Cliffe Packaging Limited - Limited company accounts 20.1

Cliffe Packaging Limited - Limited company accounts 20.1

CLIFFE PACKAGING LIMITED - Company Information

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REGISTERED NUMBER: 04829354 (England and Wales)











Strategic Report, Report of the Directors and

Financial Statements

for the Period

1 September 2018 to 31 December 2019

for

Cliffe Packaging Limited
Cliffe Packaging Limited (Registered number: 04829354)






Contents of the Financial Statements
for the Period 1 September 2018 to 31 December 2019




Page

Company Information 1

Strategic Report 2

Report of the Directors 5

Report of the Independent Auditors 7

Income Statement 10

Other Comprehensive Income 11

Balance Sheet 12

Statement of Changes in Equity 13

Cash Flow Statement 14

Notes to the Cash Flow Statement 15

Notes to the Financial Statements 16


Cliffe Packaging Limited

Company Information
for the Period 1 September 2018 to 31 December 2019







DIRECTORS: P J Dawber
D K Dawber





SECRETARY: R I Hothersall





REGISTERED OFFICE: Unit 5
Apollo Park
University Way
Crewe
Cheshire
CW1 6HX





REGISTERED NUMBER: 04829354 (England and Wales)





AUDITORS: Mitten Clarke Audit Limited
Statutory Auditors
The Glades
Festival Way
Stoke on Trent
Staffordshire
ST1 5SQ
Page 1
Cliffe Packaging Limited (Registered number: 04829354)

Strategic Report
for the Period 1 September 2018 to 31 December 2019

The directors present their strategic report for the period 1 September 2018 to 31 December 2019.

REVIEW OF BUSINESS
The principal activity of the Company is the sale, conversion and distribution of flexible packaging
materials. The Company sources product from the UK, Europe and Asia, and operates a storage and
conversion facility in Crewe, UK. The Company also provides sales, technical and administrative support to
its customers, and utilises the services of selected logistics partners for the distribution and additional
storage of its products.

During the period the Company invested in new conversion machinery, with fixed asset investment of
£540K. The Company also moved to a significantly larger and improved operating facility, enabling the
on-site storage of the majority of inventory in addition to the conversion facility and administrative
functions. The Directors believe the new machinery and move to the new facility provides the Company
with an enhanced platform to meet the needs of its customers over future periods.

The Company's reporting period was extended to December 2019 in order to reflect the completion of the
site relocation/expansion and capital investment projects. The results for the current period therefore
reflect 16 months trading compared to 12 months in the previous period, and trading comparatives
therefore reflect approximately 33% growth due to the extended reporting period.

The Company's continued focus on cost effective solutions for existing and new customers enabled
increased trading levels despite UK economic uncertainty and a competitive market environment during
the period. Sales increased to £16.6M (+£4.4M, +36%) and stable margins resulted in gross margin of £3.2M
(+£0.9M, +38%). Overhead costs (distribution, administration and financing) increased to £2.7M (+£1.0M,
+56%) in the period, reflecting not only the increased reporting period but also one-time costs associated
with the site move, plus increased infrastructure costs. Profit before tax for the period was £0.5M
(-£0.1M), reflecting the one-time costs associated with the site move and increased infrastructure costs.

Inventory increased during the period (+£0.4M), reflecting the Company's commitment to supporting new
and existing customer requirements. In order to support the investment in both fixed assets (+£0.5M) and
inventory (+£0.4M), the Company arranged increased funding facilities during the period. These facilities,
including invoice, trade and asset finance, enabled increased bank borrowings of £0.8M, within funding
limits.

These are considered to be the Company's key performance indicators. The Directors are satisfied with the
financial position of the Company at the period-end which is set out in the financial statements.


Page 2
Cliffe Packaging Limited (Registered number: 04829354)

Strategic Report
for the Period 1 September 2018 to 31 December 2019

PRINCIPAL RISKS AND UNCERTAINTIES
Financial Risk Management Objectives and Policies
The Companys operations are funded mainly from bank borrowings. In common with most trading
companies it has various other financial instruments such as trade debtors and trade creditors, which arise
directly from its operations. The main risks arising from the Company's financial instruments are product
price risk, credit risk, cashflow risk, liquidity risk and foreign currency risk. The Directors review and agree
policies for managing these risks as described below:

Product price risk
The Company is exposed to fluctuations in market prices of raw materials. This position is regularly
monitored in order to take necessary action to minimise the impact of such risk.

