Cliffe Packaging Limited - Limited company accounts 20.1
Cliffe Packaging Limited - Limited company accounts 20.1
| REGISTERED NUMBER: |
| Strategic Report, Report of the Directors and |
| Financial Statements |
| for the Year Ended 31 December 2020 |
| for |
| Cliffe Packaging Limited |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Contents of the Financial Statements |
| for the Year Ended 31 December 2020 |
| Page |
| Company Information | 1 |
| Strategic Report | 2 |
| Report of the Directors | 4 |
| Report of the Independent Auditors | 6 |
| Income Statement | 9 |
| Other Comprehensive Income | 10 |
| Balance Sheet | 11 |
| Statement of Changes in Equity | 12 |
| Cash Flow Statement | 13 |
| Notes to the Cash Flow Statement | 14 |
| Notes to the Financial Statements | 16 |
| Cliffe Packaging Limited |
| Company Information |
| for the Year Ended 31 December 2020 |
| DIRECTORS: |
| SECRETARY: |
| REGISTERED OFFICE: |
| REGISTERED NUMBER: |
| AUDITORS: |
| Statutory Auditors |
| The Glades |
| Festival Way |
| Stoke on Trent |
| Staffordshire |
| ST1 5SQ |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Strategic Report |
| for the Year Ended 31 December 2020 |
| The directors present their strategic report for the year ended 31 December 2020. |
| REVIEW OF BUSINESS |
| The principal activity of the Company is the sale, conversion and distribution of flexible packaging materials. The Company sources product from the UK, Europe and Asia, and operates a storage and conversion facility in Crewe, UK. The Company also provides sales, technical and administrative support to its customers, and utilises the services of selected logistics partners for the distribution and additional storage of its products. |
| The previous reporting period was extended to 16 months to December 2019, to reflect the completion in late 2019 of the Company's site relocation/expansion and capital investment projects. The results for the current period therefore reflect 12 months trading compared to 16 months in the previous period. The current year results therefore include a 25% reduction against the trading comparatives due to the length of the reporting periods. |
| The UK and global economic environment in 2020 was dominated by the impact of the COVID-19 pandemic. The UK was further impacted by the preparation for Brexit at the end of 2020. After some initial COVID-19 disruption the Company's core business recovered quickly and strongly. The Company also developed significant new one-time business producing PPE for the public sector. Sales for the year were £14.5M with like-for-like 12 months sales showing strong growth despite the COVID-19 pandemic. Slightly improved margins resulted in gross profit of £2.9M. Overhead costs (distribution, administration, and financing) reduced to £2.1M in the year, reflecting not only the reduced reporting period but also the elimination of £0.1M one-time 2019 costs associated with the site move and asset investment. Profit before tax for the year was £0.85M, reflecting the strong sales performance, including one-time PPE, alongside stable gross margin and overhead costs. |
| Inventory reduced by £0.3M during the year, driven by global supply and logistics issues in late 2020, which have largely recovered in early 2021. The reduced inventory levels, alongside strong profitability, enabled a £1.0M reduction in bank borrowings. All funding facilities, including invoice, trade and asset finance, remained well within facility limits. |
| These are considered to be the Company's key performance indicators. The Directors are satisfied with the financial position of the Company at the year-end which is set out in the financial statements. |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Strategic Report |
| for the Year Ended 31 December 2020 |
| PRINCIPAL RISKS AND UNCERTAINTIES |
| Financial Risk Management Objectives and Policies |
| The Company's operations are funded mainly from bank borrowings. In common with most trading companies it has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations. The Company does not enter into derivative transactions. The main risks arising from the Company's financial instruments are product price risk, credit risk and foreign currency risk. The Directors review and agree policies for managing these risks as described below: |
| Product price risk |
| The Company is exposed to fluctuations in market prices of raw materials. This position is regularly monitored in order to take necessary action to minimise the impact of such risk. |
| Credit risk |
| The Company only trades with recognised, credit worthy third parties. It is the Company policy that all customers who wish to trade on credit terms are subject to credit vetting procedures. Customer debts are largely insured and trade debtor balances are monitored on an ongoing basis, with the result that the exposure to bad debts is not significant. |
