Noel Kegg Limited Group accounts (Group and Company)

Noel Kegg Limited Group accounts (Group and Company)

NOEL KEGG LIMITED - Company Information

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COMPANY REGISTRATION NUMBER: SC318609
Noel Kegg Limited
Financial Statements
For the year ended
31 December 2020
Noel Kegg Limited
Financial Statements
Year ended 31 December 2020
Contents
Page
Officers and professional advisers
1
Strategic report
2
Director's report
3
Independent auditor's report to the members
5
Consolidated statement of comprehensive income
9
Consolidated statement of financial position
10
Company statement of financial position
11
Consolidated statement of changes in equity
12
Company statement of changes in equity
13
Consolidated statement of cash flows
14
Notes to the financial statements
15
Noel Kegg Limited
Officers and Professional Advisers
Director
C N Kegg
Company secretary
C N Kegg
Registered office
2 Ashley Drive
Bothwell Industrial Estate
Uddingston
Scotland
G71 8BS
Auditor
Nelson Gilmour Smith
Chartered accountants & statutory auditor
Mercantile Chambers
53 Bothwell Street
Glasgow
G2 6TB
Bankers
Bank of Scotland
Park House Branch
Park Circus Place
Glasgow
G3 6AN
Solicitors
Ness Gallagher
95 Stewarton Street
Wishaw
Lanarkshire
ML2 8AG
Noel Kegg Limited
Strategic Report
Year ended 31 December 2020
The Director in preparing this report, has complied with s414C of the Companies Act 2006.
The group's principal activity during the year was the distribution of tools through Internet sales, mail order and trade counter.
The group focused towards a higher volume of UK sales through Toolstop Limited, which have a higher margin than EU sales, resulting in turnover increasing from £20.2m to £21.9m from sales within the UK and falling from £11.5m to £7.4m from sales outwith the UK.
The group's profit before taxation amounted to £1,180,821 (2019: £954,714) and after taxation £946,752 (2019: £767,697). Operating profit of £1,179,918 (2019: £951,193) increased 24% versus 2019. Both the level of business and year-end financial position were satisfactory and the Director remains confident about the future prospects for the business.
One of the key business risks and uncertainties affecting the company is the high volume of stock required to meet the level of product demand, which can be impacted through shifts in consumer demand and also through the wider economic situation through fluctuations in exchange rates. Other key business risks and uncertainties are presented by the ongoing trade negotiations between the UK and EU and by the Covid-19 pandemic. It is likely that these factors will negatively impact turnover in the year to 31 December 2021 and beyond.
The group's operations expose it to a variety of financial risks which include credit risk and foreign currency risk. Credit risk is the risk that a counterparty will be unable to pay amounts when they fall due. The group has implemented policies that ensure appropriate credit checks for all third party debts, including credit insurance for all account customers. The exposure of any individual account is low and the Director is satisfied that the appropriate controls are in place to minimise credit risk. The group is exposed to foreign currency risk on its purchases of inventory, and sale of goods, denominated in foreign currencies, principally Euros. The risk is managed through the Director closely monitoring movements in the Euro on a daily basis. The Director is satisfied that the application of these policies has minimised such exposure for the group.
This report was approved by the board of directors on 26 July 2021 and signed on behalf of the board by:
C N Kegg
Company Secretary
Registered office:
2 Ashley Drive
Bothwell Industrial Estate
Uddingston
Scotland
G71 8BS
Noel Kegg Limited
Director's Report
Year ended 31 December 2020
The director presents his report and the financial statements of the group for the year ended 31 December 2020 .
Director
The director who served the company during the year was as follows:
C N Kegg
Dividends
Particulars of recommended dividends are detailed in note 13 to the financial statements.
Financial instruments
The company did not hold any non-basic financial instruments in the year.
Disclosure of information in the strategic report
The group has chosen in accordance with section 414C(11) of the 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.