Credit risk
The Company only trades with recognised, credit worthy third parties. It is the company policy that all
customers who wish to trade on credit terms are subject to credit vetting procedures. Customer debts are
largely insured and trade debtor balances are monitored on an ongoing basis, with the result that the
exposure to bad debts is not significant.

Cashflow risk
Cashflow risk is continually assessed by the business. The need to ensure access to sufficient working
capital to support our business requirements is the main factor considered in monitoring of cashflow. Close
monitoring and management of cashflows ensures that we have sufficient capacity to operate efficiently
and serve our customer base effectively.

Liquidity risk
The Company has arranged access to a variety of borrowings, including invoice, trade and asset financed
facilities. The Company seeks to manage liquidity risk by ensuring sufficient liquidity is available at all
times to meet foreseeable needs.

Foreign currency risk
The Company manages its foreign currency risk by the use of forward currency contracts and maintaining
currency bank balances to cover its payment exposure to suppliers outside the UK.


Page 3
Cliffe Packaging Limited (Registered number: 04829354)

Strategic Report
for the Period 1 September 2018 to 31 December 2019

FUTURE DEVELOPMENTS
The Directors continue to develop the business based on its core strengths whilst seeking further growth
opportunities in an increasingly competitive market.

Significant challenges have been faced in early 2020 with the global COVID-19 crisis. Nationally, some
industry sectors were adversely impacted (eg construction), which for a short period in turn adversely
impacted the Company's revenues. Other sectors (eg food processing, pharmaceuticals, agriculture)
continued to trade strongly. In addition, the Company developed significant new business producing PPE
for the public sector during this period. Overall, the Company has therefore traded strongly and profitably
through the first half of 2020. As a temporary contingency the Company agreed increased bank facilities,
which have not been utilised.

The continuing economic uncertainty, notably relating to COVID-19 and Brexit, presents the Company with
particularly challenging trading conditions, but the Directors are confident that the business will continue
to trade profitably and that the financial strength of the business will be maintained.

ON BEHALF OF THE BOARD:





P J Dawber - Director


20 August 2020

Page 4
Cliffe Packaging Limited (Registered number: 04829354)

Report of the Directors
for the Period 1 September 2018 to 31 December 2019

The Directors present their report with the financial statements of the Company for the period 1
September 2018 to 31 December 2019. The period end of the Company was extended to 31 December
2019, and the financial statements therefore reflect a 16 month period compared to a 12 month period
ended 31 August 2018.

PRINCIPAL ACTIVITY
The principal activity of the company in the period under review was that of the sale, conversion and
distribution of flexible packaging materials. Further details of these activities are provided in the Strategic
Report.

DIVIDENDS
Interim dividends of £284,264 (2018 - £287,448) were declared during the period. The directors
recommend that no final dividend be paid.

The total distribution of dividends for the period ended 31 December 2019 will be £284,264 (2018 -
£287,448).

EVENTS SINCE THE END OF THE PERIOD
Information relating to events since the end of the period is given in the notes to the financial statements.

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

P J Dawber
D K Dawber

DISCLOSURE IN THE STRATEGIC REPORT
The company has chosen in accordance with section 414C(11) of Companies Act 2006 (Strategic Report and
Directors' Report) Regulations 2013 to set out in the company's Strategic Report information required by
schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

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.

Page 5
Cliffe Packaging Limited (Registered number: 04829354)

Report of the Directors
for the Period 1 September 2018 to 31 December 2019


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.

ON BEHALF OF THE BOARD:





P J Dawber - Director


20 August 2020

Page 6
Report of the Independent Auditors to the Members of
Cliffe Packaging Limited

Opinion
We have audited the financial statements of Cliffe Packaging Limited (the 'company') for the period ended
31 December 2019 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet,
Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 December 2019 and of its profit
for the period 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.

