Ellgia Limited - Limited company accounts 18.2

REGISTERED NUMBER: 00860123 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 30 June 2019

for

Ellgia Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

DIRECTORS:

S R Crook

J Rudd

J R Lavington

C Murdoch

REGISTERED OFFICE:

Unit 7

Lancaster Way Business Park

Ely

Cambridgeshire

CB6 3NW

REGISTERED NUMBER:

00860123 (England and Wales)

AUDITORS:

Hardcastle Burton LLP

Lake House

Market Hill

Royston

Hertfordshire

SG8 9JN

The directors present their strategic report for the year ended 30 June 2019.

REVIEW OF BUSINESS

The year ended 30 June 2019 was in line with expectations. Further site development has taken place during the year to

centralise systems and make all of our sites operate efficiently and as environmentally friendly as possible

The key performance indicators monitored by the directors are those that best demonstrate the financial performance and

strength of the company.

The key financial highlights are as follows:

2019

2018

£'000

£'000

Turnover

23,707

21,767

Gross profit

4,499

4,625

Net profit

444

740

Gross assets

14,342

13,496

Net assets

7,248

6,804

Following the acquisition of two businesses over the last 4 years, this year has been again a year of consolidation and

centralisation of operations. Despite the pressure on margins caused by a fall in industry level price of paper as a result

of the import restrictions in China and the political uncertainty in the UK, the directors are satisfied with the progress

made during the year.

The other performance indicators include regularly monitoring its 'carbon footprint' and encouraging change within the

business to mitigate this, for example through the use of hybrid company cars and reducing business mileage.

PRINCIPAL RISKS AND UNCERTAINTIES

During the course of its business the company is exposed to relatively low levels of financial risks. Main risks include,

but are not limited to the failure to comply with legislative and regulatory requirements such as Health and Safety and

those imposed by the Environment Agency. The company implements a rigorous health and safety management system

which is routinely monitored and improved, to mitigate the risk to the company.

FUTURE DEVELOPMENTS

The Board has a strategy of growth for the company through expansion within exiting markets and new areas when

opportunities arise. The Board will continue to invest capital funds into site improvements in Ely, Boston, Scunthorpe

and Prickwillow during the year ended 30 June 2019.

FINANCIAL RISK MANAGEMENT

The company uses various financial instruments including invoice finance facilities, operating leases and hire purchase

agreements, as well as trade debtors and trade creditors. The main risks arising from the company's financial instruments

are interest rate risk and credit risk. The directors review and agree policies for managing these risks:

Interest rate risk - The company's exposure to interest rate risk is interest arising on the invoice finance facility, this is

managed through negotiations with the provider to ensure interest rates remain at a minimal level.

Credit risk - This is the risk associated with trade debtors. The directors mitigate this risk by ensuring procedures are in

place to limit credit facilities to customers based on credit searches and trading history.

ON BEHALF OF THE BOARD:

S R Crook - Director

30 March 2020

The directors present their report with the financial statements of the company for the year ended 30 June 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of waste management.

DIVIDENDS

No dividends will be distributed for the year ended 30 June 2019.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 July 2018 to the date of this report.

S R Crook

J Rudd

J R Lavington

C Murdoch

FINANCIAL INSTRUMENTS

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 Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations

2008, Sch.7 to be contained in the directors' report. It has done so in respect of principle risks and uncertainties 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, Hardcastle Burton LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

S R Crook - Director

30 March 2020

Opinion

We have audited the financial statements of Ellgia Limited (the 'company') for the year ended 30 June 2019 which

comprise the Income Statement, Other 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 2019 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

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.

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 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 four, 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.

Denise Lindsell FCA (Senior Statutory Auditor)

for and on behalf of Hardcastle Burton LLP

Lake House

Market Hill

Royston

Hertfordshire

SG8 9JN

31 March 2020

TURNOVER

3

23,706,707

21,767,155

Cost of sales

19,207,435

17,141,847

GROSS PROFIT

4,499,272

4,625,308

Administrative expenses

3,945,255

3,674,834

OPERATING PROFIT

5

554,017

950,474

Interest receivable and similar income

5

118

554,022

950,592

Interest payable and similar expenses

6

58,101

125,835

PROFIT BEFORE TAXATION

495,921

824,757

Tax on profit

7

52,297

85,061

PROFIT FOR THE FINANCIAL YEAR

443,624

739,696

PROFIT FOR THE YEAR

443,624

739,696

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

443,624

739,696

FIXED ASSETS

Intangible assets

8

612,229

732,721

Tangible assets

9

7,444,045

7,554,369

Investments

10

1,802

251,802

8,058,076

8,538,892

CURRENT ASSETS

Stocks

11

83,271

61,054

Debtors

12

6,104,606

4,640,773

Cash at bank

96,422

254,871

6,284,299

4,956,698

CREDITORS

Amounts falling due within one year

13

5,706,402

4,979,625

NET CURRENT ASSETS/(LIABILITIES)

577,897

(22,927

)

TOTAL ASSETS LESS CURRENT LIABILITIES

8,635,973

8,515,965

CREDITORS

Amounts falling due after more than one year

14

(1,169,829

)

(1,516,344

)

PROVISIONS FOR LIABILITIES

17

(218,286

)

(195,387

)

NET ASSETS

7,247,858

6,804,234

CAPITAL AND RESERVES

Called up share capital

18

1,400

1,400

Revaluation reserve

19

257,977

257,977

Capital redemption reserve

19

600

600

Retained earnings

19

6,987,881

6,544,257

SHAREHOLDERS' FUNDS

7,247,858

6,804,234

The financial statements were approved by the Board of Directors on 30 March 2020 and were signed on its behalf by:

S R Crook - Director

Called up

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 July 2017

1,400

5,804,561

257,977

600

6,064,538

Changes in equity

Total comprehensive income

-

739,696

-

-

739,696

Balance at 30 June 2018

1,400

6,544,257

257,977

600

6,804,234

Changes in equity

Total comprehensive income

-

443,624

-

-

443,624

Balance at 30 June 2019

1,400

6,987,881

257,977

600

7,247,858

1.	STATUTORY INFORMATION

Ellgia 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. The

financial statements have been prepared under the historical cost convention as modified by the revaluation of

certain assets.

