CORAL PRODUCTS PLC
ANNUAL REPORT AND ACCOUNTS 2OL9
Contents
Business Overview
Chairman's Statement
Strateg¡c Report
Directors and Advisers
Directors' Report
Directors' Remuneration Report
Audit Committee Report
lndependent Auditor's Report to the Members of Coral Products plc
Group lncome Statement
Group Statement of Comprehensive lncome
Balance Sheets
Statement of Changes in Shareholders' Equity
Cash Flow Statements
Notes to the Financial Statements
Five Year Record (unaudited)
Notice of the Annual General Meeting
Financial Calendar and Shareholder lnformation
t
3
6
CI
11
t7
20
2L
26
26
27
28
D
30
59
60
63
Financial Highlights
Group revenue
Gross margin
Profit/(loss) before tax
Operat¡ng profit/(loss)
Underlying earnings before interest, tax, depreciat¡on and amortisation *
Underlying operating profit *
20t9
C24.7m
?5.9%
Ê0.04m
f0.5m
C2.5m
C1.0m
2018
f23.4m
34.6%
f(0.s)m
f(0.2)m
f2.1m
€0.9m
*Underlying profit measures are defined and explained in the accounting policies and in note 6 of the financial
statements.
Business Overview
About Us
Coral Products is a manufacturer and distr¡butor of plastic injection, extruded and blow moulded products into a diverse range of
sectors including food packaging, personal care, household, healthcare, automotive, on-line totes, telecoms and rail. The Group has
operat¡ons in the UK with manufacturing facilities in Haydock, Merseyside, and Wythenshawe, Greater Manchester and a distr¡bution
facil¡ty in Hyde, Greater Manchester.
By developing ¡nnovative plastic moulded products, providing excellent customer service and through its hard-working employees,
Coral Products cont¡nues to refocus on new markets to be in a pos¡tion to create growth and value for its shareholders,
Overview
The Company was listed on the main market of the LSE from April 1995, moving to AIM in August 2011. lnitially the Company focused
on serving the VHS, CD and DVD market. Due to the onset of internet-based media and the demise of the CD and DVD market the
Company has reinvented itself by developing innovative products such as food containers, extrus¡on, tr¡gger sprays and nozzles and
injection and blow moulding, serving a more diverse market and customer base.
Strategy
We aim to grow and develop our positions within our chosen product markets and geographical areas in the rigid plastic packaging and
waste recycling ¡ndustry by ma¡ntaining strong long-term relationships w¡th our customers and developing high quality, innovative
products that meet customer needs. With our trade moulding partners, we aim to develop the relationship and work together to
produce a partnership resulting in long-term reliability of production, development and flexibility as the need arises in order to deliver
long-term sustainable profit growth. There are five key drivers to our strategy which support a focused sales approach:
Health and safety - This is the main priority in the business and we have str¡ved to ¡mplement an environment where safety is
paramount. We continuously train and re-train our staff to ensure that we operate best health and safety practices throughout the
organisation.
Quality - We have an excellent reputat¡on for delivering quality products but we are not complacent. We invest cont¡nuously ¡n new
machinery, robot¡cs and moulds in order to maintain a strong posit¡on and keep market share. Our quality control and assurance
processes are regularly reviewed and developed to ensure that our customers receive quality products each t¡me.
Cost control - We continually investigate prices to improve our financial efficiency and deliver the best returns for shareholders. This
may lead to dual supply sources to ensure key costs are minimised. We recognise also the efficiencies and effectiveness that results
from new machinery in reducing our carbon footpr¡nt as well as the pos¡tive effect on reducing the cost of power absorption.
Culture - We continually look to promote a well-motivated workforce by attract¡ng and motivating talented people to drive our
business forward and foster a culture of responsibility, accountability and openness.
Acquisitions - We have adopted a strategy of seeking acquisitions where we feel we can add value from synergies or ¡nvestment to
grow our markets and ultimately enhance shareholder value.
Strategic Plan
The S-year plan implemented in 2015 continues to be followed. The plan has been bolstered by the recent addit¡on of a bespoke
recycling unit installed in the Coral Mouldings plant ¡n Haydock. lt is expected that recycling will become a big part of the future growth
of the Group.
Page l1
Business Overview
continued
Business Model
To create and grow markets for rigid plastic containers, extrusion profiles and container triggers and spray nozzles, via innovation,
development and acquis¡t¡ons. We recognise that for many products' plastic is a better container solution for handling goods and gives
greater functionality, economy and a cleaner environment'
Social, Community and Human Rights lssues
The Group endeavours to impact positively on the communit¡es in which it operates. ln particular, raw materials are purchased from
established companies which have high reputations within the plastics industry'
The Group,s ethical and social accountab¡lity statement details the standards of behaviour which are regarded as acceptable' Provision
of a safe, clean working environment, free from discrimination, is an essential right of all the employees' ln order to gain accreditation
under the BRC packaging Materials Standard on product¡on of food containers, the premises, working practices and materials had to
meet requ¡red standards of compliance. These are regularly audited to ensure the Group contlnues to adopt good manufacturing
practices in order to develop and manufacture safe, legal packaging materials. The Group is also often audited by its customers to
assess compllance wlth min¡mum acceptable standards.
Page l2
Chairman's Statement
Trading
Whilst I am pleased to report an improved performance this year, it has proved to be a difficult period. After a strong first half when
we reported revenues of Ê13.1m (2018: €11.9m) and underlying profit of f 1.0m (2018: €0.4m),
the Group endured a poor start to its
second half, with losses in the four months to 28 February 2019. This resulted in our announcing by an RNS dated 26 March 2019 that
results for the year would be materially below management and market expectations. The losses were across the Group, with the
exception of lnterpack. Decisive action, including the re-organisation of both Tatra-Rotalac and Mouldings to reduce costs, returned
the Group to profitab¡l¡ty during March and April though at a lower level than during the first half. Further direct and ind¡rect cost
reduction measures across the Group have continued into th¡s current financial period. The recycling unit introduced into production
during May 2019 is already contribut¡ng to our cost reduction plan and will do increasingly throughout the current year as we ramp up
production.
Throughout this difficult period, we have cont¡nued to ¡nvest in the Group adding new and improved capac¡ty and a state-of-the-art
recycling unit. This has created greater sales opportunit¡es in both existing and new markets. We therefore ant¡cipate significant sales
growth over the current financial year. I was pleased w¡th the increase in revenue up 5.7% to f24.7m (2018: f23.4m) and underlying
operat¡ng profit up 13.5%to f1.0m (2018: €0.9m).
(Note that underlying profit is defined in note 2 and a reconcil¡ation provided in
note 6).
The Group has continued with its strateg¡c progress of increasing focus on value-added and innovative products. The focus is to build
a significant plastic moulding business with a bias towards using recycled materials and with the new Recycling un¡t now installed and
operational at Haydock, we remain confident in our ability to do so.
The Group has reported a profit before taxation for the financial year of f0.04m (2018: €0.5m
loss). Across the Group, finance costs
have increased to €0.4m (2018: f0.3m) and depreciation to €1.5m
(2018: €1.2m)
in line with the increased spend on new, replacement
and/or improvement of the assets of the Group,
lnterpack's profit before tax ¡s €0.7m
(201s: f0.6m) and Global One-Pak's f0.2m (2018: €0.5m). The focus on Coral products
(Mouldings) has resulted in a substant¡al prof¡tability improvement from last year with a loss of f0.4m (2018: €1.1m
loss). Tatra has
been affected by adverse material prices and operational costs resulting in an increased loss to f0.2m (2018: f0.0m loss). A
reorgan¡sat¡on and cost cutting exercise was completed in July 2019 to improve future profitab¡l¡ty. These results are before
amortisation of intangibles arising on consolidation of €0.3m
(2018: f0.3m) as set out in note 6.
Our new 360-degree recycling plant using both internal and external acquired plastic waste is now ¡n operation and interest from both
new and ex¡sting customers has been very encouraging. The interest I highlighted last year by local authorities and councils is now
becoming more tangible with developments at an advanced stage w¡thin both areas.
Further investment ¡n new tool¡ng for food packaging and robotics handling will stand the business in good stead going forward with
actual demand from the new tool¡ng increasing month by month. The developments will enable the manufacturing businesses to
cont¡nue to reduce operational costs, wh¡lst reinforcing the important recycling message the business promotes.
Performance of the Group is monitored principally through adjusted profit measures which exclude f0.5m of adjusted items (2018:
f 1.1m). Such items are set out in note 6 and include the amortisation of intangibles arising on the acquisitions of Global One-pak and
Tatra-Rotalac, acquisition costs, share based payment charges, compensation for loss of office of senior management and
reorgan¡sation costs.
Page l3
Chairman's Statement
Continued
Dividends
The Board remains committed to its long-term progressive dividend policy, which takes account of the underlying growth, whilst
acknowledging the requirement for continuing investment and short-term fluctuations in profit.
Due to the uncerta¡nty surrounding UK Brexit the Board believe it is prudent to pay a total dividend of 0.25 pence per ordinary share
¡n respect of the financial year ended 30 April 2019. Having paid an interim dividend at 0.25 pence per ordinary share on 28 March
2019, the Board will not be recommending the payment of a final dividend.
Board Changes
There were no board changes during the yea(.
Chairman's Corporate Governance Statement
As Non-executive Chairman of the board, my role is to set the strategy for the company, monitor the ongoing performance of the
companies within the Group to ensure that they are meeting our requirements and also identify potential acquisition targets.
ln addition, my role also encompasses overseeing the functioning of the board and its effectiveness and ensuring sound corporate
governance practices are followed.
All the Directors of Coral believe strongly in the importance of good corporate governance for the creation of shareholder value over
the medium to long-term and to engender trust and support amongst the Group's wider stakeholders.
I work with key executives throughout the organisation to instill good corporate governance practices in accordance with the Code.
ln accordance with the changes to AIM Rule 26 the Company is now applying the revised QCA Corporate Governance Code published
earlier in 2018.
The board monitors our corporate governance pract¡ces and will always implement improvements which further enhance performance
and/or benefit stakeholders.
Strategy
Our Board continuously reviews business performance alongside market conditions to make sure that we take the correct strategic
decisions for each of our businesses. The Board recognises fully that it has been tasked with delivering enhanced shareholder value.
The challenges facing the Board relate to managing the continued growth of the group through the uncerta¡nty and timelines
surrounding UK Brexit.
People
We are reliant on the expertise, professionalism and commitment of our people and thank them for their continued contribution to
the business during a challenging year.
Page l4
Chaírman's Statement
Continued
Future Developments
a
a
a
The multi box recycling system (MBRS) was launched ln July 2019. The flrst dellver¡es to customers wlll bg made ln the latter
part of the current financlal year.
The (oollng for the new improved food packaglng is due in Haydock during August 2019 wlth production commengng soo¡
after.
we expect the tollowlng products to be introduced durÍng the latter part ef the current flnanclal year:
o ße-developed light-weight 23 ând 55 lltre caddies.
o Conservatory and outbuildings rooftiles.
o Plastic soundproofing system to'be lnstalled along road hlghways,
Outlook
whllst we have confìdence in our development strategy and the prospects of the 6roup, the very real uncertaínt¡es over Brexlt are a
cause for concern. The decllne ln sterllng agalnst the dollar and euro, our maJor tradlng currencles, leads to increases in our costs ot
materlals. We are taklng actlon to mlt¡gate these factors by contlnulng to develop exlsting products and bringlng to market new '{
innovat¡ve products. These are supplemented by new revenue streams such as,recycling.
The Group contlnues wlth lts strateg¡e progress of increasing focus on value-added and lnnovative products, particularly in the food
container, recycfing, teleconlmunications, rail industry home delívery totes and blow moulding areas. Our aim is to build a significant
plastic moulding buslness w¡th a b¡as towards using recycled materlals pr.oduced by our new recycling unit instailed in Haydock. we
remaln confldent ln our ablllty to do so via both improved internal performances of lndlvidual subsldlarles supported by strategic
acqu¡s¡t¡ons ln the short to medium term. The current year will benefit from the Coral Mouldíngs and Tatra-Rotafac cöst reductlons,
lnvestments ln plantand machinery and new business.
rv outturn
eiven the orevailing conditions.
rta look
Joe
otavnQ
21 August 2019
Page i5
Strategic Report
Review of the Business
The Group is required to produce a Strategic Report complying with the requirements of The Companies Act 2006 (Strategic Report
and Directors' Report) Regulations 2013.
An overview of the Group's strategy and business model is set out on pages 1 to 2, and together with the Chairman's Statement on
pages 3 to 5 form part of this Group's Strategic Report. This incorporates a review of the Group's activ¡ties, its business performance
and developments during the year as well as an indication of likely future developments.
Our business model is designed to bridge the gap between reliable, qual¡ty assured products made with regulated materials and our
customers' requirements. Key to the success of our business model is our experience and knowledge of the materials and processes
we handle and our ability to service customer demands with product ¡nnovation.
FINANCIAL REVIEW
lncome Statement
Group revenues for the year ended 30 April 2019 were f 1.3m higher at 824.7m (2018: f 23.4m). Of this, food container sales were
E7.4m l2lt9r Ê6.8m), sales for extrusion were f6.6m (2018: €6.7m), sales for trigger sprays and nozzles were f3.1m (2018: €3.1m) and
sales for ¡nject¡on and blow moulding increased to €7.6m
(2018: f6.8m). The Group has continued to expand its processes in order to
be able to attract more business growth from sales in areas of market growth.
The 6roup has reported a profit before taxation for the financial year of Ê0.04m (2018: €0.5m
loss). Across the Group, finance costs
have increased to €0.4m (2018: f0,3m) and depreciation to €1.5m (2018: f 1.2m) in line with the increased spend on new, replacement
and/or improvement of the assets of the Group.
Gross margins increased to 35.9% (20L8:34.6%l due to a better mix of sales and resulted in a gross prof¡t of f8.9m (2018: €8.1m).
Underlying operat¡ng profit increased by 13.5% to Ê1.0m (2018: €0.9m) and underlying earnings before interest, tax, depreciation and
amortisation increased to f2.5m (2018: Ê2.lm). Separately recorded costs of f0.5m (2018: f1.1m) resulted from acquisition costs,
intangibles amortisation and reorganisation costs, as well as share-based payment cha rges and compensation for loss of office of senior
management,
The total dividend for the year is 0.25p (2018: 0.25p) resulting in dividend cover on underlying operating profit of 4.92 times earnings
for the year (2018: 4.25 times). Basic underlying earnings per share for the year decreased to 0.75 pence (2018:0.84 pence).
Balance Sheet
Total shareholders'equity decreased by Ê0.3m to f12.9m (2018: Ê13.2m), with net assets per share decreasing to 15.6 pence
(2018: 15.9 pence).
The term loan which is repayable in rnonthly ¡nstalnìents ltV 2027 has been split between a current liability and a non-current
liab¡lity in line with the repayment profile. ln the yeâr encled 30 April 2018 this term loan was disclosed as a current liability given
the technical breach of covenant which was waived subsequent to the year-end.
Pa¡1r: l6
Strategic Report
Continued
Cash Flow
Net cash generated from operations were f 1.5m (2018: €1.0m) with cash and cash equivalents being an overdraft of f27k(2018: f47Lk
cash). As set out in note 23 the Group's net debt increased to f 8.2m (2018: f 7.3m) with the level of gearing rising from 555%to 63.6%
which is in line with the increase in investment to meet the forecasted increase in demand. The Group has a mix of secured borrowing
facilities totalling f5.1m in addition to a f1.6m 10-year mortgage. The borrowingfacilities and mortgage are both held with Barclays
Bank plc and the Group continues to enjoy a positive relationship with its bank and has recently agreed a further renewal on the
borrowing facilities to cover the period to June 2020. The land and buildings at Haydock were refinanced in May 2019 raising f500,000
in cash, this was used to clear a temporary overdraft balance in Coral Products (Mouldings) Ltd.
Borrowing facilities are monitored against the Group's forecast requirements and the Group mitigates financial risk by staggering the
maturity of borrowings and by maintaining undrawn committed facilities.
Treasury Policies
The Group operates a conservative set of treasury policies to ensure that no unnecessary risks are taken with the Group's assets. No
investments other than cash are currently permitted. Where appropriate, there may be balances held in Euros and US Dollars, but only
as part of the Group's overall hedging activity.
The Group can be affected by movements in exchange rates due to raw material prices being established in foreign currencies and on
its export sales. The Group is affected by movements between Sterling, Euro and US Dollars but has the ability to hedge any exposure
on its sales by purchasing raw materials in Euros. Thus, it is able to mitigate partly its currency risks.
Cash deposits and financial transactions give rise to credit risk in the event that counterparties fail to perform under the contract. The
Group regularly monitors the credit ratings of its counterparties and controls the amount of credit risk by adhering to limits set by the
board. The Group maintains debtor levels within the insured limits unless it has strong grounds for allowing increases. As a consequence
of these controls, the probability of material loss is considered to be at an acceptable level.
