Liquidline Limited - Period Ending 2019-12-31

Registration number: 07284069

Liquidline Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2019

Liquidline Limited

Contents

Company Information	1
Strategic Report	2 to 3
Directors' Report	4 to 5
Statement of Directors' Responsibilities	6
Independent Auditor's Report	7 to 9
Profit and Loss Account	10
Statement of Comprehensive Income	11
Balance Sheet	12
Statement of Changes in Equity	13
Notes to the Financial Statements	14 to 28

Liquidline Limited

Company Information

Directors

Mr Matthew James Pooley Mr Angus Frederick Pooley Mr Gavin William Pooley

Registered office

11 Holywells Close Ipswich IP3 0AW

Auditors

Larking Gowen LLP Chartered Accountants and Statutory Auditor 1 Claydon Business Park Great Blakenham Ipswich IP6 0NL

Page 1

Liquidline Limited

Strategic Report for the Year Ended 31 December 2019

The directors present their strategic report for the year ended 31 December 2019.

Principal activity

The principal activity of the company is the hire and sale of coffee and water dispensing machines and associated consumable items.

Fair review of the business

During the year, turnover increased by £3,878,466 to £15,206,219 and gross profit increased by £1,224,053 to £5,360,428.

Administrative expenses increased by £1,020,544 to £3,896,790 largely as a result of increased headcount to support the increased activity.

Profit before tax increased by £294,198 to £1,510,375.

At the year end the company has shareholders’ funds of £2,767,101 (2018: £2,137,209) including distributable profits of £2,766,951. The directors therefore believe the company’s position to be strong with current assets exceeding current liabilities by £1,324,187, and despite the challenges caused by the Covid-19 pandemic the directors consider that the business is in a good position to achieve its strategic aims in the coming years.

The company's key financial performance indicators during the year were as follows:

	Unit	2019	2018
Revenue	£	15,206,219	11,327,753
Gross profit margin	%	35	37
Profit before tax margin	%	10	11

Principal risks and uncertainties

The recent and ongoing COVID-19 pandemic is having a significant social and economic impact on the world’s economies including the UK. As a business we have reacted positively to this challenge. We have been able to react quickly utilising existing technology so that office staff have been able to work effectively from home during the lockdown period.

During this time there has been a significant impact on some of the company’s revenue streams. However, the rental component of turnover was largely maintained during this period and other sales revenue is recovering. In addition, Liquidline has implemented cost management measures, drawn on the support of the government furlough (JRS) scheme and diversified into return to work sanitation products. Cash reserves have been protected and marketing activity has been maintained throughout the lockdown. These actions have mitigated the impact of the crisis. We expect that with the easing of lockdown sales will return to pre-crisis levels over 6-9 months.

The company imports a large part of its product range from Europe and it is not clear how this will be affected by Britain leaving the European Union due to the uncertainty surrounding future trading relationships between the UK and the EU. This is mitigated by holding stock of the affected products sufficient to maintain supplies to customers through any period of disruption. Exchange rate risk has been reduced where appropriate by using forward exchange contracts.

Exports to the EU are minimal and this is not considered a significant risk.

Page 2

Liquidline Limited

Strategic Report for the Year Ended 31 December 2019

Approved by the Board on 23 December 2020 and signed on its behalf by:

.........................................
Mr Gavin William Pooley
Director

Page 3

Liquidline Limited

Directors' Report for the Year Ended 31 December 2019

The directors present their report and the financial statements for the year ended 31 December 2019.

Directors of the company

The directors who held office during the year were as follows:

Mr Matthew James Pooley

Mr Angus Frederick Pooley

Mr Gavin William Pooley

Results and dividends
Profits for the year, after taxation were £1,415,979 (2018: £964,805). Dividends of £786,087 (2018: £420,000) were recommended and have been paid.
 

Financial instruments
The company makes use of operational current and reserve bank accounts, trade debtors, trade creditors and hire purchase and lease arrangements. Credit risk due to exposure to trade debtors is minimised by using appropriate credit checks, controls and policy. The company finances its operations through retained profits. Exchange rate risk has been reduced where appropriate by using forward exchange contracts.

The management’s objectives are to retain sufficient liquid funds to enable it to meet its day to day obligations as they fall due while maximising returns on surplus funds; and minimise the company’s exposure to fluctuating interest rates when seeking new borrowings. Where appropriate funds are invested in sterling treasury deposit accounts. There is therefore no price risk exposure.