Director's responsibilities statement
The directors are responsible for preparing 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, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', 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 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 judgments 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information. The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 26 July 2021 and signed on behalf of the board by:
C N Kegg
Company Secretary
Registered office:
2 Ashley Drive
Bothwell Industrial Estate
Uddingston
Scotland
G71 8BS
Noel Kegg Limited
Independent Auditor's Report to the Members of Noel Kegg Limited
Year ended 31 December 2020
Opinion
We have audited the financial statements of Noel Kegg Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2020 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, 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 FRS 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's affairs as at 31 December 2020 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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 director's 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 or 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 director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The director is responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the director's 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 strategic report or the director's report. We have nothing to report in respect of the following matters in relation to which 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 director's remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of the director
As explained more fully in the director's responsibilities statement, the director is 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 director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is 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 director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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: Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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, we identified the principal risks of non-compliance with laws and regulations and 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 preparation of the financial statements such as the Companies Act 2006. We evaluated managements incentives and opportunities for the fraudulent manipulation of the financial statements, including the risk of of of of override of controls. Based on our assessment we adopted a substantive approach to our audit testing. Audit procedures performed included: Testing a sample of transactions to source documentation. We select sample sizes having regard to the inherent risk (specific and general), the quality of the internal controls and the risk that our testing might not detect possible misstatements. Making enquiries of management, those charged with governance and the entity's solicitors around actual and potential litigation and claims. Identifying legislation of particular relevance to the entity and obtaining audit evidence regarding compliance with that legislation. Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business There are inherent limitations in the audit procedures described above. 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 concealment. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director. - Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Andrew Wilson BA CA
(Senior Statutory Auditor)
For and on behalf of
Nelson Gilmour Smith
Chartered accountants & statutory auditor
Mercantile Chambers
53 Bothwell Street
Glasgow
G2 6TB
26 July 2021
Noel Kegg Limited
Consolidated Statement of Comprehensive Income
Year ended 31 December 2020
2020
2019
Note
£
£
Turnover
4
29,318,316
31,760,572
Cost of sales
25,252,460
27,617,494
-------------
-------------
Gross profit
4,065,856
4,143,078
Administrative expenses
3,124,915
3,191,885
Other operating income
5
238,977
–
------------
------------
Operating profit
6
1,179,918
951,193
Other interest receivable and similar income
10
930
3,521
Interest payable and similar expenses
11
27
–
------------
------------
Profit before taxation
1,180,821
954,714
Tax on profit
12
234,069
187,017
------------
---------
Profit for the financial year and total comprehensive income
946,752
767,697
------------
---------
Profit for the financial year attributable to:
The owners of the parent company
851,811
694,060
Non-controlling interests
94,941
73,637
---------
---------
946,752
767,697
---------
---------
All the activities of the group are from continuing operations.
Noel Kegg Limited
Consolidated Statement of Financial Position
31 December 2020
2020
2019
Note
£
£
Fixed assets
Intangible assets
14
46,553
–
Tangible assets
15
2,201,295
1,625,669
------------
------------
2,247,848
1,625,669
Current assets
Stocks
17
4,851,225
8,808,042
Debtors
18
2,448,717
2,380,206
Cash at bank and in hand
3,935,239
736,012
-------------
-------------
11,235,181
11,924,260
Creditors: amounts falling due within one year
20
1,612,018
2,177,652
-------------
-------------
Net current assets
9,623,163
9,746,608
-------------
-------------
Total assets less current liabilities
11,871,011
11,372,277
Provisions
Taxation including deferred tax
21
86,539
72,557
-------------
-------------
Net assets
11,784,472
11,299,720
-------------
-------------
Capital and reserves
Called up share capital
25
30,201
30,201
Profit and loss account
26
11,315,657
10,737,846
-------------
-------------
Equity attributable to the owners of the parent company
11,345,858
10,768,047
Non-controlling interests
438,614
531,673
-------------
-------------
11,784,472
11,299,720
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 26 July 2021 , and are signed on behalf of the board by:
C N Kegg
Director
Company registration number: SC318609
Noel Kegg Limited
Company Statement of Financial Position
31 December 2020
2020
2019
Note
£
£
Fixed assets
Intangible assets
14
46,553
–
Tangible assets
15
1,446,240
883,500
Investments
16
27,501
27,301
------------
---------
1,520,294
910,801
Current assets
Debtors
18
866,625
3,737,980
Cash at bank and in hand
3,000,548
50,200
------------
------------
3,867,173
3,788,180
Creditors: amounts falling due within one year
20
73,347
7,325
------------
------------
Net current assets
3,793,826
3,780,855
------------
------------
Total assets less current liabilities
5,314,120
4,691,656
Provisions
Taxation including deferred tax
21
11,560
1,080
------------
------------
Net assets
5,302,560
4,690,576
------------
------------
Capital and reserves
Called up share capital
25
30,201
30,201
Profit and loss account
26
5,272,359
4,660,375
------------
------------
Shareholders funds
5,302,560
4,690,576
------------
------------
The profit for the financial year of the parent company was £ 885,744 (2019: £ 931,305 ).
