Company Registration No. 06039291 (England and Wales)
POLYTHENE (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
POLYTHENE (UK) LIMITED
COMPANY INFORMATION
Directors
Mr J E Woollard
Mrs K Woollard
Mr J D Mungall
Secretary
Mrs K Woollard
Company number
06039291
Registered office
31c Avenue One
Station Lane
Witney
Oxon
OX28 4XZ
Auditor
Shaw Gibbs (Audit) Limited
264 Banbury Road
Oxford
OX2 7DY
POLYTHENE (UK) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 23
POLYTHENE (UK) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 1 -
The directors present the strategic report and financial statements for the year ended 31 December 2020.
Principal activity of the company during the year was that of packaging wholesale.
Review of the business, key performance indicators and future developments
The directors are satisfied with the performance of the company during the year as turnover continues to rise year on year with the increase being 3.3% in 2020. Turnover continues to be one of the key performance measures for the business. The increase in turnover has been generated by continued growth in the customer base and a superior product in comparison to competitors.
2020
2019
Turnover 12,145,336 11,761,813
Gross profit margin 21% 20%
Operating profit 922,912 764,115
Operating profit, which is another key performance indicator for the business has increased as the company benefitted from cost savings such as travel and entertainment as a result of the lockdowns caused by COVID-19. In addition, the company utilised the coronavirus job retention scheme. The company continues to invest in people and advertising as well as superior products. Gross profit has remained consistent with prior years.
The directors believe the continued commitment to enhance the product base and providing more environmentally friendly alternatives will enhance customer satisfaction and facilitate growth. The company is well positioned with a strong supplier base to be responsive in an innovative market place.
During the year the company also continued to invest in renovation works to one of its investment properties.
The directors consider the KPIs of the business to be turnover, gross profit, operating profit, net assets and number of new customers.
Principal risk and uncertainties
The principal risks the company faces are indicated below:
As mentioned above the company continues to invest in environmentally friendly alternatives and has formed key links with innovative suppliers.
COVID-19 has had a significant impact on the global economy. The Directors believe, due to the Company’s customer base being mainly in the pharmaceutical, food and drink (supermarkets) and the construction industries, which have been able to continue during the lockdowns, the impact has been reduced. As we can see the company continues to grow despite the challenging environment.
Mrs K Woollard
Director
16 December 2021
POLYTHENE (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2020.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr J E Woollard
Mrs K Woollard
Mr J D Mungall
Results and dividends
During the year an interim dividend of £628,000 (2019: £421,500) was paid. The directors do not recommend payment of a final dividend.
Auditor
Shaw Gibbs (Audit) Limited are deemed to be re-appointed under section 487(2) of the Companies Act 2006
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
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 of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
POLYTHENE (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 3 -
On behalf of the board
Mrs K Woollard
Director
16 December 2021
POLYTHENE (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF POLYTHENE (UK) LIMITED
- 4 -
Opinion
We have audited the financial statements of Polythene (UK) Limited (the 'company') for the year ended 31 December 2020 which comprise the profit and loss account, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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.
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
Auditor's
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
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport 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.
POLYTHENE (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF POLYTHENE (UK) LIMITED
- 5 -
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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; or
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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.
Auditor's 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 auditor's 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.
POLYTHENE (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF POLYTHENE (UK) LIMITED
- 6 -
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
.
-
At the planning stage of the audit we gain an understanding of the laws and regulations which apply to the company and how the management seek to comply with those laws regulations. This helps us to plan appropriate risk assessments.
-
During the audit we focused on relevant risk areas and review the compliance with the laws and regulations by making relevant enquiries and undertaking corroboration, for example by reviewing Board Minutes and other documentation.
-
We assessed the risk of material misstatement in the financial statements including as a result of fraud and undertook procedures including:
-
Reviewing the controls set in place by management
-
Making enquiries of management as to whether they consider fraud or other irregularity may have taken place, or where such opportunity might exist
-
Challenging management assumptions with regard to accounting estimates
-
Identifying and testing journal entries, particularly those which appear to be unusual by size or nature
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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 an auditor's 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 members, as a body, for our audit work, for this report, or for the opinions we have formed.
