The Umbrella Company (Sheaf) Limited - Limited company accounts 20.1

REGISTERED NUMBER: 03948230 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020

FOR

THE UMBRELLA COMPANY (SHEAF) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Income and Retained Earnings

7

Balance Sheet

8

Notes to the Financial Statements

9

DIRECTORS:

S Reeve

Mrs J Herring

J D Fields

SECRETARY:

Mrs J Herring

REGISTERED OFFICE:

Portland Business Park

Richmond Park Road

Handsworth

Sheffield

South Yorkshire

S13 8HS

REGISTERED NUMBER:

03948230 (England and Wales)

AUDITORS:

Hollis and Co Limited

Chartered Accountants

Statutory Auditor

35 Wilkinson Street

Sheffield

South Yorkshire

S10 2GB

BANKERS:

HSBC Bank Plc

251 Fulwood Road

Broomhill

Sheffield

South Yorkshire

S10 3BE

SOLICITORS:

Freeths LLP

Fifth Floor, 3 St Paul's Place,

129 Norfolk Street

Sheffield S1 2JE

The directors present their strategic report for the year ended 31 March 2020.

REVIEW OF BUSINESS

The results for the period and financial position of the company are as shown in the annexed financial

statements

For the year ended 31st March 2020, the company achieved a profit before tax of £959,105 on turnover of £6,174,857. Sales are up on the previous year by 11% and the gross profit percentage achieved is comparable with previous year. Overall the directors are very satisfied with the performance of the company for the period.

Next year will remain competitive.

We have, as a consequence of COVID-19 made use of the Governments job retention scheme furloughing employees.. We do not expect any long-term deterioration to our trading position or our long-term financial viability

PRINCIPAL RISKS AND UNCERTAINTIES

All major customers are covered by credit insurance.

Competitive pressure is a continuing risk which requires the company to produce high quality and affordable products to its loyal customers. Following the vote to leave the EU the directors are well aware of the uncertain trading conditions but will seek to maintain the company's competitiveness and indeed improve its market share.

The company is exposed to fluctuations of both the US Dollar and Euro currencies and the directors seek to mitigate potential losses that may be incurred.

Under the current economic climate, maintaining cashflow is paramount and this will be monitored closely to ensure cashflows are sufficient to enable the company to meet its obligations.

KEY PERFORMANCE INDICATORS

The directors consider EBITDA as the principle KPI used to measure overall company performance increasing from £980k in 2019 to £1,115k in 2020.

Other company key financial performance indicators during the period are as follows:

2020

2019

Gross Profit as a percentage of turnover

37%

37%

Operating profit as a percentage of turnover

16%

15%

FUTURE DEVELOPMENTS

The directors will continue to provide high quality and affordable products for its customers at a competitive price.

ON BEHALF OF THE BOARD:

S Reeve - Director

24 March 2021

The directors present their report with the financial statements of the company for the year ended 31 March 2020.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the manufacture and sale of promotional umbrellas.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2020.

RESEARCH AND DEVELOPMENT

During the year, the company continued to reinvest in the research and development of new and innovative processes to gain a competitive advantage in new and existing markets.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2019 to the date of this report.

S Reeve

Mrs J Herring

J D Fields

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

The auditors, Hollis and Co Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

S Reeve - Director

24 March 2021

Opinion

We have audited the financial statements of The Umbrella Company (Sheaf) Limited (the 'company') for the year ended 31 March 2020 which comprise the Statement of Income and Retained Earnings, Balance Sheet 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 March 2020 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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.

Peter Hollis (Senior Statutory Auditor)

