship with it's supply partners in Europe is of high importance to us and we have flexibility to procure

timber from wide range of reliable supply sources at the most competitive prices to help mitigate changes in market

conditions.

We have continuously worked to build a robust and flexible business by attracting and retaining the right quality staff to help

us achieve this. By doing so we have a good financial position to deal with any situations which have arisen during the year

and which we expect to face in the future.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The activities of the company expose it to a number of financial risks during the normal course of the company's business.

The company aims to limit undue exposure to business and financial risks and ensure sufficient working capital exists to

fund operations and to mitigate any potential negative effects on the company's assets and profitability. The directors

consider such risks and uncertainties to the business at this point in time are:

Currency risk

As the company trades in the UK, but purchases from various overseas markets, margins can fluctuate in line with changes in

currency spot rates against the value of sterling for our purchases.

Customer mix

There is a risk that the company becomes too dependent on a particular customer and product range and efforts are made to

ensure that our exposure in this respect is minimised by continually striving to expand the range of products and services on

offer to enhance the customer experience and build relationships with key customers.

Credit risk

There is a risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an

obligation. Company policies are aimed at minimising such losses, and require that deferred terms are only granted to

customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures. Details of the

company's debtors are shown in the notes to the financial statements.

Competitor risk

The company operates in a highly competitive market balancing both customer requirements and market pressures. The

directors review and monitor these factors to ensure the company's competitiveness is upheld to enable the company to

maintain its long term relationships with key customers and reputation for quality. We aim to improve, strengthen and

maintain the brand to ensure we maintain the right levels of investment and innovation in our customer offerings.

Liquidity risk and going concern

The company is exposed to liquidity risk as sufficient funds are required to support trading and financing activities. The

company regularly monitors its liquidity position and reports to the parent company board to ensure that sufficient funds are

available to meet both current and future requirements. This assessment of working capital requirements is reviewed by the

parent company for their financial support where additional funds are required.

With the above business risks and uncertainties in mind, we are aware that any plans for the future development of the

business may be subject to unforeseen future events outside of our control.

The company's business activities, together with the factors likely to affect its future development and position, are set out in

the business review at the beginning of the Strategic Report on page 3.

The company is expected to continue to generate positive cash flows on its own account in the foreseeable future. The

company participates in the group's centralised treasury arrangements and so shares banking arrangements with its parent and

fellow subsidiaries.

The directors, having assessed the responses of the directors of the company's parent Harlow Bros Holdings Limited to their

enquiries have no reason to believe that a material uncertainty exists that may cast significant doubt about the ability of the

Harlow group to continue as a going concern or its ability to continue with the current banking arrangements.

On the basis of their assessment of the company's financial position and of the enquiries made of the directors of Harlow

Bros Holdings Limited, the company's directors have a reasonable expectation that the company will be able to continue in

operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in

preparing the annual financial statements.

Health and Safety

We are conscious of our corporate responsibilities to all our stakeholders and to society as a whole. Health and safety,

environmental matters, staff training and equal opportunities are key areas relevant to the company's business activities.

We are keen to remain proactive in assessing and minimising the risks in all areas of the business and educating the

workforce to provide as safe a working environment as possible for our staff.

We employ a full-time Health and Safety Officer who reports to the board regularly on working practices and improvements

that can be made to increase safety for the staff. Employees are encouraged to take personal responsibility for making sure

their actions and behaviour maintain safety for all staff members during the working day.

KEY PERFORMANCE INDICATORS

We consider that our key financial performance indicators are those that communicate the financial performance and

strength of the company, these being turnover, gross margin, operating profit and earnings before interest tax depreciation

and amortisation (EBITDA). The company also closely monitors other internal KPI's.

We continually aim to develop our business with selective expansion and contraction in markets in order to work towards

increasing overall gross margin. Gross margin provides an indication of the quality of turnover growth and is also a measure

of value added by the company, reflecting the quality of the goods and services offered. Due to this strategy turnover for the

year decreased approximately 12% with gross profit margins increasing 1.1% to 11.1% (2017: 10%).

Overall, the company's EBITDA has increased to £1,138,102 (2017: £942,188), with operating profit decreasing to a loss of

£489,544 (2017: £21,913 profit), which this trend follows through to profit before tax decreasing to a loss of £488,970

(2017: £19,588 profit). This year we reported a depletion in reserves due to the post tax loss of £472,733 (2017: £84,422

increase to reserves). Our strategy to recover and improve the financial performance of the business going forward has been

commented on above in the review of business.

FINANCIAL INSTRUMENTS

A summary of the company financial instruments and related disclosures affecting the financial statements are set out in the

notes to the accounts. The financial risk management objectives and policies of the entity and its exposure to related risks are

covered above

FUTURE DEVELOPMENTS

The directors are currently carrying out a strategic review of the company. The directors anticipate the business environment

will remain competitive, but they believe that the company will be in a good financial position to meet these challenges, with

new management in place.