Future developments

The directors believe the company will continue to trade successfully in the foreseeable future.

Research and development

The company undertakes research and development activity to develop and enhance both systems and products.

Important non adjusting events after the financial period

In February 2020 Liquidline acquired the business of Caffe Picco which has strengthened our customer base and fitted well into the existing business model

In March 2020 the effect of the COVID-19 pandemic and consequent UK lockdown started to have an impact on the business. Liquidline has reacted promptly and positively to this challenge with the result that the effect on the business has been mitigated. We expect that with the easing of lockdown sales will return to pre-crisis levels over 6-9 months.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Page 4

Liquidline Limited

Directors' Report for the Year Ended 31 December 2019

Approved by the Board on 23 December 2020 and signed on its behalf by:

.........................................
Mr Gavin William Pooley
Director

Page 5

Liquidline Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report 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 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; and

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 6

Liquidline Limited

Independent Auditor's Report to the Members of Liquidline Limited

Opinion

We have audited the financial statements of Liquidline Limited (the 'company') for the year ended 31 December 2019, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•	give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;
•	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
•	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 Financial Reporting Council'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.

Other matter – prior year financial statements unaudited

The company was not required to have a statutory audit for the year ended 31 December 2018 as it was entitled to exemption from the provision of the Companies Act 2006 relating to the audit of the financial statements for the period by virtue of Section 477 and no member or members requested an audit pursuant to Section 476 of the Act. Accordingly, the corresponding figures for the year ended 31 December 2018 are unaudited.

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.

Page 7

Liquidline Limited

Independent Auditor's Report to the Members of Liquidline Limited

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.

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•	the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 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, 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 4, 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 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.

Page 8

Liquidline Limited

Independent Auditor's Report to the Members of Liquidline Limited

Auditor’s 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 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: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors 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.

......................................
Ian Fitch FCA (Senior Statutory Auditor)
For and on behalf of Larking Gowen LLP, Chartered Accountants and Statutory Auditor

Ipswich

 

24 December 2020

Page 9

Liquidline Limited

Profit and Loss Account for the Year Ended 31 December 2019

	Note	Total 31 December 2019 £	(As restated) Total 31 December 2018 £
Turnover	4	15,206,219	11,327,753
Cost of sales		(9,845,971)	(7,191,558)
Gross profit		5,360,248	4,136,195
Administrative expenses		(3,896,790)	(2,876,246)
Other operating income	5	47,337	10,235
Operating profit	6	1,510,795	1,270,184
Other interest receivable and similar income	8	713	940
Interest payable and similar expenses	9	(1,133)	(54,947)
		(420)	(54,007)
Profit before tax		1,510,375	1,216,177
Taxation	12	(94,396)	(251,372)
Profit for the financial year		1,415,979	964,805

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

The notes on pages 14 to 28 form an integral part of these financial statements.

Page 10

Liquidline Limited

Statement of Comprehensive Income for the Year Ended 31 December 2019

	Note	2019 £	(As restated) 2018 £
Profit for the year		1,415,979	964,805
Total comprehensive income for the year		1,415,979	964,805

The notes on pages 14 to 28 form an integral part of these financial statements.

Page 11

Liquidline Limited

(Registration number: 07284069)
Balance Sheet as at 31 December 2019

	Note	2019 £	(As restated) 2018 £
Fixed assets
Intangible assets	13	41,259	36,573
Tangible assets	14	2,648,248	2,332,796
		2,689,507	2,369,369
Current assets
Stocks	15	1,363,338	1,140,650
Debtors	16	2,440,272	1,679,861
Cash at bank and in hand		525,363	372,856
		4,328,973	3,193,367
Creditors: Amounts falling due within one year	18	(3,004,786)	(2,545,274)
Net current assets		1,324,187	648,093
Total assets less current liabilities		4,013,694	3,017,462
Creditors: Amounts falling due after more than one year	18	(214,387)	(137,587)
Provisions for liabilities	19	(1,032,206)	(742,666)
Net assets		2,767,101	2,137,209
Capital and reserves
Called up share capital	21	150	150
Profit and loss account	22	2,766,951	2,137,059
Total equity		2,767,101	2,137,209

Approved and authorised by the Board on 23 December 2020 and signed on its behalf by:
 

.........................................