| Foreign currency risk |
| The Company manages its foreign currency risk by the use of forward currency contracts and maintaining currency bank balances to cover its payment exposure to suppliers outside the UK. |
| Cashflow risk |
| Cashflow risk is continually assessed by the business. The need to ensure access to sufficient working capital to support the business requirements is the main factor considered in monitoring of cashflow. Close monitoring and management of cashflows ensures that the company has sufficient capacity to operate efficiently and serve the customer base effectively. |
| Liquidity risk |
| The Company has arranged access to a variety of borrowings, including invoice, trade and asset financed facilities. The Company seeks to manage liquidity risk by ensuring sufficient liquidity is available at all times to meet foreseeable needs. |
| FUTURE DEVELOPMENTS |
| The Directors continue to develop the business based on its core strengths whilst seeking further growth opportunities in an increasingly competitive market. |
| The continuing global economic uncertainty, notably relating to the ongoing COVID-19 pandemic and global commodity price and logistics issues, presents the Company with challenging trading conditions. Despite these challenges the Company has traded strongly in early 2021, and the Directors are confident that the business will continue to trade profitably and that the financial strength of the business will be maintained. |
| ON BEHALF OF THE BOARD: |
| 28 April 2021 |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Report of the Directors |
| for the Year Ended 31 December 2020 |
| The directors present their report with the financial statements of the company for the year ended 31 December 2020. |
| PRINCIPAL ACTIVITIES |
| The principal activities of the company in the year under review were those of the sale, conversion and distribution of flexible packaging materials. Further details of these activities are provided in the Strategic Report. |
| DIVIDENDS |
| Interim dividends of £350,698 (2019 - £284,264) were declared during the period. The directors recommend that no final dividend be paid. |
| The total distribution of dividends for the year ended 31 December 2020 will be £350,698 (2019 - £284,264). |
| DIRECTORS |
| The directors shown below have held office during the whole of the period from 1 January 2020 to the date of this report. |
| DISCLOSURE IN THE STRATEGIC REPORT |
| The company has chosen in accordance with section 414C(11) of Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the company's Strategic Report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. |
| STATEMENT OF DIRECTORS' RESPONSIBILITIES |
| The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
| Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
| - | select suitable accounting policies and then apply them consistently; |
| - | make judgements and accounting estimates that are reasonable and prudent; |
| - | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
| The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Report of the Directors |
| for the Year Ended 31 December 2020 |
| STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
| So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
| ON BEHALF OF THE BOARD: |
| Report of the Independent Auditors to the Members of |
| Cliffe Packaging Limited |
| Opinion |
| We have audited the financial statements of Cliffe Packaging Limited (the 'company') for the year ended 31 December 2020 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
| In our opinion the financial statements: |
| - | give a true and fair view of the state of the company's affairs as at 31 December 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 |
| In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
| Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
| Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
| 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 this gives rise to a material misstatement in the financial statements themselves. 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. |
| Report of the Independent Auditors to the Members of |
| Cliffe Packaging Limited |
| Matters on which we are required to report by exception |
| In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
| We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
| - | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
| - | the financial statements are not in agreement with the accounting records and returns; or |
| - | certain disclosures of directors' remuneration specified by law are not made; or |
| - | we have not received all the information and explanations we require for our audit; or |
