ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
|
Registered number:
for the year ended
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Company Information
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Contents
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Group Strategic Report
for the year ended 30 September 2019
The directors present their strategic report for the year ended 30 September 2019.
Business review The financial year 2018/19 was a strong year for the Group and represents our continued efforts in building the business. H Marcel Guest maintains a strong, long-term strategy, at the heart of which is the aim of building security for all the Group stakeholders. During 2018/19 the Group has continued to improve its performance in line with those objectives. Despite the backdrop of Brexit uncertainties and political instability, the Group has managed to secure several new contracts which has strengthened our customer base. We have also seen growth in our underlying business and maintained tight control of costs throughout the year. This has contributed to the double-digit growth seen in both turnover and profitability. HMG has continued to invest heavily in the health and safety and technical training and development of our people, as we have done in previous years. Substantial technical expenditure has continued in the development of high solids and compliant technologies. Our laboratory has been strengthened in the year with the appointment of several new staff. These new staff have assisted in us reaching new markets. In addition, we have strengthened our management team as part of our long-term succession planning. This has provided us with the opportunity to focus on our short to medium term objectives. Overall, we are satisfied with the performance of the business through 2018/19 and recognise this as a springboard for future growth. We look forward to the financial year 2019/20 and beyond with great confidence in our abilities to continue to grow the business. Principal risks and uncertainties The Group’s activities expose it to a number of financial risks including credit risk and liquidity risk. The factors described below highlight risks and uncertainties which affect the Group, but they are not intended to be an exhaustive analysis of all the potential risks which may arise in the ordinary course of business. The directors are of the opinion that sufficient internal controls have been implemented to monitor these factors and to enable timely management action to be taken to mitigate the risks. Political risk The past three years since the referendum regarding the UK’s exit from the European Union have provided a period of uncertainty for all and this is yet to be resolved. As our supply chain relies heavily on materials from the EU, we watch developments in this area closely, as well as considering the wider impacts any Deal or No-Deal may have. We manage this risk by ensuring we have appropriate finance in place should it be needed, as well as ensuring we hold sufficient levels of stock so that any disruptions at ports would not leave us exposed. Financial risk Our financial risk management objectives are to ensure sufficient working capital for the Group and plans remain absolutely to our expectations. Financial risks are managed through internal management controls, timely and accurate management information and by careful monitoring of sales activity and margins. The Group does not feel it is necessary to hedge its currency or interest rate risk.
Page 1
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Group Strategic Report (continued)
for the year ended 30 September 2019
Credit risk The Group’s principal financial assets are bank balances and cash, trade and other receivables. Its credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The Group has a credit insurance policy in place to mitigate the credit risk from trade receivables. Liquidity risk In order to maintain liquidity, to ensure that sufficient funds are available for ongoing operations and future developments the Group has a mixture of long term and short-term finance
The key performance indicators that are monitored on a weekly, monthly and annual basis are revenue, profit and cash balances, all of which are derived from the financial statements. The figures are stated below:
The results were satisfactory throughout the year and in line with expectations.
This report was approved by the board and signed on its behalf.
Page 2
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Directors' Report
for the year ended 30 September 2019
The directors present their report and the financial statements for the year ended 30 September 2019.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £1,298,932 (2018 - £355,376).
The directors recommend a final dividend payment of £262,163 (2018: £nil).
The directors who served during the year were:
The directors consider that the forthcoming financial year will be another year of solid performance building further security for all our stakeholders.
The Group will continue to invest heavily in research and development activities in the forthcoming year to ensure that it stays at the forefront of innovation in the coatings industry. The continued investment will enable the business to offer unique innovative products for its customers.
Page 3
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Directors' Report (continued)
for the year ended 30 September 2019
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
There have been no significant events affecting the Group since the year end.
A subsidiary of H Marcel Guest Limited, HMG Coatings (London) ceased trade during the year, and all trade was transferred to a fellow subsidiary HMG Paints Limited. The intention of the directors is to continue the company as a dormant entity once all liabilities have been settled.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 4
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Independent Auditors' Report to the Members of H. Marcel Guest Limited
We have audited the financial statements of H. Marcel Guest Limited (the 'parent company') and its subsidiaries (the 'Group') for the year ended 30 September 2019, which comprise the Group Statement of Comprehensive Income, the Group and company Balance Sheets, the Group Statement of Cash Flows, the Group and company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:
In preparing the consolidated financial statements, the group's investment in an associated undertaking (HMG Powder Coatings (Midlands) Limited) has not been consolidated as the directors do not believe that the company demonstrates sufficient control over the associate to warrant the inclusion of its assets and liabilities in the consolidated financial statements of the group. This associate has, therefore, been accounted for on a cost basis.
The investment in HMG Powder Coatings (Midlands) Limited is included at cost within investments totalling £75,000. Had the associated undertaking been correctly accounted for, based on the unaudited accounts as at 30 September 2019 provided to us, the reported net assets of the group would have been £177,308 higher (2018: £173,900 higher) in the consolidated accounts.
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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Group's or the parent 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.
Page 5
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Independent Auditors' Report to the Members of H. Marcel Guest Limited (continued)
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
Page 6
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Independent Auditors' Report to the Members of H. Marcel Guest Limited (continued)
As explained more fully in the Directors' Responsibilities Statement on page 3, 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 Group's and the parent 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 Group or the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the company's members 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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
Cheshire
SK1 1TD
Page 7
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2019
Page 8
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Registered number: 00251148
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
Page 9
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Registered number: 00251148
Company Balance Sheet
As at
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent company for the year was £219,279 (2018: £12,306)
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 39 form part of these financial statements.
