Global Recycling Solutions Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04936450 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 October 2019

for

Global Recycling Solutions Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Statement of Income and Retained Earnings

7

Statement of Financial Position

8

Notes to the Financial Statements

9

DIRECTORS:

C P Course

P Banks

J K Buckle

SECRETARY:

H L Miles

REGISTERED OFFICE:

Dairy Farm Office

Dairy road

Semer

Ipswich

Suffolk

IP7 6RA

REGISTERED NUMBER:

04936450 (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 31 October 2019.

REVIEW OF BUSINESS

For the year ended 31 October 2019 revenues were £15.836m (2018 - £12.130m) with a profit on activities before

taxation of £573k (2018 - £625k) and a profit of £533k (2018 - £625k) after taxation.

The directors are satisfied with the progress made during the year.

The directors are satisfied with the progress made during the year, albeit that the Company increased overheads in

gearing up for future growth which negatively impacted on the net profit to sales ratio as compared to the prior year.

The economic environment in which the Company finds itself is one of uncertainty, especially in its key European

markets. Coronavirus/COVID-19 is expected to negatively impact on results in 2019/20 especially on the confi-shred

sector. However, the waste sector remains buoyant, and the hope is that sales of some new additions to the product lines

in this sector, together with significant new after sales contracts won, will cushion the impact. Management are focused

on continued product development and identifying new products and markets in which to trade.

PRINCIPAL RISKS AND UNCERTAINTIES

During the course of its business the Company is exposed to relatively low levels of financial risks which are dealt with

in the next paragraph. Other risks include, but are not limited to the failure to comply with legislative and regulatory

requirements including environmental and litigation failures, business continuity and the actions of customers and

competitors. The Company has implemented risk controls and loss mitigation plans but cannot give absolute assurance

that such procedures will be effective in identifying or controlling each of the operational risks faced by the Company.

FINANCIAL RISK MANAGEMENT POLICIES

The overall aim of the Company financial risk management policy is to minimise potential adverse effects on financial

performance and net assets. In the course of the business, the Company is exposed primarily to foreign exchange risk,

liquidity risk and credit risk. Interest rate is not considered significant as the Company does not have any liabilities that

accrue significant interest and interest income on bank deposits is not material.

The Company manages the principal financial risk within policies and operating parameters approved by the Board of

Directors. The Company does not enter into speculative transactions.

i) Foreign currency risk

The Company operates domestically and overseas. The Company does hedge certain cash flows when the directors

believe this to be appropriate, but wherever possible the Company naturally hedges it's operations by invoicing

customers and paying suppliers in the same currency, and continuously reviews this policy and may change it depending

on the Company's currency exposure and economic conditions.

ii) Liquidity risk

The Company's policy on liquidity risk is to ensure that sufficient cash is available to fund on-going operations without

the need to carry significant net debt. Where appropriate financing can be negotiated, assets may be purchased under

finance lease agreement. The extent of this financing is not considered material.

iii) Credit risk

Credit risk arises on financial instruments such as trade receivables. Policies and procedures exist to ensure that

customers have an appropriate credit history. Overall, the Company considers that it is not exposed to a significant

amount of credit risk.

ON BEHALF OF THE BOARD:

P Banks - Director

8 April 2020

The directors present their report with the financial statements of the company for the year ended 31 October 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of sourcing and trading in equipment and

machinery to be used in the recycling industry.

DIVIDENDS

No dividends will be distributed for the year ended 31 October 2019.

DIRECTORS

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

report.

C P Course

P Banks

J K Buckle

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), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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:

P Banks - Director

8 April 2020

Opinion

We have audited the financial statements of Global Recycling Solutions Limited (the 'company') for the year ended

31 October 2019 which comprise the Statement of Income and Retained Earnings, Statement of Financial Position 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 31 October 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; or

-	the directors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Strategic Report.

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.

Martin Law (Senior Statutory Auditor)

for and on behalf of Hardcastle Burton LLP

Lake House

Market Hill

Royston

Hertfordshire

SG8 9JN

30 April 2020

TURNOVER

3

15,836,311

12,130,014

Cost of sales

13,095,118

9,659,627

GROSS PROFIT

2,741,193

2,470,387

Administrative expenses

2,115,785

1,817,193

OPERATING PROFIT

5

625,408

653,194

Interest payable and similar expenses

6

52,877

28,558

PROFIT BEFORE TAXATION

572,531

624,636

Tax on profit

7

40,000

-

PROFIT FOR THE FINANCIAL YEAR

532,531

624,636

Retained earnings at beginning of year

157,359

(467,277

)

RETAINED EARNINGS AT END OF YEAR

689,890

157,359

FIXED ASSETS

Intangible assets

8

61,875

82,500

Tangible assets

9

590,654

520,377

Investments

10

1

-

652,530

602,877

CURRENT ASSETS

Stocks

11

5,480,598

3,450,645

Debtors

12

2,294,339

1,275,339

Cash at bank and in hand

30,988

44,092

7,805,925

4,770,076

CREDITORS

Amounts falling due within one year

13

4,651,373

2,347,286

NET CURRENT ASSETS

3,154,552

2,422,790

TOTAL ASSETS LESS CURRENT LIABILITIES

3,807,082

3,025,667

CREDITORS

Amounts falling due after more than one year

14

1,432,392

1,183,508

NET ASSETS

2,374,690

1,842,159

CAPITAL AND RESERVES

Called up share capital

18

1,684,800

1,684,800

Retained earnings

689,890

157,359

SHAREHOLDERS' FUNDS

2,374,690

1,842,159

The financial statements were approved by the Board of Directors and authorised for issue on 8 April 2020 and were signed on its behalf by:

P Banks - Director

1.	STATUTORY INFORMATION

Global Recycling Solutions 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.

