GRIND_&_CO_LTD - Accounts
GRIND_&_CO_LTD - Accounts
The directors present the strategic report for the year ended 26 April 2020.
Turnover increased from the prior period by £1.4m (13%) from £10.7m to £12.1m, primarily due to the maturing of sites opened towards the end of the prior year and the growth in online retail sales towards the end of the period. No new sites were opened during the period. One site was refurbished, and one site was extended and refurbished, adding an additional 50 covers.
EBITDA before exceptional costs decreased from a profit of £0.3m to a loss of £0.5m driven primarily by the effects of the Covid-19 lockdown for the last two months of the period, in addition to the temporary site closures for refurbishment and extension.
In July 2019 the company secured a new £4.6m finance facility with its bank HSBC. This enabled the early repayment of the £1.3m Crowdcube bond and the refinance and consolidation of existing HSBC debt and asset finance agreements, as well as securing funding for future capital projects.
On 30th November 2019 the roastery, wholesale and retail trade and assets were hived down into a new subsidiary; Grind Coffee Roasters Ltd. This business is different operationally to the café and restaurant business and so this separation will enable the board to manage the profits and cash flows of the group more effectively.
Covid-19 has had a dramatic impact on our high street business. Like all restaurants in the UK, all sites were forced to close for lockdown between 17th March and 4th July, when we were able to begin to re-open sites as trading conditions permitted. We are happy to report that we were able to retain all staff via the furlough scheme and have done everything we can to support them through the period of lockdown. However as a direct result of the pandemic, our headcount in our high street business has been significantly reduced.
Since re-opening towards the end of the summer, our all-day-all-night business model has enabled us to flex our offering based on the type of trade now available at each site. Some sites have opened with a limited takeaway offering, whilst others are back to the full offering and trading well. We are also fortunate that we are not overly reliant on late night trade, so the effects of the 10pm curfew have not been too severe. In particular, trading in our key restaurant sites has proved resilient, even in very difficult circumstances. As we sign this report, we are of course moving into a second national lockdown, which adds further uncertainty but for which we are as prepared as possible.
Our landlords have been very supportive, and we have agreed rent free periods and further concessions for the vast majority of our high street locations. We will continue to keep our sites open where trade levels permit, delivering the most appropriate offering for each site to maximise trade whilst following the latest government guidance to keep our staff and customers safe.
While the pandemic has negatively impacted the high street, it has significantly boosted our online retail business, with online coffee sales growing dramatically in March and April. While this business is not yet able to fully mitigate the shortfall in restaurant trade during the pandemic, Grind Coffee Roasters Ltd was already run-rate profitable by the final month of the period and we are expecting significant further grown in this business in the future.
Looking forwards, the high street will undoubtedly face some challenges over the coming years and we will need to continually adapt to ensure we can return this to profitability once the pandemic subsides. Our focus for growth in the short term will be to develop Grind Coffee Roasters Ltd and grow the direct to consumer coffee business whilst continuing to grow our global wholesale partnerships with some of the world’s leading hospitality groups.
Management utilises a number of qualitative and quantitative indicators to monitor and improve the company’s performance. The company considers turnover and EBITDA to be key financial performance indicators.
2020 2019
£ £
Turnover 12,056,251 10,684,783
EBITDA (519,115) 271,779
Principal risks and uncertainties
As with any business in the hospitality sector, it is vulnerable to certain risks which may impact on consumer confidence and the cost of running the business. The directors and management team regularly review these risks to ensure they continue to be managed effectively.
Inflationary pressures continue to impact staff costs and supply prices. The company continues to review all costs to the business and undertake supplier negotiations in order to mitigate these pressures.
There is little credit risk in the company as the majority of customers pay by credit card at point of sale.
Whilst Brexit will be unlikely to influence our business directly, as our turnover and supply chain is predominately UK based, there is a concern that a general drag effect might hold the business back from growing as quickly as it would without Brexit. Our diversification into online retail sales will assist in mitigating any shortfall in trade that we may see on the high street.
Covid-19 and the measures put in place by the Government to deal with the pandemic have had an unprecedented impact on the company since March. This includes lock-down from mid-March, and post year end re-opening hospitality subject to strict social-distancing rules.
We have taken steps to reduce costs to the minimum wherever possible, and fully utilised the various Government-backed schemes and grants available to businesses, including obtaining a CBIL loan and a new trade finance facility to fund the working capital of our growing retail sales in order to put the business in the best possible position for the future. Further mitigating action may be necessary as we see how trading under the restrictions develops.
The directors have undertaken extensive financial modelling and determined that the expected “most likely” scenario shows financial headroom to the end of 2021 is sufficient. Factors such as a second lock-down, a medium-term reduction in demand (or capacity) for eat-in food and drink have been considered and modelled in assessing the company’s ability to continue as a going concern.
