another record year - zenith hygiene group · 2016-08-01 · our vision is simple: ... we are very...

Another record year Zenith Hygiene Group Plc Annual Report & Accounts

For Year Ended 29th February 2016

OverviewFinancial Highlights .............................................................................................3

About Zenith ..........................................................................................................4

What Sets Zenith Apart ......................................................................................5

Our Story So Far ....................................................................................................6

Zenith Hygiene Today ..........................................................................................7

Business Model and Strategy ...........................................................................8

Our Growth Strategy ...........................................................................................9

Directors .................................................................................................................10

Strategic ReportChairman’s Statement .......................................................................................12

CEO Statement .....................................................................................................14

Finance Director’s Statement .........................................................................16

Financial StatementsDirectors’ Report ..................................................................................................18

Independent Auditor’s Report to the Members of

Zenith Hygiene Group Plc ...............................................................................20

Consolidated Statement of Comprehensive Income .............................22

Consolidated Statement of Financial Position ..........................................23

Consolidated Statement of Changes in Equity .........................................24

Consolidated Statement of Cash Flows .......................................................25

Notes to the Consolidated Financial Statements ....................................26

Independent Auditor’s Report to the Members of

Zenith Hygiene Group Plc (Company) .........................................................47

Company Statement of Financial Position .................................................49

Company Statement of Changes in Equity ................................................50

Company Statement of Cash Flows ..............................................................51

Notes to the Company Financial Statements ............................................52

Giving Something BackSpringboard Peru Trek .......................................................................................56

Springboard London to Paris Cycle Challenge .........................................58

Contents

The Annual Report can be downloaded online.To find out more visit www.zhgplc.com

Zenith Hygiene Group PlcAnnual Report and Accounts 2016 3

Overview

Financial Highlights

Customer Split

Food Service

Healthcare

66%7%

8%

13%

3% 3%

Hotels

Facilities Management

Food & Beverage Manufacturing

Public Sector

FY14

FY15FY16

Revenue EBITDA

FY14

FY15

FY16

Profit Before Tax

FY16

FY15

FY14

*The group is now presenting the accounts under IFRS compared to prior years when UK GAAP was applied.

£‘00

0

8.4%UP 48.3%UP 104%UP

£‘00

0

£‘00

0

60

50

40

30

20

10

0

5

4

3

2

1

0

3,000

2,500

2,000

1,500

1,000

500

0

Zenith Hygiene Group PlcAnnual Report and Accounts 20164

About Zenith

Overview

Zenith is a trusted provider of cleaning and hygiene solutions to independent and national customers. We offer solutions that are essential to our customers’ ability to operate.

We focus on providing products and solutions to ensure clean, safe and hygienic environments...

to work in to live in to eat in


Based at the Group’s manufacturing operation in Lisburn, Northern Ireland.

Experienced team of product development chemists.

Develops new products and formulations to:

- Expand product range - Address specific customer requests - Improve performance levels - Comply with developments in legislation

RES

EAR

CH

&

DEV

ELO

PMEN

T

What Sets Zenith Apart?

ACCOUNT SUPPORT

COSHH and product safe handling training covering H&S legal requirements.

Training on cleaning processes and methodology.

Best practice knowledge sharing.

Solution based relationships. Bespoke to each customer account.

MANUFACTURING Purpose built factory occupying

52,000 sq ft. Latest in production

technology, with capacity at 40 million litres per annum.

NATIONAL DELIVERY COVERAGE

10 Distribution centres strategically located across the UK.

Fleet of over 70 vehicles ranging from 3.5t to 18t.

TomTom ‘Eco Plus’ driver management systems installed to reduce our carbon footprint.

Overview

Because Hygiene Matters


Overview

The BeginningFounded by

Ringo Francis

1996

2003Strategic Acquisitions2003 - Keen Janitorial, 2004 - SB Chemicals

Limited Quantum Hygiene,

MP Chemicals, Renaissance Laundry & Cleaning Supplier Ltd

2005 - GWP Group

Listed on the London Stock Exchange.

The acquisition strategy continued with Baker Hygiene & Cleaning Services coming on

board later that year.

2006

2008MBO

Zenith was delisted through a management buyout process led by Lord Stanley Fink and

Ringo Francis.

Acquisition

Zenith successfully acquired e-Hygiene

Systems Ltd.

2013

Acquisition

Zenith successfully acquired Rose

Hygiene Products Ltd and named as one of the ‘1000 Companies

to Inspire Britain’.

2016

2015Year-on-year growth

since the MBO. Successful launch of export activities

across Europe and the Middle East.

Acquired Advanced Cleaning & Hygiene

Services Ltd.

In February 2016, we were named as one of the ‘1000 Companies to Inspire Britain’ in the third edition of a report released by the London Stock Exchange. In order to be considered for the list businesses needed to demonstrate not only positive growth in revenues over the last four years, but also “significantly outperform their sector peers.”

“We are delighted to have our hard work in growing Zenith recognised in

such a prestigious report from the London Stock Exchange. Since I founded

Zenith two decades ago I have been hugely committed to the development

of both the team here and the company as a whole, and to have this

development recognised is a huge honour. “

Ringo Francis

Our Story So Far...


Lisburn NI: Manufacturing Plant

Lisburn NI: Manufacturing Plant

Lisburn NI: R&D Lab

Droitwich: Distribution Centre

Swanley: Distribution Centre

Head office: Welham Green

East Kilbride: Distribution Centre

Elland: Distribution Centre

Doncaster: Distribution Centre

Bridgwater: Distribution

Centre