Key Performance lndicators (KPls)
KPls have been set at Group level to allow the Board and shareholders to monitor the Group as a whole, as well as the operating
businesses within the Group. The Group has financial KPls which it monitors on a regular basis at Board level and, where relevant, at
operational executive management meetings as follows:
Group revenue
Gross margin
Operati ng profit/( loss)
Profit/( loss) before tax
Underlying earnings before interest, tax, depreciation and amortisation
Underlying operating profit
Gearing
2fJL9
824.7m
35.9%
80.5m
EO.O4m
e2.5m
87.0m
53.6%
2018
823.4m
34.6%
f(0.2)m
f(0.5)m
f2.1m
fO.9m
55.5%
ln addition, the Board monitors a number of non-financial indicators including customer satisfaction, product quality, employee
attraction and retention, number of reportable accidents and energy footprint.
Page l7
Strategic Report
continued
Risks and Uncertainties
Loss of a key individual.
TheGroup has identified various risks and uncertainties it faces, which include:
. Movements in commodity prices often caused by supply constraints or demand management.
.
. Foreign exchange risk, particularly with regard to the Euro, as many of the Group's materials are purchased in Euros.
. Credit risk in ensuring payments from customers are received in full and on a timely basis.
.
.
Legislative and regulatory risk as new requirements are being imposed on plastics businesses and in industry.
UK Brexit.
The Group has taken appropriate steps to manage and control these risks, which include:
. Ensuringthat current market prices are confirmed with industry price monitors and that purchases are based upon a well-
researched understanding of the various grades and their capabilities for operational uses.
. The Group's future performance depends heavily on its ability to retain and attract the services of suitable personnel. The Group
holds service contracts for its directors and senior management and periodically reviews performance, expectations and
employment conditions.
The implementation of a foreign exchange risk policy.
.
. Agreement of appropriate payment terms with customers including, where necessary, payment in advance.
o Taking a pro-active and leading role in ensuring that the Group's systems and procedures are adapted to ensure compliance
with new or changing legislation or regulatory requirements.
.
Erexit planning across the Group.
The Group regularly reviews its commercial insurance programme and maintains an appropriate and adequate portfolio of
insurance policies in line with the nature, size and complexity of the business.
The Group also continues to have in place a team of Board members whose on-going responsibility is to assess the issues which the
Group would face should it experience a major and unforeseen disaster and to put in place clear actions to continue to operate
successfully in such an event.
Diversity
Appointments within the Group are made on merit according to the balance of skills and experience offered by prospective
candidates. Whilst acknowledging the benefits of diversity, individual appointments are made irrcspcctive of pcrsonol
characteristics such as race, disability, gender, sexual orientation, religion or age.
As a predominantly manufacturing Group, few women apply for positions within the production areas. However, women are well
represented in other areas of the business and account for 20% of the Group workforce as at 30 April 2019.
Position
Group Directors
Senior Managers
Other Employees
Total Employees
Male
Female
Total
4
11
L22
r37
1
4
29
34
5
15
151
t7L
Page l8
Strategic Report
continued
Social, Community and Human Rights
The Group endeavours to impact positively on the cornmunities ¡n which it operates. ln particular the Group purchases raw
materialsfrom trusted suppliers who it recognises asobtaining the products through trusted, fairand sustainable methods.
Ethicalconcerns and human rights issues have always played an important role in the company philosophy and the Group,s ethical
and social accountability statement details the standards of behaviour which are regarded as acceptable, provision of a safe, clean
working environment, free from discrimination, coercion and harassment is a basic right of all employees, which Coral products
expects as a minimum standard of its business partners. The Group is often audited by its customers to assess compliance with
minimum acceptable standards, including ethical and human rights considerations.
UK Referendum on EU Membership
The referendum on the uK's membership of the EU on 23 June 2016 increases economic uncertainty, The Group actively monitors
and considers the economic situation to ensure it is well preparêd for all eventualities once the full effect of the referendum result
is known. The Group is currently reviewing steps to rnit¡gate the movement in exchange rates, as described on page 7.
ln addition, the Group is locking mater¡al supply costs in some cases for up to 6 months in advance to maintain material prices. The
Group is also actively sourcing alternative material from outside the EU and closely monitoring the EU exit negot¡ations and modifying,
where necessary our procurement and operational decisions,
Going concern
As explained fully in note 2 to the financial statements, after making enquiries, the oirectors have formed a judgement, at the
time of approving the financial statements, that there is a reasonable expectation that the Group has adequate resources to
cont¡nue in operational existence for the foreseeable future. For this reason, the directors continue to adopt the going concern
bases in preparing the financial statements,
This strategic report was approved by the board on 21 August 2019.
Sharon Gramauskas
Finance Director
Page l9
Directors and Advisers
N on-executive Di rectors
Joe Grlmmond, Non-Executive Choirmon
loe was appointed in March 2011. He was previously Chief Executive of James Dickie
plc and Chairman of Widney plc. Joe was appointed as non-executive Cha¡rman at
the AGM in 2011 and in December 2019 became Execut¡ve Chairman, ln June 2016 he
became non-execut¡ve Cha¡rman following the appo¡ntment of Roberto Zandona, He
became Executive Chalrman again April 2017 to August 2017 following Roberto
Zandona's retirement as d¡rector. Mr Grimmond is a Fellow of the Assoc¡at¡on of
Accounting Technicians.
David Low, Non-execut¡ve
David was appointed on 4 September 2015. He has over 25 years of experience in
investment management and management consultancy. He was a director of.
Manroy plc until july 2015 when it was sold to FN Herstal SA for €16m.
shareholder in several pr¡vate companies involved in sport and leisure, vending and
l1e is a
telemetry services, brewing and retail estate.
Executive Directors
Michael (M¡ck) Wood, chief Executive officer
Mick was appointed Chief Executive Officer ¡n January 2018. Over a career spanning
39 years he has held senior management roles at a number of plastics businesses,
the most recent be¡ng UK Operations Manager at Linpac Packag¡ng Ltd before
joinlng Coral Products PLC as Chief Operating Officer in August 2017.
Registered Office
North Flor¡da Road Haydock lndustrial Estate Haydock
Merseyside WAl1 gTP
UK Registered Number: 02429784
Auditor
BOO LLP
3 Hardman Street
Sp¡nninBf¡elds
Manchester
M3 3ÂT
Sollcitors
Legal Clar¡ty Lawyers LLP
55 Newhall Street
Birmingham
83 3RB
Bankers
Earclays Eank PLC
1st Floor
3 Hardman Street
Spinningfields
Manchester
M3 3HF
Sharon Gramauskat ACMA, F¡nonce Director and Cotnpony secretory
Registrar
Sharon was appointed in February 20U. She joined Coral Products Mould¡ngs Ltd
Share Registrars Lirn¡ted
as Group Financial Controller in December 2016. She has 19 years of experience.
She previously acted as Financial Controller of James Dewhurst Ltd, prior to this
she held accounting pos¡tions at Pets Cho¡ce Ltd, Thames Water, Scott Health and
Safety Ltd and Uniqema Ltd. Sharon is an Associate of the Chartered lnstitute for
Management Accountants.
The Courtyard
17 West Street
Farnham, Surrey
GU9 7DR
Broker & Nominated Advisor
Cairn Financial Adv¡sors LLP
Paul Freud, corporote Development Dircctor
Paul was appointed in July 2015. He is respons¡ble for directing the business
development activlt¡es and driving new sales growth by seeking market
opportunit¡es or acqulsitions. Paul has over 20 years of management and
leadership experience in the manufactur¡ng industry. He is also the Chairman of
Tatra Rotãlac Limited, responsible for developing new and innovat¡ve product
ranges for blue chip companies, including solutions for fibre optic broadbând
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61 Cheapside
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EC2V 6AX
PR Adviser
Capital M Consultants
1 Royal Exchange Avenue
London
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Page 110
Directors' Report
The Directors present their annual report and the audited financial statements for the year ended 30 April 2019.
Results and Dividends
The results for the year are set out on page 26. This shows a Group profit after taxation of f0.1m (2018: loss €0.4m)
A dividend of 0.25p per share in respect of the year ended 30 April 2018 was paid in December 2018. The amount of this dividend was
f206,537.
An interim dividend of 0.25p (2018: nil) amount¡ng to 8206,537 was paid in March 2019
There is no final dividend (2018: 0.25p) recommended in respect of the year ended 30 April 2019.
A review of the Group's activities for the year and its future prospects is set out in the Chairman's Statement and Strategic Report. The
financial risk management objectives and policies are detailed in note 4 to the financial statements.
Principal Activity
The principal activ¡ty of the Company and its subsidiaries is the manufacture and recycling of plastic injection, extrus¡on and blow
moulded products and the reseller and distributor of a range of food packaging products. The Group also operates as a trade moulder
for other UK Companies, lt has been in operation since 1990, became a fully listed plc in 1995 and moved to the AIM market in 2011.
D¡rectors
The current directors of the Company are given on page 10. During the year, no changes in d¡rectors took place.
ln accordance with the Articles of Association, Joe Grimmond and David Low are the directors retiring by rotation and offering
themselves for re-election at the AGM.
Directors' lnterests in the Shares of the Company
The beneficial interests of the Directors in the shares of the Company were as follows:
Joe Grimmond
Paul Freud
David Low
Mick Wood
Sharon Gramauskas
Ordinary shares
of lp each
30 April2019
Ordinary shares
of lp each
30 April2018
Number
Number
5,323,337
1,948,333
930,000
186,564
t.62,78?
5,273,337
1,948,333
880,000
139,756
I53,774
8,551,017
8,395,200
Between the year-end date and the date of this report Joe Grimmond, David Low and Mick Wood have all purchased additional shares
of 50,000, 50,000 and 37,037 respectively on 21 May 2019.
Page 111
Directors' Report
continued
Substantial lnterests
As at 26 July 2019, the Company had been made aware of the following interests of over 3% (other than the holdings of directors listed
above) in the ordinary shares of the Company:
Bank of New York (Nominees) Ltd
Nortrust Nominees Ltd
Vidacos Nominees Ltd
Rathbone Nominees Ltd
Rene Nominees (lOM) Ltd
Hargreaves Lansdown (Nominees) Ltd
lnteract¡ve lnvestor Services Nominees Ltd
Barclays Direct lnvesting Nom¡nees Ltd
Number of shares % of share capital
L4,O92,222
6,980,000
5,519,587
5,193,135
4,7t6,720
4,056,888
3,594,801
3,366,088
77.06
8.45
6.68
6.29
5.7t
4.97
4.35
4.O7
Share Capital
At the 2018 Annual General Meeting, the Company was granted authority to purchase up to a maximum of 15% of its own shares. The
authority expires at the conclusion of the forthcoming Annual General Meeting at which a special resolution will be proposed to renew
the authority for a further year. Any shares purchased in accordance with this authority will be subsequently cancelled.
The Board of D¡rectors
The Board's role is to provide entrepreneur¡al leadership of the Group within a framework of prudent and effective controls which
enable risk to be assessed and managed. The Board reviews the Group's strategic objectives and looks to ensure that the necessary
resources are in place to achieve these objectives. The Board also sets the Group's values and standards and manages the business in
a manner to meet its obligations to shareholders.
The Board meet regularly through the year, providing effective leadership and overall management of the Group's affairs through the
schedule of matters reserved for its decision. This includes the approval of the Group's forecast and budget, major capital expenditure,
risk management policies and approval of the financial statements. Formal agendas, papers and reports are sent to the Directors in a
timely manner prior to the Board meet¡ng.
The D¡rectors keep their skill set up to date through membership of their respective professional bodies and as a result of interaction
with other bodies with whom they work.
The Board delegates certain of its responsibilities to the Board Committees which have clearly defined terms of reference.
Remuneration Committee
The Remunerat¡on Committee comprises Joe Grimmond (chairman) and David Low. The Committee is responsible for determining the
Group's policy for the remuneration of the executive directors. lt also considers the compensation commitments of ¡ts directors in the
event of early termination of their service contracts.
Audit Committee
The Audit Committee is chaired by David Low. The executive directors may be requested to attend. ln add¡t¡on to an inter¡m meeting,
the Audit Committee meets at the year-end with the external auditors who have d¡rect access to the non-executive directors for
independent decisions. The Audit Comm¡ttee may examine any matters relating to the financial affairs and risk issues affecting the
Group which includes reviewing the accounts, announcements, internal controls, accounting policies, and appointment of the external
auditor.
Page 112
Directors' Report
cont¡nued
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with
applicable law and regulations.
statementsforeachfinancialyear. Underthatlawthedirectorshaveelected
Companylawrequiresthedirectorstopreparefinancial
to prepare the Group and Parent Company financial statements in accordance w¡th lnternational Financial Reporting Standards (lFRSs)
as adopted by the European Union. 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 Group and the Company and of the profit or loss of the Group
for that period. The directors are also required to prepare financial statements in accordance with the rules of the London Stock
Exchange for companies trading securit¡es on the Alternative lnvestment Market.
ln preparing these financial statements, the directors are required to
o
a
a
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether they have been prepared in accordance with IFRSs as adopted by the European Union, 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 Group will cont¡nue
in business.
The directors are responsible for keeping adequate account¡ng records that are sufficient to show and explain the Company's
transact¡ons and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that
its 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 detect¡on of fraud and other irregularities.
Website publication
The directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial
statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparat¡on
and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of
the Company's website is the responsibility of the directors. The directors' responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Environment and Sustainability
The key risk facing the Group in this area relates to reducing the environmental impact of the business with a focus on reducing waste
and energy usage. A number of operational changes have been implemented to reduce our environmental impact.
Product Safety
The quality and safety of the products is of the highest importa nce and any failure in sta nda rds would significantly affect the confidence
of our customers. There are str¡ngent controls in place to ensure product safety and ¡ntegr¡ty. Product performance is monitored
regularly to ensure compliance with standards.
lnsurance
The Group has in place a D¡rectors and Officers liability insurance policy that provides appropriate cover in respect of legal action
brought against its directors.
Page 113
Directors' Report
continued
Creditor Payment Policy
The policy of the Group is to agree the terms of payment with suppliers when agreeing the conditions of supply of goods and services.
Suppliers are made aware of the terms of payment and payments are made in accordance with terms agreed between the two parties.
The number of days purchases in trade creditors at the year-end amounted to 44 days (2018: 48 days).
Shareholder Relat¡ons
The importance of maintaining good relations with individual and institutional investors is recognised by the Board. This includes
meetings on a regular basis between the execut¡ve directors and institut¡onal and private investors at relevant times. The Company
encourages shareholder attendance at the Annual General Meeting, at which the Chairman and Board of Directors are available to
answer any questions on the previous year's results and on current year trading.
Health and Safety
Coral Products PLC recognises and accepts its responsibilities to carry out its business in a safe manner. lt is comm¡tted to the safety
of its employees and other people who may be affected by its activities.
It is therefore the Group's policy to do all that is reasonably practicable to protect its employees and others from injury, prevent
damage to the Group facilit¡es and other facilities in which it works.
The Group will:
o As a minimum comply with the requirements of all current relevant legislation, approved codes of pract¡ce and good working
practices;
¡ Provide and maintain as far as is reasonably practicable, safe plant, equ¡pment and systems of work;
. Maintain good general working conditions by the provision of adequate facilities such as heating, lighting and ventilation;
¡ Provide personal protective equipment where appropriate;
¡ Maintain a continuing interest in health, safety and welfare as they affect the Group's act¡vities, and in particular inform, consult
and involve employees wherever possible;
o Provide such information, instruction, tra¡n¡ng and supervision that ¡s necessary to ensure so far as is reasonably practicable, the
health and safety of our employees and others who may be affected by the work we do;
¡ Take measures to protect all persons, whether employees or not, from risks to their health and safety.
Notw¡thstanding the above, every employee must consider the prevention of accidents as a prime personal responsibility
Corporate Social Responsibility and Governance
The Group is committed to responsible business practices, good corporate governance and sound risk management. The Board
promotes the Group's corporate culture and receives feedback from employees on regular visits to operating sites and interact¡on
with local staff during this time.
Our Corporate Social Responsibility Committee demonstrates our commitment to our local and wider commun¡ty. As well as working
alongside local authorities to provide local jobs for local people, we strive to actively support those in our commun¡ty through
sponsorship events and volunteering opportunities.
Our Safety-F¡rst Core Value and Employee Assistance Programmes ensure the wellbeing of our employees and creates a safe and
comfortable work place environment.
We actively consider CSR when selecting suppliers by ensuring that all companies in our supply chain work towards the same ethical
trading standards that we demonstrate.
