ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
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Registered number: 01576051
financial statements
For the period ended 28 March 2020
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CONSUMA PAPER PRODUCTS LIMITED
COMPANY INFORMATION
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CONSUMA PAPER PRODUCTS LIMITED
CONTENTS
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CONSUMA PAPER PRODUCTS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 28 MARCH 2020
Consuma Paper Products Ltd ('Consuma') is a leading supplier of private label facial tissues, kitchen towel and toilet roll to UK supermarkets. The business was established in 1974, and from its modern Lincolnshire facility Supplies all the major retailers and leading discounters. Consuma converts parent reels using 19 production lines which laminate, print, coat, cut and fold or roll paper to produce high quality products for its customers.
A summary of Consuma’s financial results for the period ended 28 March 2020 and certain key financial performance indicators are set out in the table below:
*Adjusted EBITDA is defined as profit before interest, finance costs, tax, depreciation, amortisation, non-recurring administration and asset impairment costs. It is a non-GAAP metric used by Management and is not a FRS disclosure. Revenue In a challenging year owing to continued Brexit uncertainty together with the start of the COVID-19 pandemic in March 2020, Consuma turnover grew once more by well over 10%, driven by core facial tissue products which accounted for over 70% of overall turnover. Growth was also strong for kitchen towel and toilet tissue products. Consuma has retained its loyal customer base throughout the year and additionally started serving a new top four supermarket commencing in August 2019. Margins Global paper prices started to gradually decrease towards the very end of calendar 2018 and throughout most of 2019 as the cost of pulp started to decrease. The impact of lower prices started to feed through to improved margins even if there is a considerable lag due to ordering lead times and stock holding requirements, not helped by the Brexit stock build necessitated to protect customer deliveries throughout 2019.
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CONSUMA PAPER PRODUCTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
During March 2020, the full effects of the COVID-19 pandemic took hold in the UK at large, impacting every one of Consuma’s retail customers and thus impacting sales and every aspects of the supply chain. Consuma worked tirelessly with its supplier base and its customers to ensure its core range of household essentials continued to be stocked on supermarket shelves throughout the pandemic period. Consuma continues to work closely with its supplier partners to ensure the best price possible is secured for raw materials and works collaboratively with all its customers to ensure a fair price is delivered consistently across its range of products.
Balance Sheet Further to the successful commissioning of a new facial tissue production line during the prior year, Consuma has embarked on a major investment program to add three additional new machines further boosting its facial and rolled product capabilities. These highly efficient state of the art lines will increase capacity, reduce paper wastage and enable the retirement of older machinery and help advance Consuma further along its journey to fulfil its vision and become The Sustainable Paper Company. Consuma’s major customers are all household names with excellent payment records and no defaults were experienced during the year. The Group raised funding in excess of £8.5m in the form of equity during the year (prior year in excess of £3.5m equity) from its existing shareholders for working capital purposes and to support the growth of the business. The company benefits from a strong group of private shareholders. As part of The Group’s acquisition of the Consuma Holdings Group in March 2018, AnCellTek Holdings Limited utilised a three-year bullet loan note facility organised by a London corporate finance boutique. The loan notes accrue interest at the rate of 9% per annum to the loan note holders, the interest being quarterly and the principle becoming mature in March 2021. The loan notes are listed on an HMRC recognised exchange. Operations Consuma bolstered its Board with the appointment of a new Operations Director and Sales Director in 2019, which together with other senior management appointees has significantly strengthened the company both operationally and in terms of how it serves its customers. The health and safety of all employees remains the number one priority of the business. The Health and Safety Council consisting of Directors and Senior Managers meets on a regular basis. The Directors take their H&S responsibilities seriously and have ensured a comprehensive health and safety system is in place, encompassing appropriate governance, processes, and systems across the business. Additionally, Consuma continues to monitor all environmental aspects of its business and is working with third parties to evaluate the use of alternative energy sources and ensuring the business operates in as green a fashion as is possible. Consuma is working with its landlord to ensure a new 25,000 square foot warehouse is finalised ahead of the busy winter season. This will represent the latest in a series of recent developments all aimed at further improving the end to end supply chain and service delivered to its retail customers. Outlook Consuma is well positioned for continued growth following the continued significant investment in new equipment together with the strengthened new Management Team already in place. Consuma is also particularly excited by some of its most recent collaboration efforts with certain third party companies operating outside of the broader paper category, aimed at licensing in new technologies that will enable it to offer new and unique benefits to its customers.
