Kingstown Associates (Holdings) Limited - Limited company accounts 20.1
Kingstown Associates (Holdings) Limited - Limited company accounts 20.1
| REGISTERED NUMBER: 09796628 (England and Wales) |
| Group Strategic Report, Report of the Directors and |
| Consolidated Financial Statements for the Year Ended 31 December 2020 |
| for |
| Kingstown Associates (Holdings) Limited |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Contents of the Consolidated Financial Statements |
| for the Year Ended 31 December 2020 |
| Page |
| Company Information | 1 |
| Group Strategic Report | 2 |
| Report of the Directors | 4 |
| Report of the Independent Auditors | 6 |
| Consolidated Income Statement | 10 |
| Consolidated Other Comprehensive Income | 11 |
| Consolidated Statement of Financial Position | 12 |
| Company Statement of Financial Position | 13 |
| Consolidated Statement of Changes in Equity | 14 |
| Company Statement of Changes in Equity | 15 |
| Consolidated Statement of Cash Flows | 16 |
| Notes to the Consolidated Statement of Cash Flows | 17 |
| Notes to the Consolidated Financial Statements | 19 |
| Kingstown Associates (Holdings) Limited |
| Company Information |
| for the Year Ended 31 December 2020 |
| DIRECTORS: |
| REGISTERED OFFICE: |
| REGISTERED NUMBER: |
| AUDITORS: |
| Chartered Accountants and Statutory Auditors |
| Suite 1 |
| The Riverside Building |
| Hessle |
| East Yorkshire |
| HU13 0DZ |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Group Strategic Report |
| for the Year Ended 31 December 2020 |
| The directors present their strategic report of the company and the group for the year ended 31 December 2020. |
| REVIEW OF BUSINESS |
| We aim to present a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of the business and is written in the context of the risks and uncertainties we face. |
| The turnover in the year is has remained consistent with the previous year £16,673,473 (2019: £16,896,321) The gross profit margin has increased to 14.61% compared with 10.38% in the prior year. An emphasis on reduction of marketing spends while still maintaining turnover levels has seen a significant increase in gross margin within the year. All key operational and financial KPIs are monitored monthly and remain under control. These include cost per acquisition, operational costs, product margins, catalogue costs, delivery costs and ROI. The company has paid close attention to stock levels, paying closer attention to lead times and redundant stock. This has seen a significant reduction allowing cashflow for growth in future years. The company has also looked to strengthen its financial position by maintaining favourable credit terms with its primary suppliers. |
| PRINCIPAL RISKS AND UNCERTAINTIES |
| Financial Risk Management and Policies |
| The main financial risks of the company relate to foreign exchange and credit (in relation to trade receivables). |
| Foreign exchange risk |
| Currency risk management relating to transactional business, if significant, is dealt with through the use of foreign currency forward contracts. |
| Credit risk (trade receivables) |
| The company's credit risk is primarily attributable to trade receivables. It is company policy that all customers are granted credit subject to credit verification procedures. A rigorous system of credit control is applied, and receivables are continually monitored. The amounts presented in the balance sheet are net of allowances for doubtful debts. |
| FUTURE DEVELOPMENTS |
| The Company has made significant changes in how it reaches out to its customers throughout the year, reducing marketing spend significantly without having a significant impact on turnover. The Company has continued to find niches in the market with the focus on the 5 main brands which it provides to its customers. The company has always had the ethos of providing value for money and bringing products to the market which are not readily available to its target audience and will continue with this approach. |
| The Companies plans for the current financial year are to focus on continual improvement in all areas and the maximisation of return on investment on marketing spend, the early indications show that the company is well on its way to successfully achieving this. |
| There has been a realisation that the Company must continue to evolve and meet its customer's needs in order to survive. The need to recruit new customers and maintain database size is seen as a key to future success. Importance is laid upon finding new areas in which to do this. The Company understands that consumer trends are moving slowly to the online platform and as such the company has invested in the software and staff to enable it to capitalise more on the market and will continue to do so. An increase in online sales has seen a significant reduction in recruitment costs. |
| The Company continues to strive to find the best rates in terms of cost with regards to product, marketing and distribution however, it is noted that this cannot be at a detriment to service. In terms of distribution the Company has been able to maintain costs and at the same time improve the customer experience. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Group Strategic Report |
| for the Year Ended 31 December 2020 |
| MATTERS OF STRATEGIC IMPORTANCE |
| As for many companies of our size, the business environment in which we operate continues to be challenging given the current global slowdown. With these risks and uncertainties in mind, we are aware that any plans for future development of the business may be subject to unforeseen future events outside of our control. However, we will continue to show flexibility and respond to market conditions and opportunities as they arise. |
| ON BEHALF OF THE BOARD: |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Report of the Directors |
| for the Year Ended 31 December 2020 |
| The directors present their report with the financial statements of the company and the group for the year ended 31 December 2020. |
| PRINCIPAL ACTIVITY |
| The principal activity of the group in the year under review was that of engagement in the UK mail order catalogue market. |