We are committed to Environment programs and energy reductions for a sustainable future,
Page 114
Directors' Report
cont¡nued
Employment and Human Rights
The Group is committed to providing and promoting equal opportunities for staff and job applicants. We are comm¡tted to creating a
working environment which enables everyone to work to the best of their skills and abilities and without the threat of discrimination
or harassment arising. As a Group we pride ourselves on treating all members of staff equally, ¡rrespective of thelr or their ',Associated
Persons" gender, sex, pregnancy or maternity status, marital status, race, colour, religion or belief, disability, age, sexual orientation,
gender reassignment ("Protected Characteristics"). An Associated Person may be a member of staff,s family, friends or other
dependants.
All employees are required to comply with their obligations to promote a working env¡ronment free from discrimination. Employees
are expected to treat their colleagues, customers and members of the public as they would expect to be treated and respect the
Protected Characteristics of others.
Anti-Slavery and Human Trafficking
Coral Products PLC has a zero-tolerance approach to modern slavery and are committed to act¡ng ethically and with integrity in all our
business dealings and relationships and to implementing and enforcing effective systems and controls to ensúre modern slavery is not
taking place anywhere in our own business or in any of our supply chains.
The Group is also commltted to ensuring there is transparency in our own business and in our approach to tackling modern slavery
throughout our supply chains, consistent with our disclosure obligations under the Modern Slavery Act 2015. We expect the same high
standards from all of our contractors, suppliers and other business partners, and as part of our contracting processes, we include
specific prohibitions against the use of forced, compulsory or trafficked labour, or anyone held in slavery or servitude, whether adults
or chlldren, and we expect that our suppllers will hold their own suppliers to the same high standards.
Auditor
ln accordance wlth Section 489 of the Companies Act 2006 a resolution will be proposed at the Annual General Meet¡ng that BDo LLp
be re-appointed as auditor.
Disclosure of lnformation to Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
'
'
so far as the director is aware, there is no relevant information of which the Group's auditor is unaware;
the director has taken all steps that he or she ought to have taken as a director in order to make himself or herself aware of
any relevant audit information and to establish that the Group's auditor is aware of that information.
This confirmat¡on is g¡ven and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.
Post Balance Sheet Events
The land and buildings at Haydock were refinanced in May 2019 raising f500,000, this was used to clear a ternporary overdraft balance
in Coral Products (Mouldings) Ltd.
Page 115
Directors' Report
continued
Corporate Governance Code
Hlgh standards of corporate governance are a key priorlty for the Board and provide the framework on which it seeks to deliver long
term improvement in shareholder value, The responsibility for corporate governance rests w¡th the Board as a whole and policies are
regularly reviewed and adapted as necessary to changing circumstances and feedback from both internal and external sources.
The Group has adopted the QCA Code in compliance w¡th AIM Rule 26 which requires AIM companies to report on corporate
governance from 28 September 2018. The Group is small and has limited resources and therefore has formulated a corporate
governance policy around the principles contained ¡n the QCA (Quoted Companies Alliance) corporate governance code which is
appropriate for smaller companies,
The QCA code was revised at the end of April 2018 and the Board has set out on the Group's website (www,coralproducts.com) and
ln this report how it addresses the ten principles ofthe new code.
Research and Development
During the year, the Group has spent Ê729,000 (2018: f307,000) on research and development
AnnualGeneral Meeting
The AGM will be held on Wednesday 25 September 2AI9 in Leverhulme Room One at Haydock Race Track, Newton-le-Willows,
Merseyside, WA12 OHQ. The Notice of Meeting is contained on pages 60 to 62 of this report. At the meeting, resolutions will be
prepared to receive the audited accounts and approve the Remuneratlon Report, to elect directors and to re-appoint 8DO LLp as
auditor. ln add¡tlon, shareholders wlll be asked to renew both the general authority of the directors to issue shares and to author¡se
the directors to ¡ssue shares without applying the statutory pre-emption rights. The directors have no present intention of exercising
the authority if granted, but consider it will be comrnercially useful to have the author¡ty should they need to allot shares for any
he future
By order of the Board
S Gramauskas
Company Secretary
21 August 2019
Page 116
Directors' Remuneration Report
lntroduction
Although not required to do so by the AIM rules, the directors have decided to provide certain directors' remuneration disclosures. A
resolution to approve the report will be proposed at the Annual General Meeting. The auditor reports to the shareholders on the
"auditable part" of the Directors' remuneration report and to state whether in their opin¡on that part of the report has been properly
prepared in accordance with Section 420 of the Companies Act 2006. The report has therefore been divided into separate sections for
aud¡ted and unaudited information.
Unoudited inÍormotion
Remuneration Committee
The Group has established a Remuneration Comm¡ttee which is constituted in accordance with the recommendations of the Combined
Code. The remunerat¡on comm¡ttee now comprises Joe Grimmond (Chairman) and David Low.
The performance measurement of the executive directors and the determination of their annual remuneration package are
undertaken by the Committee. The remunerat¡on of the non-executive directors is determined by the Board. No director plays a part
in any discussions about his own remunerat¡on.
Remuneration Policy
Executive remuneration packages are designed to attract, motivate and retain directors of the h¡gh calibre needed to progress and
develop the Company and to reward them for enhancing value to shareholders. There are three ma¡n elements of the remuneration
package for executive directors:
o Basic annual salary and benefits
o Pensioncontributions
.
Share opt¡ons
Basic Salary
An executive director's basic salary is determined by the Remuneration Committee prior to the beginning of each year and when an
individual changes pos¡t¡on or responsibility. ln deciding appropriate levels, the Committee considers the Group as a whole and by
reference to other compan¡es ¡n the media and manufacturing sectors,
The Group has a policy of allowing contracts of service to be no more than one year in duration. Execut¡ve directors' contracts of
service which include details of remuneration will be available for inspection at the Annual General Meeting. ln addition to basic salary,
the executive directors receive pension contributions and certain benef¡ts-¡n-kind, principally medical insurance.
Pension Contributions
The executive directors have individual pension arrangements in the form of personal pension plans. The Group makes a contribution
at a rate oÍ L2% of basic salary towards funding each director/s pension plan.
Performance Bonus
There is a performance bonus in place. Additionally, the remunerat¡on committee is empowered to make awards for special
circumstances if appropriate.
Share Options
No share options were exercised during the year (2018: Nil).
Page 117
Directors' Remuneration Report
continued
Performance Graph
The graph below shows the Group's share price movement over the last f¡ve years.
24.5
20.06
15.ô2
1f.18
4.74
2.3
Jul '15
Jul'16
Jul'17
Jul '18
Jul'10
Directors' Contracts
The Company's policy is that executive directors should have contracts with an indefinite term providing for a maximum of six months'
notice. The details of the executive directors' contracts are summarised as follows:
Paul Freud
MickWood
Sharon Gramauskas
Date of,contract Notlce perlod
July 2015
January 2018
February 2017
3 months
6 months
6 months
Non-Executive Directors
The service contracts of non-executive directors were originally set for an initial period of three years. They are now required to submit
themselves for re-election every year and the Board believes this to be appropriate in the circumstances. The non-execut¡ve directors
have specific terms of engagement and their remuneration is determined by the Board based on a review of fees paid to non-executive
directors of similar companies and reflects the time commitment and responsibilities of each role. The current basic annual fee payable
to the senior non-executive director is f50,000.
The Board met ll times during this financial period with 100% attendance from all Directors.
Page 118
Directors' Remuneration Report
contlnued
Audlted lntormation
Dlrectors' Remuneratlon
The total amounts pald for Dlrectord remuneratlon was as follows:
Emoluments
Penslon contrlbutlons - deflned contrlbutlon scheme
Share based payment
Emoluments - Executive Dlrectors
2019
2019
Sasic salary
Benef¡ts-ln-klnd
f,000
Paul Freud
Sharon Gramauskas
Joe Grimmond*
M¡ck Woodrt
€'000
100
65
tt4
279
I Emoluments whllst acting as executive Çhalr.man,
t* Dlrecto¡/s salary for 2018 is for 10 months only.
Emoluments - Non-execut¡ve Directors
Davld low
Joe Grlmmond
By
Joe
Chairman of the Remuneraflon Commlttee
21 August 2019
a019
Execüt¡ve
t'(xlo
20t9
Non-
executlve
l'000
292
t7
61
370
78
78
2019
Pensíon
f,,'o(þ
20r9
Share based
payment
¿'000
I
t2
13
6
!1
t7
12
49
6t
Page 119
2019
'Total
c'ooo
370
17
61
448
20t9
Totôf
f'000
100
a+
186
370
20t8
Total
f'000
363
t2
4L
4t6
20t8
Total
dfoot
t02
7i
50
115
338
20r9
f'(Xl0
28
50
78
2018
f'(mo
28
50
78
Audit Committee Report
ourlng the year the Audit commlttee met 2 tlmes and there were also meetlngs between the Audlt commlttee chalr, the Group Flnance
Dlrector and the external audltor.
The Audit committee discussed the scope and key audit matters before the commencement of the current audit.
Flnancial Reporting
The commlttee has revlewed with both management and the external audltor the more signlflcant areas of Judgement and the
approprlateness and appllcatlon of the Group's accountlng pollcles. ln partlcular, emphasls was placed on the two new accoun¡ng standards
of IFRS 15 (Revenue from contracts wlth customers) and IFRS 9 (Flnanclal lnstrumentsl adopted for the fìrst time durlng the year.
The adoptlon of lFRs 15 has changed the revenue recogn¡tlon pollcles applied by the Group and the commlttee has revlewed the
approprlateness ofthose updated pollcies wlth both management and the external audltor. As detailed ¡n note 2, the adoptlon of IFRS 15 has
not had a material impact on the recognltlon of revenue.
The adoptlon of IFRS t has resulted ln the Group applylng the slmplifled method of expected cred¡t loss model when calculating lmpalrment
losses on lts flnanclal essets measured at amonlsed cost. As detalled ln note 2, the Gfoup has chosen not to restate compâraüves as there has
been no materlal impact as the provlslon calculated under the expected loss model ls not signlflcantly dlfferent.
The commlttee ls also reviewing progress to the adoptlon of lFRs 16 ¡n the next financlal year which wlll require all leases to be recognlsed on
the Group's balance sheet.
The commlttee reports to the Board on whether the accounts are a comprehensive review of the current year,s activlty.
Rlsk management and ¡nternal control
The Audlt commlttee has overall responslbillty for the monltorlng of lnternal controls, approvlng accountlng pollcles and agreelng the
treatment of slgníflcant accountlng lssues.
The consideration and documentatlon of risks and opportunltles ls undertâken on an annuar basls as part of the budgetlng process whlch the
full Board take part in' These måtters are then rnonltored and adapted as requlred throughout the year by the means of regular management
meetln8s and scheduled conference calls between the Executlve D¡rectors and the dlvlslonal management tearns. The annual insurançe
renewâl provldes a further opportunlty to assess rlsks and provlde cover ln areas where rrsk mlilgatlon ls not possible, or levels of rlsk are
slgnlflcant.
The Board reviews monthly flnanclal perforrnance agalnst budgets and forecasts and monltors bank facilities and other treasury funct¡ons wlth
any policy changes approved by the Board.
The Audit commlttee recelves feedback from the external auditors on areas of risk and accounting proceriures which are used ln adaptlng
internal control processes as requhed.
The commlttee reviews any proposed due dlllgence of acquisltlon targets and the selection of the professlonal ftrm carrv¡ng out the work.
Audlt lndependence
The comm¡ttee ls responsible for maklng recommendatlons to the Board on the appointment of the externalaudltor and for non.audlt servlces
such as taxation and acquisltion due dlllgence.
The chair of the cotnm¡ttee met with the external audit partner to dlscuss lndependence before the commencement of the current yea/s
audlt.
The Audlt commlttee Report has been approved by the Board and signed on lts behalf by:
David low
Chalrman of the Audlt Cornm¡ttee
21 August 2019
(
Page 120
lndependent Auditor's Report to the Members of
Coral Products plc
Opinion
We have aud¡ted the financial statements of Coral Products plc (the 'parent company') and its subsidiaries (the 'group') for the year
ended 30 April 2019 which comprise the group income statement, the group statement of comprehensive income, the group and
parent company balance sheets, the group and parent company statements of changes in shareholders' equity, the group and parent
company cash flow statements and notes to the financial statements, including a summary of significant accounting policies.
The financial report¡ng framework that has been applied in the preparation of the financial statements is applicable law and
lnternational Financial Report¡ng Standards (lFRSs) as adopted by the European Union and, as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act 2006.
ln our opinion:
the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 30 April
2019 and of the group's profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European
Union and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for op¡n¡on
We conducted our audit in accordance with lnternational Standards on Auditing (UK) (lSAs (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 group and the parent 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 as applied to listed entities, 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 relat¡ng to going concern
We have nothing to report ¡n respect of the following matters in relation to which the lSAs (UK) require us to report to you where:
the directors' use of the go¡ng concern basis of accounting in the preparat¡on of the f¡nancial statements ¡s not appropr¡ate;
or
the directors have not disclosed in the financial statements any identified material uncertalnties that may cast significant
doubt about the group's or the parent company's ability to cont¡nue 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.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect on: the overall aud¡t strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opin¡on on these matters.
Page 121
lndependent Auditor's Report to the Members of
Coral Products plc
Continued
lmpairment of Goodwill and lntangible Assets
As described in Note 2 (Accounting policies), Note 14
(Goodwill) and Note 15 (Other intangible assets), the group
has goodwill and intangible assets, which requires
management to test these balances for impairment at least
annually.
There is a high degree of management judgement and
assumpt¡ons required in assessing the value in use of the Cash
Generating Units ("CGU") to which the Goodwill and
lntangible assets are allocated and therefore determining any
potential impairments.
How we Addressed the Key Aud¡t Matter in the Audit
We obtained the impairment analys¡s performed by management for
each CGU.
We tested management's impairment analysis for each CGU for logical
and arithmetic accuracy and to check that it has been undertaken in
accordance with the requirements of the accounting standards.
We performed procedures to obtain an understanding of the underlying
assumptions made by management. The key assumptions included:
o future trading projections and cash flow forecasts;
o the discount rate applied; and
.
the long-term growth rate.
The reasonableness of these key assumptions was tested through
reviewing the group's detailed calculations and challenging the
methodology applied in preparing the trading and cash flow forecasts.
This was done by engaging BDO specialists to ass¡st us in assessing the
rcasonablcncss of the underlying assumptions and this enabled us to
check that the directors had adopted reasonabie assumptions in each
c¡rcumstance.
We also reviewed the sensitivity analyses prepared by management to
understand the relative impact of changes in the key assumptions within
the impairment models, as wellas to check that management's disclosure
of sensitivities (included in Note 14) in respect of the impairment review
are complete and balanced.
Based on the work performed we concur with management's view that
there is no requirement for goodwill and intangible assets to be impaired.
lnventory Valuation and Existence
How We Addressed the Key Aud¡t Matter in the Audit
As described in Note 2 (Accounting policies) and Note 17
(lnventories), the group carries inventory at the lower of cost
and net realisable value. As at 30 April 2019, the group held
inventories of f3.5m (2018: f2.9m).
Judgement is required to assess the appropriate level of
provisioning for ¡tems which may be sold at a value below
cost as a result of a reduction in consumer demand, age of
items held in stock, and/or new products being developed
that render inventory items obsolete,
Such judgements include management's expectations for
future sales.
A significant risk has been raised in relation to inventory
valuation and existence for items held within the subsidiary
undertaking Coral Products (Mouldings) Limited and Tatra
Rotalac Lim¡tecj, given inventory count variances and
significant inventory write-downs in previous years.
We obta¡ned evidence over management's judgements applied in
calculating the value of inventory provisions by:
a
a
a
considering the carrying amount of a sample of inventory to
confirm it is held at the lower of cost and net real¡sable value.
lnventory cost was tested by verifying relevant supplier
invoices and ensuring overheads incurred in bringing ¡nventory
to its present location and condit¡on have been appropriately
recorded. lnventory cost (plus any costs to complete) was
compared to net realisable value by examination of post year-
end invoices a nd sales prices for the sample of inventory tested;
assessing the group's ¡nventory provis¡oning policy by
reviewing usage of raw materials and sales of finished goods,
with specific consideration g¡ven to slow moving or obsolete
stock lines; and
we also reviewed the basis of stock provisioning applied by all
group ent¡t¡es and considered whether these were being
applied consistently and reflected the nature of the stock held
in each location.
We obtained evidence over existence of inventory through attendance at
year end counts, sales and purchases cut off testing and verification of a
sample of inventory items to relevant supplier invoice.
Based on the work performed we did not identify any issues over the
reasonableness of inventory valuation and existence.
Page 122
lndependent Auditor's Report to the Members of
Coral Products plc
Continued
Our application of materiality
We consider materiality to be the magnitude by which misstatements, individually or in the aggregate, could reasonably be expected
to influence the economic decisions of the users of the financial statements. We use materiality both in planning the scope of our audit
work and in evaluating the results of our work. Misstatements below these levels will not necessarily be evaluated as immaterial as
we also take ¡nto account the nature of identified mlsstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined mater¡ality for the financial statements as a whole as follows:
Basis for
Rationale for the benchmark adopted
O.SYo of revenue (2018l.0.60/o o1 revenue).