These financial statements were approved by the board of directors and authorised for issue on 26 July 2021 , and are signed on behalf of the board by:
C N Kegg
Director
Company registration number: SC318609
Noel Kegg Limited
Consolidated Statement of Changes in Equity
Year ended 31 December 2020
Called up share capital
Profit and loss account
Equity attributable to the owners of the parent company
Non-controlling interests
Total
£
£
£
£
£
At 1 January 2019
30,201
10,317,786
10,347,987
618,036
10,966,023
Profit for the year
694,060
694,060
73,637
767,697
--------
-------------
-------------
---------
-------------
Total comprehensive income for the year
–
694,060
694,060
73,637
767,697
Dividends paid and payable
13
–
( 274,000)
( 274,000)
( 160,000)
( 434,000)
--------
-------------
-------------
---------
-------------
Total investments by and distributions to owners
–
( 274,000)
( 274,000)
( 160,000)
( 434,000)
At 31 December 2019
30,201
10,737,846
10,768,047
531,673
11,299,720
Profit for the year
851,811
851,811
94,941
946,752
--------
-------------
-------------
---------
-------------
Total comprehensive income for the year
–
851,811
851,811
94,941
946,752
Dividends paid and payable
13
–
( 274,000)
( 274,000)
( 188,000)
( 462,000)
----
---------
---------
---------
---------
Total investments by and distributions to owners
–
( 274,000)
( 274,000)
( 188,000)
( 462,000)
--------
-------------
-------------
---------
-------------
At 31 December 2020
30,201
11,315,657
11,345,858
438,614
11,784,472
--------
-------------
-------------
---------
-------------
Noel Kegg Limited
Company Statement of Changes in Equity
Year ended 31 December 2020
Called up share capital
Profit and loss account
Total
£
£
£
At 1 January 2019
30,201
4,003,070
4,033,271
Profit for the year
931,305
931,305
--------
------------
------------
Total comprehensive income for the year
–
931,305
931,305
Dividends paid and payable
13
–
( 274,000)
( 274,000)
--------
------------
------------
Total investments by and distributions to owners
–
( 274,000)
( 274,000)
At 31 December 2019
30,201
4,660,615
4,690,816
Profit for the year
885,744
885,744
--------
------------
------------
Total comprehensive income for the year
–
885,744
885,744
Dividends paid and payable
13
–
( 274,000)
( 274,000)
----
---------
---------
Total investments by and distributions to owners
–
( 274,000)
( 274,000)
--------
------------
------------
At 31 December 2020
30,201
5,272,359
5,302,560
--------
------------
------------
Noel Kegg Limited
Consolidated Statement of Cash Flows
Year ended 31 December 2020
2020
2019
Note
£
£
Cash flows from operating activities
Profit for the financial year
946,752
767,697
Adjustments for:
Depreciation of tangible assets
182,160
149,164
Amortisation of intangible assets
4,232
–
Fair value adjustment of investment property
( 2,000)
( 17,500)
Government grant income
( 238,977)
–
Other interest receivable and similar income
( 930)
( 3,521)
Interest payable and similar expenses
27
–
Loss on disposal of tangible assets
756
–
Tax on profit
234,069
187,017
Accrued income
( 15,126)
( 104,431)
Changes in:
Stocks
3,956,817
( 671,950)
Trade and other debtors
( 68,511)
182,327
Trade and other creditors
( 649,514)
( 183,561)
------------
---------
Cash generated from operations
4,349,755
305,242
Interest paid
( 27)
–
Interest received
930
3,521
Tax paid
( 165,731)
( 305,824)
------------
---------
Net cash from operating activities
4,184,927
2,939
------------
---------
Cash flows from investing activities
Purchase of tangible assets
( 790,197)
( 70,024)
Proceeds from sale of tangible assets
33,655
–
Purchase of intangible assets
( 50,785)
–
------------
---------
Net cash used in investing activities
( 807,327)
( 70,024)
------------
---------
Cash flows from financing activities
Proceeds from borrowings
47,126
–
Government grant income
238,977
–
Dividends paid
( 462,000)
( 434,000)
------------
---------
Net cash used in financing activities
( 175,897)
( 434,000)
------------
---------
Net increase/(decrease) in cash and cash equivalents
3,201,703
( 501,085)
Cash and cash equivalents at beginning of year
725,439
1,226,524
------------
------------
Cash and cash equivalents at end of year
19
3,927,142
725,439
------------
------------
Noel Kegg Limited
Notes to the Financial Statements
Year ended 31 December 2020
1. General information
The company is a private company limited by shares, registered in Scotland. The address of the registered office is 2 Ashley Drive, Bothwell Industrial Estate, Uddingston, G71 8BS, Scotland.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland', and the Companies Act 2006.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of freehold properties and investment properties measured at fair value through profit or loss. The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The accounts have been prepared on a going concern basis.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:
(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.
