Project Greenline Limited - Limited company accounts 20.1

REGISTERED NUMBER: 11979450 (England and Wales)

FOR

Page

Company Information  

1

Group Strategic Report  

2

Report of the Directors  

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

16

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)

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 2020.

REVIEW OF BUSINESS

We entered 2020 delivering strong results alongside significant growth however the unpredictability of the period affected by the pandemic saw turnover in the period March to June significantly affected meaning effective cost savings were absolutely business critical to ensure the business emerged from 2020 in a position of strength. The business subsidiary sales rebounded June onwards, costs were controlled and reduced where possible and the team supported the Board throughout the process of navigating the years difficulties. Ultimately the second half of 2020 saw an unexpected recovery of sales meaning we have been able to settle our CBILs loan facility during 2021 and prior to incurring any loan interest.

The groups' strategy continues to be supported by our 'Best Value No Messin' proposition and we are now well placed to target sustained growth alongside a carefully considered growth plan. Key to developments over future years will be the integration of I.T. solutions, expansion of warehousing facilities, ensuring product availability and the training of our team to use said improvements to extract the benefits on offer meaning we can provide market leading levels of customer service alongside a defined and robust product range.

Consolidated turnover increased pro-rata on the previous year resulting in sales of over £11m for the companies' first 12-month reporting period however, margins were reduced due to the Directors decision to support customers through the period. The operational performance of the business relied heavily on our proactive and understanding team of individuals and resulted in reduced distribution and administrative expenses. In addition, the Team set about protecting the liquidity of the business during the period and this has resulted in a strong cash position ensuring the business will be best placed to overcome any market fluctuations presented going forwards and as the business continues to operate through the pandemic.

Notable is the fact that the UK/EU trade deal has been deemed a manageable change which should have little effect on the ability of the group to perform in future years, relations with overseas suppliers and customers remain strong.

Stock turn remained at satisfactory levels meaning the Directors can continue to support investment in new products and can push forward with strategic investment in stocks.

The health and safety of our team and customers remains as a key consideration alongside daily operations and planned investments in warehousing capacity.

The Directors have continued to invest in training for existing colleagues and have reinstated our recruitment drive with a number of apprenticeships being supported over the 12 month period. Our investment in apprentices continues to provide suitably trained and valuable individuals who contribute to the success of the business.

The market remains competitive however the company continues to excel at providing leading products and services backed up by a robust repairs centre which ensures we can provide an in-house market leading solution to any customer issues raised.

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.

The Directors are confident future growth plans can be delivered upon, we move forward in a confident manner.

PRINCIPAL RISKS AND UNCERTAINTIES

Regardless of the COVID-19 outbreak we consider ourselves to be in a strong position which will allow us to deal with the current uncertainty this situation brings. Investments during 2020 in I.T. and online platforms have significantly influenced our ability to perform better than forecast during this difficult period however we have also been very well supported by the continued positive attitude of our team, a healthy stock profile and strong supplier relationships.

KEY PERFORMANCE INDICATORS

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

2020

(£m)

Sales

11.218

Profit before tax

1.496

Shareholders funds

4.697

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 24% was achieved (2019 only traded for a 6 month period so no comparison offered). 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 2020 which has been released to the Group profit and loss account amounted to £0.374m leaving a residual net book value of negative goodwill as at 31 December 2020 amounting to £0.126m.

SUMMARY

A positive year demonstrating the resilience of the business in a fast-changing market.

ON BEHALF OF THE BOARD:

C K Sanders - Director

23 July 2021

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

PRINCIPAL ACTIVITY

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2020 will be £190,227 (2019 - £62,212)

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 2020 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 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 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:

C K Sanders - Director

23 July 2021

Opinion

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 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 Group 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 Group 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 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 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 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.

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:

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

27 July 2021

TURNOVER

4

11,218,443

5,455,648

Cost of sales

(7,737,486

)

(3,633,914

)

GROSS PROFIT

3,480,957

1,821,734

Distribution costs

(306,989

)

(180,636

)

Administrative expenses

(2,079,859

)

(14,553

)

1,094,109

1,626,545

Other operating income

5

348,357

32,929

OPERATING PROFIT

7

1,442,466

1,659,474

Interest receivable and similar income

53,639

38,314

1,496,105

1,697,788

Interest payable and similar expenses

8

-

(505

)

PROFIT BEFORE TAXATION

1,496,105

1,697,283

Tax on profit

9

(218,970

)

(83,807

)

PROFIT FOR THE FINANCIAL YEAR

1,277,135

1,613,476

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR

THE YEAR

1,277,135

1,613,476

Profit attributable to:

Owners of the parent

1,195,393

1,575,114

Non-controlling interests

81,742

38,362

1,277,135

1,613,476

Total comprehensive income attributable to:

Owners of the parent

1,195,393

1,575,114

Non-controlling interests

81,742

38,362

1,277,135

1,613,476

FIXED ASSETS

Intangible assets

12

(126,242

)

(500,352

)

Tangible assets

13

105,670

131,274

Investments

14

-

-

(20,572

)

(369,078

)

CURRENT ASSETS

Stocks

15

2,559,689

2,640,010

Debtors

16

3,017,712

2,924,324

Cash at bank

2,217,515

975,696

7,794,916

6,540,030

CREDITORS

Amounts falling due within one year

17

(2,509,519

)

(1,932,085

)

NET CURRENT ASSETS

5,285,397

4,607,945

TOTAL ASSETS LESS CURRENT

LIABILITIES

5,264,825

4,238,867

CREDITORS

Amounts falling due after more than one

year

18

(437,500

)

(300,000

)

PROVISIONS FOR LIABILITIES

22

(18,350

)

(21,800

)

NET ASSETS

4,808,975

3,917,067

CAPITAL AND RESERVES

Called up share capital

23

125

125

Merger reserve

24

2,179,294

2,365,678

Retained earnings

24

2,518,068

1,512,902

SHAREHOLDERS' FUNDS

4,697,487

3,878,705

NON-CONTROLLING INTERESTS

111,488

38,362

TOTAL EQUITY

4,808,975

3,917,067

The financial statements were approved by the Board of Directors and authorised for issue on 23 July 2021 and were signed on its behalf by:

C K 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

918

7

CREDITORS

Amounts falling due within one year

17

(201,000

)

(100,007

)

NET CURRENT LIABILITIES

(200,082

)

(100,000

)

TOTAL ASSETS LESS CURRENT

LIABILITIES

3,165,721

3,265,803

CREDITORS

Amounts falling due after more than one

year

18

(200,000

)

(300,000

)

NET ASSETS

2,965,721

2,965,803

CAPITAL AND RESERVES

Called up share capital

23

125

125

Merger reserve

2,365,678

2,365,678

Retained earnings

599,918

600,000

SHAREHOLDERS' FUNDS

2,965,721

2,965,803

Company's profit for the financial year

46,599

600,000

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 23 July 2021 and were signed on its behalf by:

C K Sanders - Director

Called up

share

Retained

Merger

capital

earnings

reserve

£   

£   

£   

Changes in equity

Issue of share capital

125

-

2,365,678

Dividends

-

(62,212

)

-

Total comprehensive income

-

1,575,114

-

Balance at 31 December 2019

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

Non-controlling

Total

Total

interests

equity

£   

£   

£   

Changes in equity

Issue of share capital

2,365,803

-

2,365,803

Dividends

(62,212

)

-

(62,212

)

Total comprehensive income

1,575,114

38,362

1,613,476

Balance at 31 December 2019

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