CORAL PRODUCTS PLC
ANNUAL REPORT AND ACCOUNTS 2021
Contents
Business Overview
Chairman’s Statement
Strategic Report
Directors and Advisers
Directors’ Report
Directors’ Remuneration Report
Audit Committee Report
Independent Auditor’s Report to the Members of Coral Products PLC
Group Income Statement
Group Statement of Comprehensive Income
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 Information
1
3
6
11
12
18
21
22
31
31
32
34
36
37
73
74
77
Financial Highlights (on continuing operations)
Group revenue
Gross margin
Loss before tax
Operating loss
Underlying earnings before interest, tax, depreciation and amortisation *
Underlying operating profit *
2021
£10.7m
35.5%
£(0.3)m
£(0.2)m
£1.3m
£0.9m
2020
Restated
£8.7m
33.4%
£(0.5)m
£(0.3)m
£0.8m
£0.4m
*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 distributor of plastic injection, extruded and vacuum formed moulded products into a diverse
range of sectors including personal care, household, healthcare, automotive, telecoms and rail. The Group has operations in the UK
with manufacturing and distribution facilities throughout Greater Manchester.
By developing innovative plastic moulded products, providing excellent customer service and through its hard-working employees,
Coral Products continues to refocus on new markets to be in a position 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. The Company develops
innovative products such as extrusion profiles, trigger sprays and nozzles, injection moulded and vacuum formed products, serving a
more diverse market and customer base. The Company manufactures and distributes a range of own and customer plastic products
servicing a plethora of different uses including Network Rail, Telecoms, extrusion profiles, customised packaging, personal care and
cosmetics.
Strategy
We aim to grow and develop our positions within our chosen product markets and geographical areas by maintaining strong long-term
relationships with our customers and developing high quality, innovative products that meet customer needs. 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 a main priority in the business and we have strived to implement 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 reputation for delivering quality products but we are not complacent. We invest continuously in new
machinery, robotics and moulds in order to maintain a strong position and keep market share. Our quality control and assurance
processes are regularly reviewed and developed to ensure that our customers receive quality products each time. We are currently
certified to ISO 9001 standard.
Cost control – We continually monitor 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 and automation in reducing our carbon footprint as well as the positive effect on reducing the cost of power usage in
our manufacturing facilities.
Culture – We continually look to promote a well-motivated workforce by attracting 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 investment to
grow our markets and ultimately enhance shareholder value.
Strategic Plan
In light of the likely long-term effect on economic activity from the covid 19 pandemic we are revisiting and reviewing our strategy for
the next 5 years.
P a g e | 1
Business Overview
continued
Business Model
To create and grow markets for vacuum formed and fabricated products, extrusion profiles, triggers and spray nozzles, via innovation,
development and acquisitions. We recognise that for many products’ plastic is a better solution for handling goods and gives greater
functionality, economy and supports a cleaner environment than other packaging mechanisms.
Social, Community and Human Rights Issues
The Group endeavours to impact positively on the communities in which it operates. In particular, raw materials are purchased from
established companies which have high reputations within the plastics industry.
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, is an essential right of all the employees. These are regularly audited
to ensure the Group continues to adopt good manufacturing practices in order to develop and manufacture safe, legal packaging
materials. The Group is often audited by its customers to assess compliance with minimum acceptable standards.
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Chairman’s Statement
Coronavirus
With the coronavirus pandemic ongoing, our continuing priority is to do all we can to keep our workplaces as safe as possible for staff,
ensuring that we follow all government guidelines. We have planned our business to be flexible, in all areas, to meet fluctuating levels
of demand. We have robust financial controls that will ensure we maintain our working capital requirements whilst meeting all our
agreed parameters with our financial partners. Our sites have continued manufacturing throughout the pandemic.
There will be many challenges to our working practices as the pandemic develops and we have put plans in place to protect our most
vulnerable employees, comply with the differing levels of Government restrictions and cope with illness throughout the business. In
particular, we have adapted our technology for greater home working and seeking to segregate critical operational teams so as to keep
all our vital operations and projects on track.
The actions taken by your Board give us confidence that we will come through this current crisis and will be in a position to take
advantage of any economic upturn.
The CBIL loan of £1 million pounds received on 13 May 2020 has now been fully repaid. We have returned to spending on capital
expenditure to meet current increased demand and have recommenced dividend payments.
Trading
This current trading period has improved significantly upon the previous one, despite the ongoing Brexit, United States – China trading
hostilities and Covid-19 pandemic issues. Revenue on continuing operations was £10.7m (2020: £8.7m), underlying operating profit
£0.9m (2020: £0.4m) and gross margin 35.5% (2020: 33.4%).
In February 2021, the Group sold Interpack Limited and Coral Products (Mouldings) Limited to IPL Limited for a consideration of £7.8m.
The Board believes that the Disposal provided the Company with the opportunity to crystallise an attractive return on invested capital
with respect to the Sale Companies, reduce net debt and also to provide additional financial flexibility to further develop and support
the recent progress of the Continuing Group. Following the Disposal, the Continuing Group will consist of Coral Products PLC, Tatra
Rotalac Limited and Global One-Pack Limited. The Board believes there is potential to further develop the Continuing Group in terms
of sales and profits. The net result was a profit after tax to the parent company of £2.5m and an increase in distributable reserves to
£5.9m (2020: £3.4m). The Group used the funds to repay in full the £1m coronavirus business interruption loan (CBIL) and a £1.7m
mortgage on the property at Haydock.
The proposed sale of the land and building at the Haydock site has now exchanged with completion expected in the first half of the
new financial year, following the completion of the current roof replacement works.
In March 2021, the Group acquired 100% of the share capital of Customised Packaging Limited (CPL) for a net consideration of £1.2m.
CPL designs, supplies and manufactures plastic products, using top-of-the-range sheet extrusion technology and vacuum forming
capabilities to its network of blue-chip customers. This is a significant milestone for Coral as it expands further the Group’s market
coverage and product range.
The Group has reported a loss before taxation for the financial year of £0.3m (2020: £0.5m) on continuing operations. Across the
Group, finance costs have remained static at £0.1m (2020: £0.1m) and depreciation at £0.4m (2020: £0.4m).
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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.
The Board having considered the improved financial performance for the year ended 30 April 2021 paid an interim dividend of 0.5p on
28 May 2021. A final dividend is proposed of 0.5 pence per share with an ex-dividend date of 11 November 2021 and a record date of
12 November 2021. This final dividend will be paid on 30 November 2021.
Board Changes
Michael (Mick) Wood left with the sale of Coral Products (Mouldings) Limited and Interpack Limited in March 2021. At the same time
Joe Grimmond became Executive Chairman.
Steve Barber joined as non-executive director in March 2021.
Chairman’s Corporate Governance Statement
As 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.
In 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.
In 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 practices 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 uncertainty and timelines
surrounding UK Brexit and the coronavirus pandemic.
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.
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Chairman’s Statement
Continued
Future Developments
Following on from the disposal of Coral Products (Mouldings) Limited, Interpack Limited, the Group have cash reserves of circa £3.8m
as at the year end. After the sale of the Haydock property during the current financial year, the Group will have cash reserves of circa
£6.5m after the payment of dividends.
The Board is continuing to consider the most effective use of the very strong cash rich asset base. We recognise that in today’s low
interest rate climate cash is a poor substitute for profit earning assets.
Outlook
Whilst we have confidence in our development strategy and the prospects of the Group, the very real uncertainties over Brexit and
the coronavirus pandemic are a cause for concern.
The Group continues with its strategic progress of increasing focus on value-added and innovative products, particularly in the
telecommunications, rail industry, shutters, extrusion and vacuum forming areas. Our aim is to build a significant plastic moulding
business with a bias towards using recycled materials.
Our Group is facing macro-economic challenges that are unprecedented, but we believe that our balance sheet and margins mean
that we can mitigate the effects. The crisis will pass at some point. At that time, it will be the work we do to move the bus iness
forward that will determine our future success. So, our priorities being clear: (1) to do all we can to keep our workplaces as safe
as possible for staff, (2) secure the cash resources of the business and (3) continue to develop our product ranges throughou t the
next financial period.
We have enjoyed a strong start to our current financial year and we look forward to a satisfactory outturn for the year given the
prevailing conditions.
Joe Grimmond
Chairman
4 October 2021
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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 activities, 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, quality 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 innovation.
FINANCIAL REVIEW
Income Statement
Group revenues for the year ended 30 April 2021 for the continuing operations were £10.7m (2020: £8.7m). Of this, sales for extrusion
were £6.1m (2020: £6.0m), sales for trigger sprays and nozzles were £4.1m (2020: £2.7m) and sales of vacuum formed products were
£0.5m (2020: £nil).
The Group has reported a loss before taxation on continuing operations for the financial year of £0.3m (2020: £0.5m). Across the
Group, finance costs have remained static at £0.1m (2020: £0.1m) and depreciation at £0.4m (2020: £0.4m) in line with the hold of
spend on new, replacement and/or improvement of the assets of the Group throughout most of the financial period.
On continuing operations gross margins increased to 35.5% (2020: 33.4%), this resulted in a gross profit of £3.8m (2020: £2.9m).
Underlying operating profit increased to £0.9m (2020: £0.4m) and underlying earnings before interest, tax, depreciation and
amortisation increased to £1.3m (2020: £0.8m). Separately disclosed costs of £1.1m (2020: £0.3m) resulted from due diligence costs,
intangibles amortisation, reorganisation costs, share-based payment charges, compensation for loss of office of senior management,
acquisition costs on the purchase of Customised Packaging Limited and the disposal costs on the sale of Coral Products (Mouldings)
Limited and Interpack Limited to IPL UK Limited.
Balance Sheet
Total shareholders’ equity increased to £12.7m (2020: £12.1m), and net assets per share at 14.8 pence (2020: 14.7 pence).
Cash Flow
Net cash generated from operations was £1.5m (2020: £2.6m) with cash and cash equivalents being £3.8m (2020: £0.5m). As set out
in note 26 the Group now has no net debt (2020: £8.0m) with the level of gearing decreasing from 66.0% to 0.0%. The Group has
secured borrowing facilities totalling £3.0m. The borrowing facilities are 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
September 2022.
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.
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Strategic Report
Continued
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 Indicators (KPIs)
KPIs 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 KPIs which it monitors on a regular basis at Board level and, where relevant, at
operational executive management meetings as follows:
On continuing operations
Group revenue
Gross margin
Operating loss
Loss before tax
Underlying earnings before interest, tax, depreciation and amortisation
Underlying operating profit
Gearing
2021
£10.7m
35.5%
£(0.2)m
£(0.3)m
£1.3m
£0.9m
n/a
2020
£8.7m
33.4%
£(0.3)m
£(0.5)m
£0.8m
£0.4m
66.0%
In 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.
P a g e | 7
Strategic Report
Continued
Section 172 Statement
The following disclosure describes how the directors have had regard to the matters set out in section 172(1)(a)-(f) and forms the
directors statement required under section 414CZA of the Companies Act 2006.
Directors’ duties
As part of their induction, all Directors have been briefed on their duties with access available to professional advice from the
Company’s external legal advisors. The Directors fulfil their duties in part through a governance framework that includes delegation of
certain day-to-day decision making to senior employees, principally the Managing Directors of each of the subsidiaries of the Group.
Risk Management
As the Group grows, its business and risk environment become increasingly complex. It is therefore vital to the Company’s long-term
success that it effectively identifies, evaluates, manages and mitigates the risks that it faces and that we continue to evolve its approach
to risk management. Monthly Board meetings are conducted at which challenges and risks to the business are discussed and addressed
in a timely manner. Focus for the 2020-21 financial year began with a maintain strategy as the Covid Pandemic progressed, the
concentration being on cost reduction to match the disrupted sales growth, however following the disposal of Coral Products
(Mouldings) Limited and Interpack Limited and recovery of the remaining Group, this was modified to a growth strategy.
Engaging with our shareholders
A small number of the Company’s shareholders (which include members of the Company’s Board) continue to be actively engaged
within the business. The Board meet monthly throughout the year, and ad hoc, as necessary. The Board recognises the importance of
continuing an effective and transparent dialogue with shareholders and ensuring that non-management shareholders understand and
support the Group’s strategy and objectives. At least annually the Group’s strategy and plan for the forthcoming year is explained and
discussed with shareholders with half-yearly reporting and updates for material issues as and when required.
Culture and environment
The Board recognises that integrating environmental, social and governance (ESG) considerations into the Group’s investments is of
paramount importance to the Group’s long-term success and value is placed on managing the Company in a sustainable way. Working
within the plastics industry can, and does, bring criticism as demonstrated by the many documentaries and news reports about plastic
pollution on TV on a daily basis. The Groups investment strategies align with being a responsible manufacturer i.e. new machinery
criteria includes the requirement for less energy and resources.
Covid-19 Pandemic
Throughout the Covid-19 pandemic we followed the government guidelines. All members of the teams were updated via briefs on
regular occasions to ensure communications and adherence was achieved, this included the installation of barriers in offices, one-way
systems for entering and leaving the buildings, extra wash and cleaning stations to keep our employees and visitors safe at our
manufacturing sites and distribution centres. As key suppliers to the food, medical, telecommunications and transport we made the
decision to keep our business operational whilst ensuring that as the Government Covid-19 guidelines subsequently changed we stuck
to them rigidly.
Business relationships
The Company is committed to acting ethically and with integrity in all business dealings and relationships. Fostering business
relationships with key stakeholders, customers, limited partners and suppliers is important to the Company’s success. Many customers
and suppliers have been aligned with the business for many years with, in the case of suppliers, access to at least two suppliers for our
major materials.
The Board looks to implement and enforce effective systems and controls to ensure its supply chains are maintaining the highest
standard of business conduct in line with best practice including in relation to anti-bribery and modern slavery. The employee
handbook has recently been updated with all up-to-date relevant information and Personnel have been advised, and in some instances,
trained accordingly as and when new legislation or Governmental advice is issued.
P a g e | 8
Strategic Report
Continued
Section 172 Statement (continued)
Being a relatively small company of just over 60 employees largely operating in two locations in the North West of the England, there
is a high level of visibility regarding employee engagement and satisfaction. The UK based directors are able to monitor this
engagement as they sit with and amongst the employees.