Consolidation
The financial statements consolidate the financial statements of Noel Kegg Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Non-controlling interests
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination.
The proportions of profit or loss and changes in equity allocated to the owners of the parent and to the minority interests are determined on the basis of existing ownership interests and do not reflect the possible exercise or conversion of options or convertible instruments.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. There were no judgements (apart from those involving estimations) that management made in the process of applying the entity's accounting policies that are of material effect. Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. Key assumptions and estimates affecting the company's financial statements are limited to the consideration of rates of depreciation. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are limited to the determination of depreciation and amortisation methodologies and the fair value of investment and freehold properties. At the balance sheet date the carrying value of intangible assets subject to amortisation policies was £46,553 (2019: £nil), while the amortisation charged in the year amounted to £4,232 (2019: £nil). The carrying value of fixed assets subject to depreciation policies was £808,214 (2019: £742,169), while the depreciation charged in the year amounted to £182,161 (2019: £149,164). The value of investment properties subject to estimation uncertainties over their fair value was £885,500 (2019: £883,500). The value of freehold properties subject to estimation uncertainties over their fair value was £507,581 (2019: £nil).
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
33% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Leasehold improvements
-
10% straight line
Plant and machinery
-
10% straight line
Equipment
-
25% reducing balance
Motor vehicles
-
25% reducing balance
Leasehold improvements includes expenditure on integral features and other enhancements to the leasehold property. Notwithstanding the fact that the lease expires in less than 10 years, the Directors consider that depreciating leasehold improvements over 10 years is the most appropriate basis.
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.
Investment property is initially recorded at cost, which includes purchase price and any directly attributable expenditure.
Investment property is revalued to its fair value at each reporting date and any changes in fair value are recognised in profit or loss.
If a reliable measure of fair value is no longer available without undue cost or effort for an item of investment property, it shall be transferred to tangible assets and treated as such until it is expected that fair value will be reliably measurable on an on-going basis.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Basic financial instruments include Cash and cash equivalents, trade debtors, and trade creditors. Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or loss and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. Short term trade debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. Short term trade creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured subsequently at amortised cost using the effective interest method. Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised. Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
The company operates a defined contribution pension scheme for Directors and key employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.
4. Turnover
Turnover arises from:
2020
2019
£
£
Sale of goods
29,285,296
31,726,252
Rental Income - Residential
33,020
34,320
-------------
-------------
29,318,316
31,760,572
-------------
-------------
The turnover is attributable to the one principal activity of the group. An analysis of turnover by the geographical markets that substantially differ from each other is given below:
2020
2019
£
£
United Kingdom
21,955,784
20,237,582
Overseas
7,362,532
11,522,990
-------------
-------------
29,318,316
31,760,572
-------------
-------------
5. Other operating income
2020
2019
£
£
Government grant income
238,977
–
---------
----
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2020
2019
£
£
Amortisation of intangible assets
4,232
–
Depreciation of tangible assets
182,161
149,164
Loss on disposal of tangible assets
756
–
Fair value adjustments to investment property
( 2,000)
( 17,500)
Impairment of trade debtors
12,500
52,315
Foreign exchange differences
( 4,336)
–
---------
---------
7. Auditor's remuneration
2020
2019
£
£
Fees payable for the audit of the financial statements
7,500
4,900
-------
-------
Fees payable to the company's auditor and its associates for other services:
Other non-audit services
21,400
33,500
--------
--------
8. Staff costs
The average number of persons employed by the group during the year, including the director, amounted to:
2020
2019
No.
