ACCOUNTS - Final Accounts

An analysis of turnover by class of business is as follows:

NEWSTEAM GROUP LTD. - Company Information

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Registered number: 09340207

NEWSTEAM GROUP LTD

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

NEWSTEAM GROUP LTD

COMPANY INFORMATION

Directors	Mr J T W Truscott (resigned 29 October 2020)
	Miss J A Collier
	Mr M J Kinton
	Mr J R Kennett
	Mr J H Fulton (appointed 1 November 2020, resigned 31 March 2021)
	Mr S R Wakeham (appointed 1 November 2020)
	Mr P C Goddard (appointed 5 April 2021)


Registered number	09340207


Registered office	Cauldon Locks
	Shelton New Road
	Stoke on Trent
	Staffordshire
	ST4 7AA


Independent auditors	Price Bailey LLP
	Chartered Accountants & Statutory Auditors
	Tennyson House
	Cambridge Business Park
	Cambridge
	CB4 0WZ

NEWSTEAM GROUP LTD

CONTENTS

	Page
Strategic Report	1 - 4
Directors' Report	5 - 6
Independent Auditors' Report	7 - 10
Statement of Comprehensive Income	11
Balance Sheet	12
Statement of Changes in Equity	13
Statement of Cash Flows	14
Analysis of Net Debt	15
Notes to the Financial Statements	16 - 28

NEWSTEAM GROUP LTD

STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

Introduction

The Directors present their strategic report for the year ending 31st December 2020
Business Review
News Team Group Ltd (NTG) is a company that specialises in the distribution of print media to both the residential and commercial markets.
Historic losses have reduced year on year while the company has invested in building a national distribution network for print media.
For the first time the company is reporting profits of £344,454 in 2020.
The financial outlook is good.
Our biggest short term challenge is the significant tightening of the labour market for delivery contractors. Any inflationary pressures on our contractor labour will adversely impact our gross margin until this is recovered with pricing action in the fourth quarter.
We believe the company now has one of the largest news media distribution networks in the country. This represents our key USP as publishers employ us to directly distribute their titles to end users.
In terms of the market structure for print media there are a number of significant trends.
The market has been in decline for some time and we believe that trend will continue. The customer base is increasingly mature. The digital channel is distributing an increased proportion of news media. Publishers have protected their profitability by pricing actions well above inflation.
In recent years there has been a very significant reduction in the number of newsagents as volumes have declined and margins have been squeezed. This represents an opportunity for NTG to acquire their home delivery rounds.
Throughout 2020 NTG continued to pursue five strategic priorities:
1. Grow our distribution network into new areas so we can provide a national network to deliver news media on a daily basis.
2. Grow our home delivery business through the acquisition of domestic newspaper rounds from newsagents who wish to exit the business. Our focus is on acquiring rounds in or near existing rounds so we can improve our labour efficiency.
3. Grow our corporate customer base.
4. Increase our market share of the magazine distribution business.
5. Continue to invest in the quality of our management.
Outlook for 2021 and 2022
Our outlook for 2021 and 2022 is positive.
The Covid 19 pandemic helped us significantly grow our home delivery business in 2020 and improve our gross margins through the optimisation of rounds and improved labour efficiency.
Post lockdown we have seen moderate attrition of the home delivery customers we acquired in 2020, however acquisition of new customers has continued at a regular rate.

Page 1

NEWSTEAM GROUP LTD

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Commercial business is expected to return to the levels that existed prior to government lockdowns.
We will continue to acquire good quality home delivery rounds in areas where we can achieve synergies with our existing network.
Our biggest threat is the supply and cost of contractor labour. In line with virtually every sector we have found the post Brexit labour market is tight and experiencing above inflation increases.

Overall our assessment for 2022 is that strong sales growth in both our home delivery and commercial sectors will drive increased profitability.
Throughout 2022 we will continue to proactively invest in our infrastructure by upgrading the quality of our management and strategically extending the geographic reach of our network.

Principal risks and uncertainties

Further mutations of Covid 19
New mutations of Covid 19 will remain a risk to the economy through further lockdowns.
Although a diminishing risk, we believe any further lockdowns could result in a decline in national contracts which would be offset by increased demand for home delivery.
The impact of Brexit on the supply and cost of contractor labour
All our delivery work is done by contractors. Continued tightening of that labour market will result in above inflation cost increases which will be a significant impact on gross margin. We would recover any impact through pricing action which could increase customer attrition.
Information Technology
Given our potential for sales growth and our very high dependency on information technology we need to ensure the scalability and reliability of our systems.
Competition
Our main risk is the entrance of a new company who wants to own a direct to customer daily delivery service, however this is unlikely considering the specific operational challenges for a new entrant to the market to provide the service required.
Regulatory
Any regulatory changes that affected the supply or cost of contractor labour would require us to re-engineer our business model.
Financial Risks
The most significant financial risk is a supplier imposed change to payment terms.

