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Registered number: 05210453
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AMALGAM COLLECTION LIMITED
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 DECEMBER 2020
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AMALGAM COLLECTION LIMITED
REGISTERED NUMBER:05210453
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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AMALGAM COLLECTION LIMITED
REGISTERED NUMBER:05210453
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2020
The notes on pages 4 to 13 form part of these financial statements.
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AMALGAM COLLECTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
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Capital contribution reserve
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The notes on pages 4 to 13 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
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Capital contribution reserve
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The notes on pages 4 to 13 form part of these financial statements.
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Amalgam Collection Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Power House, Romney Avenue, Lockleaze, Bristol, BS7 9ST.
2.ACCOUNTING POLICIES
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BASIS OF PREPARATION OF FINANCIAL STATEMENTS
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of 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 following principal accounting policies have been applied:
At the year end the company had net current liabilities of £1,014,703 (2019: £1,149,850). The directors have considered the cashflow projections for the group and are confident the group can operate within its facilities for the next 12 months.
Included within creditors over one year is £1,291,73 (2019: £1,331,131) due to the ultimate parent undertaking Danegeld Holdings Limited, a company incorporated in the British Virgin Islands. The ultimate controlling party has indicated that they are supportive of the group (which constitutes Amalgam Collection Limited, its parent company and all fellow subsidiary companies) in executing its turnaround plan. The ultimate controlling party has also indicated that further financial support will be made available where necessary to ensure the group continues to operate for a period of at least 12 months for approval of these financial statements.
On this basis, and having considered the current situation with COVID-19 as noted in the Director's report, the directors consider that the preparation of these financial statements on the going concern basis is appropriate.
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FOREIGN CURRENCY TRANSLATION
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.ACCOUNTING POLICIES (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue 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 revenue is recognised:
Sale of goods
Revenue 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 revenue 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.
Where the company receives deposits from customers for goods ordered and these conditions are not satisfied the balance is held in deferred income.
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OPERATING LEASES: THE COMPANY AS LESSEE
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
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.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.ACCOUNTING POLICIES (continued)
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 profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of financial position date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
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.
The estimated useful lives range as follows:
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.
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.ACCOUNTING POLICIES (continued)
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TANGIBLE FIXED ASSETS (CONTINUED)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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3 - 6 years Straight Line
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2 - 6 years Straight Line
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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 profit or loss.
Finished goods stock includes completed products. When stock is purchased from a group company (‘the manufacturer’), the company use a standard costing method to value the finished goods stock. To manufacture the product is a very labour intensive process and as a consequence the company values the finished stock by allocating production overheads of the manufacturer, which are invoiced to the Company and recorded in Cost of Sales in the period to which they relate, to the units produced on the basis of the normal capacity of the production facilities to arrive at a ‘standard unit cost’. Normal capacity is the production expected to be achieved on average over a year period under normal circumstances. The amount of fixed overhead allocated to each unit of production is not increased as a consequence of low production or idle plant.
Management uses judgment when allocating the production overheads to individual products. The company sells a wide range of products can be grouped down to categories or types of model. Each type of model is allocated a ‘unit of production’ and this is multiplied by the ‘standard unit cost’. A more complex and labour intensive product will have a higher value compared to a straight forward product.
Finished goods stock purchased from third parties is recorded at cost.
Work in progress is manufactured by the company and includes labour and attributable overheads.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell.
At each reporting 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 profit or loss.
When stock are sold, the company recognises the carrying amount of those stock items as an expense in the period in which the related revenue is recognised.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.ACCOUNTING POLICIES (continued)
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CASH AND CASH EQUIVALENTS
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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.
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.
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JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY
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Deferred tax asset
The company have not recorded the deferred tax asset of £1,013,570 (2019: £903,793) relating to losses and other deductions as there is uncertainty as to when future profits will arise within this company. See Note 2.2 for further details.
Stock provision
The company sells perfect scale model cars in both new and classic designs and these are subject to changes in customer taste and demands. It is therefore necessary for management to consider the recoverability of the cost of inventory and the associated provisioning required. Due to the nature of the products sold by the company, judgement has to be applied when forming an expectation about customers changes in taste and demand.
Management have devised a methodology to provide for stock, and consider that the sales trends in the past three years will set a precedent for future sales. Any products which have not sold in the last three years are provided for in full. If there have been no sales in the past two years then there is a 50% provision against the cost of those products. If there have been no sales in the past 12 months then there will be a 25% provision against that product type. Products which have been sold in the last three years will be provided for on a sliding scale, depending on the numbers which have sold in each of the past three years.
Management do not consider the age of stock when determining the appropriate stock provision. At 31 December 2020, the stock provision stands at £619,363 (2018: £652,462).
Further to this methodology, management do review the stock held and will provide for damaged products, as well as applying assumptions around anticipated saleability of finished goods on an ad-hoc basis. See Note 7 for the carrying amount of inventory net of its associated provision.
Recoverability of amounts owed by group
The directors believe that the amounts owed from group undertakings are recoverable in full and therefore do not require impairment.
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The average monthly number of employees, including directors, during the year was 20 (2019: 18).
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Charge for the year on owned assets
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Charge for the year on owned assets
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are interest free, unsecured and repayable on demand.
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CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
Included within other creditors is £101,145 (2019: £101,328) due to a director. This amount is unsecured and interest free.
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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ALLOTTED, CALLED UP AND FULLY PAID
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1,000 (2019: 1,000) Ordinary shares of £1.00 each
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Profit and loss account
The profit and loss account includes all current and prior period retained profits and losses. All are available for distribution.
Capital contribution reserve
The capital contribution reserve arised in relation to the waiver of intercompany loans with the parent company. These contributions are non-refundable, have no entitlement dividends, interest or assets of the company on winding up and the reserve is considered distributable.
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COMMITMENTS UNDER OPERATING LEASES
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At 31 December 2020 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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RELATED PARTY TRANSACTIONS
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As a wholly owned subsidary of Amalgam Holdings Limited, the company has taken advantage of the exemption contained within FRS 102 from disclosing transactions with wholly owned group companies.
During the year, the company has made purchases of £2,750,245 (2019: £3,274,856) from Dongguan Finexpo Models Co Ltd, a company under common control. At the year end £764,238 (2019: £886,970) was due to Dongguan Finexpo Models Co Ltd and is recognised in trade creditors.
At the year end £101,145 was included in other creditors (2019: £101,238) which was due to a director of the company.
At the year end the company had a loan from the ultimate parent company. The details of this loan are described in note 10.
During the year the company made sales totalling £3,564 (2019: £185,035) to the ultimate controlling party. At the year end £120,890 (2019: £120,454) was included in trade debtors.
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AMALGAM COLLECTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
The immediate parent company is Amalgam Holdings Limited, a company incorporated in England and Wales.
The ultimate parent company is Danegeld Holdings Limited, a company incorporated in British Virgin Islands.
The auditors report on the accounts for the year ended 31 December 2020 was unqualified.
The audit report was signed on 28 September 2021 by Simon Morrison FCA (Senior Statutory Auditor) for and on behalf of Bishop Fleming Bath Limited.
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