CORAL PRODUCTS PLC
ANNUAL REPORT AND ACCOUNTS 2022
Contents
Strategic Report
Business Overview
Chairman’s Statement
Review of the Business
Treasury Policies
Key Performance Indicators
Section 172 Statement
Risks and Uncertainties
Corporate Responsibility
Going Concern
Governance
Directors and Advisors
Directors’ Report
Directors’ Remuneration Report
Audit Committee Report
Independent Auditor’s Report to the Members of Coral Products PLC
Financial Statements
Group Income Statement
Group Statement of Comprehensive Income
Balance Sheets
Statement of Changes in Shareholders’ Equity
Cash Flow Statements
Notes to the Financial Statements
Shareholder Information
Five Year History
Notice of the Annual General Meeting
Financial Calendar and Shareholder Information
1
3
5
6
6
7
8
9
11
12
13
17
19
20
26
26
27
29
31
32
67
68
71
Strategic Report
The Group is required to produce a Strategic Report complying with the requirements of The Companies Act 2006 Regulations 2013.
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 the UK.
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 able to create growth and value for its shareholders.
It has been in operation since 1989, became a fully listed PLC in 1995 and moved to the AIM market in 2011.
Principal Activity
The principal activity of the Company and its subsidiaries is the manufacture of plastic injection, extrusion, vacuum formed, fabricated
products, cap enclosures and distribution of a range of trigger sprays and nozzles.
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 six 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 and ISO 14001 standards.
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 also recognise 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.
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Strategic Report
Continued
Business Overview (Continued)
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.
Recycling - We are constantly thinking of the future and have a focus on sustainability. In all manufacturing processes, any scrap or
waste material is reused or recycled. We offer “end-of-life” recycling, where customers and users can return products to us once they
have reached the end of their life cycle for recycling and reprocessing. Our manufacturing subsidiaries are taking steps in providing a
circular strategy by using recycled and reprocessed materials as a sustainable alternative wherever product specification permits.
Strategic Plan
In March 2021 the Group adopted a five-year plan aimed at substantially increasing Group revenue and profitability from our specialist
plastic products manufacturing and distribution facilities. The Group took the initial step along this plan when it disposed of Coral
Products (Mouldings) Ltd and Interpack Ltd followed shortly after by the acquisition of Customised Packaging Ltd. Further acquisitions
have occurred following the year end, see note 28 for details.
Business Model
To create and grow markets for specialist plastic products via innovation, development and acquisitions. Our aim is to build a significant
specialist plastic business with a bias towards using recycled materials.
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 corporate responsibility 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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Strategic Report
Continued
Chairman’s Statement
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.
In accordance with the changes to AIM Rule 26 the Company applies the revised QCA Corporate Governance Code published earlier in
2018. I work with key executives throughout the organisation to instil good corporate governance practices in accordance with the
Code.
The Board monitors our corporate governance practices and will always implement improvements which further enhance performance
and/or benefit stakeholders.
Trading
2021/22 was an exceptionally productive year for Coral Products plc as we continue to adapt and develop our business to enable us to
maximise the opportunities available. An analysis of our performance and our outlook for the year ahead are covered in detail in the
following pages, but, looking back on the year, among the highlights are:
•
•
•
•
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. Having made two interim
dividend payments totalling 0.9p for this financial period the Board are proposing a final dividend of 0.2 pence per share.
The sale of the land and building in Haydock completed in November 2021, following the completion of the roof replacement
works.
Customised Packaging Limited is now fully integrated into the group and performing well. An earnout was paid in February 2022
as per the sale and purchase agreement following better than expected results for the period January to December 2021.
Tatra Rotalac Limited saw a significant increase in turnover and net profit. Output has improved following operational efficiencies
and investment in new machinery.
• Global One Pak Limited has strengthened its management team following the departure of the original directors. The team is
focusing on future growth and researching new innovative products and markets.
•
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.
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Strategic Report
Continued
Chairman’s Statement (Continued)
I am very proud to see how everyone within the business has embraced our challenges, opportunities and ambitions. We are reliant
on the expertise, professionalism and commitment of our people. I would like to thank them for this, and also for the continued
commitment that they have shown over the past two years whilst having to deal with disruption to both their work and personal lives
due to the pandemic.
Outlook
We enter the 2022/23 financial period with confidence for the outlook for our business and its ability to continue its successful
evolution. The effects of the pandemic are ongoing and we remain mindful of macroeconomic and geopolitical risks. However, our
continued investment over many years in our people and our systems has generated strong and resilient results in the past year and
we believe will continue to do so. Our continuing priority is to do all we can to keep our workplaces as safe as possible for staff. 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 and due to
contracts already negotiated all its operations will remain relatively unaffected by the current turmoil in energy prices.
The Group continues with its strategic progress of increasing focus on value-added and innovative products. Our aim is to build a
significant specialist plastic business with a bias towards using recycled materials.
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
6 September 2022
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Strategic Report
Continued
Review of the Business
Group revenue
Total revenue by product type:
Extrusion and injection moulded products
Trigger sprays and nozzles
Vacuum formed products
•
•
•
Gross profit
Gross margin
Underlying operating profit
Underlying earnings before interest, tax, depreciation and amortisation
Finance costs
Depreciation
Separately disclosed costs
Shareholders’ equity
Net assets per share
Gearing
Net cash generated from operations
Cash and cash equivalents
Net debt
Secured borrowing facilities
2022
£14.4m
£9.5m
£2.1m
£2.8m
£5.3m
36.7%
£1.6m
£1.8m
£(0.1)m
£(0.2)m
£(0.2)m
£11.7m
14.9p
n/a
£2.7m
£7.6m
£nil
£3.1m
2021
£10.7m
£6.1m
£4.1m
£0.5m
£3.8m
35.5%
£0.9m
£1.3m
£(0.4)m
£(0.1)m
£(1.1)m
£12.7m
14.8p
n/a
£1.5m
£3.8m
£nil
£3.1m
Separately disclosed costs resulted from due diligence costs, intangibles amortisation, reorganisation costs and share-based payment
charges.
The borrowing facilities are held with Barclays Bank PLC and the Group continues to enjoy a positive relationship with its bank. The
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.
The movement in shareholders’ equity is explained as:
1 May 2022
Net profit after tax
Equity settled share-based payments
Purchase of own shares into treasury
Dividend payments
30 April 2022
£’000
12,737
967
21
(790)
(1,228)
11,707
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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)
KPI’s are designed to measure the development, performance and position of the business. The 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. These are
monitored on a regular basis at Board level and, where relevant, at operational executive management meetings as follows:
Group revenue
Gross margin
Operating profit/(loss)
Profit/(loss) before tax
Underlying earnings before interest, tax, depreciation and amortisation
Underlying operating profit
Gearing
2022
£14.4m
36.7%
£1.4m
£1.3m
£1.8m
£1.6m
n/a
2021
£10.7m
35.5%
£(0.2)m
£(0.3)m
£1.3m
£0.9m
n/a
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.
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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.
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 industries 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.