There is a degree of uncertainty around scenario modelling in the current climate that cannot be avoided. If factors change significantly, it could impact on the company as a going concern and further mitigating action may be necessary. However, on the basis of their current projections the directors consider they have a reasonable expectation that the company has sufficient resources to continue as a going concern. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.
On behalf of the board
The directors present their annual report and financial statements for the year ended 26 April 2020.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The group's policy is to consult and discuss with employees, through staff councils and at meetings.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
On 7 September 2020 Group Audit Service Limited trading as Wilkins Kennedy Audit Services changed its name to Azets Audit Services Limited. The name they practice under is Azets Audit Services and accordingly they have signed their report in their new name.
select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
We have audited the financial statements of Grind & Co Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 26 April 2020 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
give a true and fair view of the state of the group's and the parent company's affairs as at 26 April 2020 and of the group's loss for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's 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 group's or the parent 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 included in the annual report, other than the financial statements and our auditor’s report 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 our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
As explained more fully in the directors' responsibilities statement, 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 is 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.
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 an auditor’s report 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: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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 an auditor's report 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,382,850 (2019 - £535,565 loss).
Grind & Co Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 8-10 New North Place, London, England, EC2A 4JA.
The group consists of Grind & Co Ltd and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements incorporate those of Grind & Co Ltd and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All financial statements are made up to 26 April 2020. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The group profit and loss account and statement of cash flows include the results and cash flows of Grind Coffee Roasters Limited for the seven month period from its incorporation on 11 October 2019. Grind Coffee Roasters Limited commenced trading from 1 December 2019.
Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates. In the group financial statements, associates are accounted for using the equity method.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. In the group financial statements, joint ventures are accounted for using the equity method.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The directors consider the going concern basis appropriate, having considered the current circumstances of the business and various financial modelling scenarios in light of the current economic uncertainties surrounding the Covid-19 pandemic.
They have undertaken extensive financial modelling and determined that the expected “most likely” scenario shows financial headroom to the end of 2021 is sufficient. Factors such as a second lock-down, a medium-term reduction in demand (or capacity) for eat-in food and drink have been considered and modelled in assessing the company’s ability to continue as a going concern. Further detailed comments are included in the strategic report on page 2. There is a degree of uncertainty around scenario modelling in the current climate that cannot be avoided. If factors change significantly, it could impact on the company as a going concern and further mitigating action may be necessary.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (on dispatch of the goods for online sales and when goods are supplied to customers in cafes and restaurants ), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally 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.
Basic financial assets, which include debtors and cash and bank balances, 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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
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 finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
The directors do not consider temporary rent concessions granted during the Covid-19 pandemic should be treated as variations to lease terms, and as such they are recognised over the period granted, not spread over the term of the lease.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
In determining whether a lease meets the definition of a finance lease or operating lease the directors have used their experience to review and consider whether the company has obtained all the risks and rewards of ownership of the asset, what the useful economic life of the asset is, the term of the lease and what the residual value of the asset is expected to be. On the basis of these considerations the directors have determined that all leases meet the definition of operating leases and have been accounted for as such.
The directors use their experience to review and estimate useful economic lives and residual values of all assets, taking into account both standards of maintenance and technical obsolescence. Depreciation policies as noted within the accounting policies are based upon these estimates.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The above totals represent the total number of employees under contract during the year. The total full time equivalent is 243 (2019 240).
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2019 - 1).
Directors' remuneration covers three directors. The other director received no remuneration.
The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 26 April 2020 are as follows:
There are no financial assets or financial liabilities at fair value through profit and loss.
The bank loan is secured by a fixed and floating charge over the group's assets.
The bank loan matures in August 2024. Interest is charged at 2.98% over base.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The group has unused tax losses of £7,145,779 (2019 £5,183,739)
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
All share classes except for CC-B shares rank equally for voting purposes. On a show of hands, each member shall have one vote and on a poll each member shall have one vote per share held. Each share ranks equally for any dividend declared and on distribution rights on winding up. CC-B shares do not have voting rights or pre-emption rights but otherwise rank equally for all other economic purposes including winding up.
Share premium accounts consists of the consideration paid for share capital above its nominal value.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The operating leases represent short term leases in relation to spare office space that the group rent.
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
During the period the entity benefited from temporary rent concessions occurring as a direct consequence of the Covid-19 pandemic. The result of this was a deduction in the P&L charge of £70,446.
The remuneration of key management personnel is as follows.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
In the opinion of the directors, there is no ultimate single controlling party. The directors directly own 22% of the share capital.