PJ Colours Limited - Limited company accounts 20.1

REGISTERED NUMBER: 03479538 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Period 1 May 2019 to 31 December 2019

for

PJ Colours Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

9

Other Comprehensive Income

10

Statement of Financial Position

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

DIRECTORS:

N J Hamilton

H R Jackson

J Spence

N D Jackson

SECRETARY:

J Spence

REGISTERED OFFICE:

The Glades

Festival Way

Festival Park

Stoke on Trent

Staffordshire

ST1 5SQ

REGISTERED NUMBER:

03479538 (England and Wales)

AUDITORS:

Mitten Clarke Audit Limited

Statutory Auditors

The Glades

Festival Way

Stoke on Trent

Staffordshire

ST1 5SQ

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

REVIEW OF BUSINESS

During the period ending December 2019 PJ Colours Limited maintained the levels of revenue achieved, which indicates another strong performance after a big uplift in 18/19.

The company continues to monitor the situation regarding Brexit and has a number of options for raw material purchases both from EU and non EU sources. The company has also made all of the necessary provisions with HMRC & REACH in the event of a no deal Brexit.

PRINCIPAL RISKS AND UNCERTAINTIES

The Board consider the principal risks and uncertainties to the business to be;

Price risk

The company operates in a highly competitive industry, which is subject to price pressure from both local and overseas competition. The board review prices and raw material costs on an ongoing basis.

Foreign currency risk

The company purchases many of its raw materials from overseas suppliers and as such, is often exposed to fluctuations in foreign exchange rates. The board reviews the impact movements in foreign exchange has on both imports and exports on an ongoing basis.

Covid 19

We are constantly reviewing the current Covid 19 situation and have put measures in place to ensure the safety and well-being of staff and visitors. This has not compromised the efficiency of the operation and we have experienced no drop in productivity through the crisis.

KEY PERFORMANCE INDICATORS

The board monitors progress of the company using the following KPIs:

Revenue

1/5/19 - 31/12/19

2018/19

Revenue

£9,338,056 (£14.01m ann.)

£14,319,439

(Decrease) / Increase

(2.2% ann.)

11.4%

This KPI is calculated by taking the turnover and other operating income for the year. This is compared to the previous year and movement is shown as a percentage.

Operating Profit

1/5/19 - 31/12/19

2018/19

Operating Profit

£523,501

£896,749

% of revenue

5.6%

6.3%

This KPI is calculated by taking the total revenue and deducting, the cost of sales, distribution costs and administrative expenses.

FUTURE DEVELOPMENTS

The company saw a downturn in turnover to 35% of that budgeted as a result of the measures taken in response to Covid-19, but by July 2020 sales had returned to normal levels. The company has remained profitable in the post year end period. Following the year end the company has received £1,250,000 additional funding under the Coronavirus Business Interruption Loan Scheme.

The company expects a similar level of activity in terms of revenue for the year 2020. The company is continuing to focus on new product lines and has expanded its commercial team and that will help improve both revenue and margins moving forward.

ON BEHALF OF THE BOARD:

H R Jackson - Director

16 November 2020

The directors present their report with the financial statements of the company for the period 1 May 2019 to 31 December 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the period under review was that of the manufacture and sale of pigments and additives to the concrete and asphalt industries.

DIVIDENDS

Interim dividends of £425,000 were paid 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 £425,000.

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 May 2019 to the date of this report.

N J Hamilton

H R Jackson

J Spence

N D Jackson

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 set out in 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.

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 or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

Mitten Clarke Audit Limited, has indicated its willingness to continue in office and will be proposed for re-appointment in accordance with section 485 Companies Act 2006.

ON BEHALF OF THE BOARD:

H R Jackson - Director

16 November 2020

Opinion

We have audited the financial statements of PJ Colours Limited (the 'company') for the period ended 31 December 2019 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, 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 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.

Emphasis of matter

We draw attention to Note 24 of the financial statements, which describes the impact of post balance sheet events on the company and the directors' assessment of the going concern status of the company. Our opinion in not modified in this respect.

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

- the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the 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.

Lindsey Shepherd (Senior Statutory Auditor)

for and on behalf of Mitten Clarke Audit Limited

Statutory Auditors

The Glades

Festival Way

Stoke on Trent

Staffordshire

ST1 5SQ

19 November 2020

TURNOVER

4

9,338,056

14,319,439

Cost of sales

7,503,746

11,564,864

GROSS PROFIT

1,834,310

2,754,575

Distribution costs

407,749

585,350

Administrative expenses

903,060

1,272,476

1,310,809

1,857,826

OPERATING PROFIT

6

523,501

896,749

Interest receivable and similar income

7

68,041

76,208

591,542

972,957

Interest payable and similar expenses

8

83,533

105,408

PROFIT BEFORE TAXATION

508,009

867,549

Tax on profit

9

75,532

145,186

PROFIT FOR THE FINANCIAL PERIOD

432,477

722,363

PROFIT FOR THE PERIOD

432,477

722,363

OTHER COMPREHENSIVE INCOME

-

342,903

Income tax relating to other comprehensive income

-

(30,000

)

OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF INCOME TAX

-

312,903

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

432,477

1,035,266

FIXED ASSETS

Tangible assets

12

502,687

529,295

CURRENT ASSETS

Stocks

13

2,027,637

1,994,057

Debtors

14

4,477,121

4,674,955

Cash at bank and in hand

152,710

177,276

6,657,468

6,846,288

CREDITORS

Amounts falling due within one year

15

3,188,745

3,887,841

NET CURRENT ASSETS

3,468,723

2,958,447

TOTAL ASSETS LESS CURRENT LIABILITIES

3,971,410

3,487,742

CREDITORS

Amounts falling due after more than one year

16

(1,738,011

)