Page 7
Report of the Independent Auditors to the Members of
Cliffe Packaging Limited


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 five, 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.

Page 8
Report of the Independent Auditors to the Members of
Cliffe Packaging Limited


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.




Nicola Johnson (Senior Statutory Auditor)
for and on behalf of Mitten Clarke Audit Limited
Statutory Auditors
The Glades
Festival Way
Stoke on Trent
Staffordshire
ST1 5SQ

20 August 2020

Page 9
Cliffe Packaging Limited (Registered number: 04829354)

Income Statement
for the Period 1 September 2018 to 31 December 2019

Period Year Ended
1.9.18 to 31.12.19 31.8.18
Notes £    £    £    £   

TURNOVER 4 16,551,891 12,180,886

Cost of sales 13,316,084 9,838,139
GROSS PROFIT 3,235,807 2,342,747

Distribution costs 1,178,877 521,054
Administrative expenses 1,448,273 1,175,296
2,627,150 1,696,350
OPERATING PROFIT 6 608,657 646,397


Interest payable and similar expenses 7 101,589 50,912
PROFIT BEFORE TAXATION 507,068 595,485

Tax on profit 8 114,249 131,363
PROFIT FOR THE FINANCIAL PERIOD 392,819 464,122

The notes form part of these financial statements

Page 10
Cliffe Packaging Limited (Registered number: 04829354)

Other Comprehensive Income
for the Period 1 September 2018 to 31 December 2019

Period
1.9.18
to Year Ended
31.12.19 31.8.18
Notes £    £   

PROFIT FOR THE PERIOD 392,819 464,122


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD
392,819
464,122

The notes form part of these financial statements

Page 11
Cliffe Packaging Limited (Registered number: 04829354)

Balance Sheet
31 December 2019

2019 2018
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 10 122,213 166,657
Tangible assets 11 592,575 115,320
Investments 12 1,100 1,100
715,888 283,077

CURRENT ASSETS
Stocks 13 2,992,301 2,599,748
Debtors 14 2,612,499 3,005,220
Cash at bank and in hand 210 36,669
5,605,010 5,641,637
CREDITORS
Amounts falling due within one year 15 4,843,165 4,911,143
NET CURRENT ASSETS 761,845 730,494
TOTAL ASSETS LESS CURRENT
LIABILITIES
1,477,733
1,013,571

CREDITORS
Amounts falling due after more than
one year
16
(315,691
)
(65,762
)

PROVISIONS FOR LIABILITIES 21 (112,589 ) (21,911 )
NET ASSETS 1,049,453 925,898

CAPITAL AND RESERVES
Called up share capital 22 203,500 198,500
Share premium 23 21,623 11,623
Capital redemption reserve 23 70,167 70,167
Retained earnings 23 754,163 645,608
SHAREHOLDERS' FUNDS 1,049,453 925,898

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





P J Dawber - Director


The notes form part of these financial statements

Page 12
Cliffe Packaging Limited (Registered number: 04829354)

Statement of Changes in Equity
for the Period 1 September 2018 to 31 December 2019

Called up Capital
share Retained Share redemption Total
capital earnings premium reserve equity
£    £    £    £    £   

Balance at 1 September 2017 233,500 573,934 11,623 35,167 854,224

Changes in equity
Purchase of own shares (35,000 ) (105,000 ) - 35,000 (105,000 )
Dividends - (287,448 ) - - (287,448 )
Total comprehensive income - 464,122 - - 464,122
Balance at 31 August 2018 198,500 645,608 11,623 70,167 925,898

Changes in equity
Issue of share capital 5,000 - 10,000 - 15,000
Dividends - (284,264 ) - - (284,264 )
Total comprehensive income - 392,819 - - 392,819
Balance at 31 December 2019 203,500 754,163 21,623 70,167 1,049,453

The notes form part of these financial statements

Page 13
Cliffe Packaging Limited (Registered number: 04829354)

Cash Flow Statement
for the Period 1 September 2018 to 31 December 2019

Period
1.9.18
to Year Ended
31.12.19 31.8.18
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 213,335 348,236
Interest paid - (50,359 )
Interest element of hire purchase
payments paid
-
(553
)
Tax paid (136,571 ) (89,711 )
Net cash from operating activities 76,764 207,613