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Strategic Report
Continued
Risks and Uncertainties
The Board has overall responsibility for risk management, the supporting system of internal controls and for reviewing their
effectiveness. The Group operates a policy of continuous identification and review of business risks. This includes the monitoring
of key risks, identification of emerging risks and consideration of risk mitigations after taking into account risk appetite and the
impact of how those risks may affect the achievement of business objectives.
The risks and uncertainties that the business faces evolve over time and executive directors and senior management are delegated
the task of implementing and maintaining controls to ensure that risks are managed appropriately. The Group’s risk management
framework is designed to identify and manage, rather than eliminate, the risk of failure to achieve business objectives and to
provide reasonable, but not absolute, assurance against material misstatement or loss.
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 and US Dollar, as many of the Group’s materials are purchased in
these currencies.
• 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.
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.
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.
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Strategic Report
Continued
Corporate Responsibility
Our Principles
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:
•
•
•
•
•
•
•
Act in an ethical manner;
Recognise, respect and protect human rights;
Develop positive relationships with our suppliers and business partners;
Take responsibility for our impact on the environment;
Recruit and retain responsible employees;
Deliver value to our customers; and
Provide support through donations to charities and community organisations.
Our ESG commitment is discussed at board level, we demonstrate our commitment to our local and wider community by 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.
We encourage suppliers to actively consider ESG to ensure 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.
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;
•
• Maintain a continuing interest in health, safety and welfare as they affect the Group’s activities, and in particular inform, consult
Provide personal protective equipment where appropriate;
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.
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Strategic Report
Continued
Corporate Responsibility (Continued)
Equal Opportunities and Diversity
The Group is an equal opportunities employer and offers career opportunities without discrimination. Whilst acknowledging the
benefits of diversity, individual appointments are made irrespective of personal characteristics such as race, disability, gender, sexual
orientation, religion or age. Our policy is to treat all employees fairly and equally regardless of gender, sexual orientation, marital status,
race, colour, nationality, religion, ethnic or national origin, age or disability.
Women account for 15% of the Group workforce as at 30 April 2022.
Position
Group Directors
Senior Managers
Other Employees
Total Employees
Male
Female
Total
4
8
46
58
1
-
9
10
5
8
55
68
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. 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.
We have a good track record of promoting from within; the majority of our executive directors were promoted to the Board having
previously served as employees. We aim to realise our employees’ potential by supporting their career progression wherever possible.
The Group invests significantly in the training and development of staff and in education programmes which contribute to the
promotion prospects of employees. We believe that these opportunities will help employees feel supported and equipped to carry out
their role to the best of their ability.
Our employees can access a range of development tools or appropriate job-specific training within each area of the business. This
includes:
•
•
•
Job role-specific training covering technical, operational and skills training;
Individually tailored training to address both an employee’s individual needs and specific business requirements; and
Training in areas such as health and safety, first aid and manual handling to ensure our employees work in a safe environment.
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Strategic Report
Continued
Corporate Responsibility (Continued)
Ethical Trading
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.
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.
Recycling
We offer “end-of-life” recycling, where customers and users can return products to us once they have reached the end of their life
cycle for recycling and reprocessing. Our manufacturing subsidiaries are taking steps in providing a circular strategy by using recycled
and reprocessed materials as a sustainable alternative wherever product specification permits.
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.
The strategic report has been approved by the board and signed on its behalf by:
Sharon Tinsley
Finance Director
6 September 2022
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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 is a shareholder in
several private companies involved in sport and leisure, vending and telemetry
services, brewing and retail estate.
Registered Office
Southmoor Road Wythenshawe
Manchester M23 9DS
UK Registered Number: 02429784
Auditor
Crowe UK LLP
3rd Floor
The Lexicon
Mount Street
Manchester
M2 5NT
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
3 The Millennium Centre
Crosby Way
Farnham, Surrey
GU9 7XX
Broker & Nominated Advisor
Cenkos Limited
6.7.8 Tokenhouse Yard
London
EC2R 7AS
PR Adviser
Capital M Consultants
1 Royal Exchange Avenue
London
EC3V 3LT
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. In 2003 he co-
founded Interpack Limited, and was a director 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 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.
Phillip Allen, Group Operations Director
Phil was appointed in April 2022. He has a wealth of experience having worked in
the plastics industry for over 35 years. He joined Tatra Plastics in 2011 which was
acquired by the Group in 2016 and subsequently merged with Rotalac Plastics to
form Tatra-Rotalac Ltd. He became the Managing Director of Tatra-Rotalac in 2018
and Customised Packaging in 2022.
P a g e | 12
Directors’ Report
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 financial statements in accordance with UK adopted International Accounting Standards and Parent Company
financial statements in accordance with FRS101 (UK GAAP). 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 UK adopted International Accounting Standards, 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.
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.
•
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.
P a g e | 13
Directors’ Report
continued
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.
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.
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. 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.
P a g e | 14
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 Crowe
UK 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.
Annual General Meeting
At the meeting, resolutions will be prepared to receive the audited accounts and approve the Remuneration Report, to elect directors
and to re-appoint Crowe UK LLP as auditor and 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. In addition, shareholders will be asked to approve the proposed cancellation of the share premium and capital
redemption reserve.
Results and Dividends
The results for the year are set out on the income statement.
An interim dividend of 0.5p (2021: 0.5p) amounting to £403,737 was paid on 3 December 2021, and a second interim dividend of 0.4p
(2021: nil) amounting to £333,910 was paid on 1 June 2022.
A final dividend of 0.2p (2021: 0.5p) per share is recommended in respect of the year ended 30 April 2022 to be paid on 30 November
2022 to shareholders on the register at the close of business on 4 November 2022. 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.
Directors
Phil Allen was appointed Group Operations Director on 25 April 2022.
P a g e | 15
Directors’ Report
Continued
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
Sharon Tinsley
Steve Barber
Ordinary shares
of 1p each
30 April 2022
Number
Ordinary shares
of 1p each
30 April 2021
Number
6,413,337
2,298,333
1,305,000
162,783
2,000,000
6,293,337
2,098,333
1,080,000
162,783
2,000,000
12,179,453
11,634,453
Between the year-end date and the date of this report 25,000 shares were purchased by Joe Grimmond on 13 June 2022.
Substantial Interests
As at 22 June 2022, 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
RATHBONE NOMINEES LIMITED
MR IAN HILLMAN
RENE NOMINEES (IOM) LIMITED
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED
LAWSHARE NOMINEES LIMITED
BARCLAYS DIRECT INVESTING NOMINEES LIMITED
HARGREAVES LANSDOWN (NOMINEES) LIMITED
Number of shares
% of share capital
7,000,000
6,035,600
4,838,710
4,716,720
4,323,531
3,415,743
3,120,041
5,777,424
8.39
7.24
5.80
5.66
5.18
4.10
3.74
6.97
Share Capital
At the previous 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. During the financial year the company purchased 5,608,655 of its shares, making a total of
7,303,655 shares at the year-end (2021: 1,695,000) accounting for 8.5% of the total shares.
By order of the Board
S Tinsley
Company Secretary
6 September 2022
P a g e | 16
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
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
of up to 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 (2021: Nil).