| DIVIDENDS |
| No dividends will be distributed for the year ended 31 December 2020. |
| DIRECTORS |
| The directors shown below have held office during the whole of the period from 1 January 2020 to the date of this report. |
| Other changes in directors holding office are as follows: |
| Qualifying third party indemnity provision is in place for the benefit of the directors of the Company. |
| 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. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Report of the Directors |
| for the Year Ended 31 December 2020 |
| AUDITORS |
| The auditors, Harris Lacey and Swain, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
| ON BEHALF OF THE BOARD: |
| Report of the Independent Auditors to the Members of |
| Kingstown Associates (Holdings) Limited |
| Opinion |
| We have audited the financial statements of Kingstown Associates (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2020 which comprise the Consolidated Income Statement, Consolidated Other 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 Notes to the Consolidated Statement of Cash Flows, 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 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; 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 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. |
| Report of the Independent Auditors to the Members of |
| Kingstown Associates (Holdings) Limited |
| 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. |
| Report of the Independent Auditors to the Members of |
| Kingstown Associates (Holdings) Limited |
| 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: |
| We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. |
| Identifying and assessing potential risks related to irregularities |
| In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: |
| Audit response to risks identified |
| - the nature of the industry and sector, control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets |
| - results of our enquiries of management and their own identification and assessment of the risks of irregularities; |
| - any matters we identified having obtained and reviewed the companies' documentation of their policies and procedures relating to: |
| - identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance; |
| - detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; |
| - the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; |
| - the matters discussed among the audit engagement team including regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. |
| As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to revenue deferrals. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. |
| We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, UK Corporate Governance Code and local tax legislation. |
| In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. |
| Audit response to risks identified |
| Our procedures to respond to risks identified included the following: |
| - reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; |
| - enquiring of management concerning actual and potential litigation and claims; |
| - performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; |
| - reading minutes of meetings of those charged with governance |
| - obtained an understanding of provisions and held discussions with management to understand the basis of recognition or non-recognition of tax provisions; and |
| Report of the Independent Auditors to the Members of |
| Kingstown Associates (Holdings) Limited |
| - in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. |
| We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit. |
| A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
| Use of our report |
| This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
| for and on behalf of |
| Chartered Accountants and Statutory Auditors |
| Suite 1 |
| The Riverside Building |
| Hessle |
| East Yorkshire |
| HU13 0DZ |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Consolidated |
| Income Statement |
| for the Year Ended 31 December 2020 |
| 2020 | 2019 |
| Notes | £ | £ |
| TURNOVER | 16,673,473 | 16,896,321 |
| Cost of sales | 14,238,209 | 15,142,791 |
| GROSS PROFIT | 2,435,264 | 1,753,530 |
| Administrative expenses | 1,937,939 | 2,113,393 |
| OPERATING PROFIT/(LOSS) | 4 | 497,325 | (359,863 | ) |
| Interest receivable and similar income | - | 2,123 |
| 497,325 | (357,740 | ) |
| Interest payable and similar expenses | 5 | 85,156 | 57,615 |
| PROFIT/(LOSS) BEFORE TAXATION | 412,169 | (415,355 | ) |
| Tax on profit/(loss) | 6 | 111,657 | (32,845 | ) |
| PROFIT/(LOSS) FOR THE FINANCIAL YEAR |
( |
) |
| Profit/(loss) attributable to: |
| Owners of the parent | 300,512 | (382,510 | ) |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Consolidated |
| Other Comprehensive Income |
| for the Year Ended 31 December 2020 |
| 2020 | 2019 |
| Notes | £ | £ |
| PROFIT/(LOSS) FOR THE YEAR | 300,512 | (382,510 | ) |
| OTHER COMPREHENSIVE INCOME |
| Share based payment | 33,885 | 18,275 |
| Income tax relating to other comprehensive income |
- |
- |
| OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
33,885 |
18,275 |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
334,397 |
(364,235 |
) |
| Total comprehensive income attributable to: |
| Owners of the parent | 334,397 | (364,235 | ) |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Consolidated Statement of Financial Position |
| 31 December 2020 |
| 2020 | 2019 |
| Notes | £ | £ | £ | £ |
| FIXED ASSETS |
| Intangible assets | 8 | 967,292 | 1,152,759 |
| Tangible assets | 9 | 40,521 | 50,426 |
| Investments | 10 | - | - |
| 1,007,813 | 1,203,185 |
| CURRENT ASSETS |
| Stocks | 11 | 1,294,369 | 1,779,017 |
| Debtors | 12 | 631,991 | 700,850 |
| Cash at bank and in hand | 740,201 | 4,919 |
| 2,666,561 | 2,484,786 |
| CREDITORS |
| Amounts falling due within one year | 13 | 2,308,183 | 2,316,943 |
| NET CURRENT ASSETS | 358,378 | 167,843 |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
1,366,191 |
1,371,028 |
| CREDITORS |
| Amounts falling due after more than one year |
14 |
(1,446,219 |
) |
(1,760,753 |
) |
| PROVISIONS FOR LIABILITIES | 17 | (55,940 | ) | (80,640 | ) |
