E. T. Clay Products Limited - Limited company accounts 18.2

REGISTERED NUMBER: 03373142 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 APRIL 2018

FOR

E. T. CLAY PRODUCTS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

7

Other Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Statement of Cash Flows

12

Notes to the Financial Statements

13

DIRECTORS:

Mr E Turze

Mrs S Turze

Mr M Hillstead

Mr I Khalid

Mr D Blitz

Mr J Hawkins

REGISTERED OFFICE:

Head Office

Hangman's Wood Industrial Park

Stifford Road

South Ockendon

Essex

RM15 6RL

REGISTERED NUMBER:

03373142 (England and Wales)

SENIOR STATUTORY AUDITOR:

Sudarshan Thurairatnam

AUDITORS:

Raffingers LLP (Statutory Auditors)

19-20 Bourne Court

Southend Road

Woodford Green

Essex

IG8 8HD

The directors present their strategic report for the year ended 30 April 2018.

REVIEW OF BUSINESS

Stable Economic conditions for the financial year 2017-18 has improved the Company's profitability. Overall turnover

has increased to £20.7m (2016-17: £17.5m) and Gross profit has improved to 18% (2016-17; 14.5%). Healthy economic

activity, increased demand of our products and high service standards are the main contributor's to a Net profit before

tax of £698,238 as oppose to a loss of £312,000 in the previous accounting year. The strategy adopted by the Board of

directors for the year 2017-18 is to continue for the year 2018-19 and is already bringing fruitful rewards and company

has achieved the budgeted targets in the first quarter of the financial year 2018-19.

Adaptive Measures

The Board of directors has continued to lead the Company into the financial year 2018-19 with its continuous strategy of

adapting to competitive market conditions which is already yielding turnover and profit margins. Stock profile has been

tailored to reflect current market conditions and demands. The sales force has been reorganised to ensure that the

Board's sales strategy is implemented in the most effective and efficient manner which continued from the last financial

year. The Board has split key revenue stream of Builders into independents and nationals to have more focus on

developing these areas.

Independent Builders Merchants

The independent builder merchant market is still a strong growth area and continues to implement its two prong sales

strategy i.e. firm commitments from our key suppliers who have supported us strongly not only in independent

Merchants but also with strong relationship with National Merchants. Board has also successfully maintained and

developed business relationship with European suppliers in order to fulfil temporary supply shortages in the local

market.

The Board believes the trading year 2018-19 will continue to give further opportunities to increase profits due to

increased activity in house building and our focus on gaining a bigger share of the commercial and non-housing sector.

Therefore our strategy will be to further push forward using our low overheads, in depth stock holding, unique products

and specialised salesforce as a firm platform. We will continually review the marketplace in order to understand any

possible impact of Brexit on the Construction Sector, then we will seek to enter the most profitable areas confidently

whilst managing risk and controlling costs in the future.

ON BEHALF OF THE BOARD:

Mr E Turze - Director

19 July 2018

The directors present their report with the financial statements of the company for the year ended 30 April 2018.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of wholesalers and retailers of tiles and bricks.

DIVIDENDS

The total distribution of dividends for the year ended 30 April 2018 will be £160,633.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 May 2017 to the date of this report.

Mr E Turze

Mrs S Turze

Mr M Hillstead

Mr I Khalid

Mr D Blitz

Other changes in directors holding office are as follows:

Mr J Hawkins - appointed 1 August 2017

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen in accordance with s.414C(11)) Companies Act 2006 to set out in the company's strategic

report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and

Reports) Regulations 2008 to be contained in the directors' report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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), 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 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 transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for

safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

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 company'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

company's auditors are aware of that information.

AUDITORS

The auditors, Raffingers LLP (Statutory Auditors), will be proposed for re-appointment at the forthcoming Annual

General Meeting.

