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02456542
TENNALS GROUP LIMITED
UNAUDITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
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TENNALS GROUP LIMITED
CONTENTS
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Notes to the financial statements
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TENNALS GROUP LIMITED
REGISTERED NUMBER: 02456542
BALANCE SHEET
AS AT 30 SEPTEMBER 2016
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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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Net current (liabilities)/assets
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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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Provisions for liabilities
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Page 1
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TENNALS GROUP LIMITED
REGISTERED NUMBER: 02456542
BALANCE SHEET (CONTINUED)
AS AT 30 SEPTEMBER 2016
The directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
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 income and retained earnings 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 on 13 September 2017.
The notes on pages 3 to 11 form part of these financial statements.
Page 2
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TENNALS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Tennals Group Limited (the Company) is a private company, limited by shares, incorporated and domiciled in England. The address of its registered office is Eleanor House, 141 Tat Bank Road, Oldbury, West Midlands, B69 4NH, which is also the address of its principal place of business.
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 transition to Section 1A of Financial Reporting Standard 102 has not resulted in any changes to accounting policies to those previously used.
The following principal accounting policies have been applied:
The company made a loss in the year ended 30 September 2016 of £1,218,784 and had net liabilities of £602,098 at the year end date. The company operates using a bank overdraft and invoice discounting facilities which, as at the date of this report, amount to an overdraft facility of £500,000 and an invoice discounting facility of 70% of relevant debts with a cap of £875,000. These facilities are expected to be renewed in the near future.
The Directors have prepared financial forecasts for the period to 30 September 2018 which indicate that, based on the continued availability of these facilities, the company can continue to meet it’s obligations under terms agreed with creditors. The minimum headroom in the forecast period at a month end date is £144,000 and the directors believe that this is sufficient for the requirements of the company and the actual performance will be kept closely under review by management.
This assessment includes certain assumptions relating to the timeliness of debtor recovery from customers, trading activity levels, availability of financing facilities and cost estimation.
As noted in the company’s business review, the recent management information indicates that the company has now returned to profitability and this is a trend that the directors expect will continue into the future. This is underpinned by a strong order book looking into 2018 and beyond.
Page 3
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TENNALS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
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:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, as follows:.
Depreciation is provided on the following basis:
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Long-term leasehold property
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Fixtures, fittings and computer equipment
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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 the Statement of income and retained earnings.
Stocks are stated at the lower of cost and net realisable value,
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 profit or loss.
Page 4
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TENNALS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
2.Accounting policies (continued)
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.
The Company only enters into basic financial instruments 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 non-puttable ordinary shares.
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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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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Leased assets: the Company as lessee
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Assets obtained under hire purchase contract and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Statement of income and retained earnings so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Page 5
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TENNALS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
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 the Statement of income and retained earnings 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.
All borrowing costs are recognised in the Statement of income and retained earnings in the year in which they are incurred.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of income and retained earnings in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
Page 6
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TENNALS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of income and retained earnings, 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 balance sheet 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 Balance sheet 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 balance sheet date.
During the year the group, of which the company is a part, undertook a reconstruction to introduce a new holding company and consolidate all of the trading activities into Tennals Group Limited.
As a result, the company has provided against certain legacy inter-company balances with other group entities. This has resulted in a charge against profits of £349,256. This is a non-cash item and does not form part of the trading loss for the year.
The average monthly number of employees, including directors, during the year was 91 (2015: 39).
Page 7
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TENNALS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Page 8
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TENNALS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
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Long-term leasehold property
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Charge for the year on owned assets
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Charge for the year on financed assets
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Page 9
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TENNALS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
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Amounts owed by related parties
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Creditors: Amounts falling due within one year
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Amounts owed to related parties
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Secured loans
The amount due to the bank in relation to the CID facility of £596,623 (2015: £599,094) and due on hire purchase contracts of £5,462 (2015: 36,958) and both are secured by the related assets of the company.
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Page 10
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TENNALS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
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Commitments under operating leases
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At 30 September 2016 the Company had future minimum lease payments under non-cancellable operating leases as follows:
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In addition the company has vehicle operating leases expiring in 2-5 years with a total commitment of £590,250.
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Directors' advances, credit, benefits and guarantees
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At the beginning of the year balances of £327,217 (2015: £44,177) was due from the directors of the company. In the year further advances of £238,723 (2015: £283,040) were made to the directors. At the year end balances of £565,940 (2015: £327,217) was due from the directors. This was the maximum amount outstanding during the year.
The loans are unsecured, interest free and with no fixed terms of repayment.
Page 11
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