Risks and Uncertainties
The Group has identified various risks and uncertainties it faces, which include:
• Movements in commodity prices often caused by supply constraints or demand management.
•
•
•
•
Loss of a key individual.
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 risk of delays in supply of raw materials from Europe.
•
Coronavirus pandemic risk of loss in sales.
The Group has taken appropriate steps to manage and control these risks, which include:
•
Ensuring that 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.
•
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.
Brexit planning across the Group, mitigating lead times, increasing stock levels short term.
Coronavirus planning across the Group, mitigating costs, furloughing staff as required to keep in line with production/sales needs.
•
•
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 irrespective of personal
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 22% of the Group workforce as at 30 April 2021.
P a g e | 9
Strategic Report
Continued
Diversity (continued)
Position
Group Directors
Senior Managers
Other Employees
Total Employees
Male
Female
Total
4
11
34
49
1
-
10
11
5
11
44
60
Social, Community and Human Rights
The Group endeavours to impact positively on the communities in which it operates. In particular the Group purchases raw
materials from trusted suppliers who it recognises as obtaining the products through trusted, fair and sustainable methods.
Ethical concerns 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.
Going concern
As explained fully in note 2 to the financial statements, after making enquiries, the Directors 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
continue in operational existence for at least 12 months following the approval of the financial statements. For this reason, the
directors continue to adopt the going concern basis in preparing the financial statements.
In March 2020 an outbreak of Covid 19 hit the UK and impacted business confidence in our sector. This resulted in a few months of
significantly decreased trade as the country was forced into a lockdown. After the initial drop in sales the business has responded and
is now back to trading at pre Covid levels. As presented in the balance sheet the Group has put its property up for sale, the proceeds
of which will be used for future growth and increase working capital, this property sale exchanged on 30 April 2021 with completion
expected during the first half of the new financial year following the completion of the roof works.
In September 2021, Customised Packaging Limited was added to the Group invoice discounting facility. At the same time the
terms were renegotiated, the Group are now benefitting from lower interest rates. The directors have discussed with the bank
who have advised that they see no reason that the facility will not be continued at the next annual renewal in September 2022.
This strategic report was approved by the board on 4 October 2021.
Sharon Tinsley
Finance Director
P a g e | 10
Directors and Advisers
Non-executive Directors
David Low, Non-executive
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. He is a
shareholder in several private companies involved in sport and leisure, vending and
telemetry services, brewing and retail estate.
Steve Barber, Non-executive
Steve was appointed on 18 March 2021. He brings with him a wealth of experience
having worked in the packaging industry for more than 30 years, including for Jokey
Plastik GmbH and HK Plastics BV, two major packaging manufacturers, from 1983
to 1990, before joining Fenton Packaging Limited, a leading distributor. He left
Fenton in 2003 to co-found Interpack Limited and was a director of Interpack
Limited, a subsidiary of the Company up until its disposal in March 2021. Steve was
educated to degree level in polymers and rubber technology.
Executive Directors
Joe Grimmond, Executive Chairman
Joe 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 Chairman
at the AGM in 2011 and has fulfilled the role of Executive Chairman on numerous occasions
throughout his time with Coral Products PLC. Mr Grimmond is a Fellow of the Association
of Accounting Technicians.
Sharon Tinsley, FCMA, Finance Director and Company Secretary
Sharon was appointed in February 2017. She joined Coral Products as Group
Financial Controller in December 2016. She has over 20 years of experience. She
previously acted as Financial Controller of James Dewhurst Limited, prior to this
she held accounting positions at Pets Choice Limited, Thames Water, Scott Health
and Safety Limited and Uniqema Limited. Sharon is a Fellow of the Chartered
Institute for Management Accountants.
Paul Freud, Corporate Development Director
Paul was appointed in July 2015. He is responsible for directing the business
development activities and driving new sales growth by seeking market
opportunities or acquisitions. Paul has over 20 years of management and
leadership experience in the manufacturing industry. He is also the Chairman of
Tatra Rotalac Limited, responsible for developing new and innovative product
ranges for blue chip companies, including solutions for fibre optic broadband
installations and rail infrastructure.
P a g e | 11
Registered Office
Southmoor Road Wythenshawe
Manchester M23 9DS
UK Registered Number: 02429784
Auditor
BDO LLP
3 Hardman Street
Spinningfields
Manchester
M3 3AT
Solicitors
Legal Clarity Lawyers LLP
55 Newhall Street
Birmingham
B3 3RB
Bankers
Barclays Bank PLC
1st Floor
3 Hardman Street
Spinningfields
Manchester
M3 3HF
Registrar
Share Registrars Limited
The Courtyard
17 West Street
Farnham, Surrey
GU9 7DR
Broker & Nominated Advisor
WH Ireland LLP
24 Martin Lane
London
EC4R 0DR
PR Adviser
Capital M Consultants
1 Royal Exchange Avenue
London
EC3V 3LT
Directors’ Report
The Directors present their annual report and the audited financial statements for the year ended 30 April 2021.
Results and Dividends
The results for the year are set out on page 31. This shows a Group profit after taxation of £0.5m (2020: £0.8m loss).
An interim dividend of 0.5p (2020: nil) amounting to £429,712 was paid on 28 May 2021.
A final dividend of 0.5p (2020: nil) per share is recommended in respect of the year ended 30 April 2021 to be paid on 30 November
2021 to shareholders on the register at the close of business on 12 November 2021. This has not been included within creditors as it
was not approved before the year end.
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 activity of the Company and its subsidiaries is the manufacture of plastic injection, extrusion, vacuum formed and
fabricated products and the reseller and distributor of a range of trigger sprays and nozzles. The Group also operates as a trade moulder
for other UK Companies. It has been in operation since 1990, became a fully listed PLC in 1995 and moved to the AIM market in 2011.
Directors
During the year, the following changes in directors took place:
Michael (Mick) Wood left the business as CEO in March 2021.
Steve Barber was appointed as a non-executive director in March 2021.
In accordance with the Articles of Association, Steve Barber and David Low are the directors retiring by rotation and offering themselves
for re-election at the AGM.
Directors’ Interests 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 Tinsley
Steve Barber
Ordinary shares
of 1p each
30 April 2021
Number
Ordinary shares
of 1p each
30 April 2020
Number
6,293,337
2,098,333
1,080,000
n/a
162,783
2,000,000
11,634,453
5,893,337
2,048,333
980,000
223,078
162,783
n/a
9,307,531
Between the year-end date and the date of this report 150,000 shares were purchased by David Low on 24 June 2021 and 50,000 by
Joe Grimmond on 23 July 2021.
P a g e | 12
Directors’ Report
continued
Substantial Interests
As at 29 July 2021, 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:
JIM NOMINEES LIMITED
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED
RATHBONE NOMINEES LIMITED
LAWSHARE NOMINEES LIMITED
HARGREAVES LANSDOWN (NOMINEES) LIMITED
VIDACOS NOMINEES LIMITED
RENE NOMINEES (IOM) LIMITED
PERSHING NOMINEES LIMITED
BARCLAYS DIRECT INVESTING NOMINEES LIMITED
ROCK (NOMINEES) LIMITED
HSDL NOMINEES LIMITED
Number of shares
% of share capital
7,890,127
7,796,364
6,844,225
5,818,514
5,777,424
5,558,332
4,716,720
4,415,441
2,929,682
2,633,994
2,597,905
9.51
9.40
8.25
7.01
6.97
6.70
5.69
5.32
3.53
3.18
3.13
Share Capital
At the 2020 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. During the
financial year the company purchased 1,695,000 of its shares accounting for 2.0% of the total shares.
The Board of Directors
The Board’s role is to provide entrepreneurial 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 meeting.
The Directors 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 Remuneration 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. It also considers the compensation commitments of its directors in the
event of early termination of their service contracts.
P a g e | 13
Directors’ Report
continued
Audit Committee
The Audit Committee is chaired by David Low. The executive directors may be requested to attend. In addition to an interim meeting,
the Audit Committee meets at the year-end with the external auditors who have direct access to the non-executive directors for
independent decisions. The Audit Committee 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.
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.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected
to prepare the Group and Parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs)
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 securities on the Alternative Investment Market.
In preparing these financial statements, the directors are required to:
•
•
•
•
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; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue
in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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 detection 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 preparation
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 importance and any failure in standards would significantly affect the confidence
of our customers. There are stringent controls in place to ensure product safety and integrity. Product performance is monitored
regularly to ensure compliance with standards.
P a g e | 14
Directors’ Report
continued
Insurance
The Group has in place a Directors and Officers liability insurance policy that provides appropriate cover in respect of legal action
brought against its directors.
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.
Shareholder Relations
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 executive directors and institutional 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. It is committed 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 facilities and other facilities in which it works.
The Group will:
•
As a minimum comply with the requirements of all current relevant legislation, approved codes of practice and good working
practices;
Provide and maintain as far as is reasonably practicable, safe plant, equipment 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 activities, and in particular inform, consult
and involve employees wherever possible;
•
•
Provide such information, instruction, training and supervision that is 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; and
Take measures to protect all persons, whether employees or not, from risks to their health and safety.
Notwithstanding the above, every employee must consider the prevention of accidents as a prime personal responsibility.
P a g e | 15
Directors’ Report
Continued
Environmental, Social 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 interaction
with local staff during this time.
Our stakeholder relationships underpin our success and inform our decision making on Environmental, Social and Governance (ESG)
matters, now a widely recognised term for what we have always valued – doing the right thing. As a business our responsibilities
remain unchanged. As a Group we will:
•
•
Recognise, respect and protect human rights;
Act in an ethical manner;
•
•
•
•
•
Develop positive relationships with our suppliers and business partners;
Recruit and retain responsible employees;
Take responsibility for our impact on the environment;
Deliver value to our customers;
Provide support through donations to charities and the local community.
Our ESG Committee demonstrates our commitment to our local and wider community. As well as working alongside local authorities
to provide local jobs for local people, we strive to actively support those in our community through sponsorship events and
volunteering opportunities.
Our Safety-First Core Value and Employee Assistance Programmes ensure the wellbeing of our employees and creates a safe and
comfortable work place environment.
We actively consider ESG 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.
Employment and Human Rights
The Group is committed to providing and promoting equal opportunities for staff and job applicants. We are committed 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, irrespective of their 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 environment 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 acting ethically and with integrity in all our
business dealings and relationships and to implementing and enforcing effective systems and controls to ensure modern slavery is not
taking place anywhere in our own business or in any of our supply chains.
The Group is also committed 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 children, and we expect that our suppliers will hold their own suppliers to the same high standards.
P a g e | 16
Directors’ Report
Continued
Auditor
In accordance with Section 489 of the Companies Act 2006 a resolution will be proposed at the Annual General Meeting that BDO LLP
be re-appointed as auditor.
Disclosure of Information 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; and
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 confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.
Post Balance Sheet Events
The invoice discounting facility was reviewed in September 2021 and renewed for a further 12 months.
Corporate Governance Code
High standards of corporate governance are a key priority 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 with 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 (Quoted Companies Alliance) Code in compliance with 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 in the QCA 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
in this report how it addresses the ten principles of the new code.
Research and Development
During the year, the Group has spent £158,000 (2020: £969,000) on research and development.
Annual General Meeting
The AGM will be held on Wednesday 27 October 2021 in the offices of Tatra Rotalac, Southmoor Road, Wythenshawe, Manchester,
M23 9DS. The Notice of Meeting is contained on pages 74 to 76 of this report. At the meeting, resolutions will be prepared to receive
the audited accounts and approve the Remuneration Report, to elect directors and to re-appoint BDO LLP as auditor. In addition,
shareholders will be asked to renew both the general authority of the directors to issue shares and to authorise the directors to issue
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 commercially useful to have the authority should they need to allot shares for any purpose in the future.
By order of the Board
S Tinsley
Company Secretary
4 October 2021
P a g e | 17
Directors’ Remuneration Report
Introduction
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 opinion 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
audited and unaudited information.
Unaudited information
Remuneration Committee
The Group has established a Remuneration Committee which is constituted in accordance with the recommendations of the Combined
Code. The remuneration committee 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 remuneration of the non-executive directors is determined by the Board. No director plays a part
in any discussions about his own remuneration.
Remuneration Policy
Executive remuneration packages are designed to attract, motivate and retain directors of the high calibre needed to progress and
develop the Company and to reward them for enhancing value to shareholders. There are three main elements of the remuneration
package for executive directors:
•
•
•
Basic annual salary and benefits.
Pension contributions.
Share options.
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 position or responsibility. In deciding appropriate levels, the Committee considers the Group as a whole and by
reference to other companies in the media and manufacturing sectors. In addition to basic salary, the executive directors receive
pension contributions and certain benefits-in-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 of 12% of basic salary towards funding each director’s pension plan.
Performance Bonus
There is a performance bonus in place. Additionally, the remuneration committee is empowered to make awards for special
circumstances if appropriate.
Share Options
No share options were exercised during the year (2020: Nil).
P a g e | 18
Directors’ Remuneration Report
continued
Performance Graph
The graph below shows the Group’s share price movement over the last five years.
Directors’ Contracts
The Company’s policy is that executive directors should have contracts with an indefinite term providing for a maximum of twelve
months’ notice. The details of the executive directors’ contracts are summarised as follows:
Paul Freud
Sharon Tinsley
Date of contract
Notice period
July 2015
February 2017
12 months
6 months
Non-Executive Directors
The non-executive directors are required to submit themselves for re-election every year and the Board believes this to be appropriate
in the circumstances. The non-executive 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 £27,000.
The Board met 11 times during this financial period with 100% attendance from all Directors.