| - | the directors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Strategic Report. |
| Responsibilities of directors |
| As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
| In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
| Auditors' responsibilities for the audit of the financial statements |
| Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
| Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
| The extent to which the audit was considered capable of detecting irregularities including fraud |
| Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
| - | the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
| - | we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our previous knowledge and experience of the client and businesses in similar sectors; |
| - | we assessed the extent of compliance with the laws and regulations identified through making enquiries of management and inspecting any available legal correspondence; and |
| - | the audit team were in regular communication in relation to laws and regulations and potential instances of non-compliance throughout the audit. |
| We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
| - | making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
| - | considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
| Report of the Independent Auditors to the Members of |
| Cliffe Packaging Limited |
| To address the risk of fraud through management bias and override of controls, we: |
| - | performed analytical procedures to identify any unusual or unexpected relationships; |
| - | tested journal entries to identify unusual transactions; |
| - | assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and |
| - | investigated the rationale behind significant or unusual transactions. |
| In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
| - | agreeing financial statement disclosures to underlying supporting documentation; |
| - | enquiring of management as to actual and potential litigation and claims; |
| - | reviewing legal and professional expenses for potential ongoing litigation work; and |
| - | reviewing correspondence with HMRC. |
| There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
| Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
| 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. |
| for and on behalf of |
| Statutory Auditors |
| The Glades |
| Festival Way |
| Stoke on Trent |
| Staffordshire |
| ST1 5SQ |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Income Statement |
| for the Year Ended 31 December 2020 |
| Year Ended | Period |
| 31.12.20 | 1.9.18 to 31.12.19 |
| Notes | £ | £ | £ | £ |
| TURNOVER | 4 |
| Cost of sales |
| GROSS PROFIT |
| Distribution costs |
| Administrative expenses |
| 2,009,192 | 2,627,150 |
| 883,188 | 608,657 |
| Other operating income |
| OPERATING PROFIT | 6 |
| Interest payable and similar expenses | 7 |
| PROFIT BEFORE TAXATION |
| Tax on profit | 8 |
| PROFIT FOR THE FINANCIAL YEAR |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Other Comprehensive Income |
| for the Year Ended 31 December 2020 |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| Notes | £ | £ |
| PROFIT FOR THE YEAR |
| OTHER COMPREHENSIVE INCOME | - | - |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Balance Sheet |
| 31 December 2020 |
| 2020 | 2019 |
| Notes | £ | £ | £ | £ |
| FIXED ASSETS |
| Intangible assets | 10 |
| Tangible assets | 11 |
| Investments | 12 |
| CURRENT ASSETS |
| Stocks | 13 |
| Debtors | 14 |
| Cash in hand |
| CREDITORS |
| Amounts falling due within one year | 15 |
| NET CURRENT ASSETS |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
| CREDITORS |
| Amounts falling due after more than one year |
16 |
( |
) |
( |
) |
| PROVISIONS FOR LIABILITIES | 20 | ( |
) | ( |
) |
| NET ASSETS |
| CAPITAL AND RESERVES |
| Called up share capital | 21 |
| Share premium | 22 |
| Capital redemption reserve | 22 |
| Retained earnings | 22 |
| SHAREHOLDERS' FUNDS |
| The financial statements were approved by the Board of Directors and authorised for issue on |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Statement of Changes in Equity |
| for the Year Ended 31 December 2020 |
| Called up | Capital |
| share | Retained | Share | redemption | Total |
| capital | earnings | premium | reserve | equity |
| £ | £ | £ | £ | £ |
| Balance at 1 September 2018 |
| Changes in equity |
| Issue of share capital | - | - |
| Dividends | - | ( |
) | - | - | ( |
) |
| Total comprehensive income | - | - |
| Balance at 31 December 2019 |
| Changes in equity |
| Dividends | - | ( |
) | - | - | ( |
) |
| Total comprehensive income | - | - |
| Balance at 31 December 2020 |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Cash Flow Statement |