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CONSUMA PAPER PRODUCTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
Consuma remains exposed to paper price movements, with the recent COVID-19 pandemic creating some short to mid-term uncertainty in what was an otherwise generally downward trend in global prices following historical highs in recent years.
Economic risk and Implications of Britain leaving the European Union
The Board has considered the impact of Brexit as a whole, the effect of leaving the European Union in January 2020 as well as the end of the current planned transition timetable ending December 2020. Consuma sources parent reels from suppliers who import a significant volume from overseas through the main UK ports. Significant delays at these ports may impact the supply chain. The Company will continue to work closely with its suppliers in an effort to minimise such impact and hold extra raw material stock to the extent deemed necessary, whilst also taking account of important financial considerations. Consuma is exposed to the effect of any economic downturn which could affect consumer confidence and therefore spending. The strength of Consuma’s offering is the ability to consistently meet the needs of its customers. Consuma has developed close working relationships with its customers over many years and this has helped ensure their loyalty. Consuma is also susceptible to the movement in paper prices and exchange rates. Consuma seeks to minimise the impact by carefully managing its raw material stock and ordering pattern. Consuma has diversified its supplier base and closely monitors paper prices. Where and when appropriate, Consuma will also seek to recoup raw material cost increases from its customers in a fair, collaborative, and transparent manner. COVID-19 In March of this year, Consuma experienced an unprecedented demand across its tissue products owing to the COVID-19 pandemic. As is widely known, the lockdown implemented by the UK Government resulted in people buying significantly greater volumes of all tissue products, especially toilet tissue and facial tissue, owing to families spending much more time in the home environment, coupled perhaps with a certain level of panic buying. To best meet the sudden increased demand, the company quickly arranged for all its lines to run 24 hours a day, seven days a week. Whilst the increased demand resulted in strong sales and enabled Consuma to best satisfy its customer demand, Consuma also had to incur significant additional costs at this time. Consuma worked closely with its retail partners, as well as its supplier base to ensure that everything that could be done was put in place to ensure maximum fulfilment for every one of Consuma’s customers. Similarly, Consuma worked closely with its supplier base to ensure continuity of raw materials. In many cases, Consuma relaxed minimum order quantities to enable retail customers to place orders and receive product as soon as they were being manufactured. These changes in operations, coupled with increased overtime requirements in order to quickly gear up to 24x7 operations across all lines, resulted in Consuma incurring higher operational and supply chain costs at this time of year. Many of the COVID-19 changes, continued post the year-end, for example ensuring social distancing is maintained in the workplace, together with increased levels and higher frequency of deep cleaning. Consuma believes that the measures put in place over the past few months position the company well for any potential future second peak in the pandemic. The Board has been delighted with how everyone in Consuma worked together to ensure its retail customers were well supported during this particularly difficult time.
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CONSUMA PAPER PRODUCTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
Going Concern, Financial and Liquidity Risk
As is usual, the key financial risk is the ability to continue to generate and access sufficient funds to meet business requirements. Consuma utilises invoice discounting and a stock facility to help it meet its obligations. Careful management of cash and working capital through ongoing reporting and forecasting is a priority for the business. Regular dialogue is maintained with Consuma’s primary lender. Consuma also benefits from a strong and supportive shareholder base who have continued to provide liquidity as and when required and injected in excess of £8.5m of equity in Better All Round Limited, the group’s ultimate holding company during the year ending 28 March 2020. As at the date of this report, the Directors have full expectation that Consuma has adequate resources to continue in business for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. Credit Risk Consuma seeks to manage its credit risk by dealing with established well-known high street customers, and checking the credit-worthiness of new customers. Clear contractual relationships are established and any credit issues are addressed in a timely manner. There is a reasonable spread of customers and no overall reliance on any one customer. Interest Rate Risk Consuma is exposed to changes in interest rates through its finance lease borrowings, its invoice discounting and stock facility. This risk is managed by the use of a combination of variable and fixed rates. Key Person Dependency Loss of key individuals could impact Consuma’s ability to achieve its objectives. This is mitigated through succession planning and the Board believes Consuma today has a much stronger management team in place across all key aspects of its operations.
This report was approved by the board and signed on its behalf.
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CONSUMA PAPER PRODUCTS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 28 MARCH 2020
The Directors present their report and the financial statements for the period ended
The Directors are responsible for preparing the strategic report, the Directors' 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 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 of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are required to:
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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the period, after taxation, amounted to £5,999 (2019 - loss £863,647).