Revenue is determined to be a stable basis of assessing business performance and is
considered to be the most significant determinant of performance used by
shareholders.
ln considering individual account balances and classes of transactions we apply a lower level of mater¡ality (performance mater¡al¡ty)
in order to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality. Performance materiality was set at €86,000
(2018: É91,000), representing 70% of materiality.
We agreed with the audit committee that we would report to the committee all individual audit differences identified during the
course of our audit in excess of f6,150 (2018: f6,550). We also agreed to report differences below these thresholds that, in our view,
warranted reporting on qualitative grounds.
Our audit work on each component was executed at levels of materiality applicable to each individual entity which was lower than
group materiality. Component material¡ty ranged from E27,0OOto €100,000
(2018: f25,000 to f 100,000). Parent company mater¡ality
was €98,000 based on 80% of Group materiality (2018: f 100,000 based on 8Oo/o of Group materiality).
An overview of the scope of our aud¡t
Our group audit was scoped by obtaining an understanding of the group and its env¡ronment, including group-wide controls, and
assessing the risks of material misstatement at the group level.
The group has five components and manages its operations from three principal locations in the UK. Our group audit scope focused
on the parent company and each of the group's subsidiaries, and each entity was subject to a full scope audit. All audit work was
performed by the group audit team.
As a consequence of the audit scope determined, we achieved coverage of 100% (2018: 100%) of revenue, 100% (2018: L}O%l of profit
before tax and tOO% (20t8: tÙO%l of net assets.
Page 123
lndependent Auditor's Report to the Members of
Coral Products plc
Continued
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report
and accounts 2019, other than the fina ncia I statements a nd 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.
ln connection with our audit of the financial statements, our responsibility ¡s 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 ¡n the audit or
otherwise appears to be mater¡ally misstated. lf we identify such material incons¡stencies 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. lf, based on the work we have performed, we conclude that there is a mater¡al m¡sstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescr¡bed by the Companies Act 2006
ln ouropinion, based on the work undertaken in the coursc ofthe audit:
the information given in the 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 strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on wh¡ch we are requ¡red to report by exception
ln the light ofthe knowledge and understanding ofthe group and the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements ¡n the strategic report or the directors' report.
We have nothing to report in respect of the following matters ¡n relation to which the Companies Act 2006 requires us to report to
you il in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' report, the directors are responsible for the preparat¡on of the f¡nancial statements and for
being satisfied that they g¡ve 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.
ln preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to
cont¡nue 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.
Page 124
lndependent Auditor's Report to the Members of
Coral Products plc
Continued
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obta¡n reasonable assurance about whether the financial statements as a whole are free from material
m¡sstatement, 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 lSAs (UK) will always detect a material
m¡sstatement 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 responsibil¡ties for the audit of the financial statements is located on the Financial Reporting Council's
website at: www.frc.ore.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent company's members, as a body, in accordance w¡th Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the parent 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 parent company and the parent company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
ßoo
L-L r
Gary Harding (Sen¡or Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Manchester
United Kingdom
21 August 2019
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)
Page 125
Group lncome Statement
for the year ended 30 April 2079
Revenue
Cost of sales
Gross profit
Operat¡ng costs
Distribution expenses
Administrative expenses before impairment and separately disclosed items
lmpairment losses (separately disclosed)
Separately disclosed items
Administrative expenses
Operating profit/(lossl
Finance costs
Profit/(lossl for the financial year before taxat¡on
Taxation
Profít/(loss) for the financial year attributable to the equity holders of the parent
Earnlngs per share attr¡butable to the equlty holders of the parent
Basic and diluted earnings/(loss) per ordinary share
Group Statement of Comprehensive lncome
for the yeor ended 30 April 2019
Note
2019
f'000
2018
f'000
5
6
6
7
8
10
11
24,7t3
(15,861)
8,872
23,405
(15,302)
8,103
lt,246l
(6,6081
(s3el
l7,t47l
479
(4381
4t
43
84
lt,256l
(5,968)
(186)
(87s)
(7,033)
(186)
(311)
(4e71
t27
(370)
0.10p (O.as)p
Profit/(loss) for the financial year
Total other comprehensive income
Total comprehensive income/(loss) for the year attr¡butable to equity holders of the parent
The accompanying accounting polícies and notes form an integral part ofthese financial statements.
2019
€'000
84
84
2018
Ê'000
(370)
(370)
Page 126
Balance Sheets
os ot 30 Aprll 2079
Company reference: 02429784
ASSElS
Non-current assets
Goodwill
Other lnteng¡ble assets
Property, plant and equlpment
lnvestments in subsldlaries
l0tal non-current assets
Current assets
lnventories
Trade and other receivables
Cash and cash equivalents
Total current assets
tn8ttmEs
Current llabilities
Term loan
-ther bonowlngs
Trade and other payables
Total current liabllltles
Net current assets/(llabllltles)
Non-currcnt llabllíties
Term loan
Other bonowlngs
Deferred tax
Total non.current liabllltles
NET ASSETS
SHAREHOTDERS'EqU¡TY
Share capital
Share premium
Other reserves
Retained earnlngs
TQTAI SHAREHOIDERS' EQUITY
Note
14
15
16
13
t7
18
20
20
19
20
20
10
22
Group
As at 30 Aprll As at 30 Aprtl
2018
g,000
2019
f,000
Parent Company
As at 30 Aprll As at 30 Aprll
2078
g'000
2019
G'(XIO
5,495
1,40r
9Att
5,495
1,690
9,299
t6,?o7
16,494
2,519
t0,9?7
13/456
2,509
10,866
13,374
3,505
5,521
9,026
150
4,800
3,834
8,7U
2,864
5,452
471
9,787
1,604
4335
3,909
9,848
242
(x,0611
1,303
1,965
368
3,636
t2,9t3
826
t288
t,567
5,232
12,9t3
1,843
409
2,252
13,171
826
5,288
7,567
s¡90
t3,L7L
¿t83
27
510
1s0
59
209
301
1,303
1,303
t2454
826
t288
L,567
4ins
12As4
1,031
1,031
,l¡
1,604
5
1,609
{s781
t2,796
826
5,288
L,567
5,115
12,796
An income statement ls not provided for the parent company as permitted by section 408 of the companies Act 2006. The loss deaft
wlth ln the fìnancial statements of coral products plc was €nil
(201g: f0.1.m).
The financlal statements on pages 26 to 58 were approved by the Board of Dlrectors on 21 August 2019 and were slgned on lts behalf
by:
Joe
Sharon Gramauskas
Dlrectors
The accompanying accounting policles and notes form an integral part of these financial statements.
Pasë 127
Statement of Changes in Shareholders' Equity
for the yeor ended 30 April 2019
Called Up
Share
Capital
€'000
Share
Premium
Other
Reserve
Resefves
€'000
€'000
Note
Retained
Earnlngs
f,000
Total
Equity
€'000
Group
At 1 May 2017
Loss for the year
Other comprehensive income
Total comprehensive income
Contributions by and distributions to
owners
Credit to equity for equity settled
share-based payments
Dividend paid
At l May 2018
Profit for the year
Total comprehensive loss
Contributlons by and dlstrlbutions to
owners
Credit to equity for equity settled share-
based payments
Divldend paid
At 30 April2019
2T
72
21
t2
826
5,288
t,567
826
5,288
L,567
6,116
(370)
13,797
(370)
(370)
(370)
50
50
(306)
5,490
(306)
13,l7t
84
84
7l
84
84
7I
826
5,288
1,567
(413)
5,232
(413)
!2,913
Called Up
Share
Capital
€'000
Share
Premlum
Reserve
Ê'000
Note
Other
Retalned
Reserves
Earnings
f '000
€'000
826
5,288
t,567
5,486
(11s)
{1ls)
Total
Equlty
€'000
t3,167
(1ls)
(1ls)
2L
L2
2L
T2
826
5,288
t,567
(306)
5,115
(306)
L2,796
50
50
826
5,288
1,567 4,773
7L
(413)
7t
(413)
12,454
Parent Company
At 1 May 2017
Loss for the year
Other comprehensive income
Total comprehensive income
Contributions by and distrlbutlons to
owners
Cred¡t to equity for equity settled
share-based payments
Dividend paid
At 1 May 2018
Loss for the year
Total comprehensive loss
Contributions by and dlstrlbutions to
owners
Credit to equity for equity settled share-
based payments
Dividend paid
At 30 Aprll2019
The accompanying accountlng pollcles and notes form an integral part of these financial statements.
l,age 128
Cash Flow Statements
for the year ended 30 April 2019
Cash flows from operating activities
Profit/(loss) for the year
Adjustments for:
Deprec¡ation of property, plant and equipment
(Profit)/loss on disposal of tangible assets
Amortisat¡on of intangible assets
Share based payment charge
lnterest payable
Taxation credit
Operating cash flows before movements in working
capital
(lncrease)/decrease in inventor¡es
(lncreasel/decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Cash generated by operations
UK corporation tax paid
Net cash generated from operat¡ng activities
Cash flows from investing activities
Proceed from disposal of property, plant and
equipment
Acquis¡tion of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
New bank loans raised
Dividends paid
New finance leases
lnterest paid on borrowings
Repayments of bank borrowings
Repayments of obligations under finance lease
Movements on invoice discounting facility
Net cash used in financing activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at 1 May
Cash and cash equivalents at 30 April
Group
2019
f'000
2018
€'000
Parent Company
2019
€'000
2018
f'000
84
(370)
(114)
Note
L6
15
2t
8
10
rA6L
(23)
289
7t
438
(43)
2,277
(641)
(6e)
(7s)
L,492
2
t,494
r,2t2
L7
348
50
311
lL27l
T,44L
18
77
{s4s)
987
46
1,033
33
(6eo)
(6s71
(s)
(eo7)
(e12)
63
63
549
53
66s
66s
(11)
(11)
(413)
(631
(1s1)
57
(s7)
375
(e7l
22L
22r
L,743
(306)
(s7)
(1,601)
t,743
(306)
500
(311)
(1,601)
(8es)
L2
20
(413)
3s0
(438)
(rs1)
(801)
118
(1,335)
551
(323)
(627!'
(2271
(4e8)
(2021
47r
l27l
673
47L
27
27
The accompanying accounting policies and notes form an integral part of these financial statements.
Page 129
Notes to the Financial Statements
for the yeor ended 30 April 2079
1. GENERAL INFORMATION
Coral Products plc is a public limited Company ('Company') incorporated in the United Kingdom under the Companies Act 2006.
The Company's ordinary shares are traded on the AIM (Alternative lnvestment Market) market. The consolidated financial
statements of the Group as at and for the year ended 30 April 2019 compr¡se the Company and its subsidiaries (together
referred to as the 'Group'). The address of the registered office is given on page 10. An overview of the business is g¡ven on
pages 1 to 2. The nature of the Group's activ¡ties, together w¡th the factors likely to affect its future development, performance
and position are set out in the Chairma n's Statement on pages 3 to 5, The financial position of the G roup, its cash f lows, liquidity
position and borrowing facilities are described in the Strategic Report on pages 6 to 9.
2. SIGNIFICANTACCOUNTING POLICIES
A summary of the Group's principal accounting policies is set out below. These policies have been applied consistently to all
the years presented.
Basis of Preparation
These financial statements have been prepared in accordance with lnternational Financial Reporting Standards (IFRS) as
adopted for use in the European Union and with those parts of the Companies Act 2006 applicable to companies reporting
under IFRS. The financial statements have been prepared under the h¡storical cost convent¡on.
The consolidated and parent Company financial statements are presented in GBP which is also the Group's functional currency
Amounts are rounded to the nearest thousand, unless otherwise stated.
New Standards, Amendments and lnterpretat¡ons
The Group has adopted the following standards and interpretations which have been issued by the lnternational Accounting
Standards Board in these financial statements for the year ended 30 April 2019:
o IFRS 9 - Financial lnstruments (effective for accounting periods on or after l January 2018); and
¡
IFRS 15 - Revenue from Contracts with Customers (effective for periods on or after 1 January 2018).
,FRS 9 - Fínøncíol lnstruments
IFRS 9 'Financial instruments' replaces IAS 39 'Financial ¡nstruments: Recognition and Measurement' w¡th the exception of
macro hedge accounting. The standard is effective for accounting periods beginning on or after 1 January 2018. The standard
covers three elements:
c Classification and measurement: Changes to a more principle-based approach to classify financial assets as
either held at amortised cost, fair value through other comprehensive income (FVOCI) or fair value through
profit or loss, dependent on the business model and cash flow characterist¡cs of the financial asseu and
r
lmpairment: Moves to an impairment model based on expected credit losses based on a three-stage
approach; and
r Hedge account¡ng: The IFRS t hedge account¡ng requ¡rements are designed to allow hedge accounting to be
more closely aligned with the group's underlying risk management. A new lnternational Accounting
Standards Board (IASB) project ¡s in progress to develop an approach to better reflect dynamic risk
management in entit¡es' financial statements.
Page 130
Notes to the Financial Statements
for the yeor ended 30 April 2079
New Standards, Amendments and lnterpretat¡ons (continued)
The group have applied IFRS 9 for the first t¡me in the current year, in replacement of IAS 39. For trade receivables, the group
applied the simplified method of the expected credit loss model when calculating impairment losses on its financial assets
measured at amortised cost. This resulted in greater judgement due to the need to factor in forward-looking information when
est¡mat¡ng the appropriate amount of provisions.
ln applying IFRS 9 the group considered the probability of a default occurring over the contractual life of its trade receivables
balances on initial recognition of those assets. Underthe previous incurred loss model, the historical loss rate has typically been
between t% and 2% of lhe gross carrying amount of receivables over the last 2 years, and at 30 April 2018 this provision
amounted to f186,000.
The group has chosen not to restate comparatives on adoption of IFRS 9 as there has been no material impact and the provision
calculated under the expected loss model is not significantly different. Due to this, there has been no adjustment recorded in
respect of the IFRS 9 transition in opening equity at l May 2018. The key assumptions, inputs and est¡mation techniques for
this calculation are set out on page 38.
The classification of certain financial instruments was affected on initial application of IFRS 9, Financial assets previously
categorised as Loans and receivables under IAS 39 are now classified as Amortised cost, however the measurement remains
cons¡stent subject to the application of the expected credit loss model outlined above.
Financial liabilit¡es continue to be recognised and measured under the Amortised cost category.
IFRS 75 Revenue from controcts wíth customerc
IFRS 15, 'Revenues from Contracts with Customers' is effective for periods beginning on or after 1 January 2018. IFRS 15
introduces a five-step approach to the timing of revenue recognition based on performance obligations in customer contracts.
The group has adopted IFRS 15 - Revenue from Contracts with Customers for the financial year start¡ng 1 May 2018, applying
the fully retrospective method of transition.
With the except¡on of the additional disclosure requirements, the new standard has not had a material ¡mpact on the Group's
Financial Statements. Further details on the revenue recognition account¡ng policy are given on page 34.
Other new and amended standards and interpretations ¡ssued by the IASB that apply for the first time ¡n the annual financial
statements have not impacted the Group as they are not relevant to the Group's activities or require accounting which is
consistent with the Group's current accounting policies,
New Standards, Amendments and lnterpretat¡ons Not Yet Effective
At the date of authorisation of these financial statements, the following Standards and lnterpretations which have not been
applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the
EU):
IFRS 9 (amendments) prepayment features with negat¡ve compensation (effective l January 2019);
¡
o Amendments to references to the Conceptual Framework in IFRS (effective l January 2020);
o IFRS 3 (amendments) business combinations - definition of a business (effective l January 2020);
¡
IAS 1 and IAS 8 (amendments) - definition of material (effective l January 2020);
¡ Annual lmprovements to IFRSS 2OIS-2017 Cycle (effective from l January 2019); and
o IFRIC 23 (amendments) Uncertainty over lncome Tax Treatment (effective from l January 2019).
Page 131
Notes to the Financial Statements
for the yeor ended 30 April 2019
New Standards, Amendments and lnterpretations Not Yet Effective (continued)
IFRS 76 Leøses (effectÍve lrom 7 tonuøry 2079, EU-endorsed)
Adoption of IFRS 16 will result in the group recognising right-of-use assets and lease liabilities for all contracts that are, or
contain, a lease. For leases currently classified as operat¡ng leases, under current accounting requirements the group does not
recognise related assets or liabilities, and instead spreads the lease payments on a straight-line basis over the lease term,
disclosing in its annual financial statements the total comm¡tment.
