Project Greenline Limited - Limited company accounts 20.1

REGISTERED NUMBER: 11979450 (England and Wales)

GROUP STRATEGIC REPORT, DIRECTORS' REPORT AND

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

FOR

PROJECT GREENLINE LIMITED

Page

Company Information

1

Group Strategic Report

2

Directors' Report

4

Report of the Independent Auditors

5

Consolidated Statement of Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

15

DIRECTORS:

S L Bradshaw

R B Sanders

C K Sanders

A M Blount

SECRETARY:

I Sanders

REGISTERED OFFICE:

Sidney Robinson Business Park

Ascot Drive

Derby

DE24 8EH

REGISTERED NUMBER:

11979450 (England and Wales)

SENIOR STATUTORY AUDITOR:

Paul Orton ACA FCCA

AUDITORS:

Magma Audit LLP

Chartered Accountants

Statutory Auditor

Unit 2, Charnwood Edge Business Park

Syston Road

Leicestershire

LE7 4UZ

The directors present their strategic report of the company and the group for the year ended 31 December 2021.

REVIEW OF BUSINESS

During 2021 the group recorded increased turnover results driven by increased sales activity whilst we continued to increase our valued customer base. In part turnover growth was also influenced by supplier driven increases on certain product lines however the impact of such increases was staged through the year due to proactive purchase planning.

Crucial to the group's ongoing growth is the support offered by our team, our carefully considered network of suppliers, the strategically positioned group warehousing facilities and our 'Best Value No Messin' proposition which allows us to ensure key decisions are made in real-time.

The groups' strategy continues to deliver growth and efficiencies and we are now better placed than ever to target further advancement and efficiencies in line with our strategic objectives.

Consolidated turnover increased on the previous year, increasing from 11.218m in 2020 to 13.484m in 2021. Gross Margins held at acceptable levels however all results exceeded original budget expectations ensuring the board protected the liquidity of the business whilst making significant investments in stock holdings to ensure market price inflation was controlled and availability of required products was secured during the period. Distribution costs remained under scrutiny throughout the period and administrative expenses were reasonably contained with the company benefitting from earlier years investments which drove efficiencies. Further, significant time and funds have been invested in safety, training and I.T. systems to ensure the infrastructure which will be key to future success is robust and able to incorporate the ever-changing needs of our evolving marketplace.

The health and safety of our team and customers remains as a key consideration alongside the high service levels delivered in all areas, a diverse product range offering benefits to our customers and a robust delivery of daily operational targets.

The Directors have continued to invest in reducing the environmental impact the business places upon the environment with aspirations to significantly reduce emissions further over the coming years. It is recognised that our overall contribution to reducing global emissions will be key to protecting not only the environment of the future but also the marketplace we rely upon.

During the year the company continued to purchase subsidiary shares previously owned by minority shareholders thus increasing the company's ownership percentage of subsidiary companies. This further investment demonstrates confidence going forwards and a phased change in group ownership whilst ensuring cashflow is invested strategically to support further growth.

The market remains competitive and uncertain however the company continues to closely monitor market shifts and accurately predict market fluctuations to ensure we continue to excel at providing leading products and services backed up by a class leading repairs centre which in turn ensures we can provide a market leading solution to any customer issues raised.

Our strategy remains in place and unchanged - We strive to excel at satisfying our customers' needs and expectations and are motivated by ensuring the economic, social and environmental sustainability of the group alongside delivery of controlled growth in a safe manner.

PRINCIPAL RISKS AND UNCERTAINTIES

The team has performed admirably when faced with the challenges/impacts presented by COVID-19, Brexit and the conflict in Ukraine. We look forward to the future with momentum and confidence whilst aware of potential difficulties external factors may place upon the coming years.

KEY PERFORMANCE INDICATORS

Sales/ profits over the last year has been as follows:

2020

2021

(£m)

(£m)

Sales

11.218

13.484

Profit before tax

1.496

1.293

Shareholders funds

4.697

5.236

We consider that our top-level key financial performance indicators are those that accurately communicate the financial performance and strength of the company. Specifically, turnover, gross margin, operating profit and return on capital employed.

Considering the challenges during the year a satisfactory return on capital employed of 19% was achieved (2020 - 24%). The calculation is based on profit after tax and non-controlling interests share as a percentage of net assets before non-controlling interests share.

In 2019, as a result of the acquisition of the DIPT Holdings Limited by Project Greenline Limited, £1.514m of negative goodwill was recognised to account for the difference between the consideration paid and the fair value of the net assets acquired and primarily arose as a result of the difference in the fair value of stock and fixed assets. The negative goodwill is being amortised as the stock acquired is sold and as assets are depreciated or disposed of. The amortisation credit in 2021 which has been released to the Group profit and loss account amounted to £0.06m.

SUMMARY

Ultimately a year which demonstrated the capabilities and determination of the team employed during the period which on balance, yielded improved results.