ON BEHALF OF THE BOARD:

Mr E Turze - Director

19 July 2018

Opinion

We have audited the financial statements of E. T. Clay Products Limited (the 'company') for the year ended

30 April 2018 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position,

Statement of Changes in Equity, Statement of Cash Flows and Notes to the 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 company's affairs as at 30 April 2018 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 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the 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 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, 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors 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 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, 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 Statement of Directors' Responsibilities set out on page three, 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 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.

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.

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.

Sudarshan Thurairatnam (Senior Statutory Auditor)

for and on behalf of Raffingers LLP (Statutory Auditors)

19-20 Bourne Court

Southend Road

Woodford Green

Essex

IG8 8HD

26 July 2018

TURNOVER

20,716,957

17,538,895

Cost of sales

17,034,356

14,984,059

GROSS PROFIT

3,682,601

2,554,836

Administrative expenses

3,057,589

2,920,020

625,012

(365,184

)

Other operating income

72,716

52,870

OPERATING PROFIT/(LOSS)

5

697,728

(312,314

)

Interest receivable and similar income

510

79

PROFIT/(LOSS) BEFORE TAXATION

698,238

(312,235

)

Tax on profit/(loss)

6

81,046

(2,834

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

617,192

(309,401

)

PROFIT/(LOSS) FOR THE YEAR

617,192

(309,401

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR

617,192

(309,401

)

FIXED ASSETS

Tangible assets

8

173,909

202,302

CURRENT ASSETS

Stocks

9

1,448,652

1,083,077

Debtors

10

4,973,120

4,545,100

Cash at bank and in hand

79,952

74,298

6,501,724

5,702,475

CREDITORS

Amounts falling due within one year

11

5,292,270

4,972,880

NET CURRENT ASSETS

1,209,454

729,595

TOTAL ASSETS LESS CURRENT LIABILITIES

1,383,363

931,897

PROVISIONS FOR LIABILITIES

15

30,807

35,900

NET ASSETS

1,352,556

895,997

CAPITAL AND RESERVES

Called up share capital

16

50,000

50,000

Retained earnings

17

1,302,556

845,997

SHAREHOLDERS' FUNDS

1,352,556

895,997

The financial statements were approved by the Board of Directors on 19 July 2018 and were signed on its behalf by:

Mr E Turze - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 May 2016

50,000

1,239,764

1,289,764

Changes in equity

Dividends

-

(84,366

)

(84,366

)

Total comprehensive loss

-

(309,401

)

(309,401

)

Balance at 30 April 2017

50,000

845,997

895,997

Changes in equity

Dividends

-

(160,633

)

(160,633

)

Total comprehensive income

-

617,192

617,192

Balance at 30 April 2018

50,000

1,302,556

1,352,556

Cash flows from operating activities

Cash generated from operations

1

480,134

138,814

Net cash from operating activities

480,134

138,814

Cash flows from investing activities

Purchase of tangible fixed assets

(7,369

)

(32,378

)

Interest received

510

79

Net cash from investing activities

(6,859

)

(32,299

)

Cash flows from financing activities

Loan repayments in year

(66,988

)

-

Amount introduced by directors

60,000

300,000

Amount withdrawn by directors

(300,000

)

(345,015

)

Equity dividends paid

(160,633

)

(84,366

)

Net cash from financing activities

(467,621

)

(129,381

)

Increase/(decrease) in cash and cash equivalents

5,654

(22,866

)

Cash and cash equivalents at beginning of year

2

74,298

97,164

Cash and cash equivalents at end of year

2

79,952

74,298

1.	RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2018

2017

£

£

Profit/(loss) before taxation

698,238

(312,235

)

Depreciation charges

35,762

38,949

Finance income

(510

)

(79

)

733,490

(273,365

)

(Increase)/decrease in stocks

(365,575

)

180,501

Increase in trade and other debtors

(428,020

)

(96,882

)