| NET LIABILITIES | (135,968 | ) | (470,365 | ) |
| CAPITAL AND RESERVES |
| Called up share capital | 18 | 1,000 | 1,000 |
| Share premium | 19 | 5,000 | 5,000 |
| Share based payment reserve | 19 | 108,508 | 74,623 |
| Retained earnings | 19 | (250,476 | ) | (550,988 | ) |
| SHAREHOLDERS' FUNDS | (135,968 | ) | (470,365 | ) |
| The financial statements were approved by the Board of Directors and authorised for issue on 27 September 2021 and were signed on its behalf by: |
| W Barry - Director |
| E A Curd - Director |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Company Statement of Financial Position |
| 31 December 2020 |
| 2020 | 2019 |
| Notes | £ | £ | £ | £ |
| FIXED ASSETS |
| Intangible assets | 8 |
| Tangible assets | 9 |
| Investments | 10 |
| CREDITORS |
| Amounts falling due within one year | 13 |
| NET CURRENT LIABILITIES | ( |
) | ( |
) |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
| CREDITORS |
| Amounts falling due after more than one year |
14 |
| NET LIABILITIES | ( |
) | ( |
) |
| CAPITAL AND RESERVES |
| Called up share capital | 18 |
| Share premium | 19 |
| Share based payment reserve | 19 |
| Retained earnings | 19 | ( |
) | ( |
) |
| SHAREHOLDERS' FUNDS | ( |
) | ( |
) |
| Company's loss for the financial year | (84,961 | ) | (57,615 | ) |
| The financial statements were approved by the Board of Directors and authorised for issue on |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Consolidated Statement of Changes in Equity |
| for the Year Ended 31 December 2020 |
| Share |
| Called up | based |
| share | Retained | Share | payment | Total |
| capital | earnings | premium | reserve | equity |
| £ | £ | £ | £ | £ |
| Balance at 1 January 2019 | 1,000 | (168,478 | ) | 5,000 | 56,348 | (106,130 | ) |
| Changes in equity |
| Total comprehensive income | - | (382,510 | ) | - | 18,275 | (364,235 | ) |
| Balance at 31 December 2019 | 1,000 | (550,988 | ) | 5,000 | 74,623 | (470,365 | ) |
| Changes in equity |
| Total comprehensive income | - | 300,512 | - | 33,885 | 334,397 |
| Balance at 31 December 2020 | 1,000 | (250,476 | ) | 5,000 | 108,508 | (135,968 | ) |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Company Statement of Changes in Equity |
| for the Year Ended 31 December 2020 |
| Share |
| Called up | based |
| share | Retained | Share | payment | Total |
| capital | earnings | premium | reserve | equity |
| £ | £ | £ | £ | £ |
| Balance at 1 January 2019 | ( |
) | ( |
) |
| Changes in equity |
| Total comprehensive income | - | ( |
) | - | ( |
) |
| Balance at 31 December 2019 | ( |
) | ( |
) |
| Changes in equity |
| Total comprehensive income | - | ( |
) | - | ( |
) |
| Balance at 31 December 2020 | ( |
) | ( |
) |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Consolidated Statement of Cash Flows |
| for the Year Ended 31 December 2020 |
| 2020 | 2019 |
| Notes | £ | £ |
| Cash flows from operating activities |
| Cash generated from operations | 1 | 1,331,139 | (15,420 | ) |
| Interest paid | (85,156 | ) | (57,615 | ) |
| Tax paid | (10,163 | ) | 20,386 |
| Net cash from operating activities | 1,235,820 | (52,649 | ) |
| Cash flows from investing activities |
| Purchase of intangible fixed assets | (36,999 | ) | (24,474 | ) |
| Purchase of tangible fixed assets | (27,739 | ) | (4,968 | ) |
| Purchase of fixed asset investments | - | (69,279 | ) |
| Sale of tangible fixed assets | 6,648 | - |
| Sale of fixed asset investments | - | 69,279 |
| Interest received | - | 2,123 |
| Net cash from investing activities | (58,090 | ) | (27,319 | ) |
| Cash flows from financing activities |
| Loan repayments in year | (387,500 | ) | (387,500 | ) |
| Net cash from financing activities | (387,500 | ) | (387,500 | ) |
| Increase/(decrease) in cash and cash equivalents | 790,230 | (467,468 | ) |
| Cash and cash equivalents at beginning of year |
2 |
(50,029 |
) |
417,439 |
| Cash and cash equivalents at end of year | 2 | 740,201 | (50,029 | ) |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Statement of Cash Flows |
| for the Year Ended 31 December 2020 |
| 1. | RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
| 2020 | 2019 |
| £ | £ |
| Profit/(loss) before taxation | 412,169 | (415,355 | ) |
| Depreciation charges | 252,882 | 288,315 |
| Loss on disposal of fixed assets | 580 | - |
| Share-based payment expense | 33,885 | 18,275 |
| Financing cost on loan notes | 50,375 | 48,789 |
| Finance costs | 85,156 | 57,615 |
| Finance income | - | (2,123 | ) |
| 835,047 | (4,484 | ) |
| Decrease/(increase) in stocks | 484,648 | (151,610 | ) |
| Decrease in trade and other debtors | 68,859 | 341,536 |
| Decrease in trade and other creditors | (57,415 | ) | (200,862 | ) |
| Cash generated from operations | 1,331,139 | (15,420 | ) |
| 2. | CASH AND CASH EQUIVALENTS |
| The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
| Year ended 31 December 2020 |
| 31.12.20 | 1.1.20 |
| £ | £ |
| Cash and cash equivalents | 740,201 | 4,919 |
| Bank overdrafts | - | (54,948 | ) |
| 740,201 | (50,029 | ) |
| Year ended 31 December 2019 |
| 31.12.19 | 1.1.19 |
| £ | £ |
| Cash and cash equivalents | 4,919 | 417,439 |
| Bank overdrafts | (54,948 | ) | - |
| (50,029 | ) | 417,439 |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Statement of Cash Flows |
| for the Year Ended 31 December 2020 |
| 3. | ANALYSIS OF CHANGES IN NET DEBT |
| At 1.1.20 | Cash flow | At 31.12.20 |
| £ | £ | £ |
| Net cash |
| Cash at bank and in hand | 4,919 | 735,282 | 740,201 |
| Bank overdrafts | (54,948 | ) | 54,948 | - |
| (50,029 | ) | 790,230 | 740,201 |
| Debt |
| Debts falling due within 1 year | (387,500 | ) | - | (387,500 | ) |
| Debts falling due after 1 year | (962,501 | ) | 337,125 | (625,376 | ) |
| (1,350,001 | ) | 337,125 | (1,012,876 | ) |
| Total | (1,400,030 | ) | 1,127,355 | (272,675 | ) |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements |
| for the Year Ended 31 December 2020 |
| 1. | STATUTORY INFORMATION |
| Kingstown Associates (Holdings) Limited is a |
| 2. | ACCOUNTING POLICIES |
| Basis of preparing the financial statements |
| Basis of consolidation |