| for the Year Ended 31 December 2020 |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| Notes | £ | £ |
| Cash flows from operating activities |
| Cash generated from operations | 1 |
| Tax paid | ( |
) | ( |
) |
| Net cash from operating activities |
| Cash flows from investing activities |
| Purchase of tangible fixed assets | ( |
) | ( |
) |
| Sale of tangible fixed assets |
| Net cash from investing activities | ( |
) | ( |
) |
| Cash flows from financing activities |
| New HP in the period | - | 362,792 |
| HP capital repayments in the period | ( |
) | ( |
) |
| Share issue |
| Share premium |
| Interest paid | ( |
) | ( |
) |
| Interest element on HP/Finance lease | ( |
) | ( |
) |
| Equity dividends paid | ( |
) | ( |
) |
| Net cash from financing activities | ( |
) | ( |
) |
| Increase/(decrease) in cash and cash equivalents | ( |
) |
| Cash and cash equivalents at beginning of year |
2 |
(2,456,939 |
) |
(1,971,672 |
) |
| Cash and cash equivalents at end of year |
2 |
( |
) |
( |
) |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Cash Flow Statement |
| for the Year Ended 31 December 2020 |
| 1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| Profit before taxation |
| Depreciation charges |
| Loss on disposal of fixed assets |
| Amortisation | 33,333 | 44,444 |
| Finance costs | 55,296 | 101,589 |
| 1,016,249 | 716,026 |
| Decrease/(increase) in stocks | ( |
) |
| (Increase)/decrease in trade and other debtors | ( |
) |
| Increase/(decrease) in trade and other creditors | ( |
) |
| Cash generated from operations |
| 2. | CASH AND CASH EQUIVALENTS |
| The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
| Year ended 31 December 2020 |
| 31.12.20 | 1.1.20 |
| £ | £ |
| Cash and cash equivalents | 222 | 210 |
| Bank overdrafts and other facilities | ( |
) | ( |
) |
| (1,430,301 | ) | (2,456,939 | ) |
| Period ended 31 December 2019 |
| 31.12.19 | 1.9.18 |
| £ | £ |
| Cash and cash equivalents | 210 | 36,669 |
| Bank overdrafts and other facilities | ( |
) | ( |
) |
| (2,456,939 | ) | (1,971,672 | ) |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Cash Flow Statement |
| for the Year Ended 31 December 2020 |
| 3. | ANALYSIS OF CHANGES IN NET DEBT |
| At 1.1.20 | Cash flow | At 31.12.20 |
| £ | £ | £ |
| Net cash |
| Cash at bank and in hand | 210 | 12 | 222 |
| Bank overdrafts and |
| other facilities | (2,457,149 | ) | 1,026,626 | (1,430,523 | ) |
| (2,456,939 | ) | (1,430,301 | ) |
| Debt |
| Finance leases | (354,854 | ) | 30,119 | (324,735 | ) |
| (354,854 | ) | 30,119 | (324,735 | ) |
| Total | (2,811,793 | ) | 1,056,757 | (1,755,036 | ) |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements |
| for the Year Ended 31 December 2020 |
| 1. | STATUTORY INFORMATION |
| Cliffe Packaging Limited is a |
| 2. | STATEMENT OF COMPLIANCE |
| 3. | ACCOUNTING POLICIES |
| Basis of preparing the financial statements |
| The financial statements cover the company as an individual entity and are presented in Pounds Sterling (£) being the functional currency. |
| The financial statements have been prepared on a going concern basis on the assumption that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have made this assessment with regard to the company’s current and expected performance. |
| Group accounts |
| The financial statements present information about the company as an individual undertaking, not the group as a whole. Exemption from preparing group accounts has been taken as per Section 405 of The Companies Act 2006 as all subsidiaries have been dormant throughout the period and they are immaterial to the financial statements individually and in aggregate. |
| Significant judgements and estimates |
| In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
| The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
| Critical judgements in applying the Company's accounting policies |
| In the directors' opinion there are no critical judgements which impact the financial statements, apart from those involving estimations (dealt with separately below), that they have made in applying company's accounting policies and that have had a significant effect on the amounts recognised in the financial statements. |
| Key sources of estimation uncertainty |
| The directors consider that there are no key estimates and assumptions used in preparing the financial statements. |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 3. | ACCOUNTING POLICIES - continued |
| Turnover |
| Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, after taking account of trade discounts, settlement discounts and volume rebates, excluding value added tax and other sales taxes. |
| Sale of goods |
| Turnover from the sale of goods is recognised when all of the following conditions are satisfied: |
| - | the Company has transferred the significant risks and rewards of ownership to the buyer; |