Mr Gavin William Pooley

Director

The notes on pages 14 to 28 form an integral part of these financial statements.

Page 12

Liquidline Limited

Statement of Changes in Equity for the Year Ended 31 December 2019

	Share capital £	Profit and loss account £	Total £
At 1 January 2019	150	2,137,059	2,137,209
Profit for the year	-	1,415,979	1,415,979
Total comprehensive income	-	1,415,979	1,415,979
Dividends	-	(786,087)	(786,087)
At 31 December 2019	150	2,766,951	2,767,101

	Share capital £	Profit and loss account £	Total £
At 1 January 2018	150	1,592,254	1,592,404
Profit for the year	-	964,805	964,805
Total comprehensive income	-	964,805	964,805
Dividends	-	(420,000)	(420,000)
At 31 December 2018	150	2,137,059	2,137,209

The notes on pages 14 to 28 form an integral part of these financial statements.

Page 13

Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

1	General information

The company is a private company limited by share capital incorporated in United Kingdom.

The address of its registered office is:
11 Holywells Close
Ipswich
IP3 0AW
 

The principal activity of the company is the hire and sale of coffee and water dispensing machines and associated consumable items.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

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 the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•	the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv);

•	the requirements of Section 7 Statement of Cash Flows;

•	the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);

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

•	the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;

•	the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Holywells Holdings Limited as at 31 December 2019 and these financial statements may be obtained from Companies House.

Page 14

Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Going concern

The directors have considered the Company‘s position at the time of signing the financial statements, and in particular the current issues caused by the Covid-19 pandemic and its potential impact on the Company and the wider economy. The directors have produced revised forecasts for the remainder of the 2020 financial year and medium term. The directors have considered the current financial position of the company together with the range of measure the directors can take to mitigate ongoing costs should they need to. Based on this, the directors have concluded that they have a reasonable expectation that the company will have adequate resources to continue in operational existence for the foreseeable future, and at least twelve months from the date of signing these financial statements, they therefore continue to adopt the going concern basis of accounting in preparing these financial statements.

Reclassification of comparative amounts

Certain comparatives have been restated for purposes of comparability, there has been no effect on the profit or the reserves position for either the current or comparative year.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is Sterling (£).

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of income and retained earnings.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of income and retained earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of income and retained earnings within 'administration expenses'.

Tax

The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Page 15

Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Deferred tax is recognised on tax losses not yet used and on temporary differences where it is probable that there will be taxable revenue against which these can be offset. The main component for deferred tax for the company is fixed asset timing differences.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Land & buildings	25% Straight line
Office equipment	25% Reducing balance
Motor vehicles	25% Reducing balance/straight line
Hire Stock	33% Straight line/reducing balance
Plant and machinery	25% Reducing balance

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class	Amortisation method and rate
Goodwill	20% Straight line

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Page 16

Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Provisions

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Page 17

Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Research and development

Research and development expenditure is charged to the Statement of income and retained earnings when it is incurred.

3	Judgements in applying accounting policies and key sources of estimation uncertainty

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. These estimates and judgements are continually evaluated and are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The judgements, estimates and assumptions which have significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are addressed below:

•	Tangible fixed assets are recognised at cost, less accumulated depreciation. Depreciation is charged over the estimated useful life of the asset to it's estimated residual value.

•	Intangible fixed assets are recognised at cost, less accumulated amortisation. Amortisation is charged over the estimated useful life of the asset to it's estimated residual value.

•	The recoverability of trade debtors is considered on a regular basis. When calculating any debtor provisions, the directors consider the age of the debts and the financial position of the customer.

•	The estimated selling prices of stock are considered on a regular basis. When calculating any stock provision, the directors consider the age of the stock and the current trend in product sales.

•	A provision for warranty costs based on the expected number of warranty call outs per machine sold or leased.