The Board has decided it will apply the modified retrospect¡ve adoption method in IFRS 16, and, therefore, will only recognise
leases on balance sheet as at 30 April 2019. ln add¡tion, ¡t has decided to measure right-of-use assets by reference to the
measurement of the lease liability on that date. This will ensure there is no immediate impact to net assets on that date. At 30
April 2019 operat¡ng lease commitments amounted to Ê1,180k (see note 26) which is not expected to be mater¡ally different
to the anticipated position on 30 April 2O2O or the amount which is expected to be disclosed at 30 April 2020. Assuming the
group's lease commitments remain at this level, the effect of discounting those commitments is anticipated to result in the
right-of-use assets and lease l¡abilities of approximately f980k being recognised on 30 April 2019. However, further work stiil
needs to be carried out to determine whether and when extension and termination options are likèly to be exercised, which
may result in the actual liability recognised being different.
lnstead of recognising an operating expense for its operating lease payments, the group will ¡nstead recognise interest on its
lease liabilities and amortisat¡on on its right-of-use assets. This will increase reported EBITDA by the amount of its current
operating lease cost, which for the year ended 30 April 2019 was approximately f 17lk.
The first set of interim accounts that will be prepared in accordance with IFRS 16 is the 6-month ending 31 October 2019.
Basis of Consolidation
The Group's financial statements consolidate those of the Company and lts subsldlary undertaklngs drawn up to 30 April 2019.
Subsidiaries are consolidated from the date of their acquis¡tion, being the date on which the Group obtains control. Control is
achieved when the Company:
o has the power over the investee;
¡
r
has the ability to use its power to affect its returns.
is exposed, or has rights, to variable return from ¡ts involvement with the investee; and
The financial statements of subsidiaries used in the preparat¡on of the consolidated financial statements are prepared for the
same report¡ng year as the parent Company and are based on cons¡stent accounting policies. All intra-Group balances and
transactions, including unrealised profits arising from them, are eliminated in full.
Business combinations are accounted for using the acquis¡tion method. This method involves recogn¡tion at fair value of all
identifiable assets and liabilities at the acquis¡tion date. Goodwill represents the excess of acquisition costs over the fair value
of the Group's share of the identifiable net assets of the acquired subsidiary at the date of acquisition. The costs of acquisition
are expensed during the year.
Going Concern
ln adopting the going concern basis for preparing the financial statements, the Board has considered the business activities as
set out ¡n the Chairman's Statement and the Strategic Report as well as the Group's principal risks and uncertaint¡es as set out
in the Strategic Report. Based on the Group's cash flow forecasts and projections, the Board is satisfied that the Group will be
able to operate within the level of its facilities for the foreseeable future. For this reason, the Group continues to adopt the
going concern basis in preparing its financial statements.
Page 132
Notes to the Financial Statements
for the yeor ended 30 April 2079
Going Concern (continued)
ln carrying out their dut¡es in respect of going concern, the directors have carried out a review of the Group's and the Company's
financial pos¡t¡on and cash flow forecast for a period of twelve months from the date of signing these financial statements. The
forecasts have been based on a comprehensive review of revenue, expenditure and cash flows, taking ¡nto account specific
business risks and the uncertainties brought about by the current economic environment.
To ensure the continuat¡on of the Group the directors regularly review the revenue generat¡ng act¡vit¡es, gross margin levels
and cash flows of the Group, both in the short and medium term, and have a thorough approach to managing the working
capital of the business by holding regular reviews with the managing directors of each division of the Group. The Group meets
its day to day working capital requirements through invoice discounting facilities, an overdraft and short-term borrowing
facilities which are due for renewal in June 2020.
Forecasts are prepared and updated on a regular basis. The forecasts are compiled using key market data, extensive dialogue
with customers and suppliers, in depth analysis of all the key input costs and a range of scenario and sensit¡vity planning.
Uncertainties in preparing these forecasts are:
¡ Movements in commodity prices
. Act¡vltles of competitors
o Reliance on key suppliers, particularly w¡th regard to movements in the Euro as many of the Group's materials are
purchased in Euro's
The risk of the Government imposing budget cuts
¡
¡ Credit risk in ensuring payments from customers are received in full and on a timely basis
¡
.
Legislative and regulatory risk as new requirements are being imposed on plastic businesses
Brex¡t
Having taken all of the above factors into consideration, the directors have reached a conclusion that the Company and the
Group are able to manage their business risks and operate within existing and future funding facilities for a period of at least
twelve months from the date of approval of the financial statements. Accordingly, they cont¡nue to adopt the going concern
basis in preparing the annual report and financial statements.
Underlying Profit
ln the opinion ofthe directors the disclosure ofthese transactions should be reported separatelyfor a better understanding of
the underlying trading performance of the Group. These underlying figures are used by the Board to mon¡tor business
performance, form the basis of bonus incentives and are used for the purposes of the bank covenants. lt is calculated as being
operating profit or earnings before separately disclosed items. The term underlying earnings is not a defined term under IFRS
and may not therefore be comparable with similar profit measurements reported by other companies. lt is not intended to be
a substitute for, or superior to, IFRS measures of profit. A reconc¡liation to statutory profit measures is detailed in note 6.
Separately Disclosed ltems
Separately disclosed items are those significant items which in management's judgement should be highlighted by virtue of
their size or incidence to enable a full understanding of the Group's performance.
Segmental Reporting
A business segment is a Group of assets and operations engaged in providing products or services that are subject to risks and
returns that are different from other segments. The directors have considered the different business activities undertaken by
the Group. The Group is organised around one operating segment, that being its core market of moulded plastic products,
therefore ¡ts operat¡ons have been reported as being one business segment. lnformation reported to the Group's Executive
Chairman for the purpose of resource allocation and assessment of performance is focused on the Group's performance as a
whole.
A geographical segment is engaged in providing products or services within a particular economic environment that are subject
to risks and returns that are different from those of segments operating in other economic environments. The Group considers
it operates in one geographical segment.
Page 133
Notes to the Financial Statements
for the year ended 30 April 2019
Revenue Recognition
IFRS 15 is effective from 1 January 2018, and replaces the previous revenue recogn¡tion standards and ¡nterpretations, including
IAS 18 Revenue and IFRIC 13 Customer Loyalty Programmes. IFRS 15 establishes a single approach for the recognition and
measurement of revenue, and requires an entity to recognise revenue as performance obligations are satisfied. lt applies to all
contracts w¡th customers except for transactions specifically scoped out, which includes interest, dividends, leases, and
insurance contracts. Revenue is derived from the transfer of goods at a point in time to customers when performance
obligations to the customer have been satisfied.
Revenue represents the amounts receivable in the normal course of business from the Group's trading businesses.
Amounts received pr¡or to the year-end in respect of services to be rendered in the following year are deferred to the following
year.
Revenue is measured at the fair va lue of the consideration received or receivable and represents a mounts receivable for goods
provided in the normal course of business, net of discounts, VAT and other sales related taxes. For the majority of the Group
revenue is recognised on despatch which is when the Group satisfy its performance obligation. Revenue for Global One-Pak Ltd
is recognised on delivery based on existing terms of sale prior to acquisit¡on. There have been no changes to the accounting for
revenue during the year.
Foreign Currencies
Transact¡ons in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the
transactions. At each balance sheet date, monetary assets and liab¡l¡ties that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. 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. Gains and losses arising on translation are included in the income statement
for the period.
Pension Contributions
The Group contributes to defined contr¡bution pension schemes and the pension charge represents the amount payable for
that period. The Group has no defined benefit arrangements in place.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable
profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of
income or expense that are taxable or deductible in other years and it further excludes ¡tems that are never taxable or
deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and
l¡abil¡ties in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is
accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that ¡t ¡s probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects ne¡ther the tax prof¡t nor the accounting profit. Deferred tax l¡abilities are recognised on
intangible assets and other temporary differences recognised in business combinations.
The carrying amount of deferred tax assets is reviewed at each balance sheet 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. The unrecognised
Page 134
deferred tax asset relates to losses carried forward.
Notes to the Financial Statements
for the year ended 30 April 2019
Taxation (continued)
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 income statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with ¡n equity. Deferred tax assets and l¡ab¡l¡t¡es are offset when
the Group has a legally enforceable r¡ght to offset current tax assets and liabilit¡es and the deferred tax assets and liabilities
relate to taxes lev¡ed by the same tax author¡ty.
Goodwill
Goodwill arises on the acquisition of subsidiaries, Goodwill represent¡ng the excess of the fair value of the consideration
transferred ("cost") over the fair value of the Group's share of the identifiable assets acquired is capitalised and reviewed
annually for impa¡rment.
Cost comprises the fair value of assets acquired, liabilities assumed and equity instruments issued, plus the amount of any non-
controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity
interest in the acquiree, Contingent consideration is included in cost at its acqu¡sition date fair value and, in the case of
contingent consideration classified as a financial liability, remeasured subsequently through profit or loss. Direct costs of
acquisition are recognised immediately as an expense.
Goodwill is measured at cost less accumulated impairment losses
lmpairment of Goodwill
lmpa¡rment tests on goodwill are performed annually at the financialyear end. Determ¡ning whether goodwill is impaired
requires an estimation of the value in use of cash generating un¡ts to which goodwill has been allocated. The calculation of
value in use requires management to est¡mate the future cash flows expected to arise from cash generating units and a suitable
discount rate in order to calculate present value. Any impairment of goodwill is charged to the Group income statement.
Property, Plant and Equipment
Property, plant and egu¡pment are stated at cost less accumulated depreciation and any recognised ¡mpairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset.
Depreciation is charged so as to write off the cost less residual value of the assets over their estimated useful lives, using the
straight-line method, on the following bases:
Property
Plant and equ¡pment
Fixtures and f¡ttings
Motor vehicles
2%
LO-25%
LO-33%
25%
-
-
-
-
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 recognised in the income statement.
The Group ut¡lises a revaluation model of measurement for land and buildings with fair value being determined by reference
to market-based evidence.
Page 135
Notes to the Financial Statements
for the year ended 30 April 2019
lntangible Assets
lntangible assets other than goodwill that are acquired by the Group are stated at cost less accumulated amortisat¡on and are
reviewed for impairment whenever there is an indication that the carrying value may be impaired.
lntangible assets comprise customer lists acquired in business combinations, as well as license fees paid in advance for the use
of trademarks and technology. Such assets are defined as having finite useful lives and the costs are amortised on a straight-
line basis over their est¡mated useful lives as follows:
Customer relationships -
-
Brands
-
Licences
LO%
I0%
L2.5-33%
lmpairment of Tangible and lntangible Assets Excluding Goodwill
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an ¡mpairment loss. lf any such indication exists, the recoverable amount
of the asset is estimated in ordei to determine the extent of the impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to
which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also
allocated to individualcash-generating un¡ts, or otherwise they are allocated to the smallest Group of cash-generating units for
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lntangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually,
and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. ln assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments ofthe
tlme value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
lf the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss ls
treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to
the revised estimate of ¡ts recoverable amount, but so that the increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognised for the asset (or cash-generating un¡t) in prior years.
A reversal of an impairment loss is recognised immediately in the income statement, unless the relevant asset is carried at a
revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
lnventories
lnventor¡es are stated at the lower of cost and net realisable value. The cost of finished goods manufactured includes
appropriate materials, labour and production overhead expenditure. Net realisable value is the estimated selling price less the
costs of disposal. Provision is made to write down obsolete or slow-moving inventory to their net realisable value.
Page 136
Notes to the Financial Statements
for the yeor ended 30 April 2079
Financial Assets and Liabilities
IFRS 9'Financial lnstruments'outlines the principles an entity must apply to measure and recognise financial assets and
liabilities. The following section sets out the accounting policies that were applied in the reporting period under IFRS 9.
lnítíol recognítíon of línoncídl ossets ønd fínancíøl líobîlítíes
The Group recognises financial assets and liabilities when it becomes a party to the terms of the contract, which is the
settlement date.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are capitalised to the initial carrying amount of the f¡nancial asset/liability, as appropriate on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial l¡abilities at fair value
through profit or loss are recognised immediately ¡n prof¡t or loss.
On initial recognition, it is presumed that the transaction price is the fair value unless there is observable information available
in an active market to the contrary. The best evidence of an instrument's fair value on initial recognition is typically the
transaction price. However, if fair value can be evidenced by comparison with other observable current market transactions in
the same instrument, or is based on a valuation technique whose inputs include only data from observable markets then the
instrument should be recognised atthe fairvalue derived from such observable market data.
For valuations that have made use of significant unobservable inputs, the difference between the model valuation and the
initial transaction price is recognised in profit or loss either on a straight line basis over the term of the transact¡on, or over the
report¡ng period until all model inputs will become observable where appropr¡ate, or released in full when previously
unobservable inputs become observable. Financial llab¡lities are subsequently measured at amortised cost.
Cløssilícatíon
Non-der¡vative financial ¡nstruments comprise trade and other receivables, cash and cash equivalents, trade and other
payables.
Finoncíol ossets
On initial recognition, the Group classifies its financial assets into the following measurement categories:
. Amortised cost;
o Fair value through other comprehensive income; or
.
Fair value through profit or loss.
The classification and subsequent measurement of financial assets depends on:
. The business model within which the financial assets are managed; and
. The contractual cash flow characteristics of the asset (that is, whether the cash flows represent solely payments of
principal and interest).
Busíness model ossessment:
The business model reflects how the Group manages the financial assets in order to generate cash flows and returns. The Group
makes an assessment of the object¡ve of a business model in which a financial asset is held. The factors considered in
determining the business model include how the financial asset's performance is evaluated and reported to management.
Page 137
Notes to the Financial Statements
for the yeor ended 30 April 2079
Financial Assets and liabiliti€s
(continued)
Assessment of whether contractual cosh flows øre solely poyments of princìpøl ønd ìnterest (SPPI):
The Group has undergone a Solely Payments of Principal and lnterest (SPPI) test to classify financial assets, The SPPI test
assesses whether the contractual cash flows of an asset gives rise to payments on specified dates that are solely payment of
principal and profit on the principal amount outstanding.
ln making the assessment of whether the contractual cash flows have SPPI character¡st¡cs, the Group considers whether the
cash flows are cons¡stent with a basic lending arrangement. That is, the contractualcash flows recovered must represent solely
the payment of principal and interest.
Principal is the fair value of the financial asset on initial recognition. lnterest typically includes only consideration for the time
value of money and credit risk but may also include consideration for other basic lending risks and costs, such as liquidity risk
and administrat¡ve costs.
Where the contractual terms include exposure to risk or volatility that is inconsistent with a basic lending arrangement, the
cash flows would not be considered to be SPPI and the assets would be mandatorily measured at fair value through profit or
loss.
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flows, prepayment and extens¡on terms, leverage features, terms that limit the Group's claim to cash flows from specified
assets (e.g. non-recourse asset arrangements), and features that modify consideration of the time value of money (e.g. tenor
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mismatch). Contractual cash flows are assessed against the SPPI test in the currency in which the financial asset is denominated.
Expected credit losses on finoncìol øssets
lmpairment provisions for current and non-current trade recãivables are recognised based on the simplified approach within
ll-RS 9 using a provision matrix in the determination of the lifetime expected credit losses. To measure expected credit losses
on a collective basis, trade receivables are grouped based on similar credit risk and ageing. The expected loss rates are based
on the Group's historical credit losses experienced over the three-year period prior to year-end. The historical loss rates are
then adjusted for current and forward-looking informat¡on on macroeconomic factors affecting the Group's customers. The
Group has identified the gross domestic product (GDP), unemployment rate and inflation rate as the key macroeconomic
factors in the countries where the Group operates. Fortrade receivables, which are reported net, such provisions are recorded
in a separate provision account with the loss being recognised within administrative expenses ¡n the consolidated statement
of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the
asset is wr¡tten off against the associated provision.
Amounts owed by subsidiory undertokíngs
At initial recognit¡on, the parent company makes an assessment as to the init¡al credit risk of the amounts owed by subsidiary
undertakings by taking into account available relevant ¡nformation about subsidiary undertakings current and expected
operat¡ng performance and cashflow pos¡t¡on. This incorporates forward looking information such as the general economic
environment, consumer confidence and inflation, changing consumer demands and the competit¡ve env¡ronment.
The parent company has defined a default of amounts owed by subsidiary undertakings to be when there is evidence that the
borrower is in significant financial difficulty such that it will have insufficient liquid assets to repay the loan when due. This is
assessed based on a number of factors including key liquidity and solvency rat¡os. An assessment is made of significant increases
in credit risk since init¡al recogn¡tion, using a qual¡tat¡ve assessment focusing on a comparison of forecasted KPls over the
expected life of the amounts owed by subsidiary undertakings at initial recognition to forecasted KPls over the remaining
expected life of the amounts owed by subsidiary undertakings at the report¡ng date (taking into account forward looking
information such as the updated economic and business environment). The parent company has also considered credit
impaired indicators and define this to be when amounts owed by subsidiary undertakings meets the definition of a default.
Page 138
Notes to the Financial Statements
for the yeor ended 30 April 2019
Fínqncial liobilities ønd equity
Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obl¡gations,
rather than the financial instrument's legal form.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term depos¡ts with an original matur¡ty of three months
or less. For the purpose of the cash flow statement, cash and cash equivalents compr¡se cash and bank balances together with
bank overdrafts that are repayable on demand.