| The consolidated financial statements incorporate those of the company and 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) other than those disclosed in note 11. |
| 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. |
| 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 directly attributable costs. 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. |
| Contingent consideration |
| 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. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 2. | ACCOUNTING POLICIES - continued |
| Critical accounting judgements and key sources of estimation uncertainty |
| Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
| Critical accounting estimates and assumptions |
| The group makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. |
| Useful economic lives of tangible assets |
| The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 10 for the carrying amount of the property plant and equipment, and the accounting policy above for the useful economic lives for each class of assets. |
| Stock provisioning |
| The group retails in perishable goods and as a result it is necessary to consider the recoverability of the cost of the stock and the associated provisioning required. When calculating the stock provision management considers the ageing of the goods and anticipated sale price. See note 12 for the net carrying amount of the stock and associated provision. |
| Useful economic lives of intangible assets |
| The annual amortisation charge and the economic useful life of intangibles is considered to be a key accounting estimate and judgement. Management have based the estimated life on the period over which repeat customer sales are expected to be generated from the capitalised customer database. |
| Fair value of share options |
| The fair value of share options at the date of grant is based upon market conditions at that specific date. This requires estimates of the current share price, together with requiring valuation assumptions to incorporate expected volatility and return on the shares over which an option exists. |
| Critical areas of judgement |
| In categorising leases as finance leases or operating leases, management makes judgements as to whether significant risks and rewards of ownership have transferred to the group. |
| In considering the impairment of stock, management make judgements as to the estimated selling price less selling costs for obsolete and slow-moving items and whether impairment losses recognised in previous years have reversed. |
| In assessing impairment of the customer database acquired in November 2015, the directors make judgements concerning the repeat business of current customers and the expected cash flows which will arise from this customer group. |
| The valuation of the call and put option over the future purchase of own shares is dependent upon the future expected profitability and financial position of the group. Anticipated cash flows have been discounted at a rate of 3.25% per annum. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 2. | ACCOUNTING POLICIES - continued |
| Turnover |
| Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
| Turnover represents the amount receivable from customers excluding Value Added Tax and discounts. Turnover is recognised at the performance date, provided the amount can be reliably measured and it is probable that the economic benefits will flow to the entity. When merchandise is sold to customers, the performance date is normally defined as the point in time at which the customer becomes beneficial owner of the merchandise. The point at which the customer is considered to become the beneficial owner is at the point of dispatch. This transfer of beneficial ownership does not necessarily correspond to the transfer of legal ownership. |
| Goodwill |
| Goodwill is capitalised and written off evenly over 10 years as in the opinion of the directors, this represents the period over which the goodwill is expected to give rise to economic benefits. |
| Intangible fixed assets (other than goodwill) |
| Other intangible assets |
| Intangible assets purchased other than in a business combination are recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably. |
| Intangible assets arising on a business combination are recognised, except where the asset arises from legal or contractual rights, and there is no history or evidence of exchange transactions for the same or similar assets and estimating the asset's fair value would depend on immeasurable variables. |
| Intangible assets are initially recognised at cost (which for intangible assets acquired in a business combination is the fair value at acquisition date) and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets are amortised to profit or loss on a straight-line basis over their useful lives, as follows:- |
| Customer database - over 10 years |
| Purchased computer software - 10 - 20% reducing balance or straight line determined on an asset by asset basis |
| The customer database intangible represents the projected revenue achievable from existing customers at the business combination date who are estimated to have sales spanning a 10 year period. As such, the directors' have estimated the economic life of the customer database to be finite at 10 years, given the projection based on historic sales data. |
| On disposal, the difference between the net disposal proceeds and the carrying amount of the intangible asset is recognised in profit or loss. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 2. | ACCOUNTING POLICIES - continued |
| Tangible fixed assets |
| Tangible fixed assets are initially measured at cost and subsequently measured at cost net of depreciation and any impairment losses. Cost represents purchase price together with any incidental costs of acquisition. |
| Depreciation |
| Depreciation is calculated so as to write off the cost of an asset to its estimated residual value, net of anticipated disposal proceeds, over the useful economic life of that asset as follows: |
| Plant & Machinery - 10-20% reducing balance or straight line determined on an asset by asset basis |
| Leasehold Improvements - over the term of the lease |