ON BEHALF OF THE BOARD:

R V D Harlow - Director

22 March 2019

The directors present their report with the financial statements of the company for the year ended 30 June 2018.

DIVIDENDS

No dividends will be distributed for the year ended 30 June 2018.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 July 2017 to the date of this report.

J R Harlow

P V J Harlow

R V D Harlow

D Poli

S G Burgess

Other changes in directors holding office are as follows:

C M Whitlock - resigned 25 May 2018

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen in accordance with Companies Act 2006, s. 414C(11) 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 to be contained in the directors' report. It has done so in respect of future developments and financial

instruments.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a

director in order to make himself aware of any relevant audit information and to establish that the company's auditors are

aware of that information.

AUDITORS

The auditors, Charnwood Accountants & Business Advisors LLP, have expressed their willingness to continue in office as

auditors and will be proposed for re-appointment at the forthcoming Annual General Meeting in accordance with Section

485 & 487 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

R V D Harlow - Director

22 March 2019

Opinion

We have audited the financial statements of Bolt Building Supplies Limited (the 'company') for the year ended 30 June 2018

which comprise the Statement of Comprehensive Income, Balance Sheet, 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 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 company's affairs as at 30 June 2018 and of its loss 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 Auditors' 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 directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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.

Opinion 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have 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 Report of the Directors.

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 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 six, 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 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.

Auditors' 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 a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Christopher David Hutton FCCA (Senior Statutory Auditor)

for and on behalf of Charnwood Accountants & Business Advisors LLP

Statutory Auditor

The Point

Granite Way

Mountsorrel

Loughborough

Leicestershire

LE12 7TZ

22 March 2019

TURNOVER

15,037,251

17,149,532

Cost of sales

13,364,784

15,430,120

GROSS PROFIT

1,672,467

1,719,412

Distribution costs

204,255

318,481

Administrative expenses

1,958,419

1,379,018

2,162,674

1,697,499

(490,207

)

21,913

Other operating income

663

-

OPERATING (LOSS)/PROFIT

4

(489,544

)

21,913

Interest receivable and similar income

574

2

(488,970

)

21,915

Interest payable and similar expenses

5

-

2,327

(LOSS)/PROFIT BEFORE TAXATION

(488,970

)

19,588

Tax on (loss)/profit

6

(16,237

)

(64,834

)

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(472,733

)

84,422

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(472,733

)

84,422

FIXED ASSETS

Tangible assets

7

1,451,573

1,340,681

CURRENT ASSETS

Stocks

8

924,976

820,031

Debtors

9

2,787,050

5,153,210

Cash at bank and in hand

478,926

126,693

4,190,952

6,099,934

CREDITORS

Amounts falling due within one year

10

2,950,182

4,219,302

NET CURRENT ASSETS

1,240,770

1,880,632

TOTAL ASSETS LESS CURRENT LIABILITIES

2,692,343

3,221,313

CREDITORS

Amounts falling due after more than one year

11

(1,680,000

)

(1,720,000

)

PROVISIONS FOR LIABILITIES

14

(14,936

)

(31,173

)

NET ASSETS

997,407

1,470,140

CAPITAL AND RESERVES

Called up share capital

15

600,000

600,000

Retained earnings

16

397,407

870,140

SHAREHOLDERS' FUNDS

997,407

1,470,140

The financial statements were approved by the Board of Directors on 22 March 2019 and were signed on its behalf by:

R V D Harlow - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 July 2016

600,000

785,718

1,385,718

Changes in equity

Total comprehensive income

-

84,422

84,422

Balance at 30 June 2017

600,000

870,140

1,470,140

Changes in equity

Total comprehensive income

-

(472,733

)

(472,733

)

Balance at 30 June 2018

600,000

397,407

997,407

1.	STATUTORY INFORMATION

Bolt Building Supplies Limited is a private company, limited by shares , registered in England and Wales. The

company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial

Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006 and under the

provision of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. The

financial statements have been prepared under the historical cost convention.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires

management to exercise its judgement in the process of applying the company accounting policies. The areas

involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to

the financial statements, are disclosed in note 2 below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as

permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

Significant judgements and estimates

In the application of the company's accounting policies, which are described in the accounting policies below,

management is required to make judgements, estimates and assumptions about the carrying values of assets and

liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the

revision and future periods if the revision affects both current and future periods.

Judgements

In preparing these financial statements, the directors have made the following key judgements that have a significant

effect on the amounts recognised in the financial statements as described below.

- Determine whether there are indicators of impairment of the company's tangible and intangible assets along with

residual values and asset lives. The residual value is the net realisable value of an asset at the end of its useful

economic life. The company has taken an assessment of the residual values that are appropriate for the business and

reviews this assessment annually. Note 7 provides details of the value of fixed assets capitalised.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that

have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the

next financial year, are described below. The Company based its assumptions and estimates on parameters available

when the financial statements were prepared. Existing circumstances and assumptions about future developments,

however, may change due to market changes or circumstances arising that are beyond the control of the Company.