(1,258,820

)

PROVISIONS FOR LIABILITIES

20

(53,000

)

(56,000

)

NET ASSETS

2,180,399

2,172,922

CAPITAL AND RESERVES

Called up share capital

21

200,000

200,000

Revaluation reserve

22

312,903

312,903

Retained earnings

22

1,667,496

1,660,019

SHAREHOLDERS' FUNDS

2,180,399

2,172,922

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 16 November 2020 and were signed on its behalf by:

H R Jackson - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 May 2018

200,000

1,777,656

-

1,977,656

Changes in equity

Dividends

-

(840,000

)

-

(840,000

)

Total comprehensive income

-

722,363

312,903

1,035,266

Balance at 30 April 2019

200,000

1,660,019

312,903

2,172,922

Changes in equity

Dividends

-

(425,000

)

-

(425,000

)

Total comprehensive income

-

432,477

-

432,477

Balance at 31 December 2019

200,000

1,667,496

312,903

2,180,399

1.	STATUTORY INFORMATION

PJ Colours 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.	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 cover the company as an individual entity, have been prepared under the historical cost convention modified to include the revaluation of freehold property and certain financial instruments at fair value; and are presented in Pounds Sterling (£) being the functional currency.

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 have been produced for a period shorter than one year for commercial reasons. As a result, the comparative amounts presented in the financial statements, including related notes, are not entirely comparable.

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 3 Financial Statement Presentation paragraph 3.17(d);

•

the requirements of Section 11 Financial Instruments paragraphs 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.

This information is included in the consolidated financial statements of Procter Johnson Holdings Limited as at 31 December 2019 and these financial statements may be obtained from The Glades, Festival Way, Festival Park, Stoke-On-Trent, Staffordshire, United Kingdom, ST1 5SQ.

Related party exemption

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.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, after discounts, returns and rebates, excluding value added tax and other sales taxes.

Sale of goods

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

-

the company has transferred to the buyer the significant risks and rewards of ownership of the goods;

-

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 economic benefits associated with the transaction will flow to the company; and

-

the costs incurred or to be incurred in respect of the transition can be measured reliably.

Usually, turnover from the sale of goods is recognised when the goods are delivered and legal title has passed.

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost (or deemed 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.

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

Freehold property

-

Straight line over 30 years

Plant and machinery

-

33.33% , 20% and 10% on cost

Fixtures and fittings

-

25% on cost

Motor vehicles

-

33.33% on cost

The company has adopted a policy of revaluing freehold property and it is stated at its revalued amount less any subsequent depreciation and accumulated impairment losses. The difference between the depreciation based on the revalued amount charged in the profit and loss account and the asset's original cost is transferred from revaluation reserve to retained earnings.

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.

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

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

(i) Financial assets and liabilities

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the statement of financial position when, and only when there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Debt instruments which meet the conditions for basic financial instruments set out by the FRC in 'Amendments to FRS102: Basic Financial Instruments and Hedge Accounting' are subsequently measured at amortised cost using the effective interest method.

Debt instruments that are classified as payable or receivable within one year on initial recognition and which meet these conditions are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

Financial assets are derecognised when and only when (a) the contractual rights to the cash flows from the financial asset expire or are settled, (b) the company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or (c) the company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

(ii) Investments and Equity instruments

Equity instruments issued by the company are recorded at the fair value of cash or other resources received or receivable net of direct issue costs.

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 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 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 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.

Leasing commitments

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.

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

1.5.19

to

Year Ended

31.12.19

30.4.19

as

restated

£

£

United Kingdom

6,736,859

9,907,459

Rest of the world

2,601,197

4,411,980

9,338,056

14,319,439

5.	EMPLOYEES AND DIRECTORS

Period

1.5.19

to

Year Ended

31.12.19

30.4.19

as

restated

£

£

Wages and salaries

593,466

833,811

Social security costs

45,365

65,149

Other pension costs

71,239

102,397

710,070

1,001,357

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

Period

1.5.19

to

Year Ended

31.12.19

30.4.19

as

restated

Directors

4

4

Employees

32

32

36

36

Period 1.5.19

to

Year Ended

31.12.19

30.4.19

£

£

Directors' remuneration

116,258

152,154

Directors' pension contributions to money purchase schemes

65,908

97,860

The number of directors to whom retirement benefits were accruing under money purchase schemes was 4 (30.04.19: 4).

6.	OPERATING PROFIT

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

Period

1.5.19

to

Year Ended

31.12.19

30.4.19

as

restated

£

£

Hire of plant and machinery

16,812

29,222

Leasing of plant and machinery

92,323

141,089

Depreciation - owned assets

59,182

108,373

Auditors' remuneration

5,655

5,530

Auditors' remuneration for non audit work

6,650

6,450

Foreign exchange differences

(16,665

)

(39,437

)

7.

INTEREST RECEIVABLE AND SIMILAR INCOME

Period

1.5.19

to

Year Ended

31.12.19

30.4.19

as

restated

£

£

Deposit account interest

771

952

Other loan interest

67,270

75,256

68,041

76,208

8.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

1.5.19

to

Year Ended

31.12.19

30.4.19

as

restated

£

£

Bank loan interest

615

-

Invoice discounting interest

24,565

37,550

Other loan interest

58,353

67,858

83,533

105,408

9.

TAXATION

Analysis of the tax charge

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

Period

1.5.19

to

Year Ended

31.12.19

30.4.19

as

restated

£

£

Current tax:

UK corporation tax

101,918

170,604

(Over)/Under provision

(23,386

)

(13,418

)

Total current tax

78,532

157,186

Deferred tax

(3,000

)

(12,000

)

Tax on profit

75,532

145,186