Leased Assets
Leases for which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Assets
held under finance leases and hire purchase contracts are capitalised in the balance sheet and depreciated over their expected
useful lives. The amount initially recognised as an asset is the lower of the fair value of the leased asset and the present value
of the minimum lease payments payable overthe term of the lease. The corresponding lease commitment is shown as a liability.
Lease payments are analysed between capital and interest. The interest element of leasing payments represents a constant
proportion of the capital balance outstanding and is charged to the income statement over the period of the lease. The capital
element reduces the balance owed to the lessor.
All other leases are regarded as operating leases and the payments made under them are charged to the income statement on
a straight-line basis over the lease term.
Research and Development
Research and development tax credits are included and offset against the research and development line within admin¡stration
expenseS.
Share-based Payment Transactions
The Group's equity-settled share-based payments comprise the grant of options under the Group's share option schemes
ln accordance with lFR52 "Share-based payment", the Group recognises an expense to the income statement representing the
fair value of outstanding equity-settled share-based payment awards to employees which have not vested as at 30 April 2019.
Those fair values are charged to the income statement over the relevant vest¡ng period adjusted to reflect the actual and
expected vest¡ng levels. The Group calculates the fair market value of the options as being based on the market value of a
Company's share at the date of grant adjusted to reflect the fact that an employee is not entitled to rece¡ve dividends over the
relevant holding period.
The total amount to be expensed over the vesting period is determined w¡th reference to the fair value of options granted,
excluding the impact of any non-market vesting conditions. Non-market vesting condit¡ons are included ¡n the assumptions
aboutthenumberofoptionsexpectedtovest. AteachreportingdatetheGrouprevisesitsestimateofthenumberofoptions
expected to vest.
It recognises the impact of revisions to original estimates, if any, in the income statement, with a corresponding adjustment to
equity. The proceeds received, net of any directly attributable transact¡on costs, are credited to share capital and share
premium when the options are exercised.
lnvestments in Subsidiaries
lnvestments in subsidiaries are shown in the parent Company balance sheet at cost less any provision for impairment
Page 139
Notes to the Financial Statements
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Dividends
Dividends receivable by the Company are recognised in the income statement if they are declared, appropriately authorised
and no longer at the discretion of the entity paying the dividend, prior to the balance sheet date. Dividends payable by the
Company are recognised when declared and therefore final dividends proposed afterthe balance sheet date are not recognised
as a liability at the balance sheet date. Dividends paid to shareholders are shown as a movement in equ¡ty.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements under IFRS requires the Group to make estimates and assumptions that affect the
application of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical
experience and other factors including expectations of future events that are believed to be reasonable under the
c¡rcumstances. Actual results may differ from these est¡mates. The est¡mates and assumptions, which have a significant risk of
causing a material adjustment to the carrying amount of assets and liabilities, are outlined below.
lnventory Valuation
lnventor¡es are valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions
for siow moving and obsolete stocks. Calculation of these provisions requires estimates to be made, which include forecast
consumer demand, the promotional, competit¡ve and economic environment, and inventory loss trends. Due to the nature of
inventory provisions, ¡t ¡s ¡mpractical to disclose the assumptions that underlie est¡mates and quantify the impact of sensitivity
on those provisions.
lmpairment Reviews
The Board reviews the useful ecorlomic lives and residual values attributed to assets orr arr orrgoirrg basis to errsure they are
appropriate and performs an annual impairment review of goodwill and impairment reviews on tangible and other intangible
assets (other than goodwill) when there are indicators of impairment. The recoverable amount is the greater of the net sell¡ng
price and value in use, where value in use is determined by discounting the future cash flows generated from the continu¡ng
useof theunit. Thevalueinusecalculationrequiresmanagementtoestimatethefuturecashflowsexpectedtoarisefromthe
cash-generating unit and a suitable discount rate in order to calculate present value (see note 14).
4. FINANCIAL INSTRUMENTS - RISK MANAGEMENT
The Group is exposed through its operations to one or more of the following financial risks:
. Market price risk
- Fair value or cash flow interest rate risk
- Foreign currency risk
Liquidity risk
cred¡t risk
.
.
Policies for managing these risks are set by the Board following recommendations from the Finance Director. The oolicy for
each of theabove risks is described in more detail below. Further quant¡tative information in respectof these risks is presented
throughout these fina ncia I statements.
Page 140
Notes to the Financial Statements
for the year ended 30 April 2019
Trade and other receivables (note 18)*
Principal Financial lnstruments
The principalfinancial instruments used by the Group, from which financial risk arises, are as follows:
.
.
.
.
.
. Other external loans (note 20)**
Cash at bank*
Trade and other payables (note 19)**
Finance leases (note 19,20), operating leases and hire purchase agreements
Bank loans, overdrafts and invoice discounting fac¡lities (note 19,20)**
*Financial assets held at amortised cost
**Financial liabilities held at amortised cost
Market Risk
Market risk arises from the Group's use of interest bearing, tradeable and foreign currency financial instruments. lt is the risk
that the fair value of future cash flows of a financial instrument will fluctuate because of changes in interest rates (¡nterest rate
risk), foreign exchange rates (currency risk) or other market factors (other price risk).
The Group's main exposure to market risk arises from increases in ¡nput costs ¡n so far as it is unable to pass them on to
customers through price increases. The Group does not undertake any hedging activity in this area and all materials and utilities
are purchased in spot markets. The Group seeks to mit¡gate increases in ¡nput costs through a combination of continuous
¡mprovement activit¡es to minimise increases in ¡nput costs and passing cost increases on to customers, where this is
commercially viable.
The Group is also aware of market risk in relation to the dependence upon a relatively small number of keyvendors in its supply
chain. This risk could manifest ¡n the event of a commercial or natural event leading to reduced or curtailed supply. The Group
seeks to mitigate these risks by maintaining transparent and constructive relationships with key vendors, sharing long term
plans and forecasts, and encouraging effective disaster recovery planning. Alternative sources of supply in different geographic
regions have also been put into place.
The Group is also exposed to the risk of a downturn in ¡ts customers'end markets leading to reduced levels of activ¡ty for the
Group. The Directors seek to ensure that the Group's activities are not significantly concentrated in sales to either one individual
customer or into a single market sector in order to mitigate the exposure to a downturn in activity levels.
lnterest Rate Risk
The Group is exposed to movements ¡n interest rates in currencies in which it has borrowings, namelySterlingand Euros, and
this risk is controlled by managing the proportion of fixed to variable rates within l¡mits. lnterest rate swaps are used to achieve
the desired mix if the Board consider the proportion to be outside the limits. The Group uses a mixture of fixed and variable
rate loan and finance lease facilities in order to m¡tigate its interest rate exposure. During the current and prior financialyear,
the Group has not utilised interest rate swaps.
Foreign Currency Risk
The Group conducts business in both Sterling and Euros. As a result, the Group is exposed to foreign exchange risks, which will
affect transact¡on costs and the translat¡on of debtor and creditor balances. A significant amount of the Group's raw material
purchases are in Euros and this helps to provide a natural match to the exposure from sales in that currency. Foreign currency
is bought to match liabilities as they fall due where currency receipts are insufficient to match the liability.
Page 141
Notes to the Financial Statements
for the yeor ended 30 April 2019
Liquidity Risk
Borrowing facilities are monitored against the Group's forecast requirements and the Group mitigates financial risk by
staggering the matur¡ty of borrowings and by maintaining undrawn committed facilities. Short term flexibility is achieved by
bank overdraft and invoice discounting facilities.
cred¡t R¡sk
Cash deposits and financial transactions give rise to cred¡t risk in the event that counterparties fail to perform under the
contract. The Group regularly monitors the credit ratings of its cou nterparties and controls the amount of credit risk by adhering
to limits set by the board. Where a customer is deemed to represent an unacceptable level of credit risk, terms of trade are
modified to limit the Group's exposure.
lnformation Technology (lT) Risk
Group lT systems and the information they contain are subject to security risks including the unexpected loss of continuity from
virus or other issues, and the deliberate breach of security controls for commercial gain or mischief. Any such occurrences could
have a significant detr¡mental effect on the Group's business activ¡ties. These risks are m¡tigated by the utilisation of physical
and embedded security systems, regular back-ups and comprehensive disaster recovery plans.
Capital Disclosures
Capital comprises share capital, share premium and retained earnings.
The Group's objective when maintaining capital is to safeguard the Group's ability to cont¡nue as a going concern so that ¡t can
provide returns to shareholders and benefits for other stakeholders. ln order to maintain the capital structure, the Group may
adjust the dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
Sensitivity Analysis
Whilst the Group takes steps to m¡nimise its exposure to cash flow interest rate risk and foreign exchange risk as described
above, changes in ¡nterest and foreign exchange rates will have an impact on profit.
The annualised effect of a 1% increase in the interest rate at the balance sheet date on the variable rate debt carried at that
date would, all other variables being held constant, have resulted in a decrease of the Group's post-tax profit for the year of
€35,000. A 1% decrease in the interest rate would, on the same basis, have increased post-tax profits by the same amount.
The Group's foreign exchange risk is dependent on the movement in the Euro to Sterling exchange rate. The effect of a 5%
strengthening in the Euro against Sterling at the balance sheet date on the Euro denominated debt at the date and on the
annualised interest on that amount would, all other variables being held constant, have resulted in a decrease ¡n the post-tax
profit for the year of f27,000. A 5% weakening in the exchange rate would, on the same basis, have increased post-tax profit
by f30,000.
The other numerical disclosures required by IFRST in relation to financial ¡nstruments are included in notes 18, 19 and 20.
Page 142
Notes to the Financial Statements
for the yeor ended 30 April 2079
5. REVENUE
A breakdown of Group revenues by geographical region, based on the location of the customer is shown as follows:
Continuing operat¡ons:
UK
Rest of Europe
Rest of the World
A breakdown of Group revenues by product group is shown as follows:
Food containers
Extrusion
Trigger sprays and nozzles
lnjection & Blow Moulding
2019
€'000
2?,269
7ts
749
24,7tt
2019
['000
7,454
6,628
3,069
7,582
2018
f'000
2r,068
t,326
1,011
23,405
2018
f'000
6,767
6,745
3,109
6,784
24,733
23,405
All Group revenue is ¡n respect of the sale of goods and originated in the UK. No single customer contributed 10% or more to
the Group's revenue for the year ended 30 April 2019 or the year ended 30 April 2018.
There are no contract assets or liabilit¡es arising from contracts with customers.
6.
UNDERLYING PROFIT AND SEPARATETY DISCTOSED ITEMS
Underlying profit before tax, underlying earnings per share, underlying operating profit, underlying earnings before interest,
tax and depreciation are defined as being before share based payment charges, amort¡sation of intangibles recognised on
acquisition, acquisition costs, reorganisation costs, compensat¡on for loss of office and impairment loss on trade receivables.
Collectively these are referred to as separately disclosed items. ln the opinion of the directors the disclosure of these
transactions should be reported separately for a better understand¡ng of the underlying trading performance of the Group.
Operating profit/(loss)
Separately disclosed items w¡th¡n administrative expenses
Share based payment charge (note 21)
Amortisat¡on of intangible assets (customer relationships and brands) (note 15)
lmpairment losses on trade receivables (note 18)
Reorganisation costs
Total separately disclosed items
Underlying operating profit
Deprec¡at¡on
Underlying EBITDA
Separately disclosed items (excluding amort¡sat¡on)
EBITDA
Page 143
20L9
f'000
479
7t
289
tt9
s39
1,018
L,461
2,479
(2sol
2,229
2018
f'000
(186)
50
348
186
481
1,065
879
L,212
2,09r
(717!,
1,374
Notes to the Financial Statements
for the year ended 30 April 2079
6. UNDERLYING PROFIT AND SEPARATELY DISCLOSED ITEMS (continued)
Separately disclosed items in the current year are referenced where applicable to other notes. ln the year the ¡tems include
reorganisation costs of €179,000 which included acquisition due diligence costs of C72,000, reorganisation costs of €38,000
and redundancy costs of Ê69,000,
The share-based payment charge and amort¡sation charge have both been separately disclosed as are not controlled by
management and do not represent the underlying trading performance of the Group.
Separately disclosed items in the prior year include reorganisation costs of f481,000 which included set up costs of the new
automotive plant of Ê200,000, the write off of slow moving and obsolete stock of Ê225,000 and redundancy costs of f56,000,
in add¡t¡on to a provision of €186,000
for impa¡rment of trade receivables in respect of specific customers.
7. OPERATING PROFIT
This is stated after charging/(ffediting) the following
Staff costs (note 9)
lmpairment loss recognised on trade receivables
Cost of inventories recognised as expense
Net foreign exchange gains
Depreciation of property, plant and equipment:
Owned assets
Undeifinance leases
Amortisation of intangible assets
Rentals under operating leases:
Hire of plant and machinery
Land and buildings
R&D Expenditure
Auditors remuneration for statutory audit services to this Company
Auditors remunerat¡on for statutory audit services to subsidiaries
Non-audit fees of fnil (2018: f3,000) were payable to the auditor
8. FINANCE COSTS
lnterest payable on bank borrowings
lnterest payable on finance leases
lnterest payable on term loans
lnterest payable on other loans
Page 144
2019
c'000
5,114
34
13,576
(86)
1,058
403
289
43
t28
739
20
48
2019
f'000
t26
227
85
438
2018
f'000
5,396
186
12,189
(6s)
826
386
348
39
r28
307
15
40
2018
Ê'000
79
L67
57
8
311
Notes to the Financial Statements
for the yeor ended 30 April 2079
9. STAFFCOSTS
Average number of employees (lncludlng executive directorsf comprised
Production
Selling and distributlon
Admin¡strat¡on
Their aggregate remuneratlon comprised
Wages and salaries
Social security costs
Other pens¡on costs
Ret¡rement costs to former directors
Total remuneration before share option charge
Share option charge/(credit)
Total remuneratlon
20t9
No.
125
18
28
t7r
20t9
c'000
4477
458
108
5,043
7t
5,114
2078
No.
129
20
31
180
2018
f'000
4,844
430
72
5,346
50
5,396
Other than the D¡rectors, the parent company had 2 employees (2018: none). Details of Directors' emoluments are shown in
the Directors' Remunerat¡on Report on pages 17 to 19.
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activ¡ties of the Group, including the dlrectors of the Company and the site general managers.
The¡r eggregate remuneratlon comprised
Wages and salaries
Social security costs
Other pension costs
Share option charge
2019
C,(xD
2018
f,000
s02
63
13
10
570
68
9
9
656
Page 145
Notes to the Financial Statements
for the year ended 30 April 2079
10. TAXATION
The (credit)/charge for taxation on the profit/(loss) for the financial year is as follows:
Current tax
Current tax on profit/(loss) for the year
Deferred tax
Reversal of temporary differences
Total taxation credit for the financial year
2019
€'000
(43)
(43)
2018
Ê'000
l74l
(s3)
(t27l'
The tax assessed for the year is different from that calculated at the standard rate of corporation tax in the UK of 19% (2018:
19%). The differences are rcconciled as follows
Reconciliation of taxation credit
Profit/(loss) on ordinary activities before tax
Tax on profit on ordinary activities at 19% standard rate of tax
(20L8: t9o/ol
Non-deductible expenses
Deferred tax not recognised
Other differences
Total taxation credit
Deferred tax liability - Group
At 1 May 2018
Adjustment in respect of prior year
Reversal of temporary differences cred¡ted to profit and loss
At 30 April 2019
Comprising:
Accelerated capital allowances
Other temporary differences
Liability arising on business combination
2019
c'000
4t
8
42
(7e)
(14)
(431
2019
c'000
409
2
(431
368
150
(66)
284
368
2018
f'000
(4s7l.
(e4)
l24l_
(e)
lr27l
2018
f'000
462
(s3)
409
58
t4
337
409
The Group has not recognised a deferred tax asset of €1,860 (2018: f95,396) in relation to tax losses that can be carried forward
indefinitely.
Changes ¡n tax rates and factors affecting the future tax charge
Reductions in the UK Corporation tax rate from20%to 77% (19% effective from 1 April 2017 and 17% effective from 1 April
2020) have been substantively enacted. This will impact the Group's future tax charge accordingly. The deferred tax liability at
30 April 2019 has been calculated based on the rates substantively enacted at the reporting date and that are expected to apply
when the deferred tax liability settles.