Page 2

NEWSTEAM GROUP LTD

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Financial key performance indicators

There are a number of key financial indicators that are reviewed regularly by the Directors through our financial reporting and analysis. These include:
• weekly profitability and cash reporting
• monthly management accounts
• monthly rolling annual forecasts
• continuous quarterly 5 year plans
The key financial indicators are:
o Sales Growth %
o Number of customer accounts
o Customer Acquisition
o Customer Attrition
o Gross Margin %
o Net Profit ratio to Total Income %
o Weekly Cash Flow movements

Page 3

NEWSTEAM GROUP LTD

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Other key performance indicators

In addition to the key financial indicators, we monitor on a daily basis key customer service and operating performance indicators. These indicators measure our re-delivery rates and conduct a root cause analysis of all communications with our telephone call centre.

This report was approved by the board on 28 September 2021 and signed on its behalf.

Mr J R Kennett

Director

Page 4

NEWSTEAM GROUP LTD

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

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

Principal activity

The principal activity of the company continued to be that of the distribution and delivery of newspapers and magazines.

Directors

The directors who served during the year were:

Mr J T W Truscott (resigned 29 October 2020)

Miss J A Collier

Mr M J Kinton

Mr J R Kennett

Mr J H Fulton (appointed 1 November 2020, resigned 31 March 2021)

Mr S R Wakeham (appointed 1 November 2020)

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the directors are required to:

∙select suitable accounting policies for the Company's financial statements 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 to 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.

Results and dividends

The profit for the year, after taxation, amounted to £344,454 (2019 - loss £143,346).

No dividends were declared or paid in the year.

Future developments

These have been disclosed in the Strategic Report on page 1 of these financial statements.

Page 5

NEWSTEAM GROUP LTD

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

Under section 487(2) of the Companies Act 2006, Price Bailey LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board on 28 September 2021 and signed on its behalf.

Mr J R Kennett

Director

Page 6

NEWSTEAM GROUP LTD

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEWSTEAM GROUP LTD

Opinion

We have audited the financial statements of NewsTeam Group Ltd (the 'Company') for the year ended 31 December 2020, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

∙give a true and fair view of the state of the Company's affairs as at 31 December 2020 and of its profit for the year then ended;

∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

∙have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.

Emphasis of matter

We draw attention to note 2.2 in the financial statements which describes the directors's assessment of going concern and the current and future effect of the Covid-19 pandemic on the Company. As stated the Company has a net liability position at the balance sheet date. The Company continues to rely on the support of its shareholders and has received assurances that the repayment of the loan balances will not be requested for a period of at least twelve months from approval of these financial statements.
Our opinion is not modified in respect of this matter.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Page 7

NEWSTEAM GROUP LTD

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEWSTEAM GROUP LTD (CONTINUED)

Other information

The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report 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 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.

Opinion 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' 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, or returns adequate for our audit have not been received from branches not visited by us; or

∙the financial statements are not in agreement with the accounting records and returns; or

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

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

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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 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 directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Page 8

NEWSTEAM GROUP LTD

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEWSTEAM GROUP LTD (CONTINUED)

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 an Auditors' 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:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in
which it operates and considered the risk of material misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations. This included those regulations directly related to the financial
statements, including financial reporting, tax legislation and distributable profits and industry regulations including
GDPR, employment law and health and safety.
We communicated the identified laws and regulations with the audit team and remained alert to any indications
of non-compliance throughout the audit. We carried out specific procedures to address the risks identified.
These included the following:
-agreeing the financial statement disclosures to underlying supporting documentation to assess compliance with
provisions of relevant laws and regulations described as having a direct effect on the financial statements;
-enquiries of management including those responsible for key regulations;
-performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of
material misstatement due to fraud;
In addressing the risk of management override of controls, we carried out testing of journal entries and other
adjustments for appropriateness, assessing whether the judgements made in making accounting estimates are
indicative of a potential bias and evaluating the business rationale of significant transactions outside the normal
course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk
increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.

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 Auditors' Report.

Page 9

NEWSTEAM GROUP LTD

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEWSTEAM GROUP LTD (CONTINUED)

Use of our report

This report is made solely to the Company's shareholders 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 shareholders those matters we are required to state to them in an Auditors' 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 shareholders for our audit work, for this report, or for the opinions we have formed.