Lorna Watson (Senior Statutory Auditor)
For and on behalf of Shaw Gibbs (Audit) Limited
20 December 2021
Chartered Certified Accountants
Statutory Auditor
264 Banbury Road
Oxford
OX2 7DY
POLYTHENE (UK) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 7 -
2020
2019
Notes
£
£
Turnover
3
12,145,336
11,761,813
Cost of sales
(9,630,267)
(9,357,978)
Gross profit
2,515,069
2,403,835
Administrative expenses
(1,638,136)
(1,670,615)
Other operating income
45,979
30,895
Operating profit
4
922,912
764,115
Interest receivable and similar income
16,037
14,959
Interest payable and similar expenses
(99,158)
(98,362)
Profit before taxation
839,791
680,712
Tax on profit
7
(123,148)
(130,833)
Profit for the financial year
716,643
549,879
POLYTHENE (UK) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2020
31 December 2020
- 8 -
2020
2019
Notes
£
£
£
£
Fixed assets
Intangible assets
9
3,495
3,306
Tangible assets
10
901,850
910,716
Investment properties
11
1,475,128
1,447,120
2,380,473
2,361,142
Current assets
Stocks
12
649,845
531,688
Debtors
13
2,729,287
3,127,558
Cash at bank and in hand
206,346
102,540
3,585,478
3,761,786
Creditors: amounts falling due within one year
14
(3,944,834)
(4,217,176)
Net current liabilities
(359,356)
(455,390)
Total assets less current liabilities
2,021,117
1,905,752
Creditors: amounts falling due after more than one year
15
(1,000,681)
(961,736)
Provisions for liabilities
(56,775)
(68,998)
Net assets
963,661
875,018
Capital and reserves
Called up share capital
18
100
100
Share premium account
9,900
9,900
Revaluation reserve
19
236,174
236,174
Profit and loss reserves
717,487
628,844
Total equity
963,661
875,018
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 16 December 2021 and are signed on its behalf by:
Mrs K Woollard
Director
Company Registration No. 06039291
POLYTHENE (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
- 9 -
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2019
100
9,900
236,174
500,465
746,639
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
-
-
549,879
549,879
Dividends
8
-
-
-
(421,500)
(421,500)
Balance at 31 December 2019
100
9,900
236,174
628,844
875,018
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
-
716,643
716,643
Dividends
8
-
-
-
(628,000)
(628,000)
Balance at 31 December 2020
100
9,900
236,174
717,487
963,661
POLYTHENE (UK) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 10 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
806,432
963,854
Interest paid
(99,158)
(98,362)
Income taxes (paid)/refunded
(40,000)
19,642
Net cash inflow from operating activities
667,274
885,134
Investing activities
Purchase of intangible assets
(1,956)
(2,688)
Purchase of tangible fixed assets
(75,588)
(81,700)
Proceeds on disposal of tangible fixed assets
5,651
191
Purchase of investment property
(28,008)
(140,569)
Decrease/(increase) in directors loan account
120,488
(176,507)
Net cash generated from/(used in) investing activities
20,587
(401,273)
Financing activities
Proceeds of new bank loans
50,000
Repayment of bank loans
(6,055)
(66,306)
Dividends paid
(628,000)
(421,500)
Net cash used in financing activities
(584,055)
(487,806)
Net increase/(decrease) in cash and cash equivalents
103,806
(3,945)
Cash and cash equivalents at beginning of year
102,540
106,485
Cash and cash equivalents at end of year
206,346
102,540
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 11 -
1
Accounting policies
Company information
Polythene (UK) Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
31c Avenue One, Station Lane, Witney, Oxon, OX28 4XZ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 " The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102") and the requirements of the Companies Act 2006
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Turnover
The turnover shown in the profit an loss account represents amounts invoiced during the year, exclusive of Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.3
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Patents
- 3 years straight line
1.4
Tangible fixed assets
Tangible fixed assets (excluding freehold properties)
are initially measured at cost and subsequently measured at cost or
deemed cost
, net of depreciation and any impairment losses.
Freehold properties are initially measured at cost and subsequently revalued at each year end date to market value, which is not considered to be materially difference from fair value, by the directors based on underlying market conditions and evidence of transaction prices for similar properties in the area. the fair value is then depreciated in line with the rates below.