Page 146
Notes to the Financial Statements
for the yeor ended 30 April 2079
TI. EARNINGS PER ORDINARY SHARE
Number of Shares
Weighted average number of shares for the purposes of basic earnings per share
Effect of share opt¡ons
Weighted average number of shares for the purposes of diluted earnings per share
Earnings per share
Diluted earnings per share
Underlying earnings per share
Basic and underlying earnings per share have been calculated as follows:
2019
2018
82,614,865
82,674,865
4,000,000
4,000,000
86,614,865 86,614,865
2019
2018
0.10p
0.10p
0.75p
(0.as)p
(0.4s)p
0.84p
2019
20L8
Weighted
Earnings
Weighted
(Loss)/
average
number of
per
(Loss)/
share
earnings
average
number of
earnings
per share
shares
(pence)
€'000
shares
(pence)
Earnings
c'000
Profit for the year
Separately disclosed items (note 6)
Underlying profit for the period
84 82,614,865 0.10
539
623 82,614,865 0.75
(370) 82,6\4,865
1,065
695 82,614,865
(0.4s)
0.84
Underlying earnings per share
Underlying earnings per share has been presented in addition to basic earn¡ngs per share since in the opinion of the directors
this provides shareholders with a more meaningful representation of the earnings derived from the Group's operations. This
measure is not intended to be a substitute for, or super¡or to, the IFRS measure.
T2. DIVIDENDS PAID AND PROPOSED
lnterim dividend 0.25p paid 28 March 2019 (2018: nil)
Final dividend for 2018 0.25p paid 20 December 2OL8 (2017:0.37p paid 31 October 2017)
2019
f'000
207
207
4t4
2018
€'000
306
306
No final dividend (2018: 0.25p) is to be recommended at the forthcoming AGM. The final dividend is subject to approval by
shareholders at the Annual General Meet¡ng on 25 September 2019 and has not been included as a liability in these financial
statements.
Page 147
Notes to the Financial Statements
for the yeor ended 30 April 2079
13. INVESTMENTS: SHARES lN GROUP UNDERTAKINGS
Parent Company
Cost and net book value
At 1 May 2018
Share options granted to employees in subsidiaries (note 21)
At 30 April 2019
2019
c'000
10,866
7L
10,937
2018
f'000
10,816
50
10,866
lnvestments in subsidiary undertakings are recorded at cost, which is the fair value of the consideration paid.
All subsidiaries of the company are wholly owned, incorporated in England and Wales and operate in the United Kingdom.
Company
Business activity
Holding Registeredoffice
lnterpack Limited
lmporters and distributors of
rco%
plastic containers
Coral Products
Manufacture of plastic products
toÙ%
(Mouldings) Limited
using plastic injection moulding
Florida Road, Haydock lndustr¡al Estate,
Haydock, Merseyside, WA11 gTP
Florida Road, Haydock lndustrial Estate,
Haydock, Merseyside, WA11 gTP
machines
Tatra Rotalac Limited
Manufacture of plastic mouldings
ß0%
Florida Road, Haydock lndustr¡al Estate,
Rotalac Plastics Limited
and extrus¡ons
Manufacture of plastic mouldings
Haydock, Merseyside, WA11 9TP
LOO%
Florida Road, Haydock lndustr¡al Estate,
Global One-Pak Limited
Design, packaging and
LOOo/o
Hyde Park House, Cartwright Street,
and extrusions
Haydock, Merseyside, WA11 9TP
d¡stribution of lotion pumps,
Newton Hyde, Cheshire,
trigger sprays and aerosol caps
SK14 4EH
L4. GOODWILL
Group
At 30 April 2019 and 2018
Í'000
5,49s
Goodwill has been allocated to cash generating units (CGUs), which represent the lowest level within the Group at which the
goodwill is monitored for internal management purposes. This allocation is shown in the table below:
lnterpack
Limited
E
Tatra Rotalac
timited
c
Global One-
Pak Limited
E
Goodwill
At 30 April 2019 and 2018
3,457
t,3tt
634
Other
C
93
Total
C.
5,495
Page 148
Notes to the Financial Statements
for the yeor ended 30 April 2019
t4. GOODWILL (continued)
The Group tests goodwill and intangible assets annually for impairment. The recoverable amount of goodwill and intangibles
arising on the acquisition of lnterpack, Tatra and GlobalOne-Pak in prev¡ous years is determined from value ¡n use calculations.
The key assumptions for the value in use calculations are those regarding the discount rates, revenue and overhead growth
rates, and perpetuity growth rate. Management estimates discount rates us¡ng pre-tax rates that reflect market assessments
of the time value of money and the risks specific to the acquired subsidiaries. ln assessing goodwill and intangibles for
impairment, the d¡rectors consider each subsidiary to be the smallest Group of assets that generate cash flows and represent
the lowest level within the Group at which goodwill is monitored for internal management purposes. As at the year-end of 30
April 2019, the impairment rev¡ew has concluded that the value in use of each exceeds the total goodwill and intangible
carrying value. ln performing this impairment review, the Group has prepared cash flow forecasts derived from the most recent
financial budgets approved by the Board, and then est¡mates revenue growth for the following four years at 25% per annum,
with overheads also assumed to increase at2.5% per annum. Thereafter, a growth rate for pre-tax prof¡t of 2,5% per annum is
assumed into perpetulty. The growth rate of 2.5% exceeds the long-term average growth rate, however, management have
estlmated this based on a prudent view offuture growth in demand. A pre-tax rate of 11.5% has been used to discount the
foiecast cash flow. The key assumptions are based on past experience for eipected changes in future conditions.
The Group has conducted a sens¡t¡vity analysis on the impairment test of each CGU and the Group of units carrying value. A
decrease in the growth rate of profit to 0% (i.e. the current level of prof¡t being generated remains constant) over the
forthcoming five years would not cause the carrying value to be impaired for either lnterpack, Tatra-Rotalac or Global One-
Pak, nor would a reduction of the growth rate for pre-tax profit into perpetuity to 0%. An increase in the discount rate to 15%
(lnterpack), 15% (Tatra) and L5% (Global One-Pak) respectively would not create a potential impairment indicator, however
such levels are not deemed to be reasonable by management.
15. OTHER INTANGIBLE ASSETS
Group
Cost
At 1 May 2Ol7 , L May 2018 and 30 April 2019
Amortisation
At 1 May 2017
Charge in the year
At 1 May 2018
Charge in the year
At 30 April 2019
Net book value
At 30 April 2019
At 30 April 2018
Customer
relationships
€,000
Brands
€'000
Licences
€'000
Total
f'000
2,653
899
316
L,2T5
257
\,472
1,181
1,438
322
38
32
70
32
LO2
220
252
573
573
573
573
3,548
1,510
348
1,858
289
2,t47
1,407
1,690
Page 149
Notes to the Financial Statements
for the year ended j0 April 2079
15. OTHER INTANGIBIE ASSETS (continued)
Parent Company
Cost
At 1 May 2Ot7,I May 2018 and 30 April 2019
Deprec¡at¡on
At 1 May 20L7, t May 2018 and 30 April 2019
Net book value
At 30 April 2019
At 30 April2018
[icences
c'000
Total
f'000
403
403
403
403
As set out in note 14, the Group tests goodwill and intangible assets annually for ¡mpairment.
16. PROPERTY, PIANT AND EqUIPMENT
Group
Cost or valuâtion
At 1 May 2017
Additions
Disposals
At 1 May 2018
Addit¡ons
Disposals
At 30 April 2019
Depreciation
At 1 May 2017
Charge in the year
Disposals
At 1 May 2018
Charge in the year
Disposals
At 30 April 2019
Net book value
At 30 April 2019
At 30 April 2018
land and
buildings
f'000
Fixtures and
fittings
c'000
Plant and
equipment
f'000
Motor
vehicles
f'000
20
(20)
8
(8)
2,508
2,508
t2
2,52O
2,520
2,508
239
L76
(es)
320
L7
337
90
103
(es)
98
119
217
120
222
12,837
1,936
t4,773
1,554
(547l.
15,780
7,095
1,109
8,204
1,342
(s37)
9,009
6,77L
6,569
Total
c'000
15,604
2,L12
(11s)
L7,60T
1,583
(s47l,
18,6?7
7,193
1,2r2
(103)
8,302
I,467
(s37)
9,226
9,41L
9,299
The net book value of plant and equipment includes f3,415,000 (20L8: 83,L25,000) in respect of assets held under finance
leases. Depreciation for the year in respect of these assets was f403,000 (2018: f386,000).
Page 150
Notes to the Financial Statements
for the yeor ended 30 April 2079
16. PROPERTY, PTANT AND EQUIPMENT (continued)
Revaluation of land and bulldlngs
The Group uses the revaluation model of measurement of land and buildings. The Group previously engaged Lambert Smith
Hampton, an accredited independent valuer, to determine the fair value of its land and buildings.
Fair value is determined by reference to market-based evidence. This is a level 2 hierarchy valuation, Valuations are based on
active market prices, adjusted for any difference in the nature, location or condition of the specific property. The date of the
most recent revaluation was 17 April 2018. The previous revaluation was on 16 December 2016.
lf land and buildings were measured using the cost model, the carry¡ng amounts would be as follows:
Cost
Accumulated depreciation
Net carrying amount
Perent Company
Cost or Valuation
At 1 May 2017 and 1 May 2018
Additions
Revaluation
At 30 April 2019
Depreciation
At 1 May 2017 and 1 May 2018
Revaluation
At 30 April 2019
Net book value
At 30 April 2019
At 30 April 2018
2019
c'000
2,to3
12271
r,876
2018
f'000
2,L03
(18s)
1,918
land and
bulldlngs
c,000
2,508
LI
asú
2,519
2,508
Page 151
Notes to the Financial Statements
for the yeor ended 30 April 2019
17. INVENTORIES
Raw mater¡als
Work in progress
Finished goods and goods for resale
Parent Company
2019
€'000
20L8
Ê'000
Group
2019
€'000
1,57L
252
L,682
3,505
2018
f'000
1,256
t79
L,429
2,864
Write-downs of inventories to net realisable value amounted to €n¡l (2018 - €50,000). These were recognised as an expense
during the year ended 30 April 2019 and included in 'cost of sales' in profit or loss.
18. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Less: provision for impairment of trade receivables
Amounts owed by subsidiary undertakings
Corporation tax recovera ble
Prepayments and accrued income
Group
2019
G'000
4,æ5
(a4l
4,611
288
622
5,521
2018
f'000
5,050
(186)
4,864
33
s55
5,452
Parent Company
2019
c'000
2018
f'000
4s5
28
483
r,0L7
T4
1,031
The fair value of trade and other receivables approximates to book value at 30 April 2019 and 2018.
The Group is exposed to credit risk with respect to trade receivables due from its customers. The Group currently has around
930 customers predominantly in the manufacturing and retail sectors.
Amounts owed by subsidiary undertakings are interest free and due on demand. The credit risk for amounts owed by subsidiary
undertakings has not increased materially since the initial recognition. There is no impairment allowance for amounts owed by
subsidiary undertakings for either the year ended 30 April 2019, or the year ended 30 April 2018.
The carrying amount of the Group's trade and other receivables are denominated in the following currencies:
Sterling
Euros
Parent Company
2019
c'000
2018
Ê'000
Group
2019
c'000
4,577
34
4,6LL
2018
Ê'000
4,725
139
4,864
Page 152
Notes to the Financial Statements
lor the yeor ended 30th Aprìl 2079
18. TRADE AND OTHER RECEIVABLES (continued)
As 30 April 2019 the llfetime expected loss provision for trade receivables is as follows:
Group
Current
Overdue less
Overdue 1 -2
Overdue
Total
than 1
month
9000
months
more than 2
f'000
months
Ê,000
€'(xlo
f'000
Expected loss ratio
o.L%
t".vÁ
2.O/o
3.O%
Gross carrylng amount
Loss provision
2,300
(2)
1,613
(16)
518
(10)
214
(6)
4,645
(341
Movement in the loss provision for trade receivables has been included in administrative expenses in the financial statements
and recelvables are shown net of allowance. ln the previous period, ¡mpairment was assessed under IAS 39 and the charge was
included in separately disclosed items (see note 6). No adjustment has been made under IFRS 9 based upon the loss experience
over the past three yeers as the impact ¡s ¡mmaterial.
To measure expected credit losses on a collective basis, trade receivables are grouped based on similar credit rlsk and ageing.
The expected loss rates are based on the Group's historical credit losses experienced over the three-year period prior to year-
end. The historical loss rates are then adjusted for current and forwardJooking information on macroeconom¡c factors affect¡ng
the Grouy's customers. The Group has ldentified the gross domestic product (GDP), unemployment rate and inflation rate as
the key macroeconomic factors in the countries where the Group operates.
The movement in the loss provision has been as follows:
At 30 Aprll 2018 under IAS 39
Restated on adoption of IFRS 9
Opening provision for impa¡rment
Utllised in the period/unused provision released
Provided in the period
Closing Provislon
Parent Company
2019
c'000
2018
f,000
Group
2019
c'000
186
186
11861
u
u
2018
f000
186
186
The maximum exposure to credit risk at the report¡ng date is the fair value of each class of receivable set out above. The Group
did not hold any significant ¡nterest swaps or forurard foreign exchange contracts at the year-end.
Page 153
Notes to the Financial Statements
for the year ended 30 April 2019
19. TRADEANDOTHERPAYABLES
Trade payables
Other taxes and social security
Corporation tax payable
Accruals and deferred income
Other payables
Group
20t9
f'000
2,938
408
464
24
3,834
2018
Ê'000
3,079
s30
272
28
3,909
Parent Company
2019
f'000
2018
Ê'000
t2
47
59
5
5
Trade payables principally comprise amounts outstand¡ng for trade purchases and ongolng costs.
The average credit period taken for trade purchases is 46 days (2018: 48 days).
The directors consider that the carrying amount of trade payables approximates to their fair value.
20. FINANCIAL LIABILITIES
The maturity profile of the non-current financial l¡abilities as at 30 April 2019 is set out below:
Group
20t9
c'000
2018
f'000
Parent Company
2019
c'000
2018
€'000
Borrowings
Current
Term loan
Bank overdraft
I nvoice discounting facility
Finance lease liabilities
Non-current
Finance lease liabilities
Term loan
150
27
3,513
1,260
4,950
1,965
1,303
3,268
The effective ¡nterest rates at the balance sheet date are as follows:
lnvoice discounting facility
Finance leases
Term loan
2019
23%
5,5o/o
3.0%
1,604
150
L,604
3,395
940
s,939
1,843
1,843
2018
150
1,604
1,303
1,303
23% over base
5.5%
3.0% over base
The bank loans and overdraft are secured by a fixed and floating charge over the Group's assets. F¡nance lease liab¡lities are
secured on the assets to which the contracts relate. The invoice discounting facility is secured over trade receivables. The
directors est¡mate that the fair value of the Group's borrowings is the same as the above book values as at 30 April 2019 and
as at 30 April 2018.
Page 154
Notes to the Financial Statements
for the yeor ended 30 April 2019
20. FINANCIAL LIABILIT¡ES (continued)
The maturity profile of the non-current financial liab¡lit¡es as at 30 April 2019 ¡s set out below:
ln more than one year but not more than two years
Finance lease liabilities
Term loan
ln more than two years but not more than five years
Finance lease liabil¡ties
Term loan
ln more than five years
Term loan
Group
2019
f'000
1,053
150
9L2
451
702
3,268
2018
f'000
939
904
1,843
Parent Company
2019
€'000
20L8
€'000
150
451
702
1,303
U ndrawn borrowing facilitíes
The Group has a maximum lnvoice Discounting Facility of f5.1m, subject to debtor levels and restrictions, together w¡th a
f50,000 bank overdraft facility. At the year-end there was a temporary overdraft facility in place of f500,000 wh¡lst an
application for a new mortgage was in progress with the bank. The mortgage was completed during May 2019 and the
temporary overdraft repaid in full.
Finance leases
Future min¡mum lease payments under finance leases including future finance charges are as follows:
Not later than one year
After one year but not more than five years
Future finance charge on finance lease
Present value of finance lease liabilities
Group
2019
c'000
7,526
2,674
4,200
(e7s)
3,225
The present value of minimum lease payments under finance leases are as follows
Not later than one year
After one year but not more than five years
6roup
20L9
f'000
1,260
1,965
3,225
Parent Company
2019
c'000
2018
f'000
Parent Company
20t9
€'000
2018
f'000
2018
f'000
998
2,L97
3,189
(406)
2,783
2018
€'000
940
L,843
2,783
There is no material difference between the maturity analysis presented above and the undiscounted cash flow analysis
Page 155
Notes to the Financial Statements
for the yeor ended 30 April 2019
21.. SHARE OPTIONS
On 8 December 2014 share options were granted to 9 employees including 1 director under an EMI Scheme, the "Coral Products
plc EMI Share Option Plan". Options were granted over 1,650,000 lp ordinary shares of the Company with an exercise price of
16p per share. The share price at the date of grant was 14.5p per share. 2 employees, including 1 director, with options
totalling 600,000 lp ordinary shares have left the Company during the two-year vesting period.
On 30 May 2017 share options were granted to 4 employees under an EMI Scheme, the "Coral Products plc EMI Share Option
Plan". Options were granted over 550,000 lp ordinary shares of the company with an exercise price of 21p per share. The share
price at the grant date was 15p per share. 1 employee with options totalling 100,000 1p ordinary shares has left the Company
during the two-year vest¡ng period.