No.
Administrative staff
65
62
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2020
2019
£
£
Wages and salaries
1,982,763
1,894,281
Social security costs
190,284
187,589
Other pension costs
54,394
61,156
------------
------------
2,227,441
2,143,026
------------
------------
9. Director's remuneration
The director's aggregate remuneration in respect of qualifying services was:
2020
2019
£
£
Remuneration
23,000
42,994
Company contributions to defined contribution pension plans
211
882
--------
--------
23,211
43,876
--------
--------
The number of directors who accrued benefits under company pension plans was as follows:
2020
2019
No.
No.
Defined contribution plans
3
3
----
----
10. Other interest receivable and similar income
2020
2019
£
£
Interest on bank deposits
317
1,353
Other interest
613
2,168
----
-------
930
3,521
----
-------
11. Interest payable and similar expenses
2020
2019
£
£
Other interest payable and similar charges
27
–
----
----
12. Tax on profit
Major components of tax expense
2020
2019
£
£
Current tax:
UK current tax expense
220,087
194,307
Adjustments in respect of prior periods
–
4
---------
---------
Total current tax
220,087
194,311
---------
---------
Deferred tax:
Origination and reversal of timing differences
13,982
( 7,294)
---------
---------
Tax on profit
234,069
187,017
---------
---------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2019: higher than) the standard rate of corporation tax in the UK of 19 % (2019: 19 %).
2020
2019
£
£
Profit on ordinary activities before taxation
1,180,821
954,714
------------
---------
Profit on ordinary activities by rate of tax
224,310
181,396
Effect of expenses not deductible for tax purposes
4,057
1,388
Effect of capital allowances and depreciation
6,082
7,512
Effect of revenue exempt from tax
( 380)
( 3,279)
------------
---------
Tax on profit
234,069
187,017
------------
---------
13. Dividends
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year):
2020
2019
£
£
Dividends on equity shares - Ordinary B
250,000
24,000
Dividends on equity shares - Ordinary C
212,000
410,000
---------
---------
462,000
434,000
---------
---------
14. Intangible assets
Group and company
Goodwill
£
Cost
At 1 January 2020
–
Acquisitions through business combinations
50,785
--------
At 31 December 2020
50,785
--------
Amortisation
At 1 January 2020
–
Charge for the year
4,232
--------
At 31 December 2020
4,232
--------
Carrying amount
At 31 December 2020
46,553
--------
At 31 December 2019
–
--------
15. Tangible assets
Group
At 1 January 2020
Additions
Disposals
Revaluation
At 31 December 2020
£
£
£
£
£
Cost or valuation
Freehold property
–
507,581
–
–
507,581
Leasehold improvements
908,756
106,925
–
–
1,015,681
Plant and machinery
198,124
4,215
–
–
202,339
Equipment
341,951
118,876
–
–
460,827
Motor vehicles
133,318
52,600
( 58,181)
–
127,737
Investment property
883,500
–
–
2,000
885,500
------------
---------
--------
-------
------------
2,465,649
790,197
( 58,181)
2,000
3,199,665
------------
---------
--------
-------
------------
At 1 January 2020
Charge for the year
Disposals
At 31 December 2020
£
£
£
£
Depreciation
Freehold property
–
–
–
–
Leasehold improvements
392,972
94,436
–
487,408
Plant and machinery
123,115
17,256
–
140,371
Equipment
287,477
42,791
–
330,268
Motor vehicles
36,416
27,677
( 23,770)
40,323
------------
---------
--------
---------
839,980
182,160
( 23,770)
998,370
------------
---------
--------
---------
At 31 December 2020
At 31 December 2019
£
£
Carrying amount
Freehold property
507,581
–
Leasehold improvements
528,273
515,784
Plant and machinery
61,968
75,009
Equipment
130,559
54,474
Motor vehicles
87,414
96,902
Investment property
885,500
883,500
------------
------------
2,201,295
1,625,669
------------
------------
Company
At 1 January 2020
Additions
Revaluation
At 31 December 2020
£
£
£
£
Cost or valuation
Freehold property
–
507,581
–
507,581
Equipment
–
57,815
–
57,815
Investment property
883,500
–
2,000
885,500
---------
------------
-------
------------
883,500
565,396
2,000
1,450,896
---------
------------
-------
------------
At 1 January 2020
Charge for the year
At 31 December 2020
£
£
£
Depreciation
Freehold property
–
–
–
Equipment
–
4,656
4,656
---------
------------
-------
–
4,656
4,656
---------
------------
-------
At 31 December 2020
At 31 December 2019
£
£
Carrying amount
Freehold property
507,581
–
Equipment
53,159
–
Investment property
885,500
883,500
------------
------------
1,446,240
883,500
------------
------------
In line with FRS 102 Section 16 and Section 17, no depreciation is being provided for on Investment Properties or Freehold Property, respectively. Rather these properties are restated to Fair Value at each period end, with any movement being recognised in the Statement of Income and Retained Earnings. Fair value of investment properties and freehold properties was determined by the Directors having regard to local market trends and recent sales of comparable assets in the open market around the balance sheet date.