Richard Vass (Senior Statutory Auditor)

for and on behalf of

Price Bailey LLP

Chartered Accountants

Statutory Auditors

Tennyson House

Cambridge Business Park

Cambridge

CB4 0WZ

28 September 2021

Page 10

NEWSTEAM GROUP LTD

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2020

	2020	2019
Note	£	£


Turnover	4	29,470,389	17,650,814
Cost of sales		(25,472,685)	(15,298,805)
Gross profit		3,997,704	2,352,009
Administrative expenses		(3,673,250)	(2,495,355)
Other operating income		20,000	-
Operating profit/(loss)	6	344,454	(143,346)
Tax on profit/(loss)	10	-	-
Profit/(loss) for the financial year		344,454	(143,346)

There was no other comprehensive income for 2020 (2019:£NIL).

The notes on pages 16 to 28 form part of these financial statements.

Page 11

NEWSTEAM GROUP LTD

REGISTERED NUMBER: 09340207

BALANCE SHEET

AS AT 31 DECEMBER 2020

		2020		2019
Note		£		£

Fixed assets
Intangible assets	11		231,402		165,599
Tangible assets	12		10,128		4,106
			241,530		169,705
Current assets
Stocks	13	9,594		12,210
Debtors: amounts falling due within one year	14	3,626,484		2,051,334
Cash at bank and in hand	15	1,251,522		141,816
		4,887,600		2,205,360
Creditors: amounts falling due within one year	16	(4,672,968)		(2,313,357)
Net current assets/(liabilities)			214,632		(107,997)
Total assets less current liabilities			456,162		61,708
Creditors: amounts falling due after more than one year	17		(2,892,500)		(2,842,500)

Net liabilities			(2,436,338)		(2,780,792)

Capital and reserves
Called up share capital	20	10,100	10,100
Share premium account	21	490,000	490,000
Profit and loss account	21	(2,936,438)	(3,280,892)
		(2,436,338)	(2,780,792)

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 28 September 2021.

Mr J R Kennett

Director

The notes on pages 16 to 28 form part of these financial statements.

Page 12

NEWSTEAM GROUP LTD

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2020

	Called up share capital	Share premium account	Profit and loss account	Total equity
	£	£	£	£
At 1 January 2019	10,100	490,000	(3,137,546)	(2,637,446)
Comprehensive income for the year
Loss for the year	-	-	(143,346)	(143,346)

At 1 January 2020	10,100	490,000	(3,280,892)	(2,780,792)
Comprehensive income for the year
Profit for the year	-	-	344,454	344,454
At 31 December 2020	10,100	490,000	(2,936,438)	(2,436,338)

The notes on pages 16 to 28 form part of these financial statements.

Page 13

NEWSTEAM GROUP LTD

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

			2020	2019
			£	£

Cash flows from operating activities
Profit/(loss) for the financial year	344,454	(143,346)
Adjustments for:
Amortisation of intangible assets	68,917	49,979
Depreciation of tangible assets	904	156
Decrease/(increase) in stocks	2,616	(200)
(Increase) in debtors	(1,575,150)	(1,141,766)
Increase in creditors	2,359,611	988,139
Net cash generated from operating activities	1,201,352	(247,038)

Cash flows from investing activities
Purchase of intangible fixed assets	(134,720)	(120,113)
Purchase of tangible fixed assets	(6,926)	-
Net cash from investing activities	(141,646)	(120,113)
Cash flows from financing activities
Other new loans	50,000	427,000
Net cash used in financing activities	50,000	427,000
Net increase in cash and cash equivalents	1,109,706	59,849
Cash and cash equivalents at beginning of year	141,816	81,967
Cash and cash equivalents at the end of year	1,251,522	141,816

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	1,251,522	141,816
	1,251,522	141,816

The notes on pages 16 to 28 form part of these financial statements.

Page 14

NEWSTEAM GROUP LTD

ANALYSIS OF NET DEBT

FOR THE YEAR ENDED 31 DECEMBER 2020


At 1 January 2020	Cash flows	At 31 December 2020
£	£	£

Cash at bank and in hand	141,816	1,109,706	1,251,522
Debt due after 1 year	(2,842,500)	(50,000)	(2,892,500)
	(2,700,684)	1,059,706	(1,640,978)

The notes on pages 16 to 28 form part of these financial statements.