Dividends in species declared during the year amounted to £1,756,296 (2019 - £Nil).
The Directors who served during the period were:
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CONSUMA PAPER PRODUCTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
Each of the persons who are Directors at the time when this Directors' report is approved has confirmed that:
The auditor, Mazars LLP, 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.
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CONSUMA PAPER PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONSUMA PAPER PRODUCTS LIMITED
We have audited the financial statements of Consuma Paper Products Limited (the 'Company') for the period ended 28 March 2020, which comprise the profit and loss account, the balance sheet, the statement of changes in equity and 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:
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CONSUMA PAPER PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONSUMA PAPER PRODUCTS LIMITED (CONTINUED)
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 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.
Emphasis of matter – Going concern and the impact of the COVID-19 outbreak on the financial statements In forming our opinion on the Company financial statements, which is not modified, we draw your attention to the Directors’ view on the impact of the COVID-19 as disclosed on page 3, and the consideration in the going concern basis of preparation on page 15. During the latter part of the financial year, there has been a global pandemic from the outbreak of COVID-19. The potential impact of COVID-19 became significant in March 2020 and is causing widespread disruption to normal patterns of business activity across the world, including the UK. The impact of COVID-19 is still evolving and, based on the information available at this point in time, the directors have assessed the impact of COVID-19 on the business and reflected the directors’ conclusion that adopting the going concern basis for preparation of the financial statements is appropriate. In forming our opinion on the Company financial statements, which is not modified, we draw your attention to the Directors’ view on the impact of the COVID-19 as disclosed on page 3, and the consideration in the going concern basis of preparation on page 15. During the latter part of the financial year, there has been a global pandemic from the outbreak of COVID-19. The potential impact of COVID-19 became significant in March 2020 and is causing widespread disruption to normal patterns of business activity across the world, including the UK. The impact of COVID-19 is still evolving and, based on the information available at this point in time, the directors have assessed the impact of COVID-19 on the business and reflected the directors’ conclusion that adopting the going concern basis for preparation of the financial statements is appropriate.
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CONSUMA PAPER PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONSUMA PAPER PRODUCTS LIMITED (CONTINUED)
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.
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 auditor's 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:
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CONSUMA PAPER PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONSUMA PAPER PRODUCTS LIMITED (CONTINUED)
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 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:
As explained more fully in the directors' responsibilities statement on page 5, 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.
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.
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 auditor's report.
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CONSUMA PAPER PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CONSUMA PAPER PRODUCTS LIMITED (CONTINUED)
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 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Mazars LLP
Chartered Accountants
Statutory Auditor
Park View House
58 The Ropewalk
Nottingham
NG1 5DW
Date:
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CONSUMA PAPER PRODUCTS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 28 MARCH 2020
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CONSUMA PAPER PRODUCTS LIMITED
REGISTERED NUMBER: 01576051
BALANCE SHEET
AS AT 28 MARCH 2020
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 35 form part of these financial statements.
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CONSUMA PAPER PRODUCTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 28 MARCH 2020
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2019
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Consuma Paper Products Limited presents its financial statements for the period ended 28 March 2020.
The Company is a private limited Company, limited by shares and is registered in England. Its registered office address is Hurlingham Business Park, Fulbeck Heath, Grantham, Lincolnshire, NG32 3HL. The presentation currency for the financial statements is Pounds Sterling (£) as this is the currency of the primary economic environment in which the Company operates and is rounded to the nearest pound. The principal activity for the period continued to be the manufacture of own label tissue products for the major retailers. A summary of the Company's accounting policies, which have been consistently applied, are set out below:
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 management to exercise judgement in applying the Company's accounting policies (see note 3).
FRS 102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions, which have been complied with, including notification of, and no objection to, the use of exemptions by the Company’s shareholders. In preparing the Company’s individual financial statements, the Company has taken advantage of the following exemptions: • from disclosing key management personnel compensation, as required by paragraph 7 of Section 33 ‘Related Party Disclosures’; • from presenting a statement of cash flows, as required by Section 7 ‘Statement of Cash Flows’. On the basis that equivalent disclosures are given in the consolidated financial statements, the Company has also taken advantage of the exemption not to provide certain disclosures as required by Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’.