P a g e | 19
Directors’ Remuneration Report
continued
Audited information
Directors’ Remuneration
The total amounts paid for Directors’ remuneration was as follows:
Emoluments
Pension contributions - defined contribution scheme
Share based payment
Emoluments – Executive Directors
2021
Executive
£’000
2021
Non-
executive
£’000
612
27
-
639
96
-
-
96
2021
Total
£’000
708
27
-
735
2020
Total
£’000
379
21
20
420
2021
Total
2020
Total
£’000
£’000
125
136
266
112
639
99
79
166
-
344
2021
£’000
2020
£’000
52
4
40
96
27
-
49
76
2021
Basic
salary
2021
Bonuses
£’000
£’000
2021
Compensation
for loss of
office
£’000
2021
Benefits-
in-kind
2021
Pension
£’000
£’000
2021
Share
based
payment
£’000
Paul Freud
Sharon Tinsley
Mick Wood
Joe Grimmond
97
67
100
12
276
28
53
3
100
184
-
-
150
-
150
-
1
1
-
2
-
15
12
-
27
-
-
-
-
-
Emoluments – Non-executive Directors
David Low
Steve Barber (joined the board on 18 March 2021)
Joe Grimmond (May 2020 to February 2021)
By order of the Board
Joe Grimmond
Chairman of the Remuneration Committee
4 October 2021
P a g e | 20
Audit Committee Report
During the year the Audit Committee met 2 times and there were also meetings between the Audit Committee Chair, the Group
Finance Director and the external auditor.
The Audit Committee discussed the scope and key audit matters before the commencement of the current audit.
Financial Reporting
The Committee has reviewed with both management and the external auditor the more significant areas of judgement and the
appropriateness and application of the Group’s accounting policies.
The Committee reports to the Board on whether the accounts are a comprehensive review of the current year’s activity.
Risk management and internal control
The Audit Committee has overall responsibility for the monitoring of internal controls, approving accounting policies and agreeing the
treatment of significant accounting issues.
The consideration and documentation of risks and opportunities is undertaken on an annual basis as part of the budgeting process
which the full Board take part in. These matters are then monitored and adapted as required throughout the year by the means of
regular management meetings and scheduled conference calls between the Executive Directors and the divisional management teams.
The annual insurance renewal provides a further opportunity to assess risks and provide cover in areas where risk mitigation is not
possible, or levels of risk are significant.
The Board reviews monthly financial performance against budgets and forecasts and monitors bank facilities and other treasury
functions with any policy changes approved by the Board.
The Audit Committee receives feedback from the external auditors on areas of risk and accounting procedures which are used in
adapting internal control processes as required.
The Committee reviews any proposed due diligence of acquisition targets and the selection of the professional firm carrying out the
work.
Audit Independence
The Committee is responsible for making recommendations to the Board on the appointment of the external auditor and for non-audit
services such as taxation and acquisition due diligence.
The Chair of the Committee met with the external audit partner to discuss independence before the commencement of the current
year’s audit.
The Audit Committee Report has been approved by the Board and signed on its behalf by:
David Low
Chairman of the Audit Committee
4 October 2021
P a g e | 21
Independent Auditor’s Report to the Members of
Coral Products PLC
Qualified Opinion on the financial statements
In our opinion, except for the possible effects of the matter described in the basis for qualified opinion section of our report:
•
•
•
•
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 2021 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006;
the Parent Company financial statements have been properly prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006 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.
We have audited the financial statements of Coral Products PLC (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year
ended 30 April 2021 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 reporting framework that has been applied in their preparation is applicable law and international accounting standards in
conformity with the requirements of the Companies Act 2006 and, as regards the Parent Company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
Basis for qualified opinion
For the year ended 30 April 2020, due to the global COVID-19 pandemic, we were unable to attend physical inventory counts across
the Group. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 31 April 2020 of
£3,368,000. Consequently, we were unable to determine whether any adjustments to this amount at 31 April 2020 were necessary or
whether there was any consequential effect on the cost of sales for the year ended 31 April 2021. In addition, were any adjustment
to the cost of sales balance be required, the strategic report would also need to be amended.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our
report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Independence
We remain 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
• Obtaining and examining management's business plan for at least the next 12 months, which is also used as a basis for the
discounted cash flow model in the impairment assessment of goodwill and other non-current assets. These forecasts were
based on the continuing operations of the Group. The Directors also performed sensitised stressed forecasts, including a
reverse stress test to identify the point at which available cash facilities would run out. We examined these cash flow
forecasts as well as considered the downside sensitivities to these;
Challenging assumptions used in the forecast period by considering available evidence, including recent performance post
the impact of Covid-19, as well as past trading performance, to support these assumptions;
Confirming that the annual renewal of the invoice discounting facility has occurred; and
Review of the wording of the going concern disclosures and assessment of consistency with forecasts.
•
•
•
P a g e | 22
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this
report.
Overview
Key audit matters
Materiality
2021
2020
1.
Impairment of goodwill and other
intangible assets
2. Acquisition
accounting
3. Disposal accounting
4.
Inventory valuation and existence
5. Going concern and Covid-19
uncertainty
Going concern and Covid-19 were not considered key audit matters for
financial year 2021 as the Group no longer has a high gearing ratio. The
Group no longer has a mortgage previously held with Barclays. In
addition, the loss making subsidiaries were disposed of during the year.
The Group has a healthy cash balance in comparison to prior years.
Group financial statements as a whole
£150k (2020: £111k) based on 0.75% (2020: 0.5%) of revenue from
continuing and discontinued operations.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal
control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk
of material misstatement.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage
of significant accounts in the financial statements, we determined that there were five (2020: five) significant components for the
purposes of the Group audit, of which two of these were disposed of during the year. The audit of all of the significant components
was performed by BDO LLP and a full scope audit was performed in each case. The audit of the two disposed components entailed a
full audit of the profit and loss account up to the date of the disposal and audit of the disposal accounting.
In relation to the remaining non-significant components, we performed audit procedures on specific accounts within those
components that we considered had the potential for the greatest impact on the significant accounts in the financial statements, either
because of the size of these accounts or their risk profile.
P a g e | 23
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
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) that we identified, including those which had the greatest effect on: the overall audit 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 opinion on these matters.
In addition to the matter described in the basis for qualified opinion section, we have determined the matters described below to be
the key audit matters to be communicated in our report.
Key audit matter
Impairment
of goodwill
and other
intangible
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 review these balances for impairment at least
annually.
required
is a high degree of management
There
in
judgement and assumptions
in use of the Cash
assessing the value
Generating Units (“CGU”) to which the Goodwill
Intangible assets are allocated and
and
therefore
potential
impairments.
determining
any
We therefore identified impairment of goodwill
and other intangible assets as a key audit
matter.
How the scope of our audit addressed the key audit matter
We obtained the
management for each CGU.
impairment analysis performed by
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:
•
•
•
future trading projections and cash flow forecasts;
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
experts to assist us in assessing the reasonableness of the
underlying assumptions and the discount rates applied. This
enabled us to check that the directors had adopted
reasonable assumptions in each circumstance.
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 well as
to check that management’s disclosure of sensitivities
(included in Note 14) in respect of the impairment review was
appropriate.
Key observations:
We observed that there was sufficient headroom when
comparing the value in use to the net carrying value for all
cash generating units. Based on the work performed we
concur with management’s view that there is no impairment
required over the cash generating units.
P a g e | 24
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Key audit matter
Acquisition
accounting
As described in note 13, the Group acquired a
new subsidiary, Customised Packaging Limited
during the year.
We identified a significant risk of material
misstatement in the application of accounting
requirements of IFRS 3 Business Combinations.
Significant judgements are involved specifically
around any fair value adjustments on
acquisition and the purchase price allocation
(“PPA”) exercise. This was therefore considered
a key audit matter.
How the scope of our audit addressed the key audit matter
We obtained the acquisition workings and the relevant PPA.
We tested a sample of items from the acquisition balance
sheet to ensure cut off between the pre-acquisition and post-
acquisition period had been correctly performed.
We also agreed a sample of transactions from the acquisition
balance sheet to supporting documentation to gain assurance
over the opening position.
Management had engaged experts to value the intangible
assets on acquisition. BDO Valuations experts reviewed the
inputs and assumptions used by the management’s expert in
determining the value of the intangible assets, together with
the mechanics of the calculations performed, in accordance
with the Business Combinations element of IFRS 3.
We checked that the treatment of deal fees and acquisition
costs had been correctly allocated to the profit and loss
account, not amounts capitalised as debt or equity. We
considered the amount of contingent consideration (earn
outs) by comparing the details of the SPA with current trading
analysis of this CGU.
We re-performed the calculation of the resulting investment
and goodwill balance to ensure in line with accounting
requirements of IFRS 3 Business Combinations.
Disposal
accounting
As described in note 13, The Group sold 100% of
the voting equity instruments of Coral Products
(Mouldings) Limited and Interpack Limited.
significant
Due to the significance of the disposals, we
risk of material
identified a
misstatement in the application of IFRS 5 Non-
current assets held for sale and Discontinued
Operations. There is a risk that the disclosures in
the financial statements do not contain all
information required by the standards. This was
therefore considered a key audit matter.
that
the significant
Key observations:
We concluded
judgements and
assumptions used in the calculation of intangible assets on
acquisition were reasonable and that the final workings
provided by management were in line with the accounting
requirements of IFRS 3 Business Combinations.
We reviewed the sale and purchase agreements entered into
and used these to assess the appropriateness of the
accounting treatment.
We tested the balance sheets at the relevant date of disposal
to ensure cut off around the sale was correctly treated. We
also ensured any disposal adjustments had been correctly
considered by management.
We verified the disposal accounting by checking that costs of
disposal had been included and any deferred consideration
was recognised appropriately. We also ensured the sale
proceeds had been received into bank.
We checked that the disclosures in respect of the disposals in
the financial statements were adequate and in line with
accounting standards.
Key observations
Based on the procedures we performed, the disposal
accounting and associated disclosures are considered to be
appropriate.
P a g e | 25
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Key audit matter
Inventory
valuation
and
existence
As described in Note 2 (Accounting policies), Note
18 (Inventories) the Group carries inventory at
the lower of cost and net realisable value.
Judgement is required to assess the appropriate
level of provisioning for items which may be sold
at a value below cost as a result of a reduction in
consumer demand, age of
in
inventory, and/or new products being developed
that render inventory items obsolete.
items held
Such judgements include management’s
expectations for future sales.
A significant risk was identified in relation to
inventory valuation for items held within the
subsidiary undertaking Tatra Rotalac Limited,
given inventory count variances and significant
inventory write-downs in previous years.
How the scope of our audit addressed the key audit matter
We attended stock counts at year end.
For finished goods and work in progress (WIP) we:
•
•
•
Reviewed management’s rationale and supporting
calculations for the valuation methodology adopted;
Considered whether
sufficient overhead was
capitalised in the cost of inventory, as well as costs of
components;
Verified that inventory was carried at the lower of
cost and net realisable value (NRV) by way of testing
post year-end sales of inventory items.
and
challenged management’s
Reviewed
inventory
provisioning methodology; and assessed whether an adequate
provision has been made by reviewing usage of raw materials
and sales of finished goods, with specific consideration given to
slow moving or obsolete inventory lines.
We reviewed whether appropriate controls have been
inventory write-offs
introduced to mitigate the further
identified in previous years.
Key observations
Based on the work performed we did not identify any issues
inventory
over management’s
valuation. An adequate provision has been made and no
further write-offs were identified.
in respect of
judgements
We did not identify any material misstatements with regards to
existence and valuation of inventory.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality
level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
P a g e | 26
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality
as follows:
Materiality
Basis for determining
materiality
Rationale
benchmark applied
the
for
Group financial statements
2020
2021
£
£
111,000
150,000
0.5% of revenue
0.75% of revenue
Parent company financial statements
2021
£
112,000
Capped at 75% of Group
2020
£
88,000
Capped at 80% of Group
The total revenue from continuing and discontinued operations has been used as a benchmark in the
determination of materiality. 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.
Performance
materiality
Rationale
benchmark applied
for
105,000
77,000
78,000
61,000
the
Performance materiality has been set at 70% (2020: 70%) of Group materiality.
In setting the percentage we have considered the level and nature of misstatements noted in previous
years. Whilst we noted some misstatements in previous years’ audits these were mostly on specific
judgemental areas rather than ‘ordinary transactions’ therefore we considered 70% to be appropriate.
Component materiality
Our audit work on each component was executed at levels of materiality applicable to each individual entity which was lower than
Group materiality. Component materiality ranged from £40,000 to £112,000. In the audit of each component, we further applied
performance materiality levels of 70% of the component materiality to our testing to ensure that the risk of errors exceeding
component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £7,500 (2019: £5,550).
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report
and accounts, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning inventory quantities
of £3,368,000 held at the prior year ended 31 April 2020. We have concluded that where the other information refers to the inventory
balance or related balances such as cost of sales or profit for the year relating to discontinued operations, it may be materially
misstated for the same reason.
P a g e | 27
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
report
Directors’
Strategic
and
report
Except for the possible effects of the matter described in the basis for qualified opinion section of our report,
in our opinion, based on the work undertaken in the course of the 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.
•
Except for the possible effects of the matter described in the basis for qualified opinion section of our report,
in the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic report or
the Directors’ report.
Matters on which
we are required
to
by
report
exception
Arising solely from the limitation on the scope of our work relating to inventory at the prior year end, referred
to above:
• we have not obtained all the information and explanations that we considered necessary for the
purpose of our audit.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
•
•
•
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.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
P a g e | 28
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
Based on our understanding of the laws and regulations applicable to the Group and accumulated knowledge of the Group and the
sectors in which it operates we considered the risk of acts by the Group which were contrary to applicable laws and regulations,
including fraud and whether such actions or non-compliance might have a material effect on the financial statements. These included
but were not limited to those that relate to the form and content of the financial statements, such as the Group accounting policies,
international accounting standards, the UK Companies Act 2006 and the AIM Rules; and industry related such as compliance with
health and safety legislation, employment law and taxation legislation. All team members were briefed to inform them of any risks in
respect of fraud and non-compliance with relevant laws and regulations in relation to their work. We obtained an understanding of
the control environment in monitoring compliance with laws and regulations, enquired with management regarding matters pertaining
to laws and regulations during the year, and reviewed any relevant correspondence arising to ensure these had been considered
appropriately.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk
of override of controls), and determined that the principal risks were related to posting inappropriate journal entries, revenue being
recorded in the correct period around the year end and management bias in accounting estimates. Our audit procedures included, but
were not limited to:
•
•
•
•
•
•
Agreement of the financial statement disclosures to underlying supporting documentation;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in
relation to the inventory provisions and impairment of goodwill to identify any potential bias (as described in the key audit
matters section above);
Detailed testing of a sample of revenue items for all significant components to ensure they were accounted for in the
correct period;
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or
including specific keywords;
Discussions with management and those charged with governance, including consideration of known or suspected
instances of non-compliance with laws and regulation and fraud; and
Review of minutes of Board meetings throughout the period, to identify any inconsistencies with our audit work or matters
of which we needed to be aware.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk
of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in
the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely we are to become aware of it.
further description of our
A
responsibilities
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
is available on
the Financial Reporting Council’s website at:
P a g e | 29
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the 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.