Page 15

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

1.	General information

NewsTeam Group Limited is a private company limited by shares incorporated in England and Wales, within the United Kingdom. The registered office is Cauldon Locks, Shelton New Road, Stoke on Trent, ST4 7AA. The company registration number is 09340207.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The financial statements are prepared in pounds sterling, which is the functional currency of the Company. The level of rounding applied is to the nearest £.

The following principal accounting policies have been applied:

2.2

Going concern

The Company has made a profit and has a net liabilities position as at 31 December 2020. During the year the Company has significantly increased home delivery income and has achieved improved gross profit margins through the optimisation of rounds and improved labour efficiency. After the year end, the cash balance has remained strong and the Company is forecasted to generate a profit in the 2022 financial year. The Company continues to rely on the support of its shareholders and that repayment of the loan balance will not be requested for a period of at least twelve months from approval of these financial statements. The Directors believe that the Company will be able to meet its liabilities as they fall due for at least twelve months from the date of approval of these financial statements.
The uncertainty as to the future impact on the Company of the recent Covid-19 pandemic in particular
has been considered as part of the Company's adoption of the going concern basis. In determining
the going concern basis, the Directors concluded that there are no material uncertainties that may cast significant doubt about the Company's ability to continue as a going concern. Accordingly, the going concern basis has been adopted in preparing the Directors' report and financial statements.

Page 16

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.3

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:

∙the Company has transferred the significant risks and rewards of ownership to the buyer;

∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of turnover can be measured reliably;

∙it is probable that the Company will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

2.4

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

2.5

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

2.6

Borrowing costs

All borrowing costs are recognised in the Statement of Comprehensive Income in the year in which they are incurred.

2.7

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 17

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.8

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Comprehensive Income over its useful economic life, which is 5 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to
benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using both the reducing balance method and straight-line method.

Depreciation is provided on the following basis:

				Plant and machinery	-	5 year straight line
				Fixtures and fittings	-	25% reducing balance basis and 3 year straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.

Page 18

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.10

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.

2.11

Debtors

Short term debtors are measured at transaction price, less any impairment.

2.12

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

2.13

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.14

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Investments in non-derivative instruments that are equity to the issuer are measured:

∙at fair value with changes recognised in the Statement of Comprehensive Income if the shares are publicly traded or their fair value can otherwise be measured reliably;

∙at cost less impairment for all other investments.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an

Page 19

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.14

Financial instruments (continued)

impairment loss is recognised in the Statement of Comprehensive Income.

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

Estimates and judgments are continually evaluated and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on management's best knowledge of the amount, events or actions, actual results ultimately may differ from those estimates. The directors consider the valuation and amortisation of intangible assets and customer vouchers to be a critical estimate and judgment to the financial statements.

	Sales of goods	29,470,389	17,650,814

All turnover arose within the United Kingdom.

5.	Other operating income
		2020	2019
		£	£

	Government grants receivable	20,000	-

The company received a government business support grant as a result of Covid-19. This grant does not need to be repaid and has been recognised as the expense was incurred in the Statement of Comprehensive Income.

Depreciation of tangible fixed assets	904	156
Amortisation of intangible fixed assets	68,917	49,979
Other operating lease rentals	25,878	23,157

Page 20

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

7.	Auditors' remuneration
		2020	2019
		£	£

Audit-related assurance services	16,450	20,000
Non-audit services	4,900	5,000
	21,350	25,000

Wages and salaries	2,067,529	1,358,629
Social security costs	168,893	120,093
Cost of defined contribution scheme	34,628	22,987
	2,271,050	1,501,709

The senior management team and executive directors are considered to be key management personnel. Total remuneration in respect of these individuals is £297,377 (2019 - £267,155).

The average monthly number of employees, including the directors, during the year was as follows:

	2020	2019
	No.	No.

Employees	91	68

Page 21

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

9.	Directors' remuneration
		2020	2019
		£	£

Directors' emoluments	227,732	204,656
Company contributions to defined contribution pension schemes	3,941	7,744
Termination payment	50,400	-
	282,073	212,400

	During the year retirement benefits were accruing to 3 directors (2019 - 3) in respect of defined contribution pension schemes.
	The highest paid director received remuneration of £88,928 (2019 - £76,144).
	The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,314 (2019 - £1,729).



Total current tax	-	-

	Deferred tax
	Total deferred tax	-	-


	Taxation on profit on ordinary activities	-	-

Page 22

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

10.Taxation (continued)

Profit/(loss) on ordinary activities before tax

344,454

(143,346)

Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)	65,446	(27,236)
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	340	998
Capital allowances for year in excess of depreciation	11,712	9,235
Utilisation of tax losses	(76,137)	-
Other timing differences leading to an increase (decrease) in taxation	(1,361)	(7,438)
Unrelieved tax losses carried forward	-	24,441
Total tax charge for the year	-	-

Factors that may affect future tax charges

The Company has estimated losses of £2,761,000 (2019 - £3,162,310) available to carry forward against future trading profits.