| Residual value is calculated on prices prevailing at the reporting date, after estimated costs of disposal, for the asset as if it were at the age and in the condition expected at the end of its useful life. |
| Impairment of fixed assets |
| An assessment is made at each reporting date of whether there are indications that a fixed asset may be impaired or that an impairment loss previously recognised has fully or partially reversed. If such indications exist, the group estimates the recoverable amount of the asset. |
| Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of fair value less costs to sell and value-in-use, are recognised as impairment losses. Impairments of revalued assets are treated as a revaluation loss. All other impairment losses are recognised in profit or loss. |
| Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Reversals of impairment losses are recognised in profit or loss or, for revalued assets, as a revaluation gain. On reversal of an impairment loss, the depreciation or amortisation is adjusted to allocate the asset's revised carrying amount (less any residual value) over its remaining useful life. |
| Stocks |
| Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Net realisable value is based on selling price less anticipated costs to complete and selling costs. |
| At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stock over its estimated selling price less selling costs is recognised as an impairment loss in the profit and loss. Reversals of impairment losses are also recognised in the profit and loss. |
| Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any long service potential, i.e. benefits expected from use or sale of the stock. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 2. | ACCOUNTING POLICIES - continued |
| Financial instruments |
| The group has elected to apply the provisions of section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instrument Issues' of FRS 102, in full, to all of its financial instruments. |
| Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instrument and are offset only when the company currently has legally enforceable right to set off the recognised amounts and intends to either settle on a net basis, or to realise the asset and settle the liability simultaneously. |
| Financial Assets |
| Trade debtors and other debtors |
| Trade debtors and other debtors which are receivable within one year and which do not constitute a financing transaction are initially measured at the transaction price. Trade debtors are subsequently measured at amortised cost, being the transaction price less any settled and impairment losses. |
| A provision for the impairment of trade debtors is established when there is objective evidence that the amounts due will not be collected according to the original terms of the contract. Impairment losses are recognised in profit or loss for the excess of the carrying value of the trade debtor over the present value of the future cash flows discounted using the original effective interest rate. Subsequent reversals of an impairment loss that objectively relate to an event occurring after the impairment loss was recognised, are recognised immediately in the profit or loss. |
| Financial liabilities and equity |
| Financial instruments are classified as liabilities and equity instruments according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
| Equity instruments |
| Financial instruments classified as equity instruments are recorded at the fair value of the cash or other resources received or receivable, net of direct costs of issuing the equity instruments. |
| Trade creditors and other creditors |
| Trade creditors, other creditors, group balances and accruals payable within one year that do not constitute a financing transaction are initially measured at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled. |
| Borrowings |
| Borrowings are initially recognised at the transaction price, including transaction costs, and subsequently measured at amortised cost using the effective interest method. Interest expense is recognised on the basis of the effective interest method and is included in interest payable and other similar expenses. |
| Where the arrangement with a creditor constitutes a financing transaction, the creditor is initially measured at the present value of future payments discounted at a market rate of interest for a similar instrument and subsequently measured at amortised cost. |
| Derecognition of financial assets and liabilities |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 2. | ACCOUNTING POLICIES - continued |
| A financial asset is derecognised only when the contractual rights to cash flows expire or are settled, or substantially all the risks and rewards of ownership are transferred to another party, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. A financial liability (or part thereof) is derecognised when the obligation specified in the contract is discharged, cancelled or expires. |
| Taxation |
| Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
| Current or deferred taxation assets and liabilities are not discounted. |
| Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
| Deferred tax |
| Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
| Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
| Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
| Foreign currencies |
| Transactions in currencies other than the functional currency (foreign currencies) are initially recorded at the exchange rate prevailing on the date of the transaction. |
| Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of transaction or, if the asset or liability is measured at fair value, the rate when fair value was determined. |
| All translation differences are taken to profit and loss, except to the extent that they relate to gains and losses recognised on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income. |
| Pension costs and other post-retirement benefits |
| The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 2. | ACCOUNTING POLICIES - continued |
| Going concern |