On 22 August 2017 share opt¡ons were granted to 2 employees, both of which are directors of the company, under the EMI
scheme. Options were granted over 2,500,000 1p ordinary shares of the company with an exercise price of 15p. The share price
at the grant date was 14.5p.
The options can be exercised two years after the grant date and there are no exercise conditions other than that for the options
to vest, the individual must remain an employee of the Group over the two-year vesting period.
The weighted average fair value of the options as at 30 April 20i.9 was f 155,327 based on a fair value oÍ 4.4p per share and
4,000,000 opt¡ons. The assumptions used in the calculation are as follows:
Option pricing model used
Black-Scholes
Black-Scholes
Black-Scholes
8 December 2014
30 May 2017
22 August 2017
Expected volatility
Option life
Risk-free interest rate
Expected dividend yield
30%
1.0 years
Ls%
3.45%
46%
10 years
1.09%
4.7%
45%
10 years
r.09%
4.8%
A deb¡t of €71,000 (2018: f50,000) has been recognised in the income statement ¡n the current year in relation to these share
opt¡ons.
No options have been exercised in the year (2018: none). The maximum term on the options is 10 years from the issue date,
which remains the weighted average remaining life.
22. SHARE CAPITAT
Group
2019
c'000
2018
€'000
Parent Company
2019
€'000
2018
f'000
Allotted, called up and fully paid
82,614,865 ordinary shares of 1p each
826
826
826
826
Page 156
Notes to the Financial Statements
for the yeor ended 30 April 2019
23. RECONCILIATION OF NET CASH FTOW TO MOVEMENT IN NET DEBT
Net (decrease)/increase in cash and cash equivalents
Decrease on invoice discounting facility
Decrease/(increase) in bank loans and other loans
lncrease in finance lease liability
Movement in net debt for the period
Net debt at beginning of period
Net debt at end of period
Group
2019
€'000
(4e8)
(118)
151
(441)
(eo6)
(7,3rtl
la,2L7l
2018
€'000
(2021
(ss1)
(t421
(806)
(1,701)
(5,610)
(7,3711
Parent Company
2019
f'000
2018
€'000
27
151
t78
(1,604)
lL,426l
{.142l.
lr42l
lL,462l
(1,604)
Other than the movement in finance leases, the Group had no non-cash changes arising from financing activ¡t¡es.
F¡nance lease liability
2,783
(4s1)
893
3,22s
2018
f'000
Cashflow Non-cashchanges
New leases
20L9
f'000
€'000
f'000
24. RELATED PARTY TRANSACTIONS
Group
The Group has a related party relationship with its subsidiaries and with its key management personnel, who are considered
to be its directors. Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidationfortheGroupandarenotdisclosed¡nth¡snote. All relatedpartytransact¡onsareconductedonanarms'length
basis.
Key management personnel
Details of the compensat¡on of the key management personnel have been disclosed in note 9, no other transact¡ons were
entered ¡nto w¡th key management personnel in the year other than as detailed below:
Parent Company
The amounts due to the Company in respect of its subsidiaries are set out in note 18. The transact¡ons entered ¡nto between
the Company and its subsidiaries were as follows:
Rentals received from Group undertakings
Recharge of overheads to Group undertakings
2019
€'000
300
?24
2018
€'000
300
204
Page 157
Notes to the Financial Statements
for the yeor ended 30 Aprll 2079
25. POST BAI.ANCE SHEET EVENTS
The land and buildings at Haydock were refinanced in May 2019 raising f50Q000 in cash, thls was used to clear a temporary
overdraft balance in Coral Products (Mouldings) Ltd.
26. COMMITMENTS
Operatlng lease errangements
At the balance sheet date, the Group had total future minimum lease payments under non-cancellable operatlng leases for
each of the following periods:
_
GrouP
2019_ __2018-_
Ê,000
f,000
Parent Company
c'000
f'000
Within o,ne year
Between two and five years
More than five years
23t
727
222
1,180
238
615
229
t,o82
The Group leases certain plant and equipment under non-cancellable operat¡ng lease agreements.
ln the opinion of the directors there is no u¡t¡mate controlling party.
Page 158
Five Year Record (unaudited)
Turnover
Proflt
Underlying operating profit
Net interest payable
Underlying profit before taxation
Separately disclosed items
Taxat¡on
Profit/(loss) after taxation
lnterest cover (times)
Underlying earnings per share (pence)
Dividend per share (pence)
Assets employed
Non-current assets
Other net (liabilities)/assets
Net assets
Flnanced by
Share capital
Reserves
Shareholder's funds
Gearing (Zo)
Net assets per share (pence)
mtg
c'000
24;rtt
1,018
(4381
580
ls3el
43
u
2,3
0.75
0.25
16,3O7
(3,rea¡
t2;9tg
826
t2,o87
12,9L3
æ
15
2018
Ê'000
2017
€'000
2016
c'000
2015
c'000
23,4O5
2L,432
18,7L4
L7,425
879
(311)
568
(1,065)
L27
(370)
2.7
0.84
0.4
t6,484
(3,313)
L3,t7L
826
L2,345
L3,771
56
16
1,093
12281
86s
(4oo)
(71
458
4.8
1.04
1.0
15,944
(2,L471
L3,797
826
12,971
!3,797
4L
L7
L,649
(180)
L,469
(7L71
(1s)
743
9.2
2.20
0.8
!4,4O2
17t4l
13,688
826
t2,862
13,688
24
t7
L,349
(184)
1,165
ls74l
191
7.3
2.L2
0.7
10,570
lr,449l
9,72L
579
8,542
9,L21
44
16
Page 159
Notice of the Annual General Meeting
Notice is hereby given that the Annual General Meeting of Coral Products plc (the Company) will be held in Leverhulme Room One at
Haydock Race Track, Newton-le-Willows, Merseyside, WA12 0HQ on Wednesday 25 September 2019, at 12.00 noon for the purpose
of considering and, if thought fit, passing of the following resolutions, of which Resolutions 1 to 7 will be proposed as Ordinary
Resolutions, to be passed with more than half of the votes in favour of the resolution and Resolutions 8 and 9 will be proposed as
Special Resolut¡ons, to be passed with at least three-quarters of the votes in favour of the Resolution.
Ordinory business
Ordinary resolutions
1.
To receive and adopt the audited accounts for the year ended 30 April 2019, together with the Reports of the D¡rectors and
2.
3.
4.
5.
6.
7.
Auditors.
To re-elect Joe Grimmond, who retires by rotation as a D¡rector of the Company.
To re-elect David Low, who retires by rotation as a Director of the Company.
To re-appoint BDO LLP as auditors of the Company to hold office until the conclusion of the next Annual General Meeting of
the Company and that the Directors be authorised to tix their remuneration.
To declare a final dividend of 0.00p per ordinary share in respect of the year ended 30 April 2019.
To approve the Board Report on Directors' Remuneration for the year ended 30 April 2019.
That the Directors be generally and uncond¡t¡onally authorised pursuant to and in accordancc with section 551 of the
Companies Act 2006 (the "2006 Act") to exercise all the powers of the Company to allot shares in the Company or grant r¡ghts
to subscribc for or to convert any sccurity into shares in thc Company ("Rights") up to an aggregate nominal amount of
e550,765, provided that this authority shall, unless renewed, varied or revoked by the Company, expire at the end of the
Company's annual general meet¡ng in 2019, save that the Company may, before such expiry, make an offer or agreement which
would or m¡ght require shares to be allotted or R¡ghts to be granted and the directors may allot shares or grant Rights in
pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired. This
authority is (i) subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation
to fractional entitlements, record dates, legal or practical problems in or under the laws of any territory or the requirements of
any regulatory body or stock exchange and (ii) in substitution for all previous authorities conferred on the directors in
accordance with section 551 of the 2006 Act but without prejudice to any allotment of shares or grant of Rights already made
or offered or agreed to be made pursuant to such authoritles.
Special resolutions
8.
That, subject to and conditional upon the passing of resolution 7 set out in this notice, the directors be generally empowered
to allot equ¡ty securities (as defined in section 560 of 2006 Act) pursuant to the authority conferred by resolution 8 as if section
561(1) of the 2006 Act did not apply to any such allotment, provided that this power shall:
8.1 be l¡mited to:
8.1.1 the allotment of equity securities in connect¡on with an offer of equ¡ty securit¡es:
(a) to the holders of ordinary shares in proport¡on (as nearly as may be practicable) to their respective holdings;
and
(b) to holders of other equity secur¡ties as required by the rights of those securities or as the directors
otherwise consider necessary;
8.7.2 the allotment of equity securities (otherwise than pursuant to paragraph 8.1.1 above) up to an aggregate nominal
amount of €550,765;
8.2 be subject to such exclusions or other arrangements as the directors may deem necessary or expedient ¡n relation to
fractional entitlements, record dates, legal or practical problems in or under the laws of any territory or the requirements
of any regulatory body or stock exchange; anci
8.3 expire at the end of the Company's annual general meeting in 2020 (unless renewed, varied or revoked by the Company
pr¡or to or on that date), save that the Company may, before such expiry make an offer or agreement which would or
might require equ¡ty secur¡t¡es to be allotted after such expiry and the directors may allot equity secur¡t¡es in pursuance
of any such offer or agreement notwithstanding that the power conferred by this resolution has expired.
Page 160
Notice of the Annual General Meeting
continued
Speciol buslness
Special resolutlon
9.
That the Company be generally and unconditionally authorised for the purposes of Sect¡on 701 of the 2006 Act to make market
purchases (with¡n the meaning of Section 693(4) of the 2006 Act) of ordinary shares of 1 pence each in the Company in such
manner and upon such terms as the Directors may from t¡me to time determine, provided that:
(a) the maximum number of ordinary shares which may be purchased is L2,392,23O;
(b) the minimum price which may be paid for an ordinary share ¡s 1 pence (being the nominal value of the ordinary share)
exclusive of expenses;
(c) the maximum price which may be paid for an ordinary share exclusive of expenses is equal to the higher of (i) 105 per cent
of the average of the middle market quotations for an ordinary share derived from the London Stock Exchange Daily
Official List for the five business days immediately preceding the day on which the purchase is made and (ii) the higher of
(a) the price of the lest independent trade and (b) the highest current independent bid (in each case, in relation to (a) and
(b), for any number of the Company's ordinary shares on the trading venue where the purchase is carried out); and
(d) the author¡ty to purchase hereby conferred shall expire at the end of the next annual general meet¡ng in 2O2Q, save that
the Company may make a contract to purchase ordinary shares under th¡s author¡ty before the expiry of the author¡ty
which will or may be completed wholly or partly thereafter and a purchase of shares may be made in pursuance of any
such contract.
By order of the Eoard
Sharon Gramauskas
Company Secretary
21 August 2019
Registered Office
North Florida Road
Haydock lndustr¡al Estate
Haydock
Merseyside WA11 gTP
Page 161
Notice of the Annual General Meeting
continued
Notes
1.
A member ent¡tled to attend and vote at the Annual General Meet¡ng may appoint another person(s) (who need not be a member of the
Company) to exerc¡se all or any of his rights to attend, speak and vote at the Annual General Meeting. A member can appoint more than one
proxy in relation to the Annual General Meeting, provided that each proxy is appo¡nted to exercise the rights attaching to different shares held
by him.
2.
3.
4.
5.
6.
7
L
9.
10.
11
L2.
A proxy does not need to be a member of the Company but must attend the Annual General Meeting to represent you. Your proxy could be
the Chairman, another director of the Company or another person who has agreed to attend to represent you. Your proxy will vote as you
¡nstruct and must attend the Annual General Meeting for your vote to be counted. Appo¡nting a proxy does not preclude you from attending
the Annual General Meeting and vot¡ng in person.
A Proxy Form which may be used to make this appo¡ntment and give proxy instruct¡ons accompanies th¡s Notice of Annual General Meeting.
Details of how to appoint a proxy are set out in the notes to the Proxy Form. lf you do not have a Proxy Form and believe that you should have
one, or if you requ¡re addit¡onal forms, please contact the Company.
ln order to be valid an appo¡ntment of proxy must be returned (together with any authority under which ¡t ¡s executed or a copy of the author¡ty
cert¡f¡ed) in hard copy form by post, by courier or by hand to the office of the Company at North Florida Road, Haydock lndustr¡al Estate,
Haydock, Merseyside WA1l 9TP, and must be received by the Company at least 48 hours prior to the meeting.
To change your proxy instructions, you may return a new proxy appointment using the methods set out above. Where you have appointed a
proxy using the hard copy Proxy Form and would like to change the instructions using another hard copy Proxy Form, please contact the
Company. The deadline for receipt of proxy appointments (see above) also applies in relation to amended instructions. To terminate your proxy
instruction, please send a written not¡ce to the Company stat¡ng your intent¡on to revoke the proxy ¡nstruct¡on, to be received by the Company
no later than 48 hours prior to the meeting. Any attempt to term¡nate or amend a proxy appo¡ntment rece¡ved after the relevant deadline will
be disregarded. Where two or more valid separate appointments of proxy are received in respect of the same share in respect of the same
macting, thc onc which is last scnt shall bc trcatcd as rcplacing and rcvoking thc othcrs.
A copy of th¡s Notice of Annual General Meet¡ng may have been sent for information only to persons who have been nominated by a member
to enjoy information r¡ghts under sect¡on 146 of the Companies Act 2006 (a "Nominated Person"). The rights to appoint a proxy cannot be
exercised by a Nominated Person: they can only be exercised by the member. However, a Nominated Person may have a right under an
agreement between him and the member by whom he was nominated to be appo¡nted as a proxy for the Annual General Meeting or to have
someone else so appointed. lf a Nom¡nated Person does not have such a right or does not wish to exerc¡se it, he may have a right under such
an agreement to g¡ve ¡nstructions to the member as to the exercise of voting rights.
To be entitled to attend and vote at the
General Meeting, members must be registered in the reg¡ster of members of the Company 48
hours prior to the meeting (or, if the meeting is acljournecl, 48 hours pr¡or to the clate of the adjournecl meeting) Changes to entr¡es on the
register after this time shall be disregarded in determining the rights of persons to attend or vote (and the number of votes they may cast) at
the meeting or adjourned meet¡ng.
^nnual
Vot¡ng on all Resolutions will be conducted by way of a poll rather than a show of hands. This is a more transparent method of voting as
member votes are to be counted according to the number of shares held. As soon as pract¡cable following the Annual General Meet¡ng, the
results of the voting at the Annual General Meeting and the numbers of proxy votes cast for and against and the number of votes actively
withheld in respect of each of the Resolutions will be announced via a regulatory information service.
A member of the Company which is a corporation may authorise a person or persons to act as its representat¡ve(s) at the Annual General
Meet¡ng. ln accordance with the provisions of the Companies Act 2006, each such representative may exercise (on behalf of the corporation)
the same powers as the corporation could exercise if ¡t were an individual member of the Company, provided that they do not do so in relation
to the same shares. lt is no longer necessary to nominate a designated corporate representat¡ve.
The Company must cause to be answered at the Annual General Meeting any quest¡on relat¡ng to the business being dealt with at the Annual
General Meeting which is put by a member attending the Annual General Meet¡ng, except ¡n certain c¡rcumstances, including if it is undesirable
¡n the interests of the Company or the good order of the meetlng that the quest¡on be answered or if to do so would ¡nvolve the disclosure of
confidential information.
As at 20 August 2019 (being the last Business Day prior to the publ¡cat¡on ofthis Notice ofAnnual General Meeting), the Company's issued
share capital cons¡sts of 82,614,865 ordinary shares of 1p each with voting r¡ghts. Therefore, the number of total voting rights in the Company
is 82,614,865.
The contents of this Notice of Annual General Meeting and deta¡ls of the total number of shares in respect of which members are ent¡tled to
exercise vot¡ng rights at the Annuai Generai Meet¡ng and, ìf applicabie, any members' statements, members' resoiutions or members' matters
of business received by the Company after the date of this Notice of Annual General Meet¡ng will be available on the Company's corporate
website: www.coralprod ucts.com.
13.
You may not use any electronic address provided in this Not¡ce of Annual General Meeting to communicate w¡th the Company for any purposes
other than those expressly stated.
Page 162
Financial Calendar
AnnualGeneral Meeting
Payment of Final Dividend
Provisional - lnterim results
25 September 2019
N/A
January 2020
Shareholder I nformation
Coral Products shareholders register ¡s maintained by Share Reg¡strars Limited who are responsible for updating the register, including
details of shareholders' addresses. lf you have a query about your shareholding in Coral Products, you should contact Share Registrars
bytelephone on0L25282L390, by emailto enouiries@shareresistrars.uk.com or ¡n wr¡ting to Share Registrars Limited, The Courtyard,
17 West Street, Farnham, Surrey GU9 7DR.
The Coral Products website et www.coralproducts.com provides news and details of the Group's activ¡t¡es plus information for
Shareholders. The investor sect¡on of the website conta¡ns real time and historical share price data as well as the results and
announcements
Page 163