Gary Harding (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Manchester
United Kingdom
4 October 2021
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
P a g e | 30
Group Income Statement
for the year ended 30 April 2021
Revenue
Cost of sales
Gross profit
Operating costs
Distribution expenses
Administrative expenses before impairment and other separately disclosed items
Other separately disclosed items
Goodwill impairment
Administrative expenses
Operating loss
Finance costs
Loss for the financial year before taxation
Taxation
Loss for the financial year attributable to the equity holders of the parent on continuing
operations
Profit/(loss) on discontinued operations
Profit/(loss) for the financial year attributable to the equity holders of the parent
Basic and diluted earnings loss per ordinary share - continuing operations
Basic earnings per ordinary share - discontinued operations
Diluted earnings per ordinary share – discontinued operations
Group Statement of Comprehensive Income
for the year ended 30 April 2021
Profit/(loss) for the financial year
Total other comprehensive profit/(loss)
Total comprehensive income/(loss) for the year attributable to equity holders of the parent
Note
2021
£’000
2020
Restated
£’000
5
6
6
7
8
10
13
11
11
11
10,714
(6,913)
3,801
(761)
(2,173)
(1,072)
-
(3,245)
(205)
(111)
(316)
76
(240)
715
475
8,703
(5,794)
2,909
(554)
(1,998)
(343)
(350)
(2,691)
(336)
(127)
(463)
82
(381)
(440)
(821)
(0.29)p
0.86p
0.84p
(0.46)p
(0.53)p
(0.53)p
2021
£’000
2020
£’000
475
(821)
-
-
475
(821)
The result for the year ended 30 April 2020 has been restated to reflect the change in continuing and discontinued operations.
The accompanying accounting policies and notes form an integral part of these financial statements.
P a g e | 31
Balance Sheets
as at 30 April 2021
Company reference: 02429784
ASSETS
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right of use assets
Investments in subsidiaries
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Assets held for sale
LIABILITIES
Current liabilities
Term loan
Other borrowings
Lease liabilities
Trade and other payables
Total current liabilities
Liabilities on assets held for sale
Net current assets/(liabilities)
Non-current liabilities
Lease liabilities
Deferred tax
Total non-current liabilities
NET ASSETS
SHAREHOLDERS’ EQUITY
Share capital
Share premium
Treasury shares
Other reserves
Retained earnings
Group
Parent Company
As at 30 April
2021
£’000
As at 30 April
2020
£’000
As at 30 April
2021
£’000
As at 30 April
2020
£’000
Note
14
15
16
17
13
18
19
21
22
22
22
20
21
22
10
25
1,945
1,243
630
1,496
-
5,314
1,828
4,453
3,843
10,124
2,500
-
1,353
459
2,039
3,851
-
5,145
1,124
2,790
4,365
-
13,424
3,368
4,931
453
8,752
2,520
-
2,978
1,191
3,749
7,918
1,765
-
-
-
-
7,422
7,422
-
1,608
2,829
4,437
2,500
-
-
-
638
638
-
-
-
2,520
-
10,951
13,471
-
39
12
51
-
1,765
-
-
677
2,442
-
8,773
1,589
6,297
(2,391)
1,035
315
1,350
12,737
859
5,621
(218)
1,567
4,908
2,509
398
2,907
12,106
826
5,288
-
1,567
4,425
-
-
-
-
-
-
13,721
11,080
859
5,621
(218)
1,567
5,892
826
5,288
-
1,567
3,399
TOTAL SHAREHOLDERS’ EQUITY
12,737
12,106
13,721
11,080
P a g e | 32
Balance Sheets
continued
An income statement is not provided for the parent Company as permitted by section 408 of the Companies Act 2006. The profit dealt
with in the financial statements of Coral Products PLC was £2,485,000 (2020: £1,388,000 loss).
The financial statements on pages 31 to 72 were approved by the Board of Directors on 4 October 2021 and were signed on its behalf
by:
Joe Grimmond
Director
Sharon Tinsley
Director
The accompanying accounting policies and notes form an integral part of these financial statements.
P a g e | 33
Statement of Changes in Shareholders’ Equity
for the year ended 30 April 2021
Called Up
Share
Capital
£’000
Share
Premium
Reserve
£’000
Note
Treasury
Shares
£’000
Other
Reserves
£’000
Retained
Earnings
£’000
Total
Equity
£’000
826
5,288
-
-
-
-
-
-
-
-
-
-
826
5,288
-
-
-
-
33
-
-
-
-
-
-
333
-
-
859
5,621
-
-
-
-
-
-
-
-
-
-
-
-
(218)
-
(218)
1,567
-
-
-
-
-
5,232
(821)
-
12,913
(821)
-
(821)
(821)
14
-
14
-
1,567
4,425
12,106
-
-
-
-
-
-
-
475
-
475
8
-
-
-
475
-
475
8
366
(218)
-
1,567
4,908
12,737
24
12
24
12
Group
At 1 May 2019
Loss for the year
Other comprehensive income
Total comprehensive loss
Contributions by and distributions
to owners
Equity settled share-based payments
Dividend paid
At 1 May 2020
Profit for the year
Other comprehensive loss
Total comprehensive loss
Contributions by and distributions
to owners
Equity settled share-based payments
Issue of new shares
Purchase of treasury shares
Dividend paid
At 30 April 2021
P a g e | 34
Statement of Changes in Shareholders’ Equity
continued
Called Up
Share
Capital
£’000
Share
Premium
Reserve
£’000
Note
Treasury
Shares
£’000
Other
Reserves
£’000
Retained
Earnings
£’000
Total
Equity
£’000
Parent Company
At 1 May 2019
Loss for the year
Other comprehensive income
Total comprehensive loss
Contributions by and
distributions to owners
Equity settled share-based
payments
Dividend paid
At 1 May 2020
Profit for the year
Total comprehensive profit
Contributions by and
distributions to owners
Equity settled share-based
payments
Issue of new shares
Purchase of treasury shares
Dividend paid
At 30 April 2021
24
12
24
12
-
-
-
-
-
-
-
-
-
-
826
5,288
-
-
-
-
-
-
-
-
-
-
826
5,288
-
-
-
33
-
-
-
-
-
333
-
-
-
(218)
-
1,567
-
-
-
-
-
1,567
-
-
-
-
-
-
4,773
(1,388)
-
12,454
(1,388)
-
(1,388)
(1,388)
14
-
3,399
2,485
2,485
8
-
-
-
14
-
11,080
2,485
2,485
8
366
(218)
-
859
5,621
(218)
1,567
5,892
13,721
The accompanying accounting policies and notes form an integral part of these financial statements.
P a g e | 35
Cash Flow Statements
for the year ended 30 April 2021
Cash flows from operating activities
(Loss)/profit for the year
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right of use assets under IFRS16
Goodwill impairment
Amortisation of intangible assets
Share based payment charge
Profit on disposal of subsidiary
Impairment of investment
Interest payable
Taxation charge/(credit)
Operating cash flows before movements in working capital
(Increase)/decrease in inventories
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Cash generated by operations
UK corporation tax received
Net cash generated from/(used in) operating activities
Cash flows from investing activities
Net cash on disposal of subsidiary
Acquisition of subsidiary
Acquisition of property, plant and equipment
Net cash generated from/(used in) investing activities
Cash flows from financing activities
New bank borrowings raised
New lease liabilities
Interest paid on bank borrowings
Interest paid on invoice discounting
Interest paid on lease liabilities
Repayments of bank borrowings
Repayments of obligations under lease liabilities
Purchase of treasury shares
Drawdowns on invoice discounting facility
Repayments of invoice discounting facility
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 May
Cash and cash equivalents at 30 April
Group
2021
£’000
2020
£’000
Parent Company
2021
£’000
2020
£’000
Note
475
(821)
2,485
(1,389)
16
17
14
15
24
13
13
8
10
13
13
16
26
26
26
26
26
26
487
666
-
284
8
(1,133)
-
329
(48)
1,068
(382)
433
422
1,541
299
1,840
7,771
(937)
(454)
6,380
1,000
-
(70)
(49)
(210)
(2,765)
(893)
(218)
23,288
(24,913)
(4,830)
3,390
453
3,843
1,032
681
350
277
14
-
-
439
-
1,972
137
563
(87)
2,585
-
2,585
-
-
(322)
(322)
500
58
(66)
(69)
(304)
(188)
(1,180)
-
27,064
(27,598)
(1,783)
480
(27)
453
-
-
-
-
-
(3,039)
(383)
70
(2)
(869)
-
(1,354)
(40)
(2,263)
299
(1,964)
7,771
(937)
-
6,834
1,000
-
(70)
-
(2,765)
-
(218)
-
-
(2,053)
2,817
12
2,829
-
-
-
-
-
-
1,388
70
-
69
-
444
(770)
(257)
-
(257)
-
-
-
-
500
-
(70)
-
(188)
-
-
-
-
242
(15)
27
12
The accompanying accounting policies and notes form an integral part of these financial statements.
P a g e | 36
Notes to the Financial Statements
for the year ended 30 April 2021
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 Investment Market) market. The consolidated
financial statements of the Group as at and for the year ended 30 April 2021 comprise the Company and its subsidiaries
(together referred to as the ‘Group’). The address of the registered office is given on page 11. An overview of the business is
given on pages 1 to 2. The nature of the Group’s activities, together with the factors likely to affect its future development,
performance and position are set out in the Chairman’s Statement on pages 3 to 5. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are described in the Strategic Report on pages 6 to 10.
2.
SIGNIFICANT ACCOUNTING 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
The financial reporting framework that has been applied in the preparation of these financial statements is applicable law and
international accounting standards in conformity with the requirements of the Companies Act 2006 and, as regards the Parent
Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
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 Interpretations
The Group has adopted the following standards and interpretations which have been issued by the International Accounting
Standards Board in these financial statements for the year ended 30 April 2021:
•
•
•
Amendments to references to the Conceptual Framework in IFRS (effective 1 January 2020);
IFRS 3 (amendments) business combinations – definition of a business (effective 1 January 2020);
IAS 1 and IAS 8 (amendments) – definition of material (effective 1 January 2020).
New Standards, Amendments and Interpretations Not Yet Effective
At the date of authorisation of these financial statements, the following Standards and Interpretations 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
UK):
•
•
•
•
•
•
•
•
•
•
IAS 1 (amendments): Classification of liabilities as current or non-current;
IFRS 3, IAS 16, IAS 37 (amendments): Business combinations, Property, plant and equipment and Provisions,
contingent liabilities and contingent assets;
Annual improvements to IFRSs (2018-2020 cycle): IFRS 1, IFRS 9, illustrative examples accompanying IFRS16 and
IAS 41;
IFRS 16 (amendments): Leases Covid-19 related rent concessions (effective 1 June 2020);
IFRS 4 (amendments): Insurance contract – deferral of IFRS9 (effective 1 January 2021);
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (Amendments): Interest rate benchmark reform, phase 2 (effective 1
January 2021);
IAS 8 (amendments): Definition of accounting estimates;
IAS 1 and IFRS practice statement 2 (amendments): Disclosure of accounting policies;
IFRS 16 (amendments): Covid-19 related rent concessions beyond 30 June 2020 (effective 1 April 2021);
IAS 12 (amendments): Deferred tax related to assets and liabilities arising from a single transaction.
We are currently assessing the impact of these new standards and amendments; however, we do not expect them to have a
material outcome on the Group.
P a g e | 37
Notes to the Financial Statements
for the year ended 30 April 2021
Basis of Consolidation
The Group’s financial statements consolidate those of the Company and its subsidiary undertakings drawn up to 30 April 2021.
Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control. Control is
achieved when the Company:
•
has the power over the investee;
•
•
is exposed, or has rights, to variable return from its involvement with the investee; and
has the ability to use its power to affect its returns.
The financial statements of subsidiaries used in the preparation of the consolidated financial statements are prepared for the
same reporting year as the parent Company and are based on consistent 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 acquisition method. This method involves recognition at fair value of all
identifiable assets and liabilities at the acquisition 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
In adopting the going concern basis for preparing the financial statements, the Board has considered the business activities as
set out in the Chairman’s Statement and the Strategic Report as well as the Group’s principal risks and uncertainties 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.
In carrying out their duties in respect of going concern, the directors have carried out a review of the Group's and the Company's
financial position and cash flow forecasts 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 into account specific
business risks and the uncertainties brought about by the current economic environment. The directors have also considered
different reverse stress sensitivity scenarios when assessing the Group for going concern. These are discussed further in the
strategic report.
To ensure the continuation of the Group the directors regularly review the revenue generating activities, 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 which are due for annual renewal in
September 2022. Conversations have been held with the bank and they have confirmed that there is an expectation that this
facility will be renewed as it has in previous years when this renewal falls due.
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 continue to adopt the going concern
basis in preparing the annual report and financial statements.
The directors have considered different sensitivity scenarios when assessing the Group for going concern. The directors
assessed what decreases would need to occur for the Group to achieve a £nil profit. These were:
1. A decrease in sales of 26%;
2. A decrease in both sales and gross margin of 15% each and
3. An increase of indirect overheads of 25% against the budget for the next financial year.
However, the board considers these scenarios highly unlikely given the current trading of the Group. Furthermore, with the
high cash availability, the board believes that should any of these occur the Group has sufficient resources to continue.
P a g e | 38
Notes to the Financial Statements
for the year ended 30 April 2021
Underlying Profit
In the opinion of the directors the disclosure of certain transactions should be reported separately for a better understanding
of the underlying trading performance of the Group. These underlying figures are used by the Board to monitor business
performance and form the basis of bonus incentives. It 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. It is not intended to be a substitute for, or superior to, IFRS measures
of profit. A reconciliation to statutory profit measures is detailed in note 6.