Page 23

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

11.	Intangible assets

		Goodwill
		£
	Cost
	At 1 January 2020	305,623
	Additions	134,720
	At 31 December 2020	440,343
	Amortisation
	At 1 January 2020	140,024
	Charge for the year on owned assets	68,917
	At 31 December 2020	208,941
	Net book value
	At 31 December 2020	231,402
	At 31 December 2019	165,599

Page 24

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

12.	Tangible fixed assets

	Plant and machinery	Fixtures and fittings	Total
	£	£	£
Cost
At 1 January 2020	-	15,473	15,473
Additions	6,926	-	6,926
At 31 December 2020	6,926	15,473	22,399
Depreciation
At 1 January 2020	-	11,367	11,367
Charge for the year on owned assets	328	576	904
At 31 December 2020	328	11,943	12,271
Net book value
At 31 December 2020	6,598	3,530	10,128
At 31 December 2019	-	4,106	4,106

13.	Stocks
		2020	2019
		£	£

	Finished goods and goods for resale	9,594	12,210

14.

Debtors

					2020	2019
					£	£


Trade debtors	3,546,370	1,992,554
Other debtors	32,605	40,291
Called up share capital not paid	99	99
Prepayments and accrued income	47,410	18,390
	3,626,484	2,051,334

Page 25

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

15.	Cash and cash equivalents
		2020	2019
		£	£

	Cash at bank and in hand	1,251,522	141,816

16.	Creditors: Amounts falling due within one year
		2020	2019
		£	£

Payments received on account	163,698	-
Trade creditors	3,535,128	1,679,613
Other taxation and social security	303,574	120,504
Other creditors	267,394	268,813
Accruals and deferred income	403,174	244,427
	4,672,968	2,313,357

Included within other creditors are loans amounting to £nil (2019 - £100,000) which are secured by way of fixed and floating charges over all assets of the Company.

17.	Creditors: Amounts falling due after more than one year
		2020	2019
		£	£

CBILS loan	50,000	-
Other loans	2,842,500	2,842,500
	2,892,500	2,842,500


Amounts falling due 1-2 years
CBILS loan	50,000	-
Other loans	2,842,500	2,842,500


	2,892,500	2,842,500

Page 26

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

19.	Financial instruments
		2020	2019
		£	£

	Financial assets
	Financial assets measured at amortised cost	4,830,497	2,174,661

	Financial liabilities
	Financial liabilities measured at amortised cost	7,261,894	5,035,353

	Financial assets measured at amortised cost comprise of cash at bank and in hand, trade debtors and other debtors.
	Financial liabilities measured at amortised cost comprise of trade creditors, other creditors, payments on account, accruals and deferred income and other loans.

20.	Share capital
		2020	2019
		£	£

Allotted, called up and fully paid

1,010,000 (2019 - 1,010,000) Ordinary shares of £0.01 each	10,100	10,100

The holders of the ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regards to the Company's residual assets.

21.

Reserves

Share premium account

The share premium account represents any premiums received on issue of share capital.

Profit and loss account

The profit and loss account represents the cumulative profits and losses of the Company, net of any dividends or other adjustments.

22.	Pension commitments

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £34,628 (2019 - £22,987). Contributions totalling £18,232 (2019 - £6,267) were payable to the fund at the balance sheet date and are included in other creditors.

Page 27

NEWSTEAM GROUP LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

Not later than 1 year	9,123	9,800
Later than 1 year and not later than 5 years	-	483
	9,123	10,283

24.

Related party transactions

During the year the Company traded with Paperround HND Service Limited, a company in which director M Kinton is also a director. Purchases from Paperround HND Service Limited totalled £244,356 (2019 - £138,662). At the balance sheet date the balance outstanding from the Company was £18,110 (2019 - £1,677).
During the year the Company traded with HSE Advisors Limited, a company in which the director S Wakeham is also a director. Purchases from HSE Advisors Limited totalled £109,331 (2019 - £55,901). At the balance sheet date the balance outstanding from the Company was £16,290 (2019 - £18,508).
During the year the Company operated a loan account with M Kinton, a director of the Company. The loan is interest free. At the balance sheet date the balance outstanding from the Company was £2,492,500 (2019 - £2,492,500).

25.	Controlling party

The ultimate controlling party is considered to be M Kinton by virtue of his majority shareholding.

Page 28