- |
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; |
| - | the amount of turnover can be measured reliably; |
- |
it is probable that the Company will receive the consideration due under the transaction; and |
| - | the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
| Goodwill |
| Goodwill is measured at cost less accumulated amortisation and any accumulated impairment losses. Goodwill is amortised over its estimated useful life of 18 years. |
| Intangible assets |
| Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
| Tangible fixed assets |
| Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life. |
| Plant and machinery | - Straight line over 12 years |
| Fixtures and fittings | - Straight line over 5 or 10 years |
| Motor vehicles | - Straight line over 7 years |
| The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. |
| Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
| At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount. |
| The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred. |
| Investments in subsidiaries |
| Investments in subsidiary undertakings are recognised at cost less provision for impairment. |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 3. | ACCOUNTING POLICIES - continued |
| Stocks |
| Inventories are stated at the lower of cost and net realiseable value. Inventories are recognised as an expense in the period in which the related revenue is recognised. |
| Cost is determined on the first-in, first-out (FIFO) method. Cost includes the purchase price, including taxes and duties and transport and handling directly attributable to bringing the inventory to its present location and condition. The cost of manufactured finished goods and work in progress includes design costs, raw materials, direct labour and other direct costs and related production overheads (based on normal operating capacity). |
| At the end of each reporting period inventories are assessed for impairment. If an item of inventory is impaired, the identified inventory is reduced to its net realiseable value and an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is recognised the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit and loss account. |
| Financial instruments |
| Apart from forward foreign exchange contracts, the Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, loans to related parties and investments in non puttable ordinary shares. |
| Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. However if the arrangements of a short term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out right short term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. |
| Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income. |
| For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date. |
| Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. |
| Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in other operating charges or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives. |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 3. | ACCOUNTING POLICIES - continued |
| Taxation |
| Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
| Current or deferred taxation assets and liabilities are not discounted. |
| Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
| 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 |
| Assets, obtained under hire purchase contracts are capitalised as tangible fixed assets and depreciated over their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period. |
| Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to profit and loss account on a straight-line basis. |
| Pension costs and other post-retirement benefits |
| The company operates defined contribution pension schemes. Contributions payable to the company's pension schemes are charged to profit or loss in the period to which they relate. |
| Government grants |
| Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 4. | TURNOVER |
| The turnover and profit before taxation are attributable to the principal activities of the company. |
| An analysis of turnover by class of business is given below: |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| An analysis of turnover by geographical market is given below: |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| United Kingdom |
| Europe |
| Rest of World | 18,476 | 38,649 |
| 5. | EMPLOYEES AND DIRECTORS |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| Wages and salaries |
| Social security costs |
| Other pension costs |
| The average number of employees during the year was as follows: |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| Directors and staff |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| Directors' remuneration |
| Directors' pension contributions to money purchase schemes |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 5. | EMPLOYEES AND DIRECTORS - continued |