Separately Disclosed Items
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 its operations have been reported as being one business segment. Information reported to the Group’s 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.
Revenue Recognition
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. It applies to all contracts with 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 prior 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 value of the consideration received or receivable and represents amounts 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 satisfies its performance obligation. Revenue for Global One-Pak
Limited is recognised on delivery based on existing terms of sale prior to acquisition. There have been no changes to the
accounting for revenue during the year.
Foreign Currencies
Transactions 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 liabilities 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.
P a g e | 39
Notes to the Financial Statements
for the year ended 30 April 2021
Pension Contributions
The Group contributes to defined contribution 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 items 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
liabilities 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 it is 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 neither the tax profit nor the accounting profit. Deferred tax liabilities 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
deferred tax asset relates to losses carried forward.
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 in equity. Deferred tax assets and liabilities are offset when
the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities
relate to taxes levied by the same tax authority.
Goodwill
Goodwill arises on the acquisition of subsidiaries. Goodwill representing 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 impairment.
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 acquisition 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.
Impairment of Goodwill
Impairment tests on goodwill are performed annually at the financial year end. Determining whether goodwill is impaired
requires an estimation of the value in use of cash generating units to which goodwill has been allocated. The calculation of
value in use requires management to estimate 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. As a
result of the impairment review an impairment charge was recognised in the prior year. Further information can be found in
note 14. There was no cash impact from this adjustment.
P a g e | 40
Notes to the Financial Statements
for the year ended 30 April 2021
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment losses.
Cost includes expenditure that is 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:
Plant and equipment
Fixtures and fittings
Motor vehicles
7-25%
10-33%
33%
-
-
-
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 utilises a revaluation model of measurement for land and buildings with fair value being determined by reference
to market-based evidence.
Right of Use Assets
The right of use asset is measured at an amount equal to the corresponding lease liability and is subsequently measured at cost
less accumulated depreciation and impairment losses. Right of use assets are depreciated over the lease term.
Right of use assets
Land and buildings
Plant and equipment
Motor vehicles
Length of lease
7 to 10 years
3 to 5 years
3 to 5 years
-
-
-
Intangible Assets
Intangible assets other than goodwill that are acquired by the Group are stated at cost less accumulated amortisation and are
reviewed for impairment whenever there is an indication that the carrying value may be impaired.
Intangible assets comprise customer lists and brands acquired in business combinations, as well 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 estimated useful lives as follows:
-
Customer relationships
-
Brands
-
Licences
12.5-33%
10%
10%
P a g e | 41
Notes to the Financial Statements
for the year ended 30 April 2021
Impairment of Tangible and Intangible 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 impairment loss. If any such indication exists, the recoverable amount
of the asset is estimated in order 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 individual cash-generating units, or otherwise they are allocated to the smallest Group of cash-generating units for
which a reasonable and consistent allocation basis can be identified.
Intangible 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. In 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 of the
time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If 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 is
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 its 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 unit) 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.
Inventories
Inventories 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.
Financial Assets and Liabilities
IFRS 9 ‘Financial Instruments’ 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.
Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, trade and other
payables.
Initial recognition of financial assets and financial liabilities
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 financial asset/liability, as appropriate on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in profit or loss.
P a g e | 42
Notes to the Financial Statements
for the year ended 30 April 2021
Financial Assets and Liabilities (continued)
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 at the fair value 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 transaction, or over the
reporting period until all model inputs will become observable where appropriate, or released in full when previously
unobservable inputs become observable.
Subsequent measurement of financial assets and financial liabilities
Financial liabilities are subsequently measured at amortised cost.
Financial assets
On initial recognition, the Group classifies its financial assets into the following measurement categories:
•
•
•
Amortised cost; or
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).
Business model assessment:
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 objective 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.
Assessment of whether contractual cash flows are solely payments of principal and interest (SPPI):
The Group has undergone a Solely Payments of Principal and Interest (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.
In making the assessment of whether the contractual cash flows have SPPI characteristics, the Group considers whether the
cash flows are consistent with a basic lending arrangement. That is, the contractual cash flows recovered must represent solely
the payment of principal and interest.
Principal is the fair value of the financial asset on initial recognition. Interest 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 administrative 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.
P a g e | 43
Notes to the Financial Statements
for the year ended 30 April 2021
Financial Assets and Liabilities (continued)
In making the assessment, the Group considers, inter alia, contingent events that would change the amount and timing of cash
flows, prepayment and extension 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
mismatch). Contractual cash flows are assessed against the SPPI test in the currency in which the financial asset is denominated.
Expected credit losses on financial assets
Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within
IFRS 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 information 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. For trade receivables, which are reported net, such provisions are recorded
in a separate provision account with the loss being recognised within administrative expenses in the consolidated statement
of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision.
Amounts owed by subsidiary undertakings
At initial recognition, the parent company makes an assessment as to the initial credit risk of the amounts owed by subsidiary
undertakings by taking into account available relevant information about subsidiary undertakings current and expected
operating performance and cashflow position. This incorporates forward looking information such as the general economic
environment, consumer confidence and inflation, changing consumer demands and the competitive environment.
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 ratios. An assessment is made of significant increases
in credit risk since initial recognition, using a qualitative assessment focusing on a comparison of forecasted KPIs over the
expected life of the amounts owed by subsidiary undertakings at initial recognition to forecasted KPIs over the remaining
expected life of the amounts owed by subsidiary undertakings at the reporting 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.
Financial liabilities and equity
Financial liabilities and equity are classified according to the substance of the financial instrument’s contractual obligations,
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 deposits with an original maturity of three months
or less. For the purpose of the cash flow statement, cash and cash equivalents comprise cash and bank balances together with
bank overdrafts that are repayable on demand.
P a g e | 44
Notes to the Financial Statements
for the year ended 30 April 2021
Leases
The Group enters into lease agreements for the use of buildings and motor vehicles. Leases are accounted for at inception by
recognising a right of use asset and lease liability.
The lease liability is measured at the present value of fixed payments under the lease. IFRS 16 requires payments to be
discounted using the interest rate implicit in the lease. Where that rate cannot be readily determined, which is generally the
case for the Group’s leases, the Group’s incremental borrowing rate is used, being the rate that the Group would have to pay
to borrow the funds necessary to obtain an asset of similar value to the right of use asset in a similar economic environment
with similar terms, security and conditions.
The initial value of the right of use asset is the present value of the fixed payments under the lease, any initial direct costs and
an estimate of dilapidation costs under the terms of the lease. An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
The Group sometimes negotiates break clauses in its property leases, with the typical factor in deciding to negotiate a break
clause being the length of the lease term. The carrying amounts of lease liabilities are not reduced by payments that would be
avoided from exercising break clauses because, as at the point of lease inception, it was considered reasonably certain that the
Group would not exercise its right to exercise any break in the lease.
Research and Development
Research and development tax credits are included and offset against the research and development line within administration
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.
In accordance with IFRS2 “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 2021.
Those fair values are charged to the income statement over the relevant vesting period adjusted to reflect the actual and
expected vesting 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 receive dividends over the
relevant holding period.
The total amount to be expensed over the vesting period is determined with reference to the fair value of options granted,
excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in the assumptions
about the number of options expected to vest. At each reporting date the Group revises its estimate of the number of options
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 transaction costs, are credited to share capital and share
premium when the options are exercised.
Investments in Subsidiaries
Investments in subsidiaries are shown in the parent Company balance sheet at cost less any provision for impairment.
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
P a g e | 45
Company are recognised when declared and therefore final dividends proposed after the balance sheet date are not recognised
as a liability at the balance sheet date. Dividends paid to shareholders are shown as a movement in equity.
Government Grants
Government grants received on capital expenditure are generally deducted in arriving at the carrying amount of the asset
purchased. Grants for revenue expenditure are netted against the cost incurred by the Group. Where retention of a government
grant is dependent on the Group satisfying certain criteria, it is initially recognised as deferred income. When the criteria for
retention has been satisfied, the deferred income balance is released to the consolidated statement of comprehensive income
or netted against the asset purchased.
Treasury Shares
Consideration paid/received for the purchase/sale of treasury shares is recognised directly in equity. The cost of treasury held
is presented as a separate reserve, the “treasury share reserve”. Any excess of the consideration received on the sale of
treasury shares over the weighted average cost of the shares sold is credited to retained earnings.
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
circumstances. Actual results may differ from these estimates. The estimates and assumptions, which have a significant risk of
causing a material adjustment to the carrying amount of assets and liabilities, are outlined below.
Inventory Valuation
Inventories are valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions
for slow moving and obsolete stocks. Calculation of these provisions requires estimates to be made, which include forecast
consumer demand, the promotional, competitive and economic environment, and inventory loss trends. Due to the nature of
inventory provisions, it is impractical to disclose the assumptions that underlie estimates and quantify the impact of sensitivity
on those provisions.
Impairment Reviews
The Board reviews the useful economic lives and residual values attributed to assets on an ongoing basis to ensure 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 fair value
less costs to sell and value in use, where value in use is determined by discounting the future cash flows generated from the
continuing use of the unit. The value in use calculation requires management to estimate the future cash flows expected to
arise from the cash-generating unit and a suitable discount rate in order to calculate present value (see note 14).
P a g e | 46
Notes to the Financial Statements
for the year ended 30 April 2021
Going Concern
In adopting the going concern basis for preparing the financial statements, the Board has considered the business activities as
set out in the Chairman’s Statement and the Strategic Report as well as the Group’s principal risks and uncertainties 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 available cash resources and facilities for the foreseeable future. For this reason, the
Group continues to adopt the going concern basis in preparing its financial statements.
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 sensitivity planning.
Uncertainties in preparing these forecasts are:
• Movements in commodity prices;
•
•
Activities of competitors;
Reliance on key suppliers, particularly with 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;
Brexit; and
Covid-19 pandemic.
•
•
•
•
•
As part of the going concern assessment the board have prepared various forecasting scenarios to assess the going concern
status of the Group.
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; and
- Foreign currency risk.
Liquidity risk; and
Credit risk.
•
•
Policies for managing these risks are set by the Board following recommendations from the Finance Director. The policy for
each of the above risks is described in more detail below. Further quantitative information in respect of these risks is presented
throughout these financial statements.
Principal Financial Instruments
The principal financial instruments used by the Group, from which financial risk arises, are as follows:
•
Trade and other receivables excluding corporation tax recoverable and prepayments (note 19)*
•
Cash at bank*
•
Trade and other payables (note 20)**
•
Lease liabilities (note 23)
•
Bank loans, overdrafts and invoice discounting facilities (note 22)**
• Other external loans (note 22)**
*Financial assets held at amortised cost
**Financial liabilities held at amortised cost
P a g e | 47
Notes to the Financial Statements
for the year ended 30 April 2021
4. FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued)
Market Risk
Market risk arises from the Group’s use of interest bearing, tradeable and foreign currency financial instruments. It is the risk
that the fair value of future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest 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 input costs in 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 mitigate increases in input costs through a combination of continuous
improvement activities to minimise increases in input 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 key vendors in its supply
chain. This risk could manifest in 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 its customers’ end markets leading to reduced levels of activity 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.
Interest Rate Risk
The Group is exposed to movements in interest rates in currencies in which it has borrowings, namely Sterling and Euros, and
this risk is controlled by managing the proportion of fixed to variable rates within limits. Interest 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 mitigate its interest rate exposure. During the current and prior financial year,
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 transaction costs and the translation 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.
Liquidity Risk
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. Short term flexibility is achieved by
bank overdraft and invoice discounting facilities.
P a g e | 48
Notes to the Financial Statements
for the year ended 30 April 2021
4. FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued)
Credit Risk
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. Where a customer is deemed to represent an unacceptable level of credit risk, terms of trade are
modified to limit the Group’s exposure.
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 continue as a going concern so that it can
provide returns to shareholders and benefits for other stakeholders. In 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 minimise its exposure to cash flow interest rate risk and foreign exchange risk as described
above, changes in interest 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
£30,000. 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 that date and on the
annualised interest on that amount would, all other variables being held constant, have resulted in a decrease in the post-tax
profit for the year of £27,000. A 5% weakening in the exchange rate would, on the same basis, have increased post-tax profit
by £30,000.
The other numerical disclosures required by IFRS7 in relation to financial instruments are included in notes 19, 20 and 22.
P a g e | 49
Notes to the Financial Statements
for the year ended 30 April 2021
5.
REVENUE
A breakdown of Group revenues by geographical region, based on the location of the customer is shown as follows:
Discontinued
operations
£’000
7,542
1,719
-
9,261
Discontinued
operations
£’000
13,090
528
-
13,618
Continuing
operations
£’000
9,811
94
809
10,714
Continuing
operations
£’000
7,792
388
523
8,703
Discontinued
operations
£’000
Continuing
operations
£’000
4,888
-
-
4,373
-
9,261
-
6,169
4,064
-
481
10,714
Discontinued
operations
£’000
Continuing
operations
£’000
6,550
-
-
7,068
-
13,618
-
6,042
2,661
-
-
8,703
2021
UK
Rest of Europe
Rest of the World
2020
UK
Rest of Europe
Rest of the World
A breakdown of Group revenues by product group is shown as follows:
2021
Food containers
Extrusion
Trigger sprays and nozzles
Injection & Blow Moulding
Vacuum forming
2020
Food containers
Extrusion
Trigger sprays and nozzles
Injection & Blow Moulding
Vacuum forming
P a g e | 50
Notes to the Financial Statements
for the year ended 30 April 2021
5.
REVENUE (continued)
All Group revenue is in 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 2021 or the year ended 30 April 2020.
There are no contract assets or liabilities arising from contracts with customers.
6. UNDERLYING PROFIT AND SEPARATELY DISCLOSED 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, amortisation of intangibles recognised on
acquisition, acquisition and disposal costs, reorganisation costs, compensation for loss of office and goodwill impairment.
Collectively these are referred to as separately disclosed items. In the opinion of the directors the disclosure of these
transactions should be reported separately for a better understanding of the underlying trading performance of the Group.