16. Investments
The group has no investments.
Company
Shares in group undertakings
£
Cost
At 1 January 2020
27,301
Additions
200
--------
At 31 December 2020
27,501
--------
Impairment
At 1 January 2020 and 31 December 2020
–
--------
Carrying amount
At 31 December 2020
27,501
--------
At 31 December 2019
27,301
--------
Subsidiaries, associates and other investments
Details of the investments in which the parent company has an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Toolstop Limited
Ordinary
90
Fixxtool Ltd
Ordinary
100
Toolsaver Limited
Ordinary
100
Spint65 Limtied
Ordinary
100
Tartan Escapes Limited
Ordinary
100
17. Stocks
Group
Company
2020
2019
2020
2019
£
£
£
£
Raw materials and consumables
4,851,225
8,808,042
–
–
------------
------------
----
----
18. Debtors
Group
Company
2020
2019
2020
2019
£
£
£
£
Trade debtors
2,397,120
1,823,857
–
–
Amounts owed by group undertakings
–
–
866,226
3,671,142
Prepayments and accrued income
46,916
129,313
–
–
Director's loan account
–
52,608
–
53,939
Other debtors
4,681
374,428
399
12,899
------------
------------
---------
------------
2,448,717
2,380,206
866,625
3,737,980
------------
------------
---------
------------
19. Cash and cash equivalents
Cash and cash equivalents comprise the following:
2020
2019
£
£
Cash at bank and in hand
3,935,239
736,012
Bank overdrafts
( 8,097)
( 10,573)
------------
---------
3,927,142
725,439
------------
---------
20. Creditors: amounts falling due within one year
Group
Company
2020
2019
2020
2019
£
£
£
£
Bank loans and overdrafts
8,097
10,573
–
–
Trade creditors
1,069,204
1,891,426
–
–
Amounts owed to group undertakings
–
–
–
200
Accruals and deferred income
18,504
33,630
3,000
3,600
Corporation tax
223,639
169,283
3,552
3,525
Social security and other taxes
245,448
72,740
–
–
Director loan accounts
47,126
–
66,795
–
------------
------------
--------
-------
1,612,018
2,177,652
73,347
7,325
------------
------------
--------
-------
In respect of overdraft facilities, the Lloyds Banking Group and Ban of Scotland have been granted a bond and floating charge over the whole of the group member Toolstop Limited's assets. Bank of Scotland has also been granted a bond and floating charge over the whole of Noel Kegg Limited 's assets.
Amounts owed to trade creditors are payable in accordance with terms agreed with the supplier.