Freehold property and refurbishments
50 & 15 years straight line respectively
Plant and machinery
3 years straight line
Computer equipment
3 years straight line
Motor vehicles
3 years straight line
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 12 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure
. Subsequently it is measured
at fair value a
t
the reporting end date.
Changes in fair value are recognised in profit or loss.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 14 -
1.10
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.11
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred
. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
1.12
Foreign exchange
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Stock valuation and obsolescence
Stock are valued at the lower of cost and net realisable value, after making due allowances for obsolete stock and slow moving items. Provisions are made for any foreseeable losses, where appropriate. No element of profit is included in the valuation.
The calculation of the above provisions requires judgements to be made, which include a number of variables, such as, the forecast customer demand, the economic environment, the ageing of the stock and the discontinuation of certain product lines by the company's key customer. These variables are monitored by the directors and a provision is in place to mitigate the relevant risks.
Freehold and investment property valuation
Freehold and investment properties are measured at market value, which is not considered to be materially different from the fair value, at the year end date. The directors estimate the market value of the properties at each year end taking into consideration the underlying market conditions and evidence of transaction prices for similar properties in the area and the necessary adjustments are made.
Useful economic life of tangible assets
The useful economic lives of non-current assets have been derived from the judgement of the directors, using their best estimate of the write-down period,
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2020
2019
£
£
Turnover analysed by class of business
Packaging wholesale
12,145,336
11,761,813
2020
2019
£
£
Other significant revenue
Interest received on overdrawn directors loan account
16,037
14,959
Grants received
13,020
Rental income arising from investment properties
32,959
30,895
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
3
Turnover and other revenue
(Continued)
- 16 -
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
11,763,973
11,367,793
Europe
380,149
350,502
USA
-
2,352
Switzerland
1,214
41,166
12,145,336
11,761,813
4
Operating profit
2020
2019
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
11,000
11,000
Exchange losses
13,721
7,792
Depreciation
84,824
7,853
Amortisation
1,767
1,597
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Average employee numbers
25
28
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
985,853
989,019
Social security costs
99,168
102,103
Pension costs
53,805
59,212
1,138,826
1,150,334
6
Directors' remuneration
2020
2019
£
£
Remuneration paid to directors
221,233
211,775
Remuneration disclosed above include the following amounts paid to the highest paid director:
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
6
Directors' remuneration
(Continued)
- 17 -
2020
2019
£
£
Remuneration for qualifying services
70,367
70,844
Company pension contributions to defined contribution schemes
15,750
18,000
7
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
149,135
140,112
Adjustments in respect of prior periods
(13,764)
(21,745)
Total current tax
135,371
118,367
Deferred tax
Origination and reversal of timing differences
(12,223)
12,466
Total tax charge
123,148
130,833
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Profit before taxation
839,791
680,712
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
159,560
129,335
Tax effect of expenses that are not deductible in determining taxable profit
3,288
6,339
Depreciation in excess of capital allowances
6,161
4,438
Research and development enhanced expenditure
(18,731)
Under/(over) provided in prior years
(13,764)
(21,745)
Deferred tax movement
(12,223)
12,466
Profit on sale of fixed asset
(1,143)
Taxation charge for the year
123,148
130,833
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 18 -
8
Dividends
2020
2019
£
£
Interim paid
628,000
421,500
9
Intangible fixed assets
Goodwill
Patents
Total
£
£
£
Cost
At 1 January 2020
112,500
19,358
131,858
Additions
-
1,956
1,956
At 31 December 2020
112,500
21,314
133,814
Amortisation and impairment
At 1 January 2020
112,500
16,052
128,552
Amortisation charged for the year
1,767
1,767
At 31 December 2020
112,500
17,819
130,319
Carrying amount
At 31 December 2020
3,495
3,495
At 31 December 2019
3,306
3,306
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 19 -
10
Tangible fixed assets
Freehold property and refurbishments
Plant and machinery
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2020
900,586
69,760
286,029
48,080
1,304,455
Additions
25,663
16,005
33,920
75,588
Disposals
(15,960)
(84,316)
(25,455)
(125,731)
At 31 December 2020
900,586
79,463
217,718
56,545
1,254,312
Depreciation and impairment
At 1 January 2020
98,037
31,985
239,668
24,049
393,739
Depreciation charged in the year
14,808
24,072
27,738
18,206
84,824
Eliminated in respect of disposals
(15,960)
(84,316)
(25,825)
(126,101)
At 31 December 2020
112,845
40,097
183,090
16,430
352,462
Carrying amount
At 31 December 2020
787,741
39,366
34,628
40,115
901,850
At 31 December 2019
802,549
37,775
46,361
24,031
910,716
11
Investment property
2020
£
Fair value
At 1 January 2020
1,447,120
Development costs
28,008
At 31 December 2020
1,475,128
The fair value of the investment properties have been arrived at on the basis of valuations carried out on 31 December 2020 by the directors. The valuations were made on an open market value basis by reference to market evidence of transaction prices, both capital and rental, for similar properties.