for and on behalf of Hollis and Co Limited

Chartered Accountants

Statutory Auditor

35 Wilkinson Street

Sheffield

South Yorkshire

S10 2GB

29 March 2021

TURNOVER

4

6,174,857

5,561,308

Cost of sales

3,876,676

3,529,146

GROSS PROFIT

2,298,181

2,032,162

Distribution costs

234,576

207,405

Administrative expenses

1,087,963

966,367

1,322,539

1,173,772

975,642

858,390

Other operating income

14,999

-

OPERATING PROFIT

6

990,641

858,390

Interest payable and similar expenses

7

31,536

27,914

PROFIT BEFORE TAXATION

959,105

830,476

Tax on profit

8

167,680

150,905

PROFIT FOR THE FINANCIAL YEAR

791,425

679,571

Retained earnings at beginning of year

4,162,159

3,482,588

RETAINED EARNINGS AT END OF YEAR

4,953,584

4,162,159

FIXED ASSETS

Tangible assets

9

141,230

147,202

CURRENT ASSETS

Stocks

10

601,736

623,813

Debtors

11

5,852,898

4,758,786

Cash at bank and in hand

307,915

122,429

6,762,549

5,505,028

CREDITORS

Amounts falling due within one year

12

1,818,360

1,346,994

NET CURRENT ASSETS

4,944,189

4,158,034

TOTAL ASSETS LESS CURRENT LIABILITIES

5,085,419

4,305,236

PROVISIONS FOR LIABILITIES

15

121,834

133,076

NET ASSETS

4,963,585

4,172,160

CAPITAL AND RESERVES

Called up share capital

16

10,001

10,001

Retained earnings

17

4,953,584

4,162,159

SHAREHOLDERS' FUNDS

4,963,585

4,172,160

The financial statements were approved by the Board of Directors and authorised for issue on 24 March 2021 and were signed on its behalf by:

Mrs J Herring - Director

1.	STATUTORY INFORMATION

The Umbrella Company (Sheaf) Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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

The figures in the financial statements are rounded to the nearest £.

2.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

At the time of preparation of these financial statements, the global Covid 19 pandemic continues to pose a risk to many businesses around the globe and the underlying uncertainty to the UK economy has to be recognised.

The directors have considered the impact of the above on the company's operations and whilst uncertainties continue to exist, they have concluded that given the company's underlying strength and the ability to access the various governmental support schemes, then it is appropriate to continue to adopt the going concern basis of preparation for these financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption 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.

Significant judgements and estimates

- Key sources of estimation uncertainty.

The Company believes that there are no areas of material estimation uncertainty which affect the financial statements.

- Critical accounting judgements in applying the Company's accounting policies.

The Company believes that the major judgements applied are:

- The use of the going concern principle which is based on the belief that the company will have adequate resources to continue in operational existence for the foreseeable future.

Turnover

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

Tangible fixed assets

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.

Short leasehold

-

25% on cost

Plant and machinery

-

15% on reducing balance

Fixtures and fittings

-

20% on reducing balance

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

Debtors and creditors receivable / payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measured at amortised cost using the effective interest rate method, less impairment. If an arrangement constitutes a finance transaction it is measured at present value.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

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

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

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 class of business is given below:

2020

2019

£

£

Sale of goods

6,174,857

5,561,308

6,174,857

5,561,308

An analysis of turnover by geographical market is given below:

2020

2019

£

£

United Kingdom

5,930,374

5,383,353

Europe

244,483

177,955

6,174,857

5,561,308

5.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

1,372,043

1,233,863

Social security costs

111,847

99,250

Other pension costs

36,568

26,376

1,520,458

1,359,489

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

2020

2019

Production

47

47

Administration

14

14

Directors

3

3

64

64

2020

2019

£

£

Directors' remuneration

217,292

202,838

Directors' pension contributions to money purchase schemes

4,894

6,360

Information regarding the highest paid director is as follows:

2020

2019

£

£

Emoluments etc

100,743

87,888

Pension contributions to money purchase schemes

2,160

2,808

6.	OPERATING PROFIT

The operating profit is stated after charging:

2020

2019

£

£

Other operating leases

22,556

14,370

Depreciation - owned assets

27,384

28,147

Loss on disposal of fixed assets

-

8,243

Auditors' remuneration

3,500

3,500

Audit of other group entities

-

1,500

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2020

2019

£

£

Bank interest

5,143

4,770

Invoice finance interest

26,393

23,144

31,536

27,914

8.

TAXATION

Analysis of the tax charge

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

2020

2019

£

£

Current tax:

UK corporation tax

178,922

150,905

Deferred tax

(11,242

)

-

Tax on profit

167,680

150,905

UK corporation tax has been charged at 19% (2019 - 19%).