ON BEHALF OF THE BOARD:

R B Sanders - Director

12 September 2022

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2021.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the sale, hire and servicing of industrial power tools and ancillary equipment.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2021 will be £140,712 (2020 - £190,227)

FUTURE DEVELOPMENTS

Information regarding future developments is included in the Strategic Report of the consolidated financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

S L Bradshaw

R B Sanders

C K Sanders

A M Blount

FINANCIAL INSTRUMENTS

Information regarding financial instruments is included in the Strategic Report of the consolidated financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Directors' 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group'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 group's auditors are aware of that information.

AUDITORS

The auditors, Magma Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

R B Sanders - Director

12 September 2022

Opinion

We have audited the financial statements of Project Greenline Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 31 December 2021 and of the group's 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 group 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 group's and the parent 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 Group Strategic Report and the Directors' Report, 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 Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the 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 the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.

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

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

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

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

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

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 group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company and industry, we identified the principal risks of non-compliance with laws and regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates. Audit procedures performed included:

-

discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

-

challenging assumptions made by management in their significant accounting estimates, in particular in relation to the stock valuation and judgements formed;

-

identifying and testing journal entries, in particular any journal entries posted with unusual account combinations, journal entries crediting cash and journal entries with specific defined descriptions.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through 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.

Paul Orton ACA FCCA (Senior Statutory Auditor)

for and on behalf of Magma Audit LLP

Chartered Accountants

Statutory Auditor

Unit 2, Charnwood Edge Business Park

Syston Road

Leicestershire

LE7 4UZ

13 September 2022

TURNOVER

4

13,484,121

11,218,443

Cost of sales

(9,260,150

)

(7,737,486

)

GROSS PROFIT

4,223,971

3,480,957

Distribution costs

(352,499

)

(306,989

)

Administrative expenses

(2,718,875

)

(2,079,859

)

1,152,597

1,094,109

Other operating income

5

73,190

348,357

OPERATING PROFIT

7

1,225,787

1,442,466

Interest receivable and similar income

67,433

53,639

1,293,220

1,496,105

Interest payable and similar expenses

8

(39

)

-

PROFIT BEFORE TAXATION

1,293,181

1,496,105

Tax on profit

9

(249,246

)

(218,970

)

PROFIT FOR THE FINANCIAL YEAR

1,043,935

1,277,135

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,043,935

1,277,135

Profit attributable to:

Owners of the parent

1,000,336

1,195,393

Non-controlling interests

43,599

81,742

1,043,935

1,277,135

Total comprehensive income attributable to:

Owners of the parent

1,000,336

1,195,393

Non-controlling interests

43,599

81,742

1,043,935

1,277,135

FIXED ASSETS

Intangible assets

12

(65,549

)

(126,242

)

Tangible assets

13

135,913

105,670

Investments

14

-

-

70,364

(20,572

)

CURRENT ASSETS

Stocks

15

3,381,268

2,559,689

Debtors

16

2,587,744

2,974,733

Cash at bank

1,461,603

2,217,515

7,430,615

7,751,937

CREDITORS

Amounts falling due within one year

17

(2,110,739

)

(2,466,540

)

NET CURRENT ASSETS

5,319,876

5,285,397

TOTAL ASSETS LESS CURRENT LIABILITIES

5,390,240

5,264,825

CREDITORS

Amounts falling due after more than one year

18

(100,000

)

(437,500

)

PROVISIONS FOR LIABILITIES

22

(31,694

)

(18,350

)

NET ASSETS

5,258,546

4,808,975

CAPITAL AND RESERVES

Called up share capital

23

125

125

Merger reserve

24

2,179,294

2,179,294

Retained earnings

24

3,057,150

2,518,068

SHAREHOLDERS' FUNDS

5,236,569

4,697,487

NON-CONTROLLING INTERESTS

21,977

111,488

TOTAL EQUITY

5,258,546

4,808,975

The financial statements were approved by the Board of Directors and authorised for issue on 12 September 2022 and were signed on its behalf by:

R B Sanders - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

-

-

Investments

14

3,365,803

3,365,803

3,365,803

3,365,803

CURRENT ASSETS

Cash at bank

1,142

918

CREDITORS

Amounts falling due within one year

17

(206,000

)

(201,000

)

NET CURRENT LIABILITIES

(204,858

)

(200,082

)

TOTAL ASSETS LESS CURRENT LIABILITIES

3,160,945

3,165,721

CREDITORS

Amounts falling due after more than one year

18

(100,000

)

(200,000

)

NET ASSETS

3,060,945

2,965,721

CAPITAL AND RESERVES

Called up share capital

23

125

125

Merger reserve

2,365,678

2,365,678

Retained earnings

695,142

599,918

SHAREHOLDERS' FUNDS

3,060,945

2,965,721

Company's profit for the financial year

149,698

46,599

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 12 September 2022 and were signed on its behalf by:

R B Sanders - Director

Called up

share

Retained

Merger

capital

earnings

reserve

£

£

£

Balance at 1 January 2020

125

1,512,902

2,365,678

Changes in equity

Dividends

-

(190,227

)