21. Provisions
Group
Deferred tax (note 22)
£
At 1 January 2020
72,557
Additions
13,982
--------
At 31 December 2020
86,539
--------
Company
Deferred tax (note 22)
£
At 1 January 2020
1,080
Additions
10,480
--------
At 31 December 2020
11,560
--------
22. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2020
2019
2020
2019
£
£
£
£
Included in provisions (note 21)
86,539
72,557
11,560
1,080
--------
--------
--------
-------
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2020
2019
2020
2019
£
£
£
£
Accelerated capital allowances
85,079
71,477
10,100
–
Fair value adjustment of investment property
1,460
1,080
1,460
1,080
--------
--------
--------
-------
86,539
72,557
11,560
1,080
--------
--------
--------
-------
In the absence of any assets sales or purchases, it is expected that deferred tax liabilities of £ 23,059 will be reversed in the year to 31 December 2021. This reversal is expected due to the anticipated rate of depreciation of the relevant assets being greater than the relevant Corporation Tax Writing Down Allowances on the same.
23. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 54,394 (2019: £ 61,156 ).
24. Government grants
The amounts recognised in the financial statements for government grants are as follows:
Group
Company
2020
2019
2020
2019
£
£
£
£
Recognised in other operating income:
Government grants released to profit or loss
238,977
–
–
–
---------
----
----
----
25. Called up share capital
Authorised share capital
2020
2019
No.
£
No.
£
Ordinary shares of £ 1 each
30,001
30,001
30,001
30,001
Ordinary B shares of £ 1 each
100
100
100
100
Ordinary C shares of £ 1 each
100
100
100
100
--------
--------
--------
--------
30,201
30,201
30,201
30,201
--------
--------
--------
--------
Issued, called up and fully paid
2020
2019
No.
£
No.
£
Ordinary shares of £ 1 each
30,001
30,001
30,001
30,001
Ordinary B shares of £ 1 each
100
100
100
100
Ordinary C shares of £ 1 each
100
100
100
100
--------
--------
--------
--------
30,201
30,201
30,201
30,201
--------
--------
--------
--------
Ordinary shares are entitled to one vote per share in any circumstances. Ordinary B shares and Ordinary C shares have no rights attached to them in terms of voting and no rights to participate in a capital distribution in the event of winding up. Shares have rights to dividend distributions as determined by the Director.
26. Reserves
Profit and loss account - This reserve records retained earnings and accumulated losses .
27. Analysis of changes in net debt
At 1 Jan 2020
Cash flows
At 31 Dec 2020
£
£
£
Cash at bank and in hand
736,012
3,199,227
3,935,239
Bank overdrafts
(10,573)
2,476
(8,097)
Debt due within one year
–
(47,126)
(47,126)
---------
------------
------------
725,439
3,154,577
3,880,016
---------
------------
------------
Noel Kegg Limited
Notes to the Financial Statements (continued)
Year ended 31 December 2020
28. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
2020
2019
2020
2019
£
£
£
£
Not later than 1 year
171,000
171,000
–
–
Later than 1 year and not later than 5 years
447,500
618,500
–
–
---------
---------
----
----
618,500
789,500
–
–
---------
---------
----
----
The group leased 2 Ashley Drive in the year, the property from which Toolstop Limited trades, for £150,000 (2018: £150,000).
29. Director's advances, credits and guarantees
During the year, the group provided loans to / (obtained loans from) directors Calum and Lynne Kegg as follows: - Beginning of the year £53,939 (2019: £191,308);- End of the year £(66,795) (2019: £53,939); and - The maximum overdrawn during the year was £183,939 (2019: £303,939); In addition, the group provided loans to / (obtained loans from) Director N. Bruce as follows:- Beginning of the year £(1,331)(2019: £(331)); - End of the year £19,669 (2019: £(1,331)); and - The maximum overdrawn during the year was £207,669 (2019: £158,669); The loans are interest free, unsecured and are repayable on demand.
30. Related party transactions
Company
During the year Ashley Ventures SSAS , a Post-Employment Benefit Plan operated for the benefit of Toolstop's Directors, charged the company for the use of the property from which Toolstop Limited trades from an amount of £ 150,000 (2019 : £ 150,000 ). During the year the Directors received aggregate dividends from Toolstop limited of £94,000 (2019: £80,000), and aggregate dividends from Noel Kegg Limited of £ 150,000 (2019: £ 150,000 ). During the year other related parties received aggregate salaries of £ 37,993 (2019: £ 54,941 ), aggregate dividends of £ 94,000 (2019: £ 80,000 ), and aggregate pension contributions of £ 638 (2019: £ 1,005 ).
31. Controlling party
During the year, the group operated under the control of Director C. Kegg, by virtue of his shareholdings in Noel Kegg Limited .