On continuing operations
Operating loss
Separately disclosed items within administrative expenses
Share based payment charge (note 24)
Amortisation of intangible assets (customer relationships and brands) (note 15)
Reorganisation costs
Goodwill impairment (note 14)
Total separately disclosed items
Underlying operating profit
Depreciation
Underlying EBITDA
Separately disclosed items (excluding amortisation and impairment)
EBITDA
Loss before tax – continuing operations
Separately disclosed items
Underlying profit/(loss) before tax – continuing operations
2021
£’000
(205)
8
284
780
-
1,072
867
417
1,284
(788)
496
(316)
1,072
756
2020
Restated
£’000
(336)
14
277
52
350
693
357
424
781
(66)
715
(463)
693
230
Separately disclosed items in the current year include acquisition costs of £30,000, disposal of subsidiaries costs of £131,000,
other costs relating to the disposal of the subsidiaries of £295,000, compensation for loss of office of £167,000, disposal costs
of land and building of £69,000, other professional fees of £12,000 and redundancy costs of £76,000.
The share-based payment charge, amortisation charge and goodwill impairment have all been separately disclosed as they are
not controlled by management and do not represent the underlying trading performance of the Group.
Separately disclosed items in the prior year include acquisition due diligence costs of £52,000.
P a g e | 51
Notes to the Financial Statements
for the year ended 30 April 2021
7. OPERATING LOSS
This is stated after charging/(crediting) the following
Staff costs (note 9)
Impairment loss recognised on trade receivables
Impairment loss on goodwill (note 14)
Cost of inventories recognised as expense
Net foreign exchange gains
Depreciation of property, plant and equipment – continuing operations (note 16)
Depreciation of right of use assets – continuing operations (note 17)
Amortisation of intangible assets (note 15)
Other income relating to government grant
Auditors’ remuneration for statutory audit services to this Company
Auditors’ remuneration for statutory audit services to subsidiaries
Non-audit fees of £nil (2020: £nil) were payable to the auditor.
Government grants represents the amount of furlough payments received.
8.
FINANCE COSTS
Interest payable on lease liabilities
Interest payable on term loans
Interest on continuing operations
Interest on lease liabilities – discontinued operations
Interest on invoice discounting facilities – discontinued operations
Interest on discontinuing operations
Total interest during the year
2021
£’000
1,830
24
-
6,913
(87)
165
252
284
(117)
30
60
2021
£’000
41
70
111
169
49
218
329
2020
Restated
£’000
2,052
41
350
5,794
(27)
280
144
277
-
20
58
2020
Restated
£’000
58
69
127
246
66
312
439
P a g e | 52
Notes to the Financial Statements
for the year ended 30 April 2021
9.
STAFF COSTS
Average number of employees (including executive directors) comprised
Production
Selling and distribution
Administration
Average number of employees on continuing operations
Average number of employees on discontinued operations
Their aggregate remuneration comprised
Wages and salaries
Social security costs
Other pension costs
Total remuneration before share option charge
Share option (credit)/charge
Total remuneration on continuing operations
Total remuneration on discontinued operations
Total remuneration
2021
No.
2020
Restated
No.
32
6
15
53
61
2021
£’000
1,524
221
77
1,822
8
1,830
2,112
3,942
32
8
12
52
101
2020
Restated
£’000
1,748
246
57
2,051
1
2,052
2,680
4,732
Other than the Directors, the parent company had 1 employee (2020: 1). Details of Directors’ emoluments are shown in the
Directors’ Remuneration Report on pages 18 to 20.
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the Group, including the directors of the Company and the site general managers.
Their aggregate remuneration comprised
Wages and salaries
Social security costs
Other pension costs
Share option charge
Remuneration on continuing operations
Remuneration on discontinued operations
P a g e | 53
2021
£’000
2020
Restated
£’000
357
42
17
4
420
91
511
337
40
17
1
395
186
581
Notes to the Financial Statements
for the year ended 30 April 2021
10. TAXATION
The (credit)/charge for taxation on the profit/(loss) for the financial year is as follows:
Group
Current tax
Current tax on profit/(loss) for the year
Deferred tax
Reversal of temporary differences
Total taxation credit for the financial year
Total taxation credit - continuing operations
Total taxation charge - discontinued operations
2021
£’000
2020
£’000
6
(54)
(48)
(76)
28
(30)
30
-
(82)
82
The tax assessed for the year is different from that calculated at the standard rate of corporation tax in the UK of 19% (2020:
19%). The differences are reconciled as follows:
Reconciliation of taxation credit
Loss on ordinary activities before tax – continuing operations
Profit/(loss) on ordinary activities before tax – discontinued operations
Profit/(loss) on ordinary activities before tax
Tax on (loss)/profit on ordinary activities at 19% standard rate of tax (2020:
19%)
Non-deductible expenses
Deferred tax not recognised
Income not taxable
Other differences
Total taxation credit
Total taxation credit - continuing operations
Total taxation charge/(credit) - discontinued operations
Deferred tax liability – Group
At 1 May 2020
Acquired as part of business combination
Disposals
Credited to the income statement
At 30 April 2021
Comprising:
Accelerated capital allowances
Losses
Other temporary differences
Liability arising on business combination
2021
£’000
(316)
743
427
81
77
-
(221)
15
(48)
(76)
28
2021
£’000
398
127
(156)
(54)
315
211
(114)
(28)
246
315
2020
£’000
(463)
(358)
(821)
(156)
153
-
-
3
-
(82)
82
2020
£’000
368
-
-
30
398
271
(78)
(17)
222
398
The Group has not recognised a deferred tax asset of £nil (2020: £nil) in relation to tax losses that can be carried forward
indefinitely.
P a g e | 54
Notes to the Financial Statements
for the year ended 30 April 2021
10. TAXATION (continued)
Parent Company
Current tax
Current tax credit for the year
Deferred tax
Fixed asset timing differences
Total taxation credit for the financial year
2021
£’000
2020
£’000
-
(2)
(2)
-
-
-
The tax assessed for the year is different from that calculated at the standard rate of corporation tax in the UK of 19% (2020:
19%). The differences are reconciled as follows:
Reconciliation of taxation credit
Profit/(loss) on ordinary activities before tax
Tax on profit/(loss) on ordinary activities at 19% standard rate
of tax (2020: 19%)
Non-deductible expenses
Income not taxable
Effects of Group relief/other reliefs
Other differences
Total taxation credit
Deferred tax liability – Parent
At 1 May 2020
Owned fixed assets realised through use
At 30 April 2021
Comprising:
Other temporary differences
2021
£’000
2020
£’000
2,487
(1,388)
472
67
(636)
97
(2)
(2)
2021
£’000
-
(2)
(2)
(2)
(2)
(264)
12
264
(12)
-
-
2020
£’000
-
-
-
-
-
Changes in tax rates and factors affecting the future tax charge
An increase in the main corporation tax rate to 25% from 1 April 2023, from the previously enacted 19% was announced at the
budget on 3 March 2021, and subsequently enacted on 24 May 2021. The deferred tax balance at 30 April 2021 has been
calculated based on the rate as at the report date of 19% (2020: 19%).
P a g e | 55
Notes to the Financial Statements
for the year ended 30 April 2021
11. EARNINGS PER ORDINARY SHARE
Number of Shares
Weighted average number of shares
Effect of weighted average number of treasury shares
Weighted average number of shares for the purposes of basic earnings per share
Effect of share options
2021
2020
83,143,645
(111,192)
83,032,453
2,138,460
82,614,865
-
82,614,865
-
Weighted average number of shares for the purposes of diluted earnings per share
85,170,913
82,614,865
Basic and diluted earnings per share – continuing operations
Underlying earnings per share – continuing operations
Basic earnings per share - discontinued operations
Diluted earnings per share – discontinued operations
Basic and underlying earnings per share have been calculated as follows:
2021
(0.29)p
1.00p
0.86p
0.84p
2020
Restated
(0.46)p
0.38p
(0.53)p
(0.53)p
Continuing Operations
2021
Weighted
average
number of
shares
Earnings
per
share
(pence)
(Loss)/
earnings
£’000
2020
Weighted
average
number of
shares
(Loss)/
earnings
per share
(pence)
Earnings
£’000
Loss for the year
Separately disclosed items (note 6)
Underlying profit/(loss) for the period
(240) 83,032,453
-
1,072
832 83,032,453
(0.29)
-
1.00
(381) 82,614,865
-
693
312 82,614,865
(0.46)
-
0.38
Discontinued Operations
2021
Weighted
average
number of
shares
Earnings
per
share
(pence)
(Loss)/
earnings
£’000
2020
Weighted
average
number of
shares
(Loss)/
earnings
per share
(pence)
Earnings
£’000
Profit/(loss) for the year
Separately disclosed items
Underlying profit/(loss) for the period
715 83,032,453
-
35
750 83,032,453
0.86
-
1.03
(440) 82,614,865
-
90
350 82,614,865
(0.53)
-
0.42
Underlying earnings per share
Underlying earnings per share has been presented in addition to basic earnings 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 superior to, the IFRS measure.
Diluted earnings per share
The number of shares calculated as above is compared with the number of shares that would have been issued assuming the
exercise of all outstanding share options. The potential ordinary shares are considered anti-dilutive as they decrease the loss
per share for continuing operations. Therefore, diluted EPS is the same as basic for continuing operations. However, the
discontinued operations can be diluted.
P a g e | 56
Notes to the Financial Statements
for the year ended 30 April 2021
12. DIVIDENDS PAID AND PROPOSED
Interim dividend £nil (2020: £nil)
Final dividend for 2020 £nil (2019: £nil)
2021
£’000
2020
£’000
-
-
-
-
-
-
An interim dividend of 0.5p was paid on 28 May 2021. A final dividend of 0.5p (2020: nil) is to be recommended at the
forthcoming AGM. The final dividend is subject to approval by shareholders at the Annual General Meeting on 27 October 2021
and has not been included as a liability in these financial statements.
13.
INVESTMENTS: SHARES IN GROUP UNDERTAKINGS
Parent Company
Cost and net book value
At 1 May
Share options granted to employees in subsidiaries (note 24)
Disposal of subsidiaries
Acquisition of subsidiary
Waiver of intercompany loan
Impairment
At 30 April
2021
£’000
10,951
8
(4,737)
1,200
-
-
7,422
2020
£’000
10,937
14
-
-
1,388
(1,388)
10,951
Investments 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 Registered office
Tatra Rotalac Limited
Manufacture of plastic mouldings
and extrusions
100%
Rotalac Plastics Limited Manufacture of plastic mouldings
100%
Global One-Pak Limited
Customised Packaging
Limited
and extrusions
Design, packaging and
distribution of lotion pumps,
trigger sprays and aerosol caps
Manufacture of plastic mouldings
and extrusions
Southmoor Road, Wythenshawe,
Manchester, M23 9DS
Southmoor Road, Wythenshawe,
Manchester, M23 9DS
100% Hyde Park House, Cartwright Street,
Newton Hyde, Cheshire,
SK14 4EH
100% Unit 2-4 Denton Business Park, Windmill
Lane, Manchester, M34 3SP
Business Combinations during the period - Acquisitions
On 3 March 2021 the Group acquired 100% of the voting equity instruments of Customised Packaging Limited whose principal
activity is the manufacture of plastic mouldings and extrusions. The principal reason for this acquisition was to expand further
the Group’s market coverage and product range.
P a g e | 57
Notes to the Financial Statements
for the year ended 30 April 2021
13.
INVESTMENTS: SHARES IN GROUP UNDERTAKINGS (continued)
Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows (note
that fair value was not used as the measurement basis for assets and liabilities that require a different basis, which includes
leases, contingent liabilities, income taxes and defined benefit pension plans):
Net assets acquired
Property, plant and equipment
Right of use assets
Inventories
Trade and other receivables
Trade and other payables
Overdraft
Intangible assets
Deferred tax liability
Total net assets
Fair value of consideration paid
Cash
Shares
Total consideration
Goodwill
Book
Value
£’000s
Adjust-
ments
£’000s
235
-
334
489
(381)
(103)
-
(47)
527
(80)
700
-
-
(620)
-
403
(80)
323
Fair
Value
£’000s
155
700
334
489
(1,001)
(103)
403
(127)
850
£’000s
834
366
1,200
350
Acquisition costs of £30,000 have been recognised as part of administration expenses in the statement of comprehensive
income.
As part of the acquisition agreement, if the profit during the next financial period exceeds £250,000 then an earn out will be
paid equal to 30% of profits in excess of £250,000. No liability has been recognised in relation to the earn out.
The main factors leading to the recognition of goodwill are the presence of certain intangible assets, such as the assembled
workforce of the acquired entity, which do not qualify for separate recognition. The goodwill recognised will not be deductible
for tax purposes.
Since the acquisition date, Customised Packaging Limited have contributed £481,000 to Group revenues, £20,000 to Group
profit and £30,000 to cash flow in this financial period.
Disposal of Subsidiaries
On 3 March 2021 the Group sold 100% of the voting equity instruments of Coral Products (Mouldings) Limited and Interpack
Limited for £7.8 million. The principal reason for this disposal was to provide the company with the opportunity to crystallise
an attractive return on invested capital with respect to the sale companies, reduce net debt and to provide additional financial
flexibility to further develop and support the recent progress of the continuing Group.
P a g e | 58
Notes to the Financial Statements
for the year ended 30 April 2021
13.
INVESTMENTS: SHARES IN GROUP UNDERTAKINGS (continued)
Details of the fair value of identifiable assets and liabilities disposed of are as follows:
Net assets sold
Fair value of consideration received
Net assets disposed of:
Property, plant and equipment
Right of use assets
Goodwill at disposal date
Inventories
Cash
Trade and other receivables
Trade and other payables
Invoice discounting facility
Lease liability
Total net assets
Gain on disposal of discontinued operation
Related tax expense
Gain on disposal of discontinued operation
£’000s
7,776
(2,309)
(2,993)
(3,550)
(2,056)
(5)
(1,672)
2,513
1,380
2,049
(6,643)
1,133
-
1,133
Disposal costs of £131,000 have been recognised as part of administration expenses in the statement of comprehensive income.