-

Total comprehensive income

-

1,195,393

-

Acquisition of non-controlling interest

-

-

(186,384

)

Balance at 31 December 2020

125

2,518,068

2,179,294

Changes in equity

Dividends

-

(140,712

)

-

Total comprehensive income

-

1,000,336

-

Acquisition of non-controlling interest

-

(320,542

)

-

Balance at 31 December 2021

125

3,057,150

2,179,294

Non-controlling

Total

Total

interests

equity

£

£

£

Balance at 1 January 2020

3,878,705

38,362

3,917,067

Changes in equity

Dividends

(190,227

)

-

(190,227

)

Total comprehensive income

1,195,393

81,742

1,277,135

Acquisition of non-controlling interest

(186,384

)

(8,616

)

(195,000

)

Balance at 31 December 2020

4,697,487

111,488

4,808,975

Changes in equity

Dividends

(140,712

)

-

(140,712

)

Total comprehensive income

1,000,336

43,599

1,043,935

Acquisition of non-controlling interest

(320,542

)

(133,110

)

(453,652

)

Balance at 31 December 2021

5,236,569

21,977

5,258,546

Called up

share

Retained

Merger

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2020

125

600,000

2,365,678

2,965,803

Changes in equity

Dividends

-

(46,681

)

-

(46,681

)

Total comprehensive income

-

46,599

-

46,599

Balance at 31 December 2020

125

599,918

2,365,678

2,965,721

Changes in equity

Dividends

-

(54,474

)

-

(54,474

)

Total comprehensive income

-

149,698

-

149,698

Balance at 31 December 2021

125

695,142

2,365,678

3,060,945

Cash flows from operating activities

Cash generated from operations

1

341,542

1,664,599

Interest paid

(39

)

-

Tax paid

(202,408

)

(194,550

)

Net cash from operating activities

139,095

1,470,049

Cash flows from investing activities

Purchase of tangible fixed assets

(91,184

)

(22,404

)

Sale of tangible fixed assets

-

(755

)

Acquisition of non-controlling interest

(453,652

)

(195,000

)

Interest received

67,433

53,639

Net cash from investing activities

(477,403

)

(164,520

)

Cash flows from financing activities

New loans advanced

-

250,000

Loan repayments in year

(250,000

)

(100,000

)

Amount withdrawn by directors

(687

)

(6,886

)

Equity dividends paid

(140,712

)

(190,227

)

Net cash from financing activities

(391,399

)

(47,113

)

(Decrease)/increase in cash and cash equivalents

(729,707

)

1,258,416

Cash and cash equivalents at beginning of year

2

1,819,382

560,966

Cash and cash equivalents at end of year

2

1,089,675

1,819,382

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2021

2020

£

£

Profit before taxation

1,293,181

1,496,105

Depreciation charges

(309

)

48,452

Loss on disposal of fixed assets

557

311

Amortisation of negative goodwill

-

(374,110

)

Finance costs

39

-

Finance income

(67,433

)

(53,639

)

1,226,035

1,117,119

(Increase)/decrease in stocks

(821,579

)

80,321

Decrease/(increase) in trade and other debtors

387,676

(50,001

)

(Decrease)/increase in trade and other creditors

(450,590

)

517,160

Cash generated from operations

341,542

1,664,599

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 2021

31/12/21

1/1/21

£

£

Cash and cash equivalents

1,461,603

2,217,515

Bank overdrafts

(371,928

)

(398,133

)

1,089,675

1,819,382

Year ended 31 December 2020

31/12/20

1/1/20

£

£

Cash and cash equivalents

2,217,515

975,696

Bank overdrafts

(398,133

)

(414,730

)

1,819,382

560,966

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/1/21

Cash flow

At 31/12/21

£

£

£

Net cash

Cash at bank

2,217,515

(755,912

)

1,461,603

Bank overdrafts

(398,133

)

26,205

(371,928

)

1,819,382

(729,707

)

1,089,675

Debt

Debts falling due within 1 year

(12,500

)

12,500

-

Debts falling due after 1 year

(237,500

)

237,500

-

(250,000

)

250,000

-

Total

1,569,382

(479,707

)

1,089,675

1.	STATUTORY INFORMATION

Project Greenline Limited is a private limited company and group, registered in England and Wales. Its registered office address is Sidney Robinson Business Park, Ascot Drive, Derby, DE24 8EH and the registered number is 11979450.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Basis of consolidation

The consolidated financial statements incorporate those of Project Greenline Limited and all of its subsidiaries (i.e. entities that the Group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the acquisition method of accounting. The results are incorporated from the date control passes. All financial statements are made up to 31 December.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.

Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Revenue is recognised on the date that goods are despatched.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Goodwill

Goodwill represents the shortfall of the cost of the business acquisition, compared to the fair value of the net assets acquired. It is initially recognised at cost and subsequently measured at cost less any accumulated amortisation and impairment.

Negative goodwill is credited to Statement of Comprehensive Income as the underlying assets are realised (stock and tangible fixed assets).