Cash flows from investing activities
Purchase of tangible fixed assets (540,180 ) (4,567 )
Sale of tangible fixed assets - 1,750
Net cash from investing activities (540,180 ) (2,817 )

Cash flows from financing activities
New HP in the period 362,792 -
HP capital repayments in the period (13,790 ) (3,053 )
Share issue 5,000 -
Share buyback - (105,000 )
Share premium 10,000 -
Interest paid (98,866 ) -
Interest element on HP/Finance lease (2,723 ) -
Equity dividends paid (284,264 ) (287,448 )
Net cash from financing activities (21,851 ) (395,501 )

Decrease in cash and cash equivalents (485,267 ) (190,705 )
Cash and cash equivalents at
beginning of period
2
(1,971,672
)
(1,780,967
)

Cash and cash equivalents at end of
period
2
(2,456,939
)
(1,971,672
)

The notes form part of these financial statements

Page 14
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Cash Flow Statement
for the Period 1 September 2018 to 31 December 2019

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
Period
1.9.18
to Year Ended
31.12.19 31.8.18
£    £   
Profit before taxation 507,068 595,485
Depreciation charges 62,925 23,791
Amortisation 44,444 66,457
Finance costs 101,589 50,912
716,026 736,645
Increase in stocks (392,553 ) (468,949 )
Decrease/(increase) in trade and other debtors 392,721 (588,164 )
(Decrease)/increase in trade and other creditors (502,859 ) 668,704
Cash generated from operations 213,335 348,236

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in
respect of these Balance Sheet amounts:

Period ended 31 December 2019
31.12.19 1.9.18
£    £   
Cash and cash equivalents 210 36,669
Bank overdrafts (2,457,149 ) (2,008,341 )
(2,456,939 ) (1,971,672 )
Year ended 31 August 2018
31.8.18 1.9.17
£    £   
Cash and cash equivalents 36,669 34,640
Bank overdrafts (2,008,341 ) (1,815,607 )
(1,971,672 ) (1,780,967 )

The notes form part of these financial statements

Page 15
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements
for the Period 1 September 2018 to 31 December 2019

1. STATUTORY INFORMATION

Cliffe Packaging 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.

The presentation currency of the financial statements is the Pound Sterling (£).


2. STATEMENT OF COMPLIANCE

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.

3. ACCOUNTING POLICIES

Basis of preparing the financial statements
The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared on the assumption that the company is able to carry
on business as a going concern, which the directors consider appropriate having regard to the
company's current and expected performance.

The financial statements are prepared for a 16 month period to 31 December 2019. In August 2019
the company was in the process of a significant site relocation/expansion and capital investment
programme, and extended the statutory period to December 2019 in order to reflect the completion
of this programme.

Group accounts
The financial statements present information about the company as an individual undertaking, not
the group as a whole. Exemption from preparing group accounts has been taken as per Section 405
of The Companies Act 2006 as all subsidiaries have been dormant throughout the period and they
are immaterial to the financial statements individually and in aggregate.

Page 16 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

3. ACCOUNTING POLICIES - continued

Significant judgements and estimates
In the application of the company's accounting policies, the directors are required to make
judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are
not readily apparent from other sources. The estimates and associated 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.

Critical judgements in applying the Company's accounting policies

In the directors' opinion critical judgements which impact the financial statements are listed below,
apart from those involving estimations (dealt with separately below), that they have made in
applying company's accounting policies and that have had a significant effect on the amounts
recognised in the financial statements.

Going concern
The Directors have assessed the going concern status of the Company and consider the Company to
be a going concern. In making this assessment the Directors considered the impact of the
Coronavirus (COVID-19) pandemic on the Company to date and the Company's ability to adapt and
continue to trade profitably thus far. The Directors have also considered the Company's existing
funding arrangements and believe that the Company has sufficient access to working capital to
enable it to continue to trade and meet its ongoing liabilities for the foreseeable future.