Page 18

Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

4

Revenue

The analysis of the company's revenue for the year from continuing operations is as follows:

	2019 £	2018 £
Sale of goods	12,952,164	9,512,963
Leasing of equipment	2,254,055	1,814,790
	15,206,219	11,327,753

The analysis of the company's turnover for the year by market is as follows:

	2019 £	2018 £
UK	15,203,905	11,327,753
Europe	2,314	-
	15,206,219	11,327,753

5	Other operating income

The analysis of the company's other operating income for the year is as follows:

	2019 £	2018 £
Miscellaneous other operating income	47,337	10,235

6	Operating profit

Arrived at after charging/(crediting)

	2019 £	2018 £
Depreciation expense	828,079	649,204
Amortisation expense	10,796	201,925
Operating lease expense - plant and machinery	97,059	79,809
Loss on disposal of property, plant and equipment	29,687	9,371

7	Auditors' remuneration

	2019 £	2018 £
Audit of the financial statements	7,500	-

 

8	Other interest receivable and similar income

	2019 £	2018 £
Other finance income	713	940

Page 19

Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

9	Interest payable and similar expenses

	2019 £	2018 £
Interest on obligations under finance leases and hire purchase contracts	1,133	3,293
Interest expense on other finance liabilities	-	51,654
	1,133	54,947

10	Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

	2019 £	(As restated) 2018 £
Wages and salaries	3,164,131	2,103,738
Social security costs	306,925	199,654
Pension costs	32,967	13,575
	3,504,023	2,316,967

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

	2019 No.	2018 No.
Administration and support	10	8
Research and development	7	9
Sales	22	17
Marketing	5	5
Distribution	54	39
	98	78

11	Directors' remuneration

The directors' remuneration for the year was as follows:

	2019 £	2018 £
Remuneration	25,902	50,025

Page 20

Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

12

Taxation

Tax charged/(credited) in the income statement

	2019 £	2018 £
Current taxation
UK corporation tax	94,396	251,372

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2018 - the same as the standard rate of corporation tax in the UK) of 19% (2018 - 19%).

The differences are reconciled below:

	2019 £	(As restated) 2018 £
Profit before tax	1,510,375	1,216,177
Corporation tax at standard rate	286,971	231,074
Effect of revenues exempt from taxation	-	(1,780)
Effect of expense not deductible in determining taxable profit (tax loss)	18,822	2,151
Effect of tax losses	33,576	-
Deferred tax expense from unrecognised tax loss or credit	94,396	-
Tax (decrease)/increase from effect of capital allowances and depreciation	(101,624)	23,832
Tax decrease arising from group relief	-	(2,400)
Tax decrease from effect of adjustment in research and development tax credit	(237,745)	(1,505)
Total tax charge	94,396	251,372

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Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

13	Intangible assets

	Goodwill  £	Total £
Cost or valuation
At 1 January 2019	1,038,498	1,038,498
Additions	15,482	15,482
At 31 December 2019	1,053,980	1,053,980
Amortisation
At 1 January 2019	1,001,925	1,001,925
Amortisation charge	10,796	10,796
At 31 December 2019	1,012,721	1,012,721
Carrying amount
At 31 December 2019	41,259	41,259
At 31 December 2018	36,573	36,573

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Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

14	Tangible assets

	Land and buildings £	Office equipment  £	Motor vehicles  £	Hire Stock  £	Plant & machinery  £	Total £
Cost or valuation
At 1 January 2019	600,848	243,150	702,338	2,977,461	282,176	4,805,973
Additions	2,140	15,721	401,606	1,384,665	57,977	1,862,109
Disposals	(602,988)	(51,551)	(146,552)	-	(24,305)	(825,396)
At 31 December 2019	-	207,320	957,392	4,362,126	315,848	5,842,686
Depreciation
At 1 January 2019	13,655	123,185	284,127	1,862,760	189,450	2,473,177
Charge for the year	-	21,366	171,829	609,058	25,826	828,079
Eliminated on disposal	(13,655)	(5,958)	(86,847)	-	(358)	(106,818)
At 31 December 2019	-	138,593	369,109	2,471,818	214,918	3,194,438
Carrying amount
At 31 December 2019	-	68,727	588,283	1,890,308	100,930	2,648,248
At 31 December 2018	587,193	119,965	418,211	1,114,701	92,726	2,332,796

Included within the net book value of land and buildings above is £Nil (2018 - £587,193) in respect of freehold land and buildings.
 

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Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

	2019 £	2018 £
Motor vehicles	520,411	264,436

Assets held for use in operating leases
The net carrying amount of tangible assets includes £1,890,308 (2018 - £1,114,701) assets held for use in operating leases.

15

Stocks

	2019 £	2018 £
Finished goods and goods for resale	1,363,338	1,140,650

 

Impairment of stocks

The amount of impairment loss included in profit or loss is £Nil (2018 - £Nil).