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2020

2019

£

£

Profit before tax

959,105

830,476

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

182,230

157,790

Effects of:

Expenses not deductible for tax purposes

1,001

2,671

Depreciation in excess of capital allowances

1,116

3,669

Adjustments to tax charge in respect of previous periods

-

(5,489

)

Non trading loan relationship losses

(5,425

)

(7,736

)

Deferred tax release

(11,242

)

-

Total tax charge

167,680

150,905

9.	TANGIBLE FIXED ASSETS

Fixtures

Short

Plant and

and

leasehold

machinery

fittings

Totals

£

£

£

£

COST

At 1 April 2019

14,230

559,550

155,965

729,745

Additions

-

9,116

12,296

21,412

At 31 March 2020

14,230

568,666

168,261

751,157

DEPRECIATION

At 1 April 2019

14,230

441,867

126,446

582,543

Charge for year

-

19,021

8,363

27,384

At 31 March 2020

14,230

460,888

134,809

609,927

NET BOOK VALUE

At 31 March 2020

-

107,778

33,452

141,230

At 31 March 2019

-

117,683

29,519

147,202

10.

STOCKS

The total carrying value of stock is pledged as security to the company's bankers.

11.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Trade debtors

1,125,023

840,070

Amounts owed by group undertakings

4,512,966

3,826,270

Other debtors

131,347

8,595

Prepayments

83,562

83,851

5,852,898

4,758,786

12.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Trade creditors

441,353

456,257

Tax

178,928

156,394

Social security and other taxes

-

24,175

VAT

163,888

132,568

Other creditors

25,058

30,086

Amounts owed to debt factor

995,427

529,773

Accrued expenses

13,706

17,741

1,818,360

1,346,994

13.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2020

2019

£

£

Within one year

81,122

61,109

Between one and five years

280,596

257,703

In more than five years

-

81,479

361,718

400,291

14.	SECURED DEBTS

HSBC Bank plc has a charge over contract monies dated 25 October 2011.

There is a Composite Company Limited Multilateral Guarantee dated 26 August 2016 given by The Umbrella Newco (Sheaf) Ltd, The Umbrella Company (Sheaf) Holdings Limited and The Umbrella Company (Sheaf) Limited to HSBC Bank plc.

There is a general letter of pledge to HSBC Bank plc dated 28 April 2008.

There is a Composite Company Limited Multilateral Guarantee dated 21 October 2011 given by The Umbrella Company (Sheaf) Holdings Limited and The Umbrella Company (Sheaf) Limited to HSBC Bank plc

There is a debenture including Fixed Charge over all present freehold and leasehold property; First Fixed Charge over books and other debts, chattels, goodwill and uncalled capital, both present and future; and First Floating Charge over all assets and undertaking both present and future dated 07 June 2000 to HSBC Bank plc

Shawn Hassack has a charge including a fixed charge, and a floating charge that covers all the property or undertaking of the company dated 26 August 2016.

15.	PROVISIONS FOR LIABILITIES

2020

2019

£

£

Deferred tax

Accelerated capital allowances

26,834

38,076

Dilapidation costs

95,000

95,000

121,834

133,076

Deferred

tax

£

Balance at 1 April 2019

38,076

Transfer to profit and loss

(11,242

)

Balance at 31 March 2020

26,834

The classification of expenses between accruals and provisions has been reviewed and this has resulted in an adjustment to the comparative figures

16.	CALLED UP SHARE CAPITAL

Allotted and issued:

Number:

Class:

Nominal

2020

2019

value:

£

£

9,900

'A' Ordinary

£1

9,000

9,000

1,000

'B' Ordinary

£1

1,000

1,000

100

'C' Ordinary

£0.01

1

1

10,001

10,001

17.

RESERVES

Retained

earnings

£

At 1 April 2019

4,162,159

Profit for the year

791,425

At 31 March 2020

4,953,584

18.	ULTIMATE PARENT COMPANY

The company's immediate parent undertaking is The Umbrella Company (Sheaf) Holdings Limited, and its ultimate parent undertaking is The Umbrella Newco (Sheaf) Ltd.The registered office address of both undertakings is Unit 20 Portland Business Park, Richmond Park Road, Handsworth, Sheffield, South Yorkshire, S13 8HS. The parent undertaking prepares consolidated financial statements and copies of these can be obtained from the registered office address.

19.	RELATED PARTY DISCLOSURES

The directors are considered to be the company's key management personnel and their remuneration is disclosed in note 5.