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
Phillip Allen
Date of contract
Notice period
July 2015
February 2017
May 2022
12 months
6 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 £32,000. 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.
The Board met 11 times during this financial period with 100% attendance from all Directors.
P a g e | 17
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
2022
Executive
£’000
2022
Non-
executive
£’000
279
9
-
288
62
-
-
62
2022
Total
£’000
341
9
-
350
2021
Total
£’000
612
27
-
639
2022
Total
2021
Total
£’000
£’000
100
80
-
108
288
125
136
266
112
639
2022
£’000
2021
£’000
32
30
-
62
52
4
40
96
2022
Basic
salary
2022
Bonuses
£’000
£’000
2022
Compensation
for loss of
office
£’000
2022
Benefits-
in-kind
2022
Pension
£’000
£’000
2022
Share
based
payment
£’000
Paul Freud
Sharon Tinsley
Mick Wood
Joe Grimmond
100
69
-
108
277
-
-
-
-
-
-
-
-
-
-
-
2
-
-
2
-
9
-
-
9
-
-
-
-
-
Emoluments – Non-executive Directors
David Low
Steve Barber
Joe Grimmond
By order of the Board
Joe Grimmond
Chairman of the Remuneration Committee
6 September 2022
P a g e | 18
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.
External Auditor
The Committee reviewed the effectiveness of the audit process in respect of the year ended 30 April 2022. In doing so, the Committee
considers the reports produced by Crowe, met the audit engagement partner and discussed the audit with the CFO. The Committee
continues to be satisfied that the external auditors are delivering the necessary scrutiny and robust challenge in their work.
Accordingly, the Committee recommended to the Board that it is appropriate to re-appoint Crowe as the Group’s external auditors for
the next financial year.
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
6 September 2022
P a g e | 19
Independent Auditor’s Report to the Members of
Coral Products PLC
Qualified Opinion
We have audited the financial statements of Coral Products PLC (the “Parent Company”) and its subsidiaries (the “Group”) for the
year ended 30 April 2022 which comprise:
•
•
•
•
•
the Group consolidated statement of comprehensive income for the year ended 30 April 2022;
the Group and parent company statement of financial position as at 30 April 2022;
the Group consolidated cashflow statement for the year then ended;
the Group and parent company statements of changes in equity for the year then ended; and
the notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group and Parent financial statements is
applicable law and International Accounting Standards in conformity with the requirements of the Companies Act 2006.
In our opinion, except for the possible effects on the comparability of the corresponding [profit] 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 2022 and of the Group’s profit for the period then ended;
the Group and Parent financial statements have been properly prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act 2006;
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
We were appointed auditor during the current year and accordingly did not attend the counting of physical inventories as at 30 April
2020, which form the cost of sales for the corresponding period. We were unable to satisfy ourselves by alternative means
concerning quantities by using other audit procedures. Our opinion on the current periods financial statements is modified solely
because of the possible effect of this matter on the comparability of the current year’s profit and the corresponding profit.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and Company’s
ability to continue to adopt the going concern basis of accounting included obtaining and reviewing management’s assessment of
going concern. This involved gaining an understanding of management’s basis for the identification of events or conditions that may
cast a significant doubt on the ability of the Group and Company to continue as a going concern, and whether a material uncertainty
related to going concern exists.
Furthermore, we performed specific audit procedures around going concern; whereby we obtained and reviewed actual financial
results against budgeted results, assessed the reasonableness of budgets and forecasts for successive financial years, evaluated the
feasibility of management’s plans in respect of going concern as well as considered whether new facts or information have become
available since management made their assessment.
We also considered explicitly whether there was any evidence of management bias in the preparation of the going concern
assessment.
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 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.
P a g e | 20
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of
this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be
expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our
testing and to evaluate the impact of misstatements identified.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk
and our evaluation of the specific risk of each audit area having regard to the internal control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and
directors’ remuneration.
Group materiality
Group performance materiality
Parent Company materiality
Parent Company performance materiality
Basis for Group materiality
Basis for Parent Company materiality
Rationale for the benchmark adopted
£100,000
£70,000
£60,000
£42,000
0.7% of turnover
0.5% of net assets
Coral Products PLC is AIM listed, with the intention to acquire and
grow the group. Turnover is considered to be the key KPI for the
Group and is a used for business decision making and used by the
investor/shareholder community. The parent company is a
holding company and therefore net assets is deemed to be an
appropriate benchmark
We agreed with the Audit Committee that we would report to the committee all individual audit misstatements identified during the
course of our audit in excess of £3,000. We also agreed to report misstatements below these thresholds that, in our view, warranted
reporting on qualitative grounds.
Overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and
assessing the risks of material misstatement at the Group level.
For the four significant components we identified, we performed a full scope audit of the complete financial information. For the
remaining components, we performed analytical reviews and other audit procedures on specific accounts within that component 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.
Audits of the components were performed at a materiality level calculated by reference to a proportion of Group materiality
appropriate to the relative scale of the business concerned.
The group audit team conducted the audit of all components of the business and no component auditors were used during the audit
process.
P a g e | 21
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. These matters included 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.
This is not a complete list of all risks identified by our audit.
Key audit matter
How the scope of our audit addressed the key audit matter
Impairment of goodwill and other intangibles
(Group)
intangible assets, which
As described in Note 2 (Accounting policies),
Note 14 (Goodwill) and Note 15 (the
intangible assets), the Group has goodwill
and
requires
management to review these balances for
impairment at least annually. There is a high
degree of management
judgement and
assumptions required in assessing the value
in use of the Cash Generating Units ("CGU")
to which the Goodwill and Intangible assets
are allocated and therefore determining any
potential
therefore
impairments. We
identified impairment of goodwill and other
intangible assets as a key audit matter.
We obtained the impairment analysis performed by management for
each CGU. We tested management's impairment analysis for each CGU
for logical and arithmetic accuracy and to check that it has been
undertaken in accordance with the requirements of the accounting
standards. We performed procedures to obtain an understanding of
the underlying assumptions made by management. The key
assumptions included
•
•
•
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 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 prepared a sensitivity analysis to understand the
relative impact of changes in the key assumptions within the
impairment models, as well as to check that management's own
sensitivity analysis and disclosure of sensitivities in relation to Global
One-Pak income (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 and accordingly no impairment was required.
P a g e | 22
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Investments impairment review (Company)
The Company statement of financial position
for 30 April 2022 includes investments in
subsidiaries of £6,975k (see note 13 of the
financial statements).
As with goodwill, management must apply
IAS 36 to determine if there is a requirement
to impair the value of each investment and
the policy is set out in note 2 of the financial
statements. Where the expected future
economic benefit is less than the asset value
there is a requirement to impair to fair value.
Inventory valuation
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 items held in inventory,
and/or new products being developed that
items obsolete. Such
render
judgements
management's
expectations for future sales.
inventory
include
We addressed this risk by obtaining, reviewing and challenging the
underlying assumptions behind management‘s detailed impairment
assessment of investments in subsidiaries.