Key sources of estimation uncertainty

The directors consider that there are no key estimates and assumptions used in preparing the
financial statements.

Page 17 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

3. ACCOUNTING POLICIES - continued

Turnover
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the
Company and the turnover can be reliably measured. Turnover is measured as the fair value of the
consideration received or receivable, net of discounts, rebates and excluding value added tax and
other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:

- the Company has transferred the significant risks and rewards of ownership to the buyer;
- the Company retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold;
- the amount of turnover can be measured reliably;
- it is probable that the Company will receive the consideration due under the transaction;
and
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Goodwill
Goodwill is measured at cost less accumulated amortisation and any accumulated impairment
losses. Goodwill is amortised over its estimated useful life of 18 years.

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.
Plant and machinery - Straight line over 12 years
Fixtures and fittings - Straight line over 5 to 10 years
Motor vehicles - Straight line over 7 years

The carrying values of tangible fixed assets are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable.

Tangible fixed assets under the cost model are stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Historical cost includes expenditure that is
directly attributable to bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management.

At each reporting date the company assesses whether there is any indication of impairment. If such
indication exists, the recoverable amount of the asset is determined which is the higher of its fair
value less costs to sell and its value in use. An impairment loss is recognised where the carrying
amount exceeds the recoverable amount.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of
such an item when that cost is incurred, if the replacement part is expected to provide incremental
future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs
and maintenance are charged to profit or loss during the period in which they are incurred.

Page 18 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

3. ACCOUNTING POLICIES - continued

Investments in subsidiaries
Investments in subsidiary undertakings are recognised at cost less provision for impairment.

Stocks
Inventories are stated at the lower of cost and net realiseable value. Inventories are recognised as
an expense in the period in which the related revenue is recognised.

Cost is determined on the first-in, first-out (FIFO) method. Cost includes the purchase price,
including taxes and duties and transport and handling directly attributable to bringing the inventory
to its present location and condition. The cost of manufactured finished goods and work in progress
includes design costs, raw materials, direct labour and other direct costs and related production
overheads (based on normal operating capacity).

At the end of each reporting period inventories are assessed for impairment. If an item of inventory
is impaired, the identified inventory is reduced to its net realiseable value and an impairment
charge is recognised in the profit and loss account. Where a reversal of the impairment is
recognised the impairment charge is reversed, up to the original impairment loss, and is recognised
as a credit in the profit and loss account.

Page 19 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

3. ACCOUNTING POLICIES - continued

Financial instruments
Apart from forward foreign exchange contracts, the Company only enters into basic financial
instruments transactions that result in the recognition of financial assets and liabilities like trade
and other accounts receivable and payable, loans from banks and other third parties, loans to
related parties and investments in non puttable ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans
and other accounts receivable and payable, are initially measured at present value of the future
cash flows and subsequently at amortised cost using the effective interest method. Debt
instruments that are payable or receivable within one year, typically trade payables or receivables,
are measured initially and subsequently, at the undiscounted amount of the cash or other
consideration, expected to be paid or received. However if the arrangements of a short term
instrument constitute a financing transaction, like the payment of a trade debt deferred beyond
normal business terms or financed at a rate of interest that is not a market rate or in the case of an
out right short term loan not at market rate, the financial asset or liability is measured, initially, at
the present value of the future cash flow discounted at a market rate of interest for a similar debt
instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each
reporting period for objective evidence of impairment. If objective evidence of impairment is
found, an impairment loss is recognised in the Statement of Comprehensive Income.

For financial assets measured at cost less impairment, the impairment loss is measured as the
difference between an asset's carrying amount and best estimate, which is an approximation of the
amount that the Company would receive for the asset if it were to be sold at the balance sheet
date.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when
there is an enforceable right to set off the recognised amounts and there is an intention to settle on
a net basis or to realise the asset and settle the liability simultaneously.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic
financial instruments. Derivatives are initially recognised at fair value on the date a derivative
contract is entered into and are subsequently re-measured at their fair value. Changes in the fair
value of derivatives are recognised in profit or loss in other operating charges or income as
appropriate. The company does not currently apply hedge accounting for interest rate and foreign
exchange derivatives.