Results of discontinued operations
Revenue
Cost of sales
Gross profit
Operating costs
Distribution expenses
Administrative expenses before other separately disclosed items
Other separately disclosed items
Administration expenses
Operating loss
Finance costs
Loss for the financial year before taxation
Taxation
Gain on disposal of discontinued operations
Net profit/(loss) on discontinued operations
Earnings per share from discontinued activities
Basic earnings per ordinary share
Diluted earnings per ordinary share
Note
5
8
10
Statement of cash flows
The statement of cash flows includes the following amounts relating to discontinued activities:
Operating activities
Investing activities
Financing activities
Net cash from discontinued activities
P a g e | 59
2021
£’000s
2020
£’000s
9,261
(5,656)
3,605
(540)
(3,202)
(35)
(3,237)
(172)
(218)
(390)
(28)
1,133
715
13,618
(8,535)
5,083
(742)
(4,297)
(90)
(4,387)
(46)
(312)
(358)
(82)
-
(440)
0.86p
0.84p
(0.53)p
(0.53)p
2021
(1,457)
7,446
(2,931)
3,058
2020
1,960
(790)
(595)
575
Notes to the Financial Statements
for the year ended 30 April 2021
14. GOODWILL
Group
At 30 April 2019
Impairment
At 30 April 2020
Additions
Disposals
At 30 April 2021
£’000
5,495
(350)
5,145
350
(3,550)
1,945
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:
Customised
Packaging
Limited
£’000
Tatra
Rotalac
Limited
£’000
Global
One-Pak
Limited
£’000
Interpack
Limited
£’000
Other
£’000
-
350
-
350
961
-
-
961
634
-
-
634
3,457
-
(3,457)
-
93
-
(93)
-
Total
£’000
5,145
350
(3,550)
1,945
Goodwill
At 30 April 2020
Additions
Disposals
At 30 April 2021
The Group tests goodwill and intangible assets annually for impairment. The recoverable amount of goodwill and intangibles
arising on the acquisition of Customised Packaging, Tatra and Global One-Pak is determined from value in 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 rates. Management estimates discount rates using pre-tax rates that reflect market assessments of the
time value of money and the risks specific to the acquired subsidiaries. In assessing goodwill and intangibles for impairment,
the directors 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. In performing this impairment
review, the Group has prepared cash flow forecasts derived from the most recent financial budgets approved by the Board, an
estimate for year two based upon expected growth and improved performance a year after the impact of the lockdown due
to coronavirus and then estimates of revenue growth for the following years at 2.0% per annum, with overheads also assumed
to increase at 2.0% per annum. Thereafter, a growth rate for pre-tax profit of 2.0% per annum is assumed into perpetuity. The
growth rate of 2.0% exceeds the long-term average growth rate, however, management have estimated this based on a
prudent view of future growth in demand. A pre-tax rate of 11.5% has been used to discount the forecast cash flow. The key
assumptions are based on past experience for expected changes in future conditions.
The Group has conducted a sensitivity analysis on the impairment test of each CGU carrying value. A decrease in the growth
rate of profit to 0% (i.e. the current level of profit being generated remains constant) over the forthcoming five years would
not cause the carrying value to be impaired for either Customised Packaging, Tatra-Rotalac or Global One-Pak, nor would a
reduction of the growth rate for pre-tax profit into perpetuity to 0%.
P a g e | 60
Notes to the Financial Statements
for the year ended 30 April 2021
15. OTHER INTANGIBLE ASSETS
Group
Cost
At 1 May 2019 and 1 May 2020
Acquired through business combinations
Disposal of business
At 30 April 2021
Amortisation
At 1 May 2019
Charge in the year
At 1 May 2020
Charge in the year
Disposal of business
At 30 April 2021
Net book value
At 30 April 2021
At 30 April 2020
Parent Company
Cost
At 1 May 2019 and 1 May 2020
Disposal
At 30 April 2021
Amortisation
At 1 May 2019 and 1 May 2020
Disposal
At 30 April 2021
Net book value
At 30 April 2021
At 30 April 2020
Customer
relationships
£’000
Brands
£’000
Licences
£’000
Total
£’000
2,653
403
(411)
2,645
1,472
245
1,717
252
(411)
1,558
1,087
936
322
-
-
322
102
32
134
32
-
166
156
188
573
-
(573)
-
573
-
573
-
(573)
-
-
-
3,548
403
(984)
2,967
2,147
277
2,424
284
(984)
1,724
1,243
1,124
Licences
£’000
Total
£’000
403
(403)
-
403
(403)
-
-
-
403
(403)
-
403
(403)
-
-
-
As set out in note 14, the Group tests goodwill and intangible assets annually for impairment.
P a g e | 61
Notes to the Financial Statements
for the year ended 30 April 2021
16. PROPERTY, PLANT AND EQUIPMENT
Group
Cost or Valuation
At 1 May 2019
Reclassification due to adoption of IFRS 16 (note 2)
Additions
Transferred to assets held for sale
Disposals
At 1 May 2020
Acquired through business combinations
Additions
Disposal of business
At 30 April 2021
Depreciation
At 1 May 2019
Reclassification due to adoption of IFRS 16 (note 2)
Charge in the year
Disposals
At 1 May 2020
Acquired through business combinations
Charge in the year – continuing operations
Charge in the year – discontinued operations
Disposal of business
At 30 April 2021
Net book value
At 30 April 2021
At 30 April 2020
Parent Company
Cost or Valuation
At 1 May 2019 and 1 May 2020
Addition
Disposal
Transferred to assets held for sale (note 21)
At 30 April 2021
Land and
buildings
£’000
Fixtures and
fittings
£’000
Plant and
equipment
£’000
Motor
Vehicles
£’000
2,520
-
-
(2,520)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
337
-
19
-
(1)
355
81
9
(279)
166
217
-
94
(1)
310
78
22
17
(261)
166
-
45
15,780
(4,245)
303
-
-
11,838
978
445
(6,347)
6,914
9,009
(854)
938
-
9,093
802
142
305
(4,056)
6,286
628
2,745
-
-
-
-
-
-
44
-
-
44
-
-
-
-
-
42
-
-
-
42
2
-
Total
£’000
18,637
(4,245)
322
(2,520)
(1)
12,193
1,103
454
(6,626)
7,124
9,226
(854)
1,032
(1)
9,403
948
165
322
(4,317)
6,494
630
2,790
Land and
buildings
£’000
2,520
180
(200)
(2,500)
-
During the year there were additions to the assets held for sale. Assets held for sale are held at their market value determined by
reference to market-based evidence.
P a g e | 62
Notes to the Financial Statements
for the year ended 30 April 2021
17. RIGHT OF USE ASSETS
Cost
At 1 May 2020
Acquired through business combinations
Additions
Disposal of business
At 30 April 2021
Depreciation
At 1 May 2020
Acquired through business combinations
Charge for the year – continuing operations
Charge for the year – discontinued operations
Disposal of business
At 30 April 2021
Carrying amount
At 30 April 2021
At 30 April 2020
18. INVENTORIES
Raw materials
Work in progress
Finished goods and goods for resale
Property
£’000
1,130
620
-
-
1,750
499
-
131
-
-
630
1,120
631
Plant and
Equipment
£’000
Motor Vehicles
Total
£’000
£’000
4,836
56
-
(4,288)
604
1,313
13
90
360
(1,408)
368
236
3,523
349
24
116
(283)
206
138
13
31
54
(170)
66
6,315
700
116
(4,571)
2,560
1,950
26
252
414
(1,578)
1,064
140
211
1,496
4,365
Group
2021
£’000
930
433
465
1,828
2020
£’000
1,394
324
1,650
3,368
Parent Company
2021
£’000
2020
£’000
-
-
-
-
-
-
-
-
During the year a provision of £200,000 (2020: £nil) has been made against inventory for slow-moving stocks. Write-downs of
inventories to net realisable value amounted to £nil (2020: £nil).
P a g e | 63
Notes to the Financial Statements
for the year ended 30 April 2021
19. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Less: provision for impairment of trade receivables
Amounts owed by subsidiary undertakings
Corporation tax recoverable
Other debtors
Deferred tax
Prepayments and accrued income
Group
2021
£’000
2,537
(24)
2,513
-
-
1,595
-
345
4,453
2020
£’000
3,807
(41)
3,766
-
306
-
-
859
4,931
Parent Company
2021
£’000
-
-
-
52
-
1,568
2
(14)
1,608
2020
£’000
-
-
-
8
-
-
-
31
39
The fair value of trade and other receivables approximates to book value at 30 April 2021 and 2020.
The Group is exposed to credit risk with respect to trade receivables due from its customers. The Group currently has around
500 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 2021, or the year ended 30 April 2020.
Prepayments and accrued income include funds of £1.1m that were held in escrow at 30 April 2021, these relate to the sale of
Coral Products (Mouldings) Limited and Interpack Limited. Most of these funds have been received during the current financial
year. There is a balance remaining in escrow of £0.2m which is expected to be received once the roof replacement at Haydock
is completed in October 2021.
The carrying amount of the Group’s trade and other receivables are denominated in the following currencies:
Sterling
Euros
US Dollars
Group
Parent Company
2021
£’000
2,461
52
-
2,513
2020
£’000
3,710
11
45
3,766
2021
£’000
2020
£’000
-
-
-
-
-
-
-
-
P a g e | 64
Notes to the Financial Statements
for the year ended 30 April 2021
19. TRADE AND OTHER RECEIVABLES (continued)
As 30 April 2021 the lifetime expected loss provision for trade receivables is as follows:
Group
Current
£’000
Overdue less
than 1
month
£’000
Overdue 1 -2
months
£’000
Overdue
more than 2
months
£’000
Total
£’000
Expected loss ratio
0.15%
1.5%
2.5%
3.5%
Gross carrying amount
Loss provision
1,465
(2)
659
(10)
215
(5)
198
(7)
2,537
(24)
Movement in the loss provision for trade receivables has been included in administrative expenses in the financial statements
and receivables are shown net of allowance.
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 information 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.
The movement in the loss provision has been as follows:
Opening provision for impairment
Utilised in the period/unused provision released
Provided in the period
Closing provision
Group
2021
£’000
41
(41)
24
24
2020
£’000
34
(34)
41
41
Parent Company
2021
£’000
2020
£’000
-
-
-
-
-
-
-
-
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable set out above. The Group
did not hold any significant interest rate swaps or forward foreign exchange contracts at the year-end.
P a g e | 65
Notes to the Financial Statements
for the year ended 30 April 2021
20. TRADE AND OTHER PAYABLES
Trade payables
Other taxes and social security
Accruals and deferred income
Amounts owed to Group undertakings
Other payables
Group
Parent Company
2021
£’000
1,483
172
367
-
17
2,039
2020
£’000
3,047
387
315
-
-
3,749
2021
£’000
42
-
150
446
-
638
2020
£’000
6
-
61
610
-
677
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs.
The directors consider that the carrying amount of trade payables approximates to their fair value.
21. ASSETS HELD FOR SALE
Assets
Land and buildings at Haydock
Liabilities
Term loan on land and buildings
Total assets/liabilities held for sale
Group
Parent Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
2,500
2,520
2,500
-
(1,765)
-
2,500
755
2,500
-
-
-
A sale has been agreed for the land and buildings at the Haydock site, contracts have been exchanged with completion occurring
during the next financial year upon completion of the roof works. The mortgage on the property was repaid in full in March
2021.
In the previous year the term loan held in the Group was a mortgage made against the property which was held as collateral in
the loan arrangement.
P a g e | 66
Notes to the Financial Statements
for the year ended 30 April 2021
22. FINANCIAL LIABILITIES
The maturity profile of the non-current financial liabilities as at 30 April 2021 is set out below:
Borrowings
Current
Term loan
Invoice discounting facility
Lease liabilities
Non-current
Lease liabilities
Liabilities held for sale outside of current and non-current
Term loan (note 21)
The effective interest rates at the balance sheet date are as follows:
Invoice discounting facility
Term loan
Lease liabilities
Group
Parent Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
-
1,353
459
1,812
1,035
1,035
-
-
-
2,978
1,191
4,169
2,509
2,509
1,765
1,765
-
-
-
-
-
-
-
-
1,765
-
-
1,765
-
-
-
-
2021
2020
2.3% over base
n/a
3.7%
2.3% over base
3.0% over base
3.7%
Lease liabilities are secured on the assets to which the contracts relate. The invoice discounting facility is secured over trade
receivables. The directors estimate that the fair value of the Group's borrowings is the same as the above book values as at 30
April 2021 and as at 30 April 2020. The invoice discounting facility was renegotiated in September 2021 when Customised
Packaging Limited was added to the facility, the new interest rate is 1.98% over base.
The maturity profile of the non-current financial liabilities as at 30 April 2021 is set out below:
In more than one year but not more than two years
Lease liabilities
In more than two years but not more than five years
Lease liabilities
Group
Parent Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
410
1,035
625
1,035
1,474
2,509
-
-
-
-
-
-
On 13 May 2020, the Group received a coronavirus business interruption loan (CBIL) of £1,000,000. This was repaid in full on
28 April 2021. The Group have now returned to spending on capital expenditure to meet current increase demand and have
recommenced dividend payments.
P a g e | 67
Notes to the Financial Statements
for the year ended 30 April 2021
22. FINANCIAL LIABILITIES (continued)
Undrawn borrowing facilities
The Group has a maximum Invoice Discounting Facility of £3.0m, subject to debtor levels and restrictions.
Grants which have been received for which the grant criteria have been met are included in operating income. Grants which
have been received where the grant criteria have not been met are included in liabilities.