Where this assessment is dependent on future performance, our
review included challenging budgeted revenue and profitability,
requesting and considering a range of scenarios, especially where a
reasonably possible change in assumptions might give rise to an
impairment.
As explained in note 13, investments have been impaired by £500,000
following a deterioration in market conditions.
We attended stock counts at year end. For finished goods and work in
progress (WIP) we:
•
•
•
and
rationale
supporting
Reviewed management's
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.
Reviewed and challenged management's 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 introduced
to mitigate the further inventory write-offs identified in previous
years.
Key observations: Based on the work performed we did not
identify any material issues over management's judgements in
respect of inventory valuation. An adequate provision has been
made and no further write-offs were identified. We did not
identify any material misstatements with regards to existence and
valuation of inventory.
Other information
The directors are responsible for the other information contained within the annual report. The other information comprises the
information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.
P a g e | 23
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our audit
•
•
the information given in the strategic report and the directors' report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of
the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters where 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; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement set out on page 13, 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 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 | 24
Independent Auditor’s Report to the Members of
Coral Products PLC
Continued
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:
We obtained an understanding of the legal and regulatory frameworks within which the Group and Parent Company operates. We also
considered and obtained an understanding of the UK legal and regulatory framework which we considered in this context were the
Companies Act 2006 and UK taxation legislation.
We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of
controls by management and misstatement of income. Our audit procedures to respond to these risks included enquiries of
management about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals. We
also reviewed and challenged accounting estimates and assumptions used by management for the valuation of goodwill, intangible
assets existence of revenue and revenue cut off, in order to verify that the calculations and models were reasonable and free of biases.
We selected a sample of transactions around the year end to verify that revenue cut off had been applied correctly and also a sample
of transactions throughout the period to ensure existence by agreeing to proof of delivery and proof of receipt of payments.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements
in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards.
We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated
schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional
misrepresentations.
further description of our
responsibilities
A
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
is available on
the Financial Reporting Council’s website at:
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we
have formed.
Michael Jayson (Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
Manchester
6 September 2022
P a g e | 25
Group Income Statement
for the year ended 30 April 2022
Revenue
Cost of sales
Gross profit
Operating costs
Distribution expenses
Administrative expenses before other separately disclosed items
Other separately disclosed items
Administrative expenses
Operating profit/(loss)
Finance costs
Profit/(loss) for the financial year before taxation
Taxation
Profit/(loss) for the financial year attributable to the equity holders of the parent on
continuing operations
Profit on discontinued operations
Profit for the financial year attributable to the equity holders of the parent
Basic earnings/(loss) per ordinary share - continuing operations
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 2022
2022
£’000
2021
£’000
14,391
(9,104)
5,287
(787)
(2,926)
(162)
(3,088)
1,412
(82)
1,330
(363)
967
-
967
1.19p
1.17p
-
-
10,714
(6,913)
3,801
(761)
(2,173)
(1,072)
(3,245)
(205)
(111)
(316)
76
(240)
715
475
(0.29)p
(0.29)p
0.86p
0.84p
Note
5
6
7
8
10
13
11
11
11
11
Profit for the financial year
Total other comprehensive profit/(loss)
Total comprehensive income for the year attributable to equity holders of the parent
The accompanying accounting policies and notes form an integral part of these financial statements.
2022
£’000
2021
£’000
967
-
967
475
-
475
P a g e | 26
Balance Sheets
as at 30 April 2022
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
Other borrowings
Lease liabilities
Trade and other payables
Total current liabilities
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
TOTAL SHAREHOLDERS’ EQUITY
Group
Parent Company
As at 30 April
2022
£’000
As at 30 April
2021
£’000
As at 30 April
2022
£’000
As at 30 April
2021
£’000
Note
14
15
16
17
13
18
19
21
22
22
20
22
10
25
1,945
916
749
1,393
-
5,003
1,781
3,237
7,589
12,607
-
1,389
416
2,800
4,605
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
-
-
-
-
6,975
6,975
-
230
4,810
5,040
-
-
-
577
577
-
-
-
-
7,422
7,422
-
1,608
2,829
4,437
2,500
-
-
638
638
8,002
8,773
4,463
6,297
907
391
1,298
11,707
859
5,621
(1,008)
1,061
5,174
11,707
1,035
315
1,350
12,737
859
5,621
(218)
1,567
4,908
12,737
-
1
1
-
-
-
11,439
13,721
859
5,621
(1,008)
1,061
4,906
11,439
859
5,621
(218)
1,567
5,892
13,721
P a g e | 27
Balance Sheets
continued
An income statement is not provided for the parent Company as permitted by section 408 of the Companies Act 2006. The loss dealt
with in the financial statements of Coral Products PLC was £285,000 (2021: £2,485,000 profit).
The financial statements were approved by the Board of Directors on 6 September 2022 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 | 28
Statement of Changes in Shareholders’ Equity
for the year ended 30 April 2022
Called Up
Share
Capital
£’000
Share
Premium
Reserve
£’000
Note
Treasury
Shares
£’000
Other
Reserves
£’000
Retained
Earnings
£’000
Total
Equity
£’000
Group
At 1 May 2020
Profit for the year
Other comprehensive income
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 1 May 2021
Profit for the year
Other comprehensive loss
Total comprehensive loss
Contributions by and distributions to owners
Equity settled share-based payments
Purchase of treasury shares
Revaluation Reserve
Dividend paid
At 30 April 2022
24
12
24
12
826
-
-
-
-
33
-
-
859
-
-
-
-
-
-
5,288
-
-
-
-
333
-
-
5,621
-
-
-
-
-
-
-
-
-
-
-
-
(218)
-
(218)
-
-
-
-
(790)
-
859
5,621
(1,008)
1,567
-
-
-
-
-
-
-
1,567
-
-
-
-
-
(506)
-
1,061
4,425
475
-
475
8
-
-
-
4,908
967
-
967
21
-
506
(1,228)
12,106
475
-
475
8
366
(218)
-
12,737
967
-
967
21
(790)
-
(1,228)
5,174
11,707
P a g e | 29
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 2020
Profit for the year
Total comprehensive loss
Contributions by and distributions to owners
Equity settled share-based
payments
24
Issue of new shares
Purchase of treasury shares
Dividend paid
At 1 May 2021
Profit for the year
Total comprehensive profit
12
Contributions by and distributions to owners
Equity settled share-based
payments
Revaluation reserve
Purchase of treasury shares
Dividend paid
12
24
826
-
-
-
33
-
-
859
-
-
-
-
-
-
5,288
-
-
-
333
-
-
5,621
-
-
-
-
-
-
-
-
-
-
-
(218)
-
(218)
-
-
-
-
(790)
-
At 30 April 2022
859
5,621
(1,008)
1,567
-
-
-
-
-
-
1,567
-
-
-
(506)
-
-
1,061
3,399
2,485
2,485
8
-
-
-
5,892
(285)
(285)
11,080
2,485
2,485
8
366
(218)
-
13,721
(285)
(285)
21
21
506
-
(1,228)
4,906
-
(790)
(1,228)
11,439
The accompanying accounting policies and notes form an integral part of these financial statements.