Increase in trade and other creditors

540,239

328,560

Cash generated from operations

480,134

138,814

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 30 April 2018

30.4.18

1.5.17

£

£

Cash and cash equivalents

79,952

74,298

Year ended 30 April 2017

30.4.17

1.5.16

£

£

Cash and cash equivalents

74,298

97,164

1.	STATUTORY INFORMATION

E. T. Clay Products Limited is a private company, limited by shares , registered in England and Wales. The

company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to property

-

25% on reducing balance

Fixtures and fittings

-

15% on reducing balance

Computer equipment

-

25% on reducing balance

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow

moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of

exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the

operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

Factored debt

Trade debts have been factored with recourse and separate presentation under FRS 5 application note C has been

adopted.

3.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

1,480,646

1,416,313

Social security costs

152,543

138,107

Other pension costs

8,768

9,232

1,641,957

1,563,652

The average number of employees during the year was as follows:

2018

2017

Sales and marketing

30

32

Office and administration

14

12

44

44

4.	DIRECTORS' EMOLUMENTS

2018

2017

£

£

Directors remunerations

510,248

299,210

The highest paid director in the period received an amount of £180,282 during the year.

5.	OPERATING PROFIT/(LOSS)

The operating profit (2017 - operating loss) is stated after charging/(crediting):

2018

2017

£

£

Hire of plant and machinery

61,278

54,837

Depreciation - owned assets

35,762

38,949

Auditors' remuneration

10,500

10,200

Foreign exchange differences

(72,716

)

(52,870

)

Factoring charges

52,523

47,047

6.

TAXATION

Analysis of the tax charge/(credit)

The tax charge/(credit) on the profit for the year was as follows:

2018

2017

£

£

Current tax:

UK corporation tax

86,139

-

Deferred tax

(5,093

)

(2,834

)

Tax on profit/(loss)

81,046

(2,834

)

UK corporation tax has been charged at 19% (2017 - 20%).

Reconciliation of total tax charge/(credit) included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

2018

2017

£

£

Profit/(loss) before tax

698,238

(312,235

)

Profit/(loss) multiplied by the standard rate of corporation tax in the UK of 19% (2017 - 20%)

132,665

(62,447

)

Effects of:

Expenses not deductible for tax purposes

3,083

3,943

Depreciation in excess of capital allowances

5,093

945

Utilisation of tax losses

(54,702

)

57,559

Deferred tax

(5,093

)

(2,834

)

Total tax charge/(credit)

81,046

(2,834

)

7.

DIVIDENDS

2018

2017

£

£

Ordinary Shares shares of 1 each

Interim

160,633

84,366

8.	TANGIBLE FIXED ASSETS

Improvements

Fixtures

to

and

Computer

property

fittings

equipment

Totals

£

£

£

£

COST

At 1 May 2017

32,245

265,934

167,158

465,337

Additions

-

1,281

6,088

7,369

At 30 April 2018

32,245

267,215

173,246

472,706

DEPRECIATION

At 1 May 2017

4,889

168,952

89,194

263,035

Charge for year

3,833

13,679

18,250

35,762

At 30 April 2018

8,722

182,631

107,444

298,797

NET BOOK VALUE

At 30 April 2018

23,523

84,584

65,802

173,909

At 30 April 2017

27,356

96,982

77,964

202,302

9.

STOCKS

2018

2017

£

£

Stocks

1,448,652

1,083,077

10.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2018

2017

£

£

Trade debtors

3,364,787

3,044,021

Other debtors

1,330,328

1,262,565

Prepayments

278,005

238,514

4,973,120

4,545,100

11.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2018

2017

£

£

Other loans (see note 12)

1,822,879

1,889,867

Trade creditors

2,550,047

2,292,221

Tax

86,139

-

Social security and other taxes

30,591

36,257

VAT

256,504

188,568

Other creditors

123,848

176,734

Directors' current accounts

60,000

300,000

Accrued expenses

362,262

89,233

5,292,270

4,972,880