23. LEASE LIABILITIES
At 1 May 2020
Acquired through business combinations
Additions – new leases
Discounted payments – continuing operations
Discounted payments – discontinued operations
Disposal of business
At 30 April 2021
Current liabilities
Non-current liabilities
At 30 April 2021
The maturity analysis for lease liabilities is shown below:
Property
£’000
634
620
-
(129)
-
-
1,125
233
892
1,125
Plant and
Equipment
£’000
Motor
Vehicles
£’000
2,851
-
-
(110)
(586)
(1,917)
238
178
60
238
215
-
116
(31)
(37)
(132)
131
48
83
131
Total
£’000
3,700
620
116
(270)
(623)
(2,049)
1,494
459
1,035
1,494
Lease liabilities < 1 year
Lease liabilities 1 - 2 years
Lease liabilities 2 - 5 years
Total
2021
Interest
£’000
59
69
186
314
2021
discounted
payments
£’000
2021
Total
repayment
£’000
354
456
684
413
525
870
2020
interest
£’000
324
347
655
1,494
1,808
1,326
2020
discounted
payments
£’000
2020
Total
repayment
£’000
1,190
1,035
1,475
3,700
1,514
1,382
2,130
5,026
P a g e | 68
Notes to the Financial Statements
for the year ended 30 April 2021
24. 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 1p 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. All these employees have left the Company.
On 30 May 2017 share options were granted to 4 employees. Options were granted over 550,000 1p ordinary shares of the
company with an exercise price of 21p per share. The share price at the grant date was 15p per share. 3 employees with options
totalling 450,000 1p ordinary shares have left the Company.
On 22 August 2017 share options were granted to 2 employees, both of which are directors of the company. 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. 1 employee with options totalling 2,000,000 1p ordinary shares has left the company.
On 23 March 2021 share options were granted to 3 employees. Options were granted over 1,538,460 1p ordinary shares of the
company with an exercise price of 13p. The share price at the grant date was 11.8p.
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.
The weighted average fair value of the options as at 30 April 2021 was £130,338 based on a fair value of 6.6p per share and
2,138,460 options. The assumptions used in the calculation are as follows:
Option pricing model used
Expected volatility
Option life
Risk-free interest rate
Expected dividend yield
8 December 2014
Black-Scholes
30%
10 years
1.9%
3.45%
30 May 2017
Black-Scholes
46%
10 years
1.09%
4.7%
22 August 2017
Black-Scholes
45%
10 years
1.09%
4.8%
23 March 2021
Black-Scholes
50%
10 years
0.78%
5.6%
A debit of £8,000 (2020: £14,000 debit) has been recognised in the income statement in the current year in relation to these
share options.
No options have been exercised in the year (2020: none). The maximum term on the options is 10 years from the issue date,
which remains the weighted average remaining life.
P a g e | 69
Notes to the Financial Statements
for the year ended 30 April 2021
25. SHARE CAPITAL
Group
Parent Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Allotted, called up and fully paid
84,247,534 ordinary shares of 1p each
Treasury shares 1,695,000 ordinary shares of 1p each
Total 85,942,534 ordinary shares of 1p each
842
17
859
826
-
826
842
17
859
826
-
826
Ordinary shares held by the company
1,695,000
218
-
-
2021
Number
2021
£’000
2020
Number
2020
£’000
The shares were acquired between March and April 2021.
26. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Net increase/(decrease) in cash and cash equivalents
Decrease on invoice discounting facility
Decrease/(increase) in bank loans and other loans
Decrease/(increase) in lease liabilities
Movement in net debt for the period
Net debt at beginning of period
Net funds/(debt) at end of period
Group
Parent Company
2021
£’000
3,390
1,625
1,765
2,206
8,986
(7,990)
996
2020
£’000
480
534
(312)
(475)
227
(8,217)
(7,990)
2021
£’000
2,817
-
1,765
-
4,582
(1,753)
2,829
2020
£’000
(15)
-
(312)
-
(327)
(1,426)
(1,753)
P a g e | 70
Notes to the Financial Statements
for the year ended 30 April 2021
26. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (continued)
Other than the movement in lease liabilities, the Group had no non-cash changes arising from financing activities.
2020
Repayment of principal – continuing operations
Repayment of principal – discontinued operations
New borrowings
Interest paid – continuing operations
Interest paid – discontinued operations
Cash movements total
Interest charge – continuing operations
Interest charge – discontinued operations
Non cash additions
Disposal of business
Non cash movement total
2021
27. RELATED PARTY TRANSACTIONS
Lease
Liabilities
(Note 23)
£’000
3,700
(270)
(623)
-
(41)
(169)
(1,103)
41
169
736
(2,049)
(1,103)
1,494
Bank
Borrowing
(Note 22)
£’000
-
(1,000)
-
1,000
-
-
-
-
-
-
-
-
-
Bank
Borrowing
(Note 21)
£‘000
1,765
(1,765)
-
-
(70)
-
(1,835)
70
-
-
-
70
-
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
consolidation for the Group and are not disclosed in this note. All related party transactions are conducted on an arms’ length
basis.
Key management personnel
Details of the compensation of the key management personnel have been disclosed in note 9, no other transactions were
entered into with 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 19. The transactions entered into between
the Company and its subsidiaries were as follows:
Rentals received from Group undertakings
Recharge of overheads to Group undertakings
2021
£’000
250
306
2020
£’000
300
388
P a g e | 71
Notes to the Financial Statements
for the year ended 30 April 2021
28. POST BALANCE SHEET EVENTS
The invoice discounting facility with Barclays was renegotiated in September 2021 when Customised Packaging Limited was
added to the Group facility and renewed for a further twelve months. This has resulted in lower interest fees.
29. ULTIMATE CONTROLLING PARTY
In the opinion of the directors there is no ultimate controlling party.
P a g e | 72
Five Year Record (unaudited)
2021
£’000
2020
Restated
£’000
2019
2018
2017
£’000
£’000
£’000
Turnover
10,714
8,703
24,733
23,405
21,432
Profit
Underlying operating profit
Net interest payable
Underlying profit/(loss) before taxation
Separately disclosed items
Goodwill impairment
Taxation
Discontinued operations
Profit/(loss) after taxation
Interest cover (times)
Underlying earnings per share (pence)
Dividend per share (pence)
Assets employed
Non-current assets
Other net assets/(liabilities)
Net assets
Financed by
Share capital
Reserves
Shareholder’s funds
Gearing (%)
Net assets per share (pence)
867
(111)
756
(1,072)
-
76
715
475
8.7
0.84
1.0
5,314
7,423
12,737
859
11,878
12,737
n/a
15
357
(127)
230
(343)
(350)
82
(440)
(821)
0.9
(0.05)
0.0
13,424
(1,318)
12,106
826
11,280
12,106
66
15
1,018
(438)
580
(539)
-
43
-
84
2.3
0.75
0.25
16,307
(3,394)
12,913
826
12,087
12,913
64
15
879
(311)
568
(1,065)
-
127
-
(370)
2.7
0.84
0.4
16,484
(3,313)
13,171
826
12,345
13,171
56
16
1,093
(228)
865
(400)
-
(7)
-
458
4.8
1.04
1.0
15,944
(2,147)
13,797
826
12,971
13,797
41
17
P a g e | 73
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 the offices of Tatra Rotalac,
Southmoor Road, Wythenshawe, Manchester, M23 9DS, on Wednesday 27 October 2021, 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 Resolutions, to
be passed with at least three-quarters of the votes in favour of the Resolution.
The Board strongly urges Shareholders to comply with Government public health instructions in respect of the COVID-19 pandemic
and its advice in relation to social contact, public gatherings and non-essential travel. The health of the Shareholders, as well as its
officers and employees, is of paramount importance. It is expected that the attendance by certain of the Directors in person at the
Annual General Meeting will be limited to satisfy the requirements of a quorum. The Annual General Meeting will end immediately
following the formal business required and there will be no corporate presentations, Q&A or refreshments. Social distancing measures
will be in place and strict hygiene arrangements in force.
The results of the Annual General Meeting will be available on the Company’s website shortly after the Annual General Meeting has
closed. The Board continues to follow advice issued by the Government with respect to the COVID-19 pandemic and will issue further
guidance if necessary.
In light of the continuing Covid-19 pandemic and those not wishing to attend the Annual General Meeting in person, the Board shall
accept any questions relating to the business being dealt with at the Annual General Meeting to be submitted by Shareholders in
advance to the Company and the Company shall, where considered appropriate, publish the question and the response on the
Company website in advance of the Annual General Meeting. Any such questions should be sent to the following email address
CHAIRMAN@CORALPRODUCTS.COM so as to be received by no later than 1 p.m. on 26 October 2021.
Ordinary business
Ordinary resolutions
1.
2.
3.
4.
5.
6.
7.
To receive and adopt the audited accounts for the year ended 30 April 2021, together with the Reports of the Directors and
Auditors.
To re-elect Steve Barber, who retires by rotation as a Director 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 fix their remuneration.
To declare a final dividend of 0.5p per ordinary share in respect of the year ended 30 April 2021.
To approve the Board Report on Directors’ Remuneration for the year ended 30 April 2021.
That the Directors be generally and unconditionally authorised pursuant to and in accordance 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 rights
to subscribe for or to convert any security into shares in the Company (“Rights”) up to an aggregate nominal amount of
£550,765, provided that this authority shall, unless renewed, varied or revoked by the Company, expire at the end of the
Company’s annual general meeting in 2021, save that the Company may, before such expiry, make an offer or agreement which
would or might require shares to be allotted or Rights 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 authorities.
P a g e | 74
Notice of the Annual General Meeting
continued
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 equity 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 limited to:
8.1.1
the allotment of equity securities in connection with an offer of equity securities:
(a)
to the holders of ordinary shares in proportion (as nearly as may be practicable) to their respective holdings;
and
(b) to holders of other equity securities as required by the rights of those securities or as the directors
otherwise consider necessary.
8.1.2
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 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
8.3 expire at the end of the Company’s annual general meeting in 2022 (unless renewed, varied or revoked by the Company
prior to or on that date), save that the Company may, before such expiry make an offer or agreement which would or
might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance
of any such offer or agreement notwithstanding that the power conferred by this resolution has expired.
Special business
Special resolution
9.
That the Company be generally and unconditionally authorised for the purposes of Section 701 of the 2006 Act to make market
purchases (within 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 time to time determine, provided that:
(a)
(b) the minimum price which may be paid for an ordinary share is 1 pence (being the nominal value of the ordinary share)
the maximum number of ordinary shares which may be purchased is 12,392,230;
(c)
exclusive of expenses;
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 last 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 authority to purchase hereby conferred shall expire at the end of the next annual general meeting in 2022, save that
the Company may make a contract to purchase ordinary shares under this authority before the expiry of the authority
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 Board
Sharon Tinsley
Company Secretary
4 October 2021
Registered Office
Southmoor Road
Wythenshawe
Manchester
M23 9DS
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Notice of the Annual General Meeting
continued
Notes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
A member entitled to attend and vote at the Annual General Meeting may appoint another person(s) (who need not be a member of the
Company) to exercise 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 appointed to exercise the rights attaching to different shares held
by him.
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 vo te as you
instruct and must attend the Annual General Meeting for your vote to be counted. Appointing a proxy does not preclude you from attending
the Annual General Meeting and voting in person.
A Proxy Form which may be used to make this appointment and give proxy instructions accompanies this Notice of Annual General Meeting.
Details of how to appoint a proxy are set out in the notes to the Proxy Form. If you do not have a Proxy Form and believe that you should have
one, or if you require additional forms, please contact the Company.
In order to be valid an appointment of proxy must be returned (together with any authority under which it is executed or a copy of the authority
certified) in hard copy form by post, by courier or by hand to the office of the Share Registrars Limited, The Courtyard, 17 West Street, Farnham,
Surrey, GU9 7DR, 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 app ointed a
proxy using the hard copy Proxy Form and would like to change the instructions using another hard copy Proxy Form, please con tact the
Registrars. 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 notice to the Registrars stating your intention to revoke the proxy instruction, to be received by the
Registrars no later than 48 hours prior to the meeting. Any attempt to terminate or amend a proxy appointment received 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 meeting, the one which is last sent shall be treated as replacing and revoking the others.
A copy of this Notice of Annual General Meeting may have been sent for information only to persons who have been nominated by a member
to enjoy information rights under section 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 appointed as a proxy for the Annual General Meeting or to have
someone else so appointed. If a Nominated Person does not have such a right or does not wish to exercise it, he may have a right under such
an agreement to give instructions to the member as to the exercise of voting rights.
To be entitled to attend and vote at the Annual General Meeting, members must be registered in the register of members of the Company 48
hours prior to the meeting (or, if the meeting is adjourned, 48 hours prior to the date of the adjourned meeting). Changes to entries 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 meeting.
Voting 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 practicable following the Annual General Me eting, 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 ac tively
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 representative(s) at the Annual General
Meeting. In 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 it were an individual member of the Company, provided that they do not do so in relation
to the same shares. It is no longer necessary to nominate a designated corporate representative.
The Company must cause to be answered at the Annual General Meeting any question relating to the business being dealt with at the Annual
General Meeting which is put by a member attending the Annual General Meeting, except in certain circumstances, including if it is undesirable
in the interests of the Company or the good order of the meeting that the question be answered or if to do so would involve the disclosure of
confidential information.
As at 1 October 2021 (being the last Business Day prior to the publication of this Notice of Annual General Meeting), the Company’s issued
share capital consists of 82,947,534 ordinary shares of 1p each with voting rights. Therefore, the number of total voting rights in the Company
is 82,947,534.
The contents of this Notice of Annual General Meeting and details of the total number of shares in respect of which members are entitled to
exercise voting rights at the Annual General Meeting and, if applicable, any members’ statements, members’ resolutions or members’ matters
of business received by the Company after the date of this Notice of Annual General Meeting will be avail able on the Company’s corporate
website: www.coralproducts.com.
13.
You may not use any electronic address provided in this Notice of Annual General Meeting to communicate with the Company for any purposes
other than those expressly stated.
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Financial Calendar
Annual General Meeting
Payment of Final Dividend
Provisional - Interim results
27 October 2021
30 November 2021
31 December 2021
Shareholder Information
Coral Products shareholders register is maintained by Share Registrars Limited who are responsible for updating the register, including
details of shareholders’ addresses. If you have a query about your shareholding in Coral Products, you should contact Share Registrars
by telephone on 01252 821390, by email to enquiries@shareregistrars.uk.com or in writing to Share Registrars Limited, The Courtyard,
17 West Street, Farnham, Surrey GU9 7DR.
The Coral Products website at www.coralproducts.com provides news and details of the Group’s activities plus information for
Shareholders. The investor section of the website contains real time and historical share price data as well as the results and
announcements.
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