Such changes are reflected in the assumptions when they occur.

a) Establishing useful economic lives for depreciation purposes of property, plant and equipment

Long-lived assets, consisting primarily of property, plant and equipment, comprise a significant portion of the

total assets. The annual depreciation charge depends primarily on the estimated useful economic lives of each type of

asset and estimates of residual values. The directors regularly review these asset useful economic lives and change

them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and

physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on

depreciation and amortisation charges for the period. Detail of the useful economic lives is included in the

accounting policies.

b) Providing for bad and doubtful debts

The company makes an estimate of the recoverable value of trade and other debtors. The company uses estimates

based on historical experience in determining the level of debts, which the company believes, will not be collected.

These estimates include such factors as the current credit rating of the debtor, the ageing profile of debtors and

historical experience. Any significant reduction in the level of customers that default on payments or other significant

improvements that resulted in a reduction in the level of bad debt provision would have a positive impact on the

operating results. The level of provision required is reviewed on an on-going basis.

Turnover

Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to

customers during the year.

Revenue is recognised when the significant risks and rewards of the goods or services provided have transferred to

the buyer, the amount of revenue can be measured reliably and it is probable that the economic benefits associated

with the transaction will flow to the company.

Revenue is measured at the fair value of the consideration receivable from the sale of goods and services to third

parties after deducting discounts, allowances for customer loyalty and other promotional activities. Revenue includes

duties which the company pays as principal, but excludes amounts collected on behalf of other parties, such as value

added tax or other sales taxes.

Revenue of the company comprises the following key streams:

Sale of goods

Revenue on the sale of goods delivered is recognised when goods have been dispatched to the customer.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Short leasehold

-

2% on cost

Furniture and equipment

-

20% on cost and 10% on cost

Plant and machinery

-

15% on cost

Motor vehicles

-

25% on cost

Tangible assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes

the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended

use.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to

complete and sell, and after making due allowance for obsolete and slow moving items.

The cost of stock is calculated on the weighted average cost principle on a first in first out basis and includes

expenditure incurred in acquiring stock, production or conversion costs, and other costs incurred in bringing them to

their existing location and condition. Stocks are recognised as an expense in the period in which the related revenue

is recognised.

Cost for raw materials and consumables are at the purchase cost to the company. Cost for Work in progress and

finished goods includes all direct expenditure.The cost of work in progress and finished goods includes

production overheads and the attributable proportion of indirect overheads based on the normal level of activity.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its

selling price, in the ordinary course of business, less costs to complete and sell. The impairment provision is

determined primarily by future demand forecasts. The write down is measured as the difference between the

calculated cost of the stock and market based upon assumptions about future demand and charged to the provision

for stock, which is a component of cost of sales.

Taxation

Taxation for the year comprises current and deferred tax. 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 equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will

be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance

sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of

transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held

under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are

depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of

the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

Going concern

The accounts have been prepared on the going concern basis the validity of which is dependent upon the continuing

support of the group.

3.	EMPLOYEES AND DIRECTORS

30.6.18

30.6.17

£

£

Wages and salaries

2,070,355

1,856,216

Other pension costs

32,387

25,971

2,102,742

1,882,187

The average number of employees during the year was as follows:

30.6.18

30.6.17

Directors

1

1

Management/Admin

20

16

Production

47

37

68

54

30.6.18

30.6.17

£

£

Directors' remuneration

85,000

60,262

4.	OPERATING (LOSS)/PROFIT

The operating loss (2017 - operating profit) is stated after charging/(crediting):

30.6.18

30.6.17

£

£

Hire of plant and machinery

7,313

3,583

Depreciation - owned assets

255,537

219,600

Profit on disposal of fixed assets

-

(1,500

)

Auditors' remuneration

10,813

10,500

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

30.6.18

30.6.17

£

£

Bank interest

-

2,327

6.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

30.6.18

30.6.17

£

£

Current tax:

UK corporation tax

-

19,597

Deferred tax

(16,237

)

(84,431

)

Tax on (loss)/profit

(16,237

)

(64,834

)

Reconciliation of total tax credit included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is

explained below:

30.6.18

30.6.17

£

£

(Loss)/profit before tax

(488,970

)

19,588

(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19% (2017 - 19.750%)

(92,904

)

3,869

Effects of:

Expenses not deductible for tax purposes

1,682

3,130

Depreciation in excess of capital allowances

20,175

12,598

Deferred tax movement

(16,237

)

(84,431

)

Losses carried forward

71,047

-

Total tax credit

(16,237

)

(64,834

)

Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2016 (on 6 September

2016). This was to reduce the main rate to 19% from 1 April 2017 and to 17% from 1 April 2020.

Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these

financial statements.

The effective tax rate differs from the UK corporation tax rate principally due to the deductibility of allowances on

capital expenditure and the under provision for prior year, and other permanent differences arising in the period.