P a g e | 30
Cash Flow Statements
for the year ended 30 April 2022
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right of use assets
Amortisation of intangible assets
Share based payment charge
Profit on disposal of subsidiary
Profit on disposal of building
Impairment of investment
Interest payable
Taxation charge/(credit)
Operating cash flows before movements in working capital
Decrease/(increase) 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
Net cash on disposal of building
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
Dividends paid
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
2022
£’000
2021
£’000
Parent Company
2022
£’000
2021
£’000
Note
967
475
(285)
2,485
16
17
15
24
13
13
8
10
13
13
16
26
12
26
26
26
26
26
165
296
327
21
-
(424)
-
82
363
1,797
47
82
761
2,687
-
2,687
-
3,500
-
(206)
3,294
-
(1,228)
-
-
(22)
(60)
-
(171)
(790)
14,799
(14,763)
(2,235)
3,746
3,843
7,589
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
-
-
-
-
-
(424)
500
-
119
(90)
-
650
(61)
499
-
499
-
3,500
-
-
3,500
-
(1,228)
-
-
-
-
-
(790)
-
-
(2,018)
1,981
2,829
4,810
-
-
-
-
(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
The accompanying accounting policies and notes form an integral part of these financial statements.
P a g e | 31
Notes to the Financial Statements
for the year ended 30 April 2022
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 2022 comprise the Company and its subsidiaries
(together referred to as the ‘Group’). The address of the registered office is given on the Directors and Advisors page. An
overview of the business and 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 Business Overview and Chairman’s Statement. The financial position
of the Group, its cash flows, liquidity position and borrowing facilities are described in the Strategic Report.
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 consolidated financial statements have been prepared on a historical cost basis (except for certain financial instruments,
land and buildings and share-based payments that have been measured at fair value), and in accordance with the AIM Rules
and UK adopted International Accounting Standards.
The Parent Company financial statements of Coral Products Plc (the “Company”) have been prepared in accordance with
Financial Reporting Standard 100 Application of Financial Reporting Requirements and Financial Reporting Standard 101
Reduced Disclosure Framework and as required by 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 have not adopted any new or revised standards in the annual financial statements for the year ended 30 April 2022.
New Standards, Amendments and Interpretations Not Yet Effective
At the date of authorisation of these financial statements, there are no amended standards and interpretations issued by the
UK Endorsement Board that impact the Group as they are either not relevant to the Group’s activities or require accounting
which is consistent with the Group’s current accounting policies.
Basis of Consolidation
The Group’s financial statements consolidate those of the Company and its subsidiary undertakings drawn up to 30 April 2022.
Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control. Control is
achieved when the Company:
•
•
•
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.
has the power over the investee;
P a g e | 32
Notes to the Financial Statements
for the year ended 30 April 2022
Basis of Consolidation (continued)
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 renewed annually. 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.
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.
P a g e | 33
Notes to the Financial Statements
for the year ended 30 April 2022
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.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and
excludes amounts collected on behalf of third parties. Each element of revenue (described below) is recognised only when:
1. provision of the goods or services has occurred;
2. consideration receivable is fixed or determinable; and
3. collection of the amount due from the customer is reasonably assured
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.
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.
P a g e | 34
Notes to the Financial Statements
for the year ended 30 April 2022
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.
P a g e | 35
Notes to the Financial Statements
for the year ended 30 April 2022
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 as license fees paid in advance
for the use of trademarks and technology. Such assets are defined as having finite useful lives and the costs are amortised on
a straight-line basis over their estimated useful lives as follows:
-
Customer relationships
-
Brands
-
Licences
12.5-33%
10%
10%
P a g e | 36
Notes to the Financial Statements
for the year ended 30 April 2022
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 | 37
Notes to the Financial Statements
for the year ended 30 April 2022
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 give 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 | 38
Notes to the Financial Statements
for the year ended 30 April 2022
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 | 39
Notes to the Financial Statements
for the year ended 30 April 2022
Leases
The Group enters into lease agreements for the use of buildings, plant and machinery 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 2022.
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.
P a g e | 40
Notes to the Financial Statements
for the year ended 30 April 2022
Dividends
Dividends receivable by the Company are recognised in the income statement if they are declared, appropriately authorised
and no longer at the discretion of the entity paying the dividend, prior to the balance sheet date. Dividends payable by the
Company are recognised when paid (for an interim dividend) or when approved by the members (for a final dividend) 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 have 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 share premium.
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 | 41
Notes to the Financial Statements
for the year ended 30 April 2022
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; and
Legislative and regulatory risk as new requirements are being imposed on plastic businesses.
•
•
•
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 | 42
Notes to the Financial Statements
for the year ended 30 April 2022
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. The Group uses a mixture of fixed and
variable rate loan and finance lease facilities in order to mitigate its interest rate exposure.
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 is 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 | 43
Notes to the Financial Statements
for the year ended 30 April 2022
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, treasury shares, other reserves 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
£14,000. 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 £2,000. A 5% weakening in the exchange rate would, on the same basis, have increased post-tax profit by
£2,000.
The other numerical disclosures required by IFRS7 in relation to financial instruments are included in notes 19, 20 and 22.
P a g e | 44
Notes to the Financial Statements
for the year ended 30 April 2022
5.
REVENUE
A breakdown of Group revenues by geographical region, based on the location of the customer is shown as follows:
Continuing operations:
UK
Rest of Europe
Rest of the World
A breakdown of Group revenues by product group is shown as follows:
Extrusion and injection moulding
Trigger sprays and nozzles
Vacuum forming
2022
£’000
13,799
134
458
14,391
2022
£’000
9,468
2,094
2,829
14,391
2021
£’000
9,811
94
809
10,714
2021
£’000
6,169
4,064
481
10,714
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 either the year ended 30 April 2022 or 30 April 2021.
There are no contract assets or liabilities arising from contracts with customers.
P a g e | 45
Notes to the Financial Statements
for the year ended 30 April 2022
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.
Operating profit/(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
Gain on sale of land and buildings
One off cost of living payment to all staff
Total separately disclosed items
Underlying operating profit
Depreciation
Underlying EBITDA
Separately disclosed items (excluding amortisation)
EBITDA
Profit/(loss) before tax – continuing operations
Separately disclosed items
Underlying profit/(loss) before tax – continuing operations
2022
£’000
1,412
21
327
158
(383)
39
162
1,574
205
1,779
165
1,944
1,330
162
1,492
2021
£’000
(205)
8
284
780
-
-
1,072
867
417
1,284
(788)
496
(316)
1,072
756
Separately disclosed items in the current year include acquisition costs of £78,000, compensation for loss of office of £79,000,
other professional fees of £2,000, and a cost-of-living payment to each employee to assist with the cost-of-living crisis of
£39,000.
The share-based payment charge, amortisation charge and goodwill impairment have all been separately disclosed as they are
not controlled by day-to-day management of the trading subsidiaries and do not represent the underlying trading performance
of the Group.
Separately disclosed items in the prior 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.