| At 31 December 2020, the group's liabilities exceeded its assets by £133,709 (2019: £470,365). The group is party to vendor loan notes, which are also repayable at £96,875 per quarter. The vendor loan notes are repayable over a 4 year period. Contingent consideration payable under a call and put option in favour of the 'A' Ordinary shareholders can be exercised at any time after a minimum of two years have lapsed post-repayment in full of the vendor loan notes. The carrying value of the vendor loan notes and contingent consideration payable are disclosed in note 15 to these financial statements. |
| The Directors have made reasonable enquiries, including a review of existing customer and supplier relationships, together with the production of financial forecasts to enable them to form a reasonable expectation that the group has sufficient facilities, and will generate appropriate cash reserves, to meet liabilities as they fall due and to continue in operational existence for the foreseeable future. This assumption is dependent upon the ongoing support of the group's bankers. |
| The Directors are satisfied that the financial forecasts produced demonstrate that the group will be able to comply with its borrowing covenants. The Directors are satisfied that the forecasts produced have been prepared on a realistic basis and have reviewed the output from these forecasts to confirm debt repayments can be met as per the agreed repayment schedules. |
| In view of the above information the Directors consider it is appropriate to continue to prepare the financial statements on a going concern basis. |
| Share based payments |
| The group grants share options ("equity-settled share-based payments") to certain employees. |
| Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity. |
| Group plans |
| The expense in relation to options over the company's shares granted to employees of a subsidiary is recognised by the company as a capital contribution and presented as an increase in the company's investment in that subsidiary. |
| Modifications and cancellations |
| When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions (the "original fair value") and under the modified terms and conditions (the "modified fair value") are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value. |
| Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 3. | EMPLOYEES AND DIRECTORS |
| 2020 | 2019 |
| £ | £ |
| Wages and salaries |
| Social security costs |
| Other pension costs |
| The average number of employees during the year was as follows: |
| 2020 | 2019 |
| Distribution | 40 | 41 |
| Administrative | 30 | 32 |
| Call centre | 48 | 54 |
| 2020 | 2019 |
| £ | £ |
| Directors' remuneration |
| Directors' pension contributions to money purchase schemes |
| Information regarding the highest paid director is as follows: |
| 2020 | 2019 |
| £ | £ |
| Emoluments etc |
| Pension contributions to money purchase schemes |
| 4. | OPERATING PROFIT/(LOSS) |
| The operating profit (2019 - operating loss) is stated after charging: |
| 2020 | 2019 |
| £ | £ |
| Depreciation - owned assets |
| Loss on disposal of fixed assets |
| Goodwill amortisation |
| Customer database amortisation |
| Computer software amortisation |
| Auditors' remuneration |
| Auditors' remuneration for non audit work |
| Operating lease rentals |
| Share-based payment expense |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 5. | INTEREST PAYABLE AND SIMILAR EXPENSES |
| 2020 | 2019 |
| £ | £ |
| Bank loan interest |
| Corporation tax interest |
| Interest payable |
| 6. | TAXATION |
| Analysis of the tax charge/(credit) |
| The tax charge/(credit) on the profit for the year was as follows: |
| 2020 | 2019 |
| £ | £ |
| Current tax: |
| UK corporation tax |
| Over/(under) provision in |
| prior year | (182 | ) | (20,386 | ) |
| Total current tax | ( |
) |
| Deferred tax | ( |
) | ( |
) |
| Tax on profit/(loss) | ( |
) |
| Reconciliation of total tax charge/(credit) included in profit and loss |
| The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
| 2020 | 2019 |
| £ | £ |
| Profit/(loss) before tax | ( |
) |
| Profit/(loss) multiplied by the standard rate of corporation tax in the UK of |
( |
) |
| Effects of: |
| Expenses not deductible for tax purposes |
| Income not taxable for tax purposes | ( |
) |
| Capital allowances in excess of depreciation | ( |
) | - |
| Utilisation of tax losses | ( |
) |
| Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
| Total tax charge/(credit) | 111,657 | (32,845 | ) |
| Tax effects relating to effects of other comprehensive income |
| 2020 |
| Gross | Tax | Net |
| £ | £ | £ |
| Share based payment | - | 33,885 |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 6. | TAXATION - continued |
| 2019 |
| Gross | Tax | Net |
| £ | £ | £ |
| Share based payment | - | 18,275 |
| 7. | INDIVIDUAL INCOME STATEMENT |
| As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
| 8. | INTANGIBLE FIXED ASSETS |
| Group |
| Customer | Computer |
| Goodwill | database | software | Totals |
| £ | £ | £ | £ |
| COST |
| At 1 January 2020 |
| Additions |
| At 31 December 2020 |
| AMORTISATION |
| At 1 January 2020 |
| Amortisation for year |
| At 31 December 2020 |
| NET BOOK VALUE |
| At 31 December 2020 |
| At 31 December 2019 |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 9. | TANGIBLE FIXED ASSETS |
| Group |
| Improvements |
| to | Plant and |
| property | machinery | Totals |
| £ | £ | £ |
| COST |
| At 1 January 2020 | 98,928 | 196,060 | 294,988 |
| Additions | 22,541 | 5,198 | 27,739 |
| Disposals | - | (13,990 | ) | (13,990 | ) |
| At 31 December 2020 | 121,469 | 187,268 | 308,737 |
| DEPRECIATION |
| At 1 January 2020 | 80,083 | 164,479 | 244,562 |
| Charge for year | 8,652 | 21,764 | 30,416 |
| Eliminated on disposal | - | (6,762 | ) | (6,762 | ) |
| At 31 December 2020 | 88,735 | 179,481 | 268,216 |
| NET BOOK VALUE |
| At 31 December 2020 | 32,734 | 7,787 | 40,521 |
| At 31 December 2019 | 18,845 | 31,581 | 50,426 |
| 10. | FIXED ASSET INVESTMENTS |
| Company |
| Unlisted |
| investments |
| £ |
| COST |
| At 1 January 2020 |
| Additions |
| At 31 December 2020 |
| NET BOOK VALUE |
| At 31 December 2020 |
| At 31 December 2019 |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 10. | FIXED ASSET INVESTMENTS - continued |