These financial statements are prepared in sterling which is the functional currency of the company. Monetary

items are rounded to the nearest £1.

On the date of signing these financial statements, there was a world-wide pandemic. Whilst the directors have

prepared revised cash flow forecasts, it is currently unknown how long the pandemic will last and the lasting

impact that it will have on the trading activity of the company. The directors believe that the company will

continue have adequate cash resources in order to pay all of its creditors as they fall due for the foreseeable

future and for at least 12 months from the date of signing of these financial statements.

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.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

Turnover is recognised to the extent that it is probable that economic benefits will flow to the company and can

be measured reliably.

Goodwill

When the fair value of the consideration for an acquired business exceeds the fair value of its separable net assets

the difference is treated as purchased goodwill and its capitalised and amortised through the profit and loss

account over its economic life. The estimated life of goodwill for the various business' acquired is 5 or 10 years.

Goodwill acquired from Ellgia Recycling Ltd is amortised over remaining balance of useful economic life from

date of acquisition.

Goodwill is reviewed for impairment at the end of the first full financial year following the acquisition and in the

other periods if events or changes in circumstances indicate that carrying value may not be recoverable.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful

life or, if held under a finance lease, over the lease term, whichever is shorter.

Freehold land and building

- Freehold land is not depreciated, building depreciated at 5% straight line

Improvement to property

- Straight line over 5 to 15 years

Plant and machinery

- 20% to 25% reducing balance, Straight line over 2 to 10 years

Fixtures and fittings

- Straight line over 2 to 7 years

Motor vehicles

- Straight line over 2 to 7 years

Freehold land and buildings used for the purpose of the trade of the company are revalued periodically and any

aggregate surplus or deficit arising from changes in market value is transferred to a revaluation reserve.

The carrying value of tangible fixed assets are reviewed for impairment when events or changes in circumstances

indicate the carrying value may not be recoverable.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow

moving items.

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' of FRS 102 to all of

its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company

becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include debtors, are initially measured at transaction price including transaction

costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement

constitutes a financing transaction, where the transaction is measured at the present value of the future receipts

discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, including creditors and loans that are classified as debt, are initially recognised at

transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is

measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities

classified as payable within one year are not amortised.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of

business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or

less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction

price and subsequently measured at amortised cost using the effective interest method.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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.

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.

Investments

Investments are recognised initially at the transaction price. At the end of each reporting period the investments

are measured at fair value with the gain or loss on revaluation being charged to the income statement.

If a reliable measure of fair value is no longer available for an asset measured at fair value, its carrying amount at

the last date the asset was reliably measurable becomes its new cost. Annual impairment reviews are performed

for all investments where a reliable measure of fair value is not available.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

30.6.19

30.6.18

£

£

United Kingdom

23,706,707

21,767,155

23,706,707

21,767,155

4.	EMPLOYEES AND DIRECTORS

30.6.19

30.6.18

£

£

Wages and salaries

4,711,900

4,404,450

Social security costs

461,736

439,960

Pensions

68,047

34,002

5,241,683

4,878,412

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

30.6.19

30.6.18

Directors

4

4

Other staff

157

161

161

159

30.6.19

30.6.18

£

£

Directors' remuneration

294,478

261,111

Directors' pension contributions to money purchase schemes

2,775

1,479

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

3

3

Information regarding the highest paid director is as follows:

30.6.19

30.6.18

£

£

Emoluments etc

102,218

93,407

Pension contributions to money purchase schemes

925

493

5.	OPERATING PROFIT

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

30.6.19

30.6.18

£

£

Hire of plant and machinery

443,615

274,845

Other operating leases

197,463

180,076

Depreciation - owned assets

1,609,267

1,201,325

Profit on disposal of fixed assets

(29,131

)

(7,811

)

Goodwill amortisation

120,492

127,636

Auditors' remuneration

17,150

17,750

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

30.6.19

30.6.18

£

£

Interest to group undertakings

-

81,306

Interest to related parties

11,667

-

Hire purchase

46,434

44,529

58,101

125,835

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

30.6.19

30.6.18

£

£

Current tax:

UK corporation tax

29,398

146,271

Deferred tax

22,899

(61,210

)

Tax on profit

52,297

85,061

Reconciliation of total tax charge included in profit and loss

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

explained below:

30.6.19

30.6.18

£

£

Profit before tax

495,921

824,757

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

94,225

156,704

Effects of:

Expenses not deductible for tax purposes

39,642

8,806

Utilisation of tax losses

(81,570

)

(75,752

)

Adjustments to tax charge in respect of previous periods

-

(8,545

)

Movement in deferred tax due to rate change

-

3,848

Total tax charge

52,297

85,061