P a g e | 46
Notes to the Financial Statements
for the year ended 30 April 2022
7. OPERATING PROFIT
This is stated after charging/(crediting) the following
Staff costs (note 9)
Impairment loss recognised on trade receivables
Cost of inventories recognised as expense
Net foreign exchange gains
Depreciation of property, plant and equipment (note 16)
Depreciation of right of use assets (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 invoice discounting facilities
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
2022
£’000
2,933
-
7,231
3
184
21
327
-
15
45
2021
£’000
1,830
24
6,913
(87)
165
252
284
(117)
30
60
2022
£’000
2021
£’000
60
22
-
82
-
-
-
82
41
-
70
111
169
49
218
329
P a g e | 47
Notes to the Financial Statements
for the year ended 30 April 2022
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 charge
Total remuneration on continuing operations
Total remuneration on discontinued operations
Total remuneration
2022
No.
2021
No.
45
9
14
68
-
2022
£’000
2,536
318
58
2,912
21
2,933
-
2,933
32
6
15
53
61
2021
£’000
1,524
221
77
1,822
8
1,830
2,112
3,942
Other than the Directors, the parent company has no employees (2021: 1). Details of Directors’ emoluments are shown in the
Directors’ Remuneration Report.
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 | 48
2022
£’000
2021
£’000
277
32
17
21
347
-
347
357
42
17
4
420
91
511
Notes to the Financial Statements
for the year ended 30 April 2022
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
2022
£’000
2021
£’000
296
67
363
363
-
6
(54)
(48)
(76)
28
The tax assessed for the year is different from that calculated at the standard rate of corporation tax in the UK of 19% (2021:
19%). The differences are reconciled as follows:
Reconciliation of taxation credit
Profit/(loss) on ordinary activities before tax – continuing operations
Profit on ordinary activities before tax – discontinued operations
Profit on ordinary activities before tax
Tax on profit on ordinary activities at 19% standard rate of tax (2021: 19%)
Non-deductible expenses
Deferred tax not recognised
Chargeable gain/(losses)
Income not taxable
Fixed assets timing differences
Tax rate changes
Other differences
Total taxation charge/(credit)
Total taxation charge/(credit) - continuing operations
Total taxation charge - discontinued operations
2022
£’000
1,330
-
1,330
253
28
(50)
166
-
(108)
93
(19)
363
363
-
2021
£’000
(316)
743
427
81
77
-
-
(221)
-
-
15
(48)
(76)
28
P a g e | 49
Notes to the Financial Statements
for the year ended 30 April 2022
10. TAXATION (continued)
Deferred tax liability – Group
At 1 May 2021
Acquired as part of business combination
Disposals
Adjustment in respect of prior years
Credited to the income statement
At 30 April 2022
Comprising:
Accelerated capital allowances
Losses
Other temporary differences
Liability arising on business combination
2022
£’000
315
-
-
(19)
67
391
181
-
(17)
229
391
2021
£’000
398
127
(156)
-
(54)
315
211
(114)
(28)
246
315
The Group has not recognised a deferred tax asset of £nil (2021: £nil) in relation to tax losses that can be carried forward
indefinitely.
P a g e | 50
Notes to the Financial Statements
for the year ended 30 April 2022
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
2022
£’000
118
1
119
2021
£’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% (2021:
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 (2021: 19%)
Non-deductible expenses
Income not taxable
Fixed assets timing differences
Chargeable gains/(losses)
Effects of Group relief/other reliefs
Other differences
Total taxation credit
Deferred tax liability – Parent
At 1 May 2021
Owned fixed assets realised through use
Credited to the income statement
At 30 April 2022
Comprising:
Other temporary differences
2022
£’000
(165)
(31)
20
-
(81)
166
-
45
119
2022
£’000
(2)
-
1
(1)
(1)
(1)
2021
£’000
2,487
472
67
(636)
-
-
97
(2)
(2)
2021
£’000
-
(2)
-
(2)
(2)
(2)
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 2022 has been
calculated based on the rate as at the report date of 19% (2021: 19%).
P a g e | 51
Notes to the Financial Statements
for the year ended 30 April 2022
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
Weighted average number of shares for the purposes of diluted earnings per share
Basic earnings per share – continuing operations
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:
2022
2021
85,942,534
(4,828,836)
81,113,698
1,369,230
82,482,928
83,143,645
(111,192)
83,032,453
2,138,460
85,170,913
2022
1.19p
1.17p
1.39p
-
-
2021
(0.29)p
(0.29)p
1.00p
0.86p
0.84p
Continuing Operations
2022
Weighted
average
number of
shares
Earnings
per
share
(pence)
(Loss)/
earnings
£’000
2021
Weighted
average
number of
shares
(Loss)/
earnings
per share
(pence)
Earnings
£’000
Profit/(loss) for the year
Separately disclosed items (note 6)
Underlying profit/(loss) for the period
967 81,113,698
-
162
1,129 81,113,698
1.19
-
1.39
(240) 83,032,453
-
1,072
832 83,032,453
(0.29)
-
1.00
Discontinued Operations
Profit/(loss) for the year
Separately disclosed items
Underlying profit/(loss) for the period
Earnings
£’000
-
-
-
2022
Weighted
average
number of
shares
Earnings
per
share
(pence)
(Loss)/
earnings
£’000
2021
Weighted
average
number of
shares
(Loss)/
earnings
per share
(pence)
-
-
-
-
-
-
715 83,032,453
-
35
750 83,032,453
0.86
-
1.03
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.
P a g e | 52
Notes to the Financial Statements
for the year ended 30 April 2022
12. DIVIDENDS PAID AND PROPOSED
Interim dividend for 2021 0.5p paid 28 May 2021 (2021: £nil)
Final dividend for 2021 0.5p paid 30 November 2021 (2021: £nil)
Interim dividend for 2022 0.5p paid 3 December 2021 (2021: £nil)
2022
£’000
420
404
404
1,228
2021
£’000
-
-
-
-
For the year ended 30 April 2021 an interim dividend of 0.5p was paid 28 May 2021 and a final dividend of 0.5p was paid 30
November 2021.
For the year ended 30 April 2022 an interim dividend of 0.5p was paid 3 December 2021, a second interim dividend of 0.4p was
paid 1 June 2022 and a final dividend of 0.2p is to be recommended at the forthcoming AGM. The final dividend is subject to
approval by shareholders at the Annual General Meeting 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
Earn out agreement
Impairment of investment in Global One Pak
At 30 April
2022
£’000
7,422
21
-
-
32
(500)
6,975
2021
£’000
10,951
8
(4,737)
1,200
-
-
7,422
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.
During the year, the investment in Global One-Pak Limited has been impaired by £500,000. This is a result of deterioration in
market conditions in recent. The carrying value of the investment has been revalued by calculating the current value in use,
which has a discount rate of 11.5% in arriving at the valuation.
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
P a g e | 53
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
Notes to the Financial Statements
for the year ended 30 April 2022
14. GOODWILL
Group
At 30 April 2020
Additions
Disposals
At 30 April 2021
Impairment
At 30 April 2022
£’000
5,145
350
(3,550)
1,945
-
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
Goodwill
At 30 April 2021 and 2022
350
961
634
Total
£’000
1,945
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 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. 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.