| The number of directors to whom retirement benefits were accruing was as follows: |
| Money purchase schemes |
| 6. | OPERATING PROFIT |
| The operating profit is stated after charging/(crediting): |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| Hire of plant and machinery |
| Other operating leases |
| Depreciation - owned assets |
| Depreciation - assets on hire purchase contracts |
| Loss on disposal of fixed assets |
| Goodwill amortisation |
| Auditors' remuneration |
| (Profit)/loss on foreign exchange | ( |
) |
| 7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| Bank interest |
| Other interest |
| Hire purchase |
| 8. | TAXATION |
| Analysis of the tax charge |
| The tax charge on the profit for the year was as follows: |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| Current tax: |
| UK corporation tax |
| Under provision of prior year tax | 10,671 | 1,571 |
| Total current tax |
| Deferred tax | ( |
) |
| Tax on profit |
| UK corporation tax has been charged at 19% (2019 - 19%). |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 8. | TAXATION - continued |
| Reconciliation of total tax charge included in profit and loss |
| The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| Profit before tax |
| Profit multiplied by the standard rate of corporation tax in the UK of |
| Effects of: |
| Expenses not deductible for tax purposes |
| Research & development deduction | (3,087 | ) | (5,700 | ) |
| Under/Over provision of prior year tax | 5,640 | 1,571 |
| Under/Over provision of current period tax | - | (72 | ) |
| Amortisation of goodwill | 6,333 | 8,444 |
| Rounding | 800 | - |
| Deferred tax not provided for | (8,210 | ) | - |
| Total tax charge | 162,810 | 114,249 |
| Factors affecting future tax charges |
| There are no factors that affect future tax charges. |
| 9. | DIVIDENDS |
| Period |
| 1.9.18 |
| Year Ended | to |
| 31.12.20 | 31.12.19 |
| £ | £ |
| Interim | 350,698 | 284,264 |
| 10. | INTANGIBLE FIXED ASSETS |
| Goodwill |
| £ |
| COST |
| At 1 January 2020 |
| and 31 December 2020 |
| AMORTISATION |
| At 1 January 2020 |
| Amortisation for year |
| At 31 December 2020 |
| NET BOOK VALUE |
| At 31 December 2020 |
| At 31 December 2019 |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 11. | TANGIBLE FIXED ASSETS |
| Fixtures |
| Plant and | and | Motor |
| machinery | fittings | vehicles | Totals |
| £ | £ | £ | £ |
| COST |
| At 1 January 2020 |
| Additions |
| Disposals | ( |
) | ( |
) |
| At 31 December 2020 |
| DEPRECIATION |
| At 1 January 2020 |
| Charge for year |
| Eliminated on disposal | ( |
) | ( |
) |
| At 31 December 2020 |
| NET BOOK VALUE |
| At 31 December 2020 |
| At 31 December 2019 |
| Included within the total net book value of tangible assets above are assets under hire purchase contracts as follows: |
| Plant & machinery £315,029 (2019 - £355,177) |
| Fixtures and fittings £70,717 (2019 - £78,877) |
| 12. | FIXED ASSET INVESTMENTS |
| Shares in |
| group |
| undertakings |
| £ |
| COST |
| At 1 January 2020 |
| and 31 December 2020 |
| PROVISIONS |
| At 1 January 2020 |
| and 31 December 2020 | 165,520 |
| NET BOOK VALUE |
| At 31 December 2020 |
| At 31 December 2019 |
| The company's investments at the Balance Sheet date in the share capital of companies include the following: |
| Registered office: Unit 5 Apollo Park, University Way, Crewe, Cheshire, England, CW1 6HX |
| Nature of business: |
| % |
| Class of shares: | holding |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 12. | FIXED ASSET INVESTMENTS - continued |
| Registered office: Unit 5 Apollo Park, University Way, Crewe, Cheshire, England, CW1 6HX |
| Nature of business: |
| % |
| Class of shares: | holding |
| 13. | STOCKS |
| 2020 | 2019 |
| £ | £ |
| Goods for resale |
| 14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 2020 | 2019 |
| £ | £ |
| Trade debtors |
| Other debtors |
| Prepayments and accrued income |
| 15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 2020 | 2019 |
| £ | £ |
| Bank loans and overdrafts (see note 17) |
| Hire purchase contracts (see note 18) |
| Trade creditors |
| Amounts owed to group undertakings |
| Corporation tax |
| Social security and other taxes |
| VAT | 238,497 | 171,062 |
| Other creditors |
| Accruals and deferred income |
| 16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
| 2020 | 2019 |
| £ | £ |
| Hire purchase contracts (see note 18) |
| Other creditors |
| 17. | LOANS |
| An analysis of the maturity of loans is given below: |
| 2020 | 2019 |
| £ | £ |
| Amounts falling due within one year or on demand: |
| Bank overdrafts and other facilities |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 18. | LEASING AGREEMENTS |
| Minimum lease payments fall due as follows: |