| Additions to investments in the year represent changes in the fair value of contingent consideration and the grant of share options in Kingstown Associates (Holdings) Limited to employees of its subsidiary, Kingstown Associates Limited. The value of share options granted for the year to 31 December 2020 is £33,885 (2019: £18,275). |
| The company holds more than 20% of the share capital of the following companies: |
Name |
Country of incorporation |
Holding |
Proportion of voting rights |
Principal activity |
| Direct | Indirect |
| Kingstown Associates Limited |
England & Wales |
Ordinary shares |
100% |
- |
Engagement in the UK mail order catalogue market |
| Fashion Friendly Limited |
England & Wales |
Ordinary shares |
- |
100% |
Dormant company* |
| Healthy Living Direct Limited |
England & Wales |
Ordinary shares |
- |
100% |
Dormant company* |
| Affordable Choices Limited |
England & Wales |
Ordinary shares |
- |
100% |
Dormant company* |
| Housewares Direct Limited |
England & Wales |
Ordinary shares |
- |
100% |
Dormant company* |
| Sparkling Touches Limited |
England & Wales |
Ordinary shares |
- |
100% |
Dormant company* |
| * denotes subsidiary is exempt from audit by virtue of s480 of Companies Act 2006 and that shares in the company are held by Kingstown Associates Limited, a 100% subsidiary. |
| The registered office of each subsidiary company is 1 Wadsworth Road, Kelleythorpe Industrial Estate, Driffield, East Yorkshire, YO25 9DJ. |
| 11. | STOCKS |
| Group |
| 2020 | 2019 |
| £ | £ |
| Finished goods | 1,294,369 | 1,779,017 |
| 12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| Group |
| 2020 | 2019 |
| £ | £ |
| Trade debtors | 368,895 | 373,471 |
| Prepayments and accrued income | 263,096 | 327,379 |
| 631,991 | 700,850 |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| Group | Company |
| 2020 | 2019 | 2020 | 2019 |
| £ | £ | £ | £ |
| Bank loans and overdrafts (see note 15) | 387,500 | 442,448 |
| Trade creditors | 1,223,053 | 1,189,782 |
| Amounts owed to group undertakings | - | - |
| Tax | 136,539 | 10,345 |
| Social security and other taxes | 346,302 | 284,543 |
| Other creditors | 34,357 | 13,892 |
| Accrued expenses | 180,432 | 375,933 |
| 2,308,183 | 2,316,943 |
| Included in other creditors is an amount of £9,168 (2019: £7,587) in relation to outstanding pension contributions. |
| 14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
| Group | Company |
| 2020 | 2019 | 2020 | 2019 |
| £ | £ | £ | £ |
| Other loans (see note 15) | 625,376 | 962,501 |
| Other creditors | 820,843 | 798,252 |
| 1,446,219 | 1,760,753 |
| Contingent consideration represents the present value of anticipated cash flows due under a call and put option entered into on the management buy-out in November 2015. The call and put option is available to holders of the 'A' Ordinary shares of the company, and can be exercised by any of the 'A' Ordinary shareholders or the company after a minimum of two years have lapsed after the repayment in full of the vendor loan. |
| At the year-end date contingent consideration recognised at fair value is the directors' best estimate of the future cash flows which are anticipated under the option agreement, discounted to present value using a rate which takes into account the likelihood and anticipated timing of the option being exercised. |
| At 31 December 2020 the fair value of contingent consideration was £820,844 (2019: £798,252). The changes in fair value during the year to 31 December 2020 of £22,591 (2019: £21,969) are considered to be attributable to changes in the present value of consideration payable. The directors do not consider that the fair value of contingent consideration under the put and call option has been affected by market risk or changes in the company's credit risk during the year to 31 December 2020. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 15. | LOANS |
| An analysis of the maturity of loans is given below: |
| Group | Company |
| 2020 | 2019 | 2020 | 2019 |
| £ | £ | £ | £ |
| Amounts falling due within one year or on | demand: |
| Bank overdrafts | - | 54,948 |
| Vendor loans | 387,500 | 387,500 |
| 387,500 | 442,448 |
| Amounts falling due between one and two | years: |
| Vendor loans - 1-2 years | 625,376 | 775,000 | 625,376 |
| Amounts falling due between two and five | years: |
| Vendor loans - 2-5 years | - | 187,501 |
| The vendor loan is repayable over a 4 year period from the date the 'Term Bank Loan' is repaid in full. Interest will only accrue on the loan note from the date the loan note becomes due and is expected to be settled by November 2023. The loan notes do not attract interest until the term bank loan is repaid in full. As such, the loan notes have been accounted for as a financing transaction and are measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. A finance cost of 3.25%, based on a comparable market rate of interest, is used to discount the vendor loan. The finance cost, which represents amending of the discount rate applied, charged to profit or loss is £50,375 (2019: £48,789). |
| The group's bankers and loan note holders hold a fixed charge over all freehold and leasehold properties together with a floating charge over all assets of the group. The loan note ranks secondary to the bank loans until the bank loans are repaid in full. |
| 16. | LEASING AGREEMENTS |
| Minimum lease payments fall due as follows: |
| Group |
| Non-cancellable operating | leases |
| 2020 | 2019 |
| £ | £ |
| Within one year | 186,772 | 186,772 |
| Between one and five years | 219,768 | 407,018 |
| 406,540 | 593,790 |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 17. | PROVISIONS FOR LIABILITIES |
| Group |
| 2020 | 2019 |
| £ | £ |
| Deferred tax | 55,940 | 80,640 |
| Group |
| Deferred |
| tax |
| £ |
| Balance at 1 January 2020 | 80,640 |
| Utilised during year | (24,700 | ) |
| Balance at 31 December 2020 | 55,940 |
| Deferred taxation is measured at 19% (2019: 19%) which is the rate of UK corporation tax substantively enacted at the balance sheet date. |
| 18. | CALLED UP SHARE CAPITAL |
| Allotted, issued and fully paid: |
| Number: | Class: | Nominal | 2020 | 2019 |