Global One Pak are currently in discussions with a number of potential customers regarding manufacturing caps and closures
in the UK and have in fact received a letter of intent from one. The Group believes that this letter of intent and the other
discussions should they translate to orders will significantly increase the sales from Global One Pak and so negate the need to
impair goodwill. Without this letter of intent, the Group believes the goodwill impairment would be in the region of £500,000.
P a g e | 54
Notes to the Financial Statements
for the year ended 30 April 2022
15. OTHER INTANGIBLE ASSETS
Group
Cost
At 1 May 2020
Acquired through business combinations
Disposal of business
At 1 May 2021 and 30 April 2022
Amortisation
At 1 May 2020
Charge in the year
Disposal of business
At 1 May 2021
Charge in the year
At 30 April 2022
Net book value
At 30 April 2022
At 30 April 2021
Parent Company
Cost
At 1 May 2020
Disposal
At 1 May 2021 and 30 April 2022
Amortisation
At 1 May 2020
Disposal
At 1 May 2021 and 30 April 2022
Net book value
At 30 April 2022
At 30 April 2021
Customer
relationships
£’000
Brands
£’000
Licences
£’000
Total
£’000
2,653
403
(411)
2,645
1,717
252
(411)
1,558
295
1,853
792
1,087
322
-
-
322
134
32
-
166
32
198
124
156
573
-
(573)
-
573
-
(573)
-
-
-
-
-
3,548
403
(984)
2,967
2,424
284
(984)
1,724
327
2,051
916
1,243
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 | 55
Notes to the Financial Statements
for the year ended 30 April 2022
16. PROPERTY, PLANT AND EQUIPMENT
Group
Cost or Valuation
At 1 May 2020
Acquired through business combinations
Additions
Disposal of business
At 1 May 2021
Additions
Transferred from Right of Use assets
Disposal of business
At 30 April 2022
Depreciation
At 1 May 2020
Acquired through business combinations
Charge in the year – continuing operations
Charge in the year – discontinued operations
Disposal of business
At 1 May 2021
Transferred from Right of Use assets
Charge in the year
Disposals
At 30 April 2022
Net book value
At 30 April 2022
At 30 April 2021
Parent Company
Cost or Valuation
At 1 May 2020
Addition
Disposal
Transferred to assets held for sale (note 21)
At 1 May 2021 and 30 April 2022
Land and
buildings
£’000
Fixtures and
fittings
£’000
Plant and
equipment
£’000
Motor
Vehicles
£’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
355
81
9
(279)
166
13
-
-
179
310
78
22
17
(261)
166
-
13
-
179
-
-
11,838
978
445
(6,347)
6,914
193
339
(4,088)
3,358
9,093
802
142
305
(4,056)
6,286
245
166
(4,082)
2,615
743
628
-
44
-
-
44
-
24
-
68
-
42
-
-
-
42
14
6
-
62
6
2
Total
£’000
12,193
1,103
454
(6,626)
7,124
206
363
(4,088)
3,605
9,403
948
165
322
(4,317)
6,494
259
185
(4,082)
2,856
749
630
Land and
buildings
£’000
2,520
180
(200)
(2,500)
-
P a g e | 56
Notes to the Financial Statements
for the year ended 30 April 2022
17. RIGHT OF USE ASSETS
Property
£’000
1,750
-
-
-
1,750
630
-
219
-
849
901
1,120
Plant and
Equipment
£’000
Motor Vehicles
Total
£’000
£’000
604
268
(338)
-
534
368
(245)
21
-
144
390
236
206
27
(24)
-
209
66
(14)
56
-
107
102
140
2,560
295
(362)
-
2,493
1,064
(259)
296
-
1,100
1,393
1,496
Cost
At 1 May 2021
Additions
Transfer to fixed asset register
Disposals
At 30 April 2022
Depreciation
At 1 May 2021
Transfer to fixed asset register
Charge for the year
Disposals
At 30 April 2022
Carrying amount
At 30 April 2022
At 30 April 2021
18. INVENTORIES
Raw materials
Work in progress
Finished goods and goods for resale
Group
2022
£’000
834
406
541
2021
£’000
930
433
465
1,781
1,828
Parent Company
2022
£’000
2021
£’000
-
-
-
-
-
-
-
-
During the year a provision of £25,000 (2021: £200,000) has been made against inventory for slow-moving stocks. Write-downs
of inventories to net realisable value amounted to £nil (2021: £nil).
P a g e | 57
Notes to the Financial Statements
for the year ended 30 April 2022
19. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Less: provision for impairment of trade receivables
Amounts owed by subsidiary undertakings
Other debtors
Deferred tax
Prepayments and accrued income
Group
2022
£’000
2,769
(42)
2,727
-
41
-
469
3,237
2021
£’000
2,537
(24)
2,513
-
1,595
-
345
4,453
Parent Company
2022
£’000
-
-
-
136
12
-
82
230
2021
£’000
-
-
-
52
1,568
2
(14)
1,608
The fair value of trade and other receivables approximates to book value at 30 April 2022 and 2021.
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 2022, or the year ended 30 April 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
2022
£’000
2,676
51
-
2,727
2021
£’000
2,461
52
-
2,513
2022
£’000
2021
£’000
-
-
-
-
-
-
-
-
P a g e | 58
Notes to the Financial Statements
for the year ended 30 April 2022
19. TRADE AND OTHER RECEIVABLES (continued)
As 30 April 2022 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
0.8%
3.0%
5.0%
7.0%
Gross carrying amount
Loss provision
2,087
(17)
567
(17)
94
(4)
21
(4)
2,769
(42)
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 loss provision has also been increased to cover
the uncertainty surrounding the end of government aid and the possibility some customers may struggle in repaying.
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
2022
£’000
24
(24)
42
42
2021
£’000
41
(41)
24
24
Parent Company
2022
£’000
2021
£’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 | 59
Notes to the Financial Statements
for the year ended 30 April 2022
20. TRADE AND OTHER PAYABLES
Trade payables
Other taxes and social security
Accruals
Amounts owed to Group undertakings
Other payables
Group
Parent Company
2022
£’000
1,829
511
444
-
16
2,800
2021
£’000
1,483
172
367
-
17
2,039
2022
£’000
29
118
109
321
-
577
2021
£’000
42
-
150
446
-
638
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
2022
£’000
2021
£’000
2022
£’000
2021
£’000
-
-
-
2,500
-
2,500
-
-
-
2,500
-
2,500
The land and buildings at the Haydock site were sold in November 2021 for £3.5 million. During the year there was an additional
amount of £576,000 spent on a roof replacement. The resulting net gain was £424,000.