| Hire purchase contracts |
| 2020 | 2019 |
| £ | £ |
| Net obligations repayable: |
| Within one year |
| Between one and five years |
| In more than five years |
| The hire purchase contracts relate to the equipment used in the company's warehousing operations. There are no contingent rental or renewal clauses. There are option to purchase fees at the end of the contracts for nominal fees. |
| Non-cancellable | operating leases |
| 2020 | 2019 |
| £ | £ |
| Within one year |
| Between one and five years |
| In more than five years |
| 19. | SECURED DEBTS |
| The following secured debts are included within creditors: |
| 2020 | 2019 |
| £ | £ |
| Hire purchase contracts | 324,735 | 354,854 |
| Invoice discounting balance | 1,261,200 | 2,062,337 |
| Other bank facilities | 169,323 | 394,812 |
| Hire purchase contracts are secured on the assets to which they relate. The company has also given security by way of a fixed charge with a negative pledge. |
| The invoice discounting balance is secured on the trade debtors. |
| Other bank facilities are secured by fixed and floating charges over all assets of the company. |
| The company has given a guarantee dated 15 February 2019 in favour of HM Revenue and Customs for £80,000. |
| 20. | PROVISIONS FOR LIABILITIES |
| 2020 | 2019 |
| £ | £ |
| Deferred tax |
| Accelerated capital allowances |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 20. | PROVISIONS FOR LIABILITIES - continued |
| Deferred |
| tax |
| £ |
| Balance at 1 January 2020 |
| Accelerated capital allowances | (7,830 | ) |
| Over provided in prior year | (5,031 | ) |
| Balance at 31 December 2020 |
| 21. | CALLED UP SHARE CAPITAL |
| 2020 | 2019 |
| Allotted, called up and fully paid | £ | £ |
| Ordinary "A" shares of £1 each | 65,000 | 65,000 |
| Ordinary "B" shares of £1 each | 65,000 | 65,000 |
| Ordinary "C" shares of £1 each | 32,500 | 32,500 |
| Ordinary "I" shares of £1 each | 3,500 | 3,500 |
| Ordinary "J" shares of £1 each | 32,500 | 32,500 |
| Ordinary "K" shares of £1 each | 5,000 | 5,000 |
| 203,500 | 203,500 |
| All Ordinary shares rank pari passu in all respects, except for dividend entitlements. Each alphabetic denomination of Ordinary share has its own dividend entitlement. |
| 22. | RESERVES |
| Share premium relates to the excess price paid for the purchase of shares in the company over their nominal value. |
| Capital redemption reserve contains the nominal value of the company's own shares which have been redeemed and cancelled by the company. |
| Retained earnings represents cumulative profits or losses net of dividends paid and other distributions. |
| 23. | PENSION COMMITMENTS |
| The company operates a defined contribution pension scheme and also pays into a separate scheme for the directors. The assets of the schemes are held separately from those of the company in independently administered funds. The total contributions payable during the period totalled £34,527 (2019 - £34,023). Contributions totalling £8,664 (2019 - £53,125) were payable to the directors fund at the balance sheet date, there were no amounts due to the other scheme in the current or prior period. |
| 24. | CAPITAL COMMITMENTS |
| 2020 | 2019 |
| £ | £ |
| Contracted but not provided for in the |
| financial statements |
| Cliffe Packaging Limited (Registered number: 04829354) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 25. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
| The following advances and repayments were made to directors: |
| 2020 | 2020 | 2019 | 2019 |
| £ | £ | £ | £ |
| Advances | Repayments | Advances | Repayments |
| P Dawber | 3,000 | 12,500 | 6,000 | - |
| D Dawber | 20,000 | 25,000 | 45,000 | - |
| The balance outstanding at the balance sheet date was £Nil (2019 - £9,000) for P Dawber and £40,000 (2019 - £45,000) for D Dawber. |
| The advances are unsecured and repayable on demand. No interest is charged on the amounts. |
| 26. | RELATED PARTY DISCLOSURES |
| The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions or balances with wholly owned subsidiaries within the group. |
| During the period, total dividends of £242,707 (2019 - £213,198) were paid to the directors. |
| The company has transacted with a pension scheme which is under common control. During the period the company incurred a rent expense of £31,250 (2019 - £25,232). At the period end no amounts were owed by or to the related party. |
| The company has also transacted with another company which has common shareholders. The company paid fees of £14,013 (2019 - £20,965). At the period end no amounts were owed by or to the related party. |
| During the year, a total of key management personnel compensation of £ |
| During the year the company paid remuneration of £62,031 (2019 - £81,240) to close family members of key management personnel. |