| value: | £ | £ |
| Ordinary A | £0.10 | 251 | 251 |
| Ordinary B | £0.10 | 749 | 749 |
| 1,000 | 1,000 |
| 19. | RESERVES |
| Group |
| Share |
| based |
| Retained | Share | payment |
| earnings | premium | reserve | Totals |
| £ | £ | £ | £ |
| At 1 January 2020 | (550,988 | ) | 5,000 | 74,623 | (471,365 | ) |
| Profit for the year | 300,512 | 300,512 |
| Share based payment expense | - | - | 33,885 | 33,885 |
| At 31 December 2020 | (250,476 | ) | 5,000 | 108,508 | (136,968 | ) |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 19. | RESERVES - continued |
| Company |
| Share |
| based |
| Retained | Share | payment |
| earnings | premium | reserve | Totals |
| £ | £ | £ | £ |
| At 1 January 2020 | ( |
) | (278,397 | ) |
| Deficit for the year | ( |
) | ( |
) |
| Share based payment expense |
| At 31 December 2020 | ( |
) | (329,473 | ) |
| Reserves of the company represent the following: |
| Capital redemption reserve |
| The nominal value of shares repurchased and still held at the end of the reporting period. |
| Profit and loss account |
| Cumulative profit and loss net of distributions to owners. |
| Capital contribution reserve |
| The accumulated cost of share options, issued to employees of Kingstown Associates Limited, in the parent company Kingstown Associates (Holdings) Limited. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 20. | SHARE-BASED PAYMENTS |
| Group |
| Equity-settled share option plan |
| The company, Kingstown Associates (Holdings) Limited, operates share option schemes and certain employees of its subsidiary company, Kingstown Associates Limited, have been granted share options in the company. Each share option scheme has varying vesting conditions, ranging from no vesting conditions to a vesting period of 5 years. The charge incurred under share-based payment transactions for the year to 31 December 2020 is £33,885 (2019: £18,275). |
| Share option plans |
| Share incentive plan - 'C' Ordinary shares |
| Options over 1,250 'C' Ordinary shares in Kingstown Associates (Holdings) Limited have been granted to employees of the subsidiary company, Kingstown Associates Limited, in March 2018. The options have a vesting period which is equivalent to the shorter of 5 years from the date of grant, or sale of the company. Each option is expected to be exercised at the par value of each 'C' Ordinary share |
| Kingstown Associates (Holdings) Limited accounts for share-based employee compensation under the fair value recognition and measurement provisions under UK GAAP. The Company's share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognised as an expense over the requisite vesting period. UK GAAP requires the cash flows resulting from the tax benefits due to tax deductions in excess of the compensation cost recognised for those options (excess tax benefits) to be classified as financing cash flows. |
| The fair value of share options is estimated using the Black-Scholes option pricing model with the following weighted average assumptions: |
| Share incentive plan - 'C' Ordinary shares 2016 |
| 2020 | 2019 |
| Expected volatility | 46.29% | 46.29% |
| Risk-free interest rate | 0.64% | 0.64% |
| Expected lives | 6.83 years | 6.83 years |
| Annual cash dividend | Nil | Nil |
| The determination of the grant date fair value of options using an option-pricing model is affected by the estimated fair value of shares in Kingstown Associates (Holdings) Limited as well as assumptions regarding a number of other complex and subjective variables, which are estimated as follows: |
| Expected volatility - As Kingstown Associates (Holdings) Limited does not have a trading history for shares, the expected share price volatility for the shares was estimated by taking the average of the historical volatilities of industry peers based on daily price observations over a period equivalent to the expected term of the share option grants. Kingstown Associates (Holdings) Limited intend to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the share price becomes available. |
| Risk-free interest rate - The risk-free interest rate is based on UK government bonds in effect at the time of the grant. The risk-free interest rate was estimated using a spot yield curve term similar to the expected term of the options. |
| Kingstown Associates (Holdings) Limited (Registered number: 09796628) |
| Notes to the Consolidated Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| Expected lives - The expected term represents the period that the share-based awards are expected to be outstanding. The expected term was determined by the Directors based upon the contractual life of the options and the anticipated future developments in the group. The company has used this method to determine expected lives of the options because of the limited history of share option exercise activity. |
| Annual cash dividend - The Directors of Kingstown Associates (Holdings) Limited do not anticipate nor plan to declare significant dividends on Ordinary shares in issue in the foreseeable future. Consequently, the company has used an expected dividend yield of £Nil. |
| Share option plan information |
| Share incentive plan - 'C' ordinary shares 2016 |
Option number |
Weighted average exercise price (£) |
| Outstanding at 1 January | 1,250 | 0.10 |
| Granted during the year | - | - |
| Forfeited during the year | - | - |
| Exercised during the year | - | - |
| Expired during the year | - | - |
| Outstanding at 31 December | 1,250 | 1,250 |
| Exercisable at 31 December | - | - |
| As the expense relating to share-based payments which is recognised in the Statement of Comprehensive Income is based on awards expected to vest, it has been reduced for estimated forfeitures. Share based payment accounting requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimated. |
| All employees who have received options over Ordinary shares are employed by Kingstown Associates Limited. The cost of granting the share options have not been recharged to subsidiary undertakings, although in the subsidiary financial statements a capital contribution reserve has been created to represent the cumulative share-based payment expense incurred. |