16

Debtors

	2019 £	2018 £
Trade debtors	2,179,344	1,461,615
Other debtors	31,529	17,002
Prepayments	229,399	201,244
Total current trade and other debtors	2,440,272	1,679,861

17	Cash and cash equivalents

	2019 £	2018 £
Cash on hand	-	250
Cash at bank	525,363	372,606
	525,363	372,856

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Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

18

Creditors

	Note	2019 £	(As restated) 2018 £
Due within one year
Loans and borrowings	23	212,755	137,097
Trade creditors		1,213,762	774,290
Amounts due to group undertakings	26	484,162	701,437
Social security and other taxes		330,695	404,143
Outstanding defined contribution pension costs		8,634	2,687
Other payables		355	97,986
Accrued expenses		166,676	(10,431)
Deferred income		587,747	438,065
		3,004,786	2,545,274
Due after one year
Loans and borrowings	23	214,387	137,587

Loans and borrowings are secured against the assets to which they relate.

19	Deferred tax and other provisions

	Warranties £	Deferred tax £	Other provisions £	Total £
At 1 January 2019	724,666	-	-	724,666
Additional provisions	-	94,396	41,400	135,796
Increase (decrease) in existing provisions	171,744	-	-	171,744
At 31 December 2019	896,410	94,396	41,400	1,032,206

The company accrues for warranty costs based on the expected number of warranty call outs per machine sold or leased. This provision has been reclassified from creditors to provisions during the year as the directors consider this to be the correct treatment.

Other provisions comprises of a provision for dilapidations. The company accrues for dilapidation costs based on the estimated costs to be incurred at the end of property leases.

Deferred tax is recognised on tax losses not yet used and temporary differences where it is probable that there will be taxable revenue against which these can be offset. The main component for deferred tax for the company is fixed asset timing differences.

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Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

20	Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £32,967 (2018 - £13,575).

Contributions totalling £8,634 (2018 - £2,687) were payable to the scheme at the end of the year and are included in creditors.

21	Share capital

Allotted, called up and fully paid shares

	2019		2018
	No.	£	No.	£
Ordinary A Shares of £0.25 each	60	15.00	60	15.00
Ordinary B Shares of £0.25 each	60	15.00	60	15.00
Ordinary C Shares of £0.25 each	90	22.50	90	22.50
Ordinary D Shares of £0.25 each	90	22.50	90	22.50
Ordinary E Shares of £0.25 each	90	22.50	90	22.50
Ordinary F Shares of £0.25 each	90	22.50	90	22.50
Ordinary G Shares of £0.25 each	120	30.00	120	30.00
	600	150	600	150

Share capital represents the nominal value of shares issued. Shares carry voting rights and an entitlement to dividends.

22

Reserves

Profit and loss account

Includes all current and prior year retained profits and losses net of dividends.

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Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

23	Loans and borrowings

	2019 £	2018 £
Non-current loans and borrowings
Finance lease liabilities	214,387	137,587

	2019 £	2018 £
Current loans and borrowings
Finance lease liabilities	212,755	137,097

24	Operating leases

The total future minimum lease payments under non-cancellable operating leases are as follows:

	2019 £	2018 £
Not later than 1 year	155,399	64,148
Later than 1 year and no later than 5 years	199,229	48,937
	354,628	113,085

25

Dividends

Final dividends paid

	2019 £	2018 £
Final dividend of £13,101 (2018 - £7,000) per each Ordinary A 25p Shares share	786,087	420,000

26	Related party transactions

Under FRS 102 paragraph 33.1A, the group is exempt from disclosing transactions between group companies.
This exemption has been taken.

27	Controlling party

Holywells Holdings Limited owned 100% of the shares of the company throughout the period, and was therefore the controlling party of the company.
 

No party had a controlling share in the parent during the year. There is therefore no controlling party.

Page 27

Liquidline Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

28	Non adjusting events after the financial period

In February 2020 Liquidline acquired the business of Caffe Picco which has strengthened our customer base and fitted well into the existing business model

In March 2020 the effect of the COVID-19 pandemic and consequent UK lockdown started to have an impact on the business. Liquidline has reacted promptly and positively to this challenge with the result that the effect on the business has been mitigated. We expect that with the easing of lockdown sales will return to pre-crisis levels over 6-9 months.

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