12
Stocks
2020
2019
£
£
Stocks
649,845
531,688
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 20 -
13
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
2,100,003
2,403,613
Other debtors
529,957
634,826
Prepayments and accrued income
99,327
89,119
2,729,287
3,127,558
14
Creditors: amounts falling due within one year
2020
2019
£
£
Bank loans
91,951
86,951
Trade creditors
1,867,371
1,965,183
Corporation tax
305,562
210,191
Other taxation and social security
305,494
148,742
Other creditors
1,342,444
1,789,583
Accruals and deferred income
32,012
16,526
3,944,834
4,217,176
Bank borrowings with National Westminster Bank PLC are secured by fixed charges on the freehold and investment properties and floating charges over the other assets held by the company.
15
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Bank loans
1,000,681
961,736
Bank borrowings with National Westminster Bank PLC are secured by fixed charges on the freehold and investment properties and floating charges over the other assets held by the company.
Amounts included above which fall due after five years are as follows:
Payable by instalments
358,616
613,931
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 21 -
16
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2020
2019
Balances:
£
£
Accelerated capital allowances
28,551
40,774
Revaluations
28,224
28,224
56,775
68,998
2020
Movements in the year:
£
Liability at 1 January 2020
68,998
Credit to profit or loss
(12,223)
Liability at 31 December 2020
56,775
17
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
53,805
59,212
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund. As at the year end £7,684 (2019: £14,275) was due to the pension scheme.
18
Called up share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
60 Ordinary A share of £1 each
60
60
30 Ordinary B share of £1 each
30
30
10 Ordinary C shares of £1 each
10
10
100
100
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 22 -
19
Revaluation reserve
2020
2019
£
£
At 31 December 2020 and 2019
236,174
236,174
20
Related party transactions
During the year a Director paid rent of £18,000 (2019: £8,700) to the company. The transactions were made at arms length and are in accordance with the open market value.
The director Mr J Woollard has personally guaranteed £50,000 as security for the bank overdraft.
Transactions with directors:
As at the year end, the directors had an overdrawn loan account of £508,974 (2019: £629,462). Interest of £16,037 (2019: £14,959) was charged on the loan during the year.
21
Ultimate controlling party
The ultimate controlling party is Mr J Woollard by virtue of his share ownership.
22
Cash generated from operations
2020
2019
£
£
Profit for the year after tax
716,643
549,879
Adjustments for:
Taxation charged
123,148
130,833
Finance costs
99,158
98,362
Gain on disposal of tangible fixed assets
(6,021)
Amortisation and impairment of intangible assets
1,767
1,597
Depreciation and impairment of tangible fixed assets
84,824
78,753
Movements in working capital:
Increase in stocks
(118,157)
(87,702)
Decrease/(increase) in debtors
277,783
(400,985)
(Decrease)/increase in creditors
(372,713)
593,117
Cash generated from operations
806,432
963,854
POLYTHENE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 23 -
23
Analysis of changes in net debt
1 January 2020
Cash flows
31 December 2020
£
£
£
Cash at bank and in hand
102,540
103,806
206,346
Borrowings excluding overdrafts
(1,048,687)
(43,945)
(1,092,632)
(946,147)
59,861
(886,286)
2020-12-31
2020-01-01
false
CCH Software
CCH Accounts Production 2021.200
No description of principal activity
Mr J E Woollard
Mr J D Mungall
Mr J D Mungall
Mrs K Woollard
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