Page 10
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Consolidated Statement of Changes in Equity
for the year ended 30 September 2019
Consolidated Statement of Changes in Equity
for the year ended 30 September 2018
Page 11
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Company Statement of Changes in Equity
for the year ended 30 September 2019
Company Statement of Changes in Equity
for the year ended 30 September 2018
Page 12
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Consolidated Statement of Cash Flows
for the year ended 30 September 2019
Page 13
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Consolidated Statement of Cash Flows (continued)
for the year ended 30 September 2019
Page 14
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
H Marcel Guest Limited is a private company limited by shares, incorporated in England. The registered office is Riverside Works, Collyhurst Road, Manchester, M40 7RU.
The principal activity is the manufacture of paints, surface coatings and related products and services.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3). Parent company disclosure exemptions In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available to qualifying entities: • No cash flow statement or net debt reconciliation has been presented for the parent company; • Disclosures in respect of the parent company’s income, expense, net gains and net losses on financial instruments measured at amortised cost have not been presented as equivalent disclosures have been provided in respect of the group as a whole; and • No disclosure has been given for the aggregate remuneration of the key management personnel of the parent company as their remuneration is included in the totals for the group as a whole. The following principal accounting policies have been applied:
The consolidated financial statements present the results of the company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
Page 15
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
2.Accounting policies (continued)
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.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group 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:
Rentals income from operating leases is credited to the Consolidated Statement of Comprehensive Income on a straight line basis over the term of the relevant lease.
Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Page 16
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
2.Accounting policies (continued)
Assets obtained under hire purchase contracts 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 Consolidated Statement of Comprehensive Income so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the Consolidated Statement of Comprehensive Income 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 Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.
Finance costs are charged to the Consolidated Statement of Comprehensive Income 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 the Consolidated Statement of Comprehensive Income in the year in which they are incurred.
Page 17
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
2.Accounting policies (continued)
Defined contribution pension plan
The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payment obligations. The contributions are recognised as an expense in the profit and loss 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 group in independently administered funds. Scheme membership and benefits The group also operates a hybrid arrangement scheme with both benefit and defined contribution elements. The benefits of "director members" are provided on a money purchase basis, but such benefits are restricted to the net assets available, having first made full provision for the benefits of all defined benefit members. The principal employer is H Marcel Guest Limited and the participating employer is HMG Paints Limited.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
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.
Page 18
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
2.Accounting policies (continued)
Acquired trademarks are shown at historical cost. The trademark is being amortised over the 10 years. This is also subject to an annual impairment review.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
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 Consolidated Statement of Comprehensive Income.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated profit and loss the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment. Investments in listed company shares are remeasured to market value at each Balance Sheet date. Gains and losses on remeasurement are recognised in profit and loss for the period.
Page 19
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
2.Accounting policies (continued)
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated Statement of Comprehensive Income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated Balance Sheet, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition. Any premium on acquisition is dealt with in accordance with the goodwill policy.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
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.
Page 20
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
2.Accounting policies (continued)
Provisions are made where an event has taken place that gives the Group 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 Consolidated Statement of Comprehensive Income in the year that the Group 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.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. .
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Page 21
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Preparation of the financial statements requires management to make significant judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. The nature of estimation means that actual outcomes could different from those estimates. The items in the financial statements where these judgements and estimates have been made include:
Stock provision Stock is reviewed to assess obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in profit and loss, the company makes judgements as to whether there is any observable data indicating that there is any future saleability of the product and the estimated net realisable value for such product. Accordingly, provision for impairment is made where the net realisable value is less than the cost based on best estimates by the management. The provision for obsolescence of stock is based on the ageing and historical sales pattern. Stock valuation and overhead absorption Stock is valued including raw material costs, production labour and an allocation of production related overheads. The overhead calculation is based on a judgement of the production element of certain overheads which may differ from the actual. As at 30 September 2019, the value of labour and overheads included in stock was £429,350 (2018: £354,891). Bad debt provision Management exercises judgement in providing for impairment loss on trade receivables. Depreciation Management of the company exercises judgement in estimating the useful economic life of property, plant and equipments. such estimations are reviewed regularly to ensure they remain appropriate.
The whole of the turnover is attributable to the sales of paint products.
Analysis of turnover by country of destination:
Page 22
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 23
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 24
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 25
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 26
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
13.Taxation (continued)
The UK Government has set the Corporation Tax main rate at 19% for years starting 1 April 2017, 2018 and 2019. at Budget 2016, the government announced a further reduction to the Corporation tax main rate for the years starting 1 April 2020, setting the rate at 17%. However, changes to future rates following the outcome of the General Election in December 2019 are not yet known.
Page 27
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 28
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
16.Tangible fixed assets (continued)
Page 29
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 30
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 31
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Subsidiary undertakings (continued)
Page 32
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 33
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 34
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 35
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
Page 36
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
26.Deferred taxation (continued)
Profit and loss account
The profit and loss account includes all current and prior period retained profits and losses after dividends paid.
Page 37
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
The group operates a defined contribution pension scheme and also a hybrid arrangement with both defined benefit and defined contribution elements. The assets of the schemes are held separately from those of the company in individual independently administered funds. The pension cost charge represents contributions payable by the group to the fund and amounted to £243,111 (2018: £180,900). Contributions totalling £NIL (2018: £1,629) were payable to the fund at the balance sheet date.
Page 38
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
H. Marcel Guest Limited
Notes to the Financial Statements
for the year ended 30 September 2019
In the opinion of the directors, the ultimate controlling party, by virtue of their shareholding in the ultimate parent company, are the Falder family.
Page 39
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||