P a g e | 60
Notes to the Financial Statements
for the year ended 30 April 2022
22. FINANCIAL LIABILITIES
The maturity profile of the non-current financial liabilities as at 30 April 2022 is set out below:
Borrowings
Current
Invoice discounting facility
Lease liabilities
Non-current
Lease liabilities
Group
Parent Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
1,389
416
1,805
907
907
1,353
459
1,812
1,035
1,035
-
-
-
-
-
-
-
-
-
-
The effective interest rates at the balance sheet date are as follows:
2022
2021
Invoice discounting facility
Lease liabilities
1.98% over base
3.7%
2.3% 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 2022 and 30 April 2021. 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 2022 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
2022
£’000
364
543
907
2021
£’000
410
625
1,035
Parent Company
2022
£’000
2021
£’000
-
-
-
-
-
-
P a g e | 61
Notes to the Financial Statements
for the year ended 30 April 2022
22. FINANCIAL LIABILITIES (continued)
Undrawn borrowing facilities
The Group has a maximum Invoice Discounting Facility of £3.0m, subject to debtor levels and restrictions.
23. LEASE LIABILITIES
At 1 May 2021
Additions – new leases
Discounted payments
Disposals
At 30 April 2022
Current liabilities
Non-current liabilities
At 30 April 2022
Property
£’000
1,125
-
(233)
-
892
226
666
892
Plant and
Equipment
£’000
Motor
Vehicles
£’000
238
247
(159)
-
326
137
189
326
131
27
(53)
-
105
53
52
105
Total
£’000
1,494
274
(445)
-
1,323
416
907
1,323
The maturity analysis for lease liabilities is shown below:
Lease liabilities < 1 year
Lease liabilities 1 - 2 years
Lease liabilities 2 - 5 years
Total
2022
Interest
£’000
60
73
136
269
2022
discounted
payments
£’000
2022
Total
repayment
£’000
415
364
544
475
437
680
1,323
1,592
2021
interest
£’000
59
69
186
314
2021
discounted
payments
£’000
2021
Total
repayment
£’000
354
456
684
413
525
870
1,494
1,808
P a g e | 62
Notes to the Financial Statements
for the year ended 30 April 2022
24. SHARE OPTIONS
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. 1 employee with options totalling 769,230
has left the company.
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 2022 was £58,415 based on a fair value of 6.6p per share and
1,369,230 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
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 £21,000 (2021: £8,000 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 (2021: 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 | 63
Notes to the Financial Statements
for the year ended 30 April 2022
25. SHARE CAPITAL
Group
Parent Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Allotted, called up and fully paid
78,638,879 (2021: 84,247,534) ordinary shares of 1p each
Treasury shares 7,303,655 (2021: 1,695,000) ordinary shares of 1p each
Total 85,942,534 ordinary shares of 1p each
786
73
859
842
17
859
786
73
859
842
17
859
2022
Number
2022
£’000
2021
Number
2021
£’000
Ordinary shares held by the company
7,303,655
1,008
1,695,000
218
26. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Net increase/(decrease) in cash and cash equivalents
Increase/(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
2022
£’000
3,746
(36)
-
171
3,881
996
4,877
2021
£’000
3,390
1,625
1,765
2,206
8,986
(7,990)
996
2022
£’000
1,981
-
-
-
1,981
2,829
4,810
2021
£’000
2,817
-
1,765
-
4,582
(1,753)
2,829
P a g e | 64
Notes to the Financial Statements
for the year ended 30 April 2022
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.
2021
Repayment of principal
New borrowings
Interest paid
Cash movements total
Interest charge
Non cash additions
Non cash movement total
2022
27. RELATED PARTY TRANSACTIONS
Lease
Liabilities
(Note 23)
£’000
1,494
(445)
-
(60)
(505)
60
274
334
1,323
Bank
Borrowing
(Note 22)
£’000
-
-
-
-
-
-
-
-
-
Bank
Borrowing
(Note 21)
£‘000
-
-
-
-
-
-
-
-
-
Group
The Group has a related party relationship with its subsidiaries and with its key management personnel, who are considered
to be its directors of the Company and the site general managers. 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.
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
2022
£’000
-
398
2021
£’000
250
306
P a g e | 65
Notes to the Financial Statements
for the year ended 30 April 2022
28. POST BALANCE SHEET EVENTS
In May 2022 the group acquired 100% of the share capital of Film & Foil Solutions Ltd for a total consideration of £3.0 million
satisfied by £2.25 million in cash and £0.75 million of shares of Coral Products at 15.5p. The purchase price allocation has not
yet been performed on this acquisition. In the most recent reporting period of 31 December 2020, revenues were £10.4m and
profit before taxation was £61,000.
In May 2022 the group acquired 100% of the share capital of Alma Products Ltd for £1.5 million satisfied by cash. In addition,
an earn out agreement is payable for the year ended 30 April 2023 if the EBITDA is greater than £300,000. The purchase price
allocation has not yet been performed on this acquisition. In the most recent reporting period of 31 December 2021, revenues
were £12.3m and profit before taxation was £145,000.
29. ULTIMATE CONTROLLING PARTY
In the opinion of the directors there is no ultimate controlling party.
P a g e | 66
Five Year Record (unaudited)
2022
2021
£’000
£’000
2020
Restated
£’000
2019
2018
£’000
£’000
Turnover
14,391
10,714
8,703
24,733
23,405
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)
1,574
(82)
1,492
(162)
-
(363)
-
967
19.2
1.39
1.1
5,003
6,704
11,707
859
10,848
11,707
n/a
15
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
P a g e | 67
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 Thursday 29 September 2022, 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.
Ordinary business
Ordinary resolutions
1.
2.
3.
4.
5.
6.
7.
To receive and adopt the audited accounts for the year ended 30 April 2022, 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 Crowe 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 0.2p per ordinary share in respect of the year ended 30 April 2022.
To approve the Board Report on Directors’ Remuneration for the year ended 30 April 2022.
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 2023, 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.
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 2023 (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.
P a g e | 68
Notice of the Annual General Meeting
continued
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 2023, 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.
10.
That the Company be authorised to cancel the share premium account and capital redemption reserve and credit the resulting
sums to the Company’s profit and loss account as permitted by the Companies Act 2006.
By order of the Board
Sharon Tinsley
Company Secretary
6 September 2022
Registered Office
Southmoor Road
Wythenshawe
Manchester
M23 9DS
P a g e | 69
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 vote 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, 3 The Millennium Centre, Crosby Way,
Farnham, Surrey, GU9 7XX, and must be received by the Company at least 48 hours prior to the meeting.
To change your proxy instructions, you may return a new proxy appointment using the methods set out above. Where you have appointed a
proxy using the hard copy Proxy Form and would like to change the instructions using another hard copy Proxy Form, please contact the
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 Meeting, the
results of the voting at the Annual General Meeting and the numbers of proxy votes cast for and against and the number of votes actively
withheld in respect of each of the Resolutions will be announced via a regulatory information service.
A member of the Company which is a corporation may authorise a person or persons to act as its 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 5 September 2022 (being the last Business Day prior to the publication of this Notice of Annual General Meeting), the Company’s issued
share capital consists of 83,402,589 ordinary shares of 1p each with voting rights. Therefore, the number of total voting rights in the Company
is 83,402,589.
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 available 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.
P a g e | 70
Financial Calendar
Annual General Meeting
Payment of Final Dividend
Provisional - Interim results
29 September 2022
30 November 2022
31 December 2022
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, 3 The
Millenium Centre, Crosby Way, Farnham, Surrey GU9 7XX.
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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