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 to be profitable and will 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 requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

Preparation of consolidated financial statements

The financial statements contain information about Global Recycling Solutions Limited as an individual

company and do not contain consolidated financial information as the parent of a group. The company is exempt

under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial

statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial

statements of its parent, Heathpatch Limited, Dairy Farm Office, Semer, Ipswich, Suffolk, IP7 6RA.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions

which impact on the reported amounts of assets and liabilities. Estimates and judgements are continually

evaluated and are based on historical experience and other factors, including expectations of future events that

are believed to be reasonable under the circumstances.

The Company's machinery which is available for hire has been recognised in stock rather than tangible fixed

assets. This is on the basis it is also available for sale. The machines are assessed for impairment at each

reporting date and impairment losses are recognised if their carrying amounts exceed their recoverable amounts.

The recoverable amounts of the machines are determined as the higher of their selling prices less costs to sell and

values in use i.e. the future net hire income. Consequently, the carrying values of machines are the same as they

would be if they were recognised as tangible fixed assets.

Turnover

Revenue from the sale of goods is recognised when significant risks and rewards of the ownership of the goods

have been transferred to the buyer.

Goodwill

Goodwill is amortised over its estimated useful life of 5 years. Other intangible assets are also written off over a

5 year period.

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.

Computer software is being amortised evenly over its estimated useful life of nil years.

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 the shorter.

Short leasehold

-

10% on cost

Plant and machinery

-

20% on cost

Fixtures and fittings

-

20% on cost

Motor vehicles

-

20% on cost

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

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

moving items.

Cost is determined on a first in first out basis and includes all direct costs incurred. Net realisable value is based

upon estimated selling price allowing for further costs of completion and disposal.

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 statement of financial position date.

Deferred tax

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

statement of financial position 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

statement of financial position 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.

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:

31.10.19

31.10.18

£

£

United Kingdom

12,915,014

10,006,481

EU & Europe

2,724,284

2,076,439

Rest of the world

197,013

47,094

15,836,311

12,130,014

4.	EMPLOYEES AND DIRECTORS

31.10.19

31.10.18

£

£

Wages and salaries

1,545,593

1,187,947

Social security costs

154,088

121,033

1,699,681

1,308,980

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

31.10.19

31.10.18

Sales staff

8

3

Office staff

5

5

Production / site staff

24

22

37

30

31.10.19

31.10.18

£

£

Directors' remuneration

125,000

119,200

5.	OPERATING PROFIT

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

31.10.19

31.10.18

£

£

Other operating leases

53,057

56,127

Depreciation - owned assets

98,014

96,167

Depreciation - assets on hire purchase contracts

90,166

50,952

(Profit)/loss on disposal of fixed assets

(972

)

782

Goodwill and other intangibles amortisation

30,000

30,000

Auditors' remuneration

11,397

12,747

Foreign exchange differences

(1,267

)

4,378

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.10.19

31.10.18

£

£

Bank loan interest

301

884

Other loan interest payable

35,832

14,992

Hire purchase

16,744

12,682

52,877

28,558

7.

TAXATION

Analysis of the tax charge

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

31.10.19

31.10.18

£

£

Deferred tax

40,000

-

Tax on profit

40,000

-

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:

31.10.19

31.10.18

£

£

Profit before tax

572,531

624,636

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

108,781

118,681

Effects of:

Expenses not deductible for tax purposes

3,567

3,978

Depreciation in excess of capital allowances

11,011

6,613

Utilisation of tax losses

(26,053

)

(129,272

)

Reverse deferred tax asset

40,000

-

Group tax relief surrendered

(97,306

)

-

Total tax charge

40,000

-

8.	INTANGIBLE FIXED ASSETS

Goodwill

and other

Computer

intangibles

software

Totals

£

£

£

COST

At 1 November 2018

606,635

-

606,635

Additions

-

9,375

9,375

At 31 October 2019

606,635

9,375

616,010

AMORTISATION

At 1 November 2018

524,135

-

524,135

Amortisation for year

30,000

-

30,000

At 31 October 2019

554,135

-

554,135

NET BOOK VALUE

At 31 October 2019

52,500

9,375

61,875

At 31 October 2018

82,500

-

82,500

9.	TANGIBLE FIXED ASSETS

Fixtures

Short

Plant and

and

Motor

leasehold

machinery

fittings

vehicles

Totals

£

£

£

£

£

COST

At 1 November 2018

64,764

377,953

46,914

491,948

981,579

Additions

-

25,805

9,273

255,547

290,625

Disposals

-

(168,562

)

(12,596

)

(53,115

)

(234,273

)

At 31 October 2019

64,764

235,196

43,591

694,380

1,037,931

DEPRECIATION

At 1 November 2018

28,672

221,055

40,069

171,406

461,202

Charge for year

6,476

63,102

4,006

114,596

188,180

Eliminated on disposal

-

(140,005

)

(12,596

)

(49,504

)

(202,105

)

At 31 October 2019

35,148

144,152

31,479

236,498

447,277

NET BOOK VALUE

At 31 October 2019

29,616

91,044

12,112

457,882

590,654

At 31 October 2018

36,092

156,898

6,845

320,542

520,377

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:

Motor

vehicles

£

COST

At 1 November 2018

331,266

Additions

202,437

At 31 October 2019

533,703

DEPRECIATION

At 1 November 2018

82,376

Charge for year

90,166

At 31 October 2019

172,542

NET BOOK VALUE

At 31 October 2019

361,161

At 31 October 2018

248,890