Taxation
Taxation for the period 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.


Page 20 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

3. ACCOUNTING POLICIES - continued
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 period 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.

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 defined contribution pension schemes. Contributions payable to the
company's pension schemes are charged to profit or loss in the period to which they relate.

4. 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:

Period
1.9.18
to Year Ended
31.12.19 31.8.18
£    £   
United Kingdom 16,370,245 12,017,990
Europe 142,997 84,336
Rest of World 38,649 78,560
16,551,891 12,180,886

Page 21 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

5. EMPLOYEES AND DIRECTORS
Period
1.9.18
to Year Ended
31.12.19 31.8.18
£    £   
Wages and salaries 736,955 494,821
Social security costs 93,971 59,366
Other pension costs 34,023 21,184
864,949 575,371

The average number of employees during the period was as follows:
Period
1.9.18
to Year Ended
31.12.19 31.8.18

Directors and staff 18 16

Period
1.9.18
to Year Ended
31.12.19 31.8.18
£    £   
Directors' remuneration 67,223 58,553
Directors' pension contributions to money purchase schemes 20,000 15,425

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

Money purchase schemes 2 2

6. OPERATING PROFIT

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

Period
1.9.18
to Year Ended
31.12.19 31.8.18
£    £   
Hire of plant and machinery 128,964 84,323
Other operating leases 82,668 28,232
Depreciation - owned assets 49,632 22,656
Depreciation - assets on hire purchase contracts 13,293 1,135
Goodwill amortisation 44,444 66,458
Auditors' remuneration 7,900 7,500
(Profit)/loss on foreign exchange (9,046 ) (6,285 )

Page 22 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

7. INTEREST PAYABLE AND SIMILAR EXPENSES
Period
1.9.18
to Year Ended
31.12.19 31.8.18
£    £   
Bank interest 96,204 48,080
Other interest 2,662 2,279
Hire purchase 2,723 553
101,589 50,912

8. TAXATION

Analysis of the tax charge
The tax charge on the profit for the period was as follows:
Period
1.9.18
to Year Ended
31.12.19 31.8.18
£    £   
Current tax:
UK corporation tax 22,000 135,000
Under provision of prior year tax 1,571 1,711
Total current tax 23,571 136,711

Deferred tax 90,678 (5,348 )
Tax on profit 114,249 131,363

UK corporation tax has been charged at 19% .

Page 23 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

8. TAXATION - continued

Reconciliation of total tax charge included in profit and loss
The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The
difference is explained below:

Period
1.9.18
to Year Ended
31.12.19 31.8.18
£    £   
Profit before tax 507,068 595,485
Profit multiplied by the standard rate of corporation tax in the UK
of 19% (2018 - 19%)
96,343
113,142

Effects of:
Expenses not deductible for tax purposes 13,663 6,861
Research & development deduction (5,700 ) (4,305 )
Under/Over provision of prior year tax 1,571 348
Under/Over provision of current period tax (72 ) 2,690
Amortisation of goodwill 8,444 12,627
Total tax charge 114,249 131,363

Factors affecting future tax charges

There are no factors that affect future tax charges.

9. DIVIDENDS
Period
1.9.18
to Year Ended
31.12.19 31.8.18
£    £   
Interim 284,264 287,448

Page 24 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

10. INTANGIBLE FIXED ASSETS
Goodwill
£   
COST
At 1 September 2018
and 31 December 2019 898,544
AMORTISATION
At 1 September 2018 731,887
Amortisation for period 44,444
At 31 December 2019 776,331
NET BOOK VALUE
At 31 December 2019 122,213
At 31 August 2018 166,657

11. TANGIBLE FIXED ASSETS
Fixtures
Plant and and Motor
machinery fittings vehicles Totals
£    £    £    £   
COST
At 1 September 2018 108,389 106,412 17,283 232,084
Additions 372,919 167,261 - 540,180
At 31 December 2019 481,308 273,673 17,283 772,264
DEPRECIATION
At 1 September 2018 64,533 42,076 10,155 116,764
Charge for period 39,685 19,982 3,258 62,925
At 31 December 2019 104,218 62,058 13,413 179,689
NET BOOK VALUE
At 31 December 2019 377,090 211,615 3,870 592,575
At 31 August 2018 43,856 64,336 7,128 115,320