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.Accounting policies (continued)
As is usual, the key financial risk is the ability to continue to generate and access sufficient funds to meet business requirements. Consuma utilises invoice discounting and a stock facility to help it meet its obligations. Careful management of cash and working capital through ongoing reporting and forecasting is a priority for the business. Regular dialogue is maintained with Consuma’s primary lender. Consuma also benefits from a strong and supportive shareholder base who have continued to provide liquidity as and when required and injected in excess of £8.5m of equity in Better All Round Limited, the group’s ultimate holding company during the year ending 28 March 2020.
As at the date of this report, the Directors have a reasonable expectation that Consuma has adequate resources to continue in business for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
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 profit and loss account except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the profit and loss account within 'finance income or costs'. All other foreign exchange gains and losses are presented in the profit and loss account within 'other operating income'.
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.Accounting policies (continued)
Turnover is recognised at the point of sale in the profit and loss account at the fair value of the consideration received or receivable for products provided in the normal course of business to customers and is shown net of value added tax and applicable discounts, returns, rebates and deductions.
The point of sale is determined when the following conditions are satisfied : - the Company has transferred significant risks and rewards of ownership to the customer - the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold - the amount to be recognised as a sale can be measured with sufficient reliability - it is probable that the Company will receive the amount invoiced - costs incurred in respect of the sale can be reliably measured. All turnover originates in the UK and its destination is as disclosed in note 4 to these financial statements. Deductions from sales are based upon the actual transactions noted and accounted for in the year concerned together with an appropriately calculated allowance for provisions necessary at the period end.
Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the lease term.
Finance costs are charged to the profit and loss account 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.
Defined contribution pension plan
The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.Accounting policies (continued)
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.
Non recurring items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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.
During the year, the asset lives applicable to plant and machinery have been reviewed and revised with the result of the depreciation rate being changed to 15% straight line from the current year. The financial impact of this change in accounting estimate on the current year is a reduction in depreciation of £154,490.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the profit and loss account.
Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.Accounting policies (continued)
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 outbasis. Work in progress and 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 transaction 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.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at transaction value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 20
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.Accounting policies (continued)
Financial assets - Classified as basic instruments Financial assets are defined as cash or any asset from another entity, or a contractual right to receive cash or another financial asset from another entity, or a contractual right to exchange financial instruments with another entity under conditions that are potentially favourable, or an equity instrument of another entity. The category of financial assets held by the Company comprise of bank and cash balances, amounts owed by related parties and trade debtors. Debtors are assets with fixed or determinable payments that are not quoted on an active market, other than those that are categorised as financial assets at transaction value through profit and loss. These are initially recognised at the transaction price. At each Balance Sheet date, they are subsequently measured at amortised cost, with interest income recognised to profit and loss using the effective interest method. Financial liabilities - Classified as basic instruments Financial liabilities are defined as any liability that is contractual obligation to deliver cash or another financial asset to another entity, or to exchange financial instruments with another entity under conditions that are potentially unfavourable. Financial liabilities held by the Company comprise of trade creditors, amounts owed to group undertakings finance leases and loans. Interest charges are recognised in profit and loss using the effective interest method. The only category of financial liability held by the Company is those measured at amortised cost using the effective interest method.
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
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates.
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 and in any future periods affected. Significant management judgements The following are management judgements in applying the accounting policies of the organisation that have the most significant effect on the amounts recognised in the financial statements. Asset impairment. In the prior period, the Directors decided to impair the value of certain fixed assets, and their associated spare parts, on the basis that these assets had not been used for some considerable time and / or were unlikely to be used at any time in the foreseeable future. Estimation uncertainty There are no estimation uncertainties in applying the accounting policies of the organisation that have had a significant effect on the amounts recognised in the financial statements.
Analysis of turnover by country of destination:
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 23
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 24
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 25
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 26
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
10.Taxation (continued)
There were no significant factors that may affect future tax charges.
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 28
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 29
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 30
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 31
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 32
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Profit and loss account
Page 33
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
The Company operates defined contribution pension schemes. The assets of the scheme are held separately from those of the Company in independently administered funds. The pension cost charge of £146,478 (2019: £79,224) represents contributions payable by the Company funds. At the period end there was a pension creditor balance of £32,745 (2019: £14,364).
Page 34
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CONSUMA PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
The Company's ultimate Parent Company is Better All Round Limited, a Company incorporated in England and Wales. The smallest group in which the results of the Company are consolidated is Consuma Holdings Limited. Copies of the consolidated financial statements of Consuma Holdings Limited are available from Hurlingham Business Park, Fulbeck Heath, Grantham, Lincolnshire, England, NG32 3HL. The Directors do not consider there to be an ultimate controlling party.
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