Included within the total net book value of tangible assets above are assets under hire purchase
contracts as follows:

Plant & machinery £355,177 (2018 - £12,603)
Fixtures and fittings £78,877 (2018 - £NIL)

Page 25 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

12. FIXED ASSET INVESTMENTS
Shares in
group
undertaking
£   
COST
At 1 September 2018
and 31 December 2019 166,620
PROVISIONS
At 1 September 2018
and 31 December 2019 165,520
NET BOOK VALUE
At 31 December 2019 1,100
At 31 August 2018 1,100

The company's investments at the Balance Sheet date in the share capital of companies include the
following:

Willdan Limited
Registered office: Unit 5 Apollo Park, University Way, Crewe, Cheshire, England, CW1 6HX
Nature of business: Dormant company
%
Class of shares: holding
Ordinary 100.00

Bag Supplies Limited
Registered office: Unit 5 Apollo Park, University Way, Crewe, Cheshire, England, CW1 6HX
Nature of business: Dormant company
%
Class of shares: holding
Ordinary 100.00

13. STOCKS
2019 2018
£    £   
Goods for resale 2,992,301 2,599,748

Stock recognised in cost of sales during the period as an expense was £12,589,722 (2018 -
£9,326,154).

14. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2019 2018
£    £   
Trade debtors 2,412,970 2,899,409
Other debtors 73,684 3,000
Prepayments and accrued income 125,845 102,811
2,612,499 3,005,220

Page 26 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2019 2018
£    £   
Bank loans and overdrafts (see note 17) 2,457,149 2,008,341
Hire purchase contracts (see note 18) 60,151 3,054
Trade creditors 1,841,468 2,187,096
Amounts owed to group undertakings 1,100 1,100
Corporation tax 22,000 135,000
Social security and other taxes 31,300 23,104
VAT 171,062 206,951
Other creditors 28,801 95,973
Accruals and deferred income 230,134 250,524
4,843,165 4,911,143

16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2019 2018
£    £   
Hire purchase contracts (see note 18) 294,703 2,798
Other creditors 20,988 62,964
315,691 65,762

17. LOANS

An analysis of the maturity of loans is given below:

2019 2018
£    £   
Amounts falling due within one year or on demand:
Bank overdrafts 2,457,149 2,008,341

18. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Hire purchase contracts
2019 2018
£    £   
Net obligations repayable:
Within one year 60,151 3,054
Between one and five years 251,123 2,798
In more than five years 43,580 -
354,854 5,852

Page 27 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

18. LEASING AGREEMENTS - continued

Non-cancellable
operating leases
2019 2018
£    £   
Within one year 212,313 86,523
Between one and five years 690,761 72,427
In more than five years 725,000 -
1,628,074 158,950

19. SECURED DEBTS

The following secured debts are included within creditors:

2019 2018
£    £   
Hire purchase contracts 354,854 5,852
Invoice discounting balance 2,062,337 2,008,341
Bank overdrafts 394,812 -
2,812,003 2,014,193

Bank overdrafts are secured over fixed and floating charges over all assets of the company.

The invoice discounting balance is secured on the trade debtors.

Hire purchase contracts are secured on the assets to which they relate.

The company has given a guarantee dated 15 February 2019 in favour of HM Revenue and Customs
for £80,000.

Page 28 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

20. FINANCIAL INSTRUMENTS

2019 2018
£    £   
Financial assets

Financial assets that are debt instruments measured at amortised
cost
2,486,654
2,902,409
2,486,654 2,902,409

2019 2018
£    £   
Financial liabilities

Financial liabilities measured at amortised cost (4,704,360 ) (4,361,326 )
(4,704,360 ) (4,361,326 )

Financial assets that are debt instruments measured at amortised cost comprise trade debtors and
other debtors.

Financial liabilities measured at amortised cost comprise bank loans and overdrafts, trade creditors,
hire purchase agreements, amounts owed to group undertakings and other creditors.

21. PROVISIONS FOR LIABILITIES
2019 2018
£    £   
Deferred tax
Accelerated capital allowances 112,589 21,911

Deferred
tax
£   
Balance at 1 September 2018 21,911
Accelerated capital allowances 90,678
Balance at 31 December 2019 112,589

Page 29 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

22. CALLED UP SHARE CAPITAL

2019 2018
Allotted, called up and fully paid £ £
Ordinary "A" shares of £1 each 65,000 65,000
Ordinary "B" shares of £1 each 65,000 65,000
Ordinary "C" shares of £1 each 32,500 32,500
Ordinary "I" shares of £1 each 3,500 3,500
Ordinary "J" shares of £1 each 32,500 32,500
Ordinary "K" shares of £1 each 5,000 -
203,500 198,500

All Ordinary shares rank pari passu in all respects, except for dividend entitlements. Each alphabetic
denomination of Ordinary share has its own dividend entitlement.

During the prior year the company repurchased 20,000 D Ordinary shares, 5,000 E Ordinary shares
and 10,000 F Ordinary shares.

During the period the company has issued 5,000 Ordinary K shares for a consideration of £15,000.

23. RESERVES

Share premium relates to the excess price paid for the purchase of shares in the company over their
nominal value.

Capital redemption reserve contains the nominal value of the company's own shares which have
been redeemed and cancelled by the company.

Retained earnings represents cumulative profits or losses net of dividends paid and other
distributions.

24. PENSION COMMITMENTS

The company operates a defined contribution pension scheme and also pays into a separate scheme
for the directors. The assets of the schemes are held separately from those of the company in
independently administered funds. The total contributions payable during the period totalled
£34,023 (2018 - £21,184). Contributions totalling £53,125 (2018 - £33,125) were payable to the
directors fund at the balance sheet date, there were no amounts due to the other scheme in the
current or prior period.

25. CAPITAL COMMITMENTS
2019 2018
£    £   
Contracted but not provided for in the
financial statements - 319,043

Page 30 continued...
Cliffe Packaging Limited (Registered number: 04829354)

Notes to the Financial Statements - continued
for the Period 1 September 2018 to 31 December 2019

26. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and repayments were made to directors:

2019201920182018
££££
AdvancesRepaymentsAdvancesRepayments

P Dawber6,000-3,000-
D Dawber45,000---

The advances are unsecured and repayable on demand. No interest is charged on the amounts.

27. RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard
102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose
related party transactions with wholly owned subsidiaries within the group.

During the period, total dividends of £213,198 (2018 - £197,906) were paid to the directors.

The company has transacted with a pension scheme which is under common control. During the
period the company paid rent of £25,232 (2018 - £18,978). At the period end no amounts were owed
by or to the related party.

The company has also transacted with another company which has common shareholders. The
company paid fees of £20,965 (2018 - £14,000). At the period end no amounts were owed by or to
the related party.

During the period, a total of key management personnel compensation of £ 87,239 (2018 - £ 73,979
) was paid.

28. POST BALANCE SHEET EVENTS

Since the balance sheet date but before the date of approval of these financial statements, the
company has paid dividends of £131,774.

In March 2020 the UK was impacted by the outbreak of a global Coronavirus (COVID-19) pandemic.
In order to manage the spread of the virus the Government has imposed significant restrictions on
the movement of people and the ability of businesses to continue to trade. This event occurred
after the company's reporting period and so is considered to be a non-adjusting event.

Significant challenges have been faced in early 2020 with the global COVID-19 crisis. Nationally,
some industry sectors were adversely impacted (eg construction), which for a short period in turn
adversely impacted the Company's revenues. Other sectors (eg food processing, pharmaceuticals,
agriculture) continued to trade strongly. In addition, the Company developed significant new
business producing PPE for the public sector during this period. Overall, the Company has therefore
traded strongly and profitably through the first half of 2020. As a temporary contingency the
Company agreed increased bank facilities, which have not been utilised.

Whilst the Directors acknowledge the increased risks arising from the Coronavirus (COVID-19)
pandemic, they do not consider this event to have had any significant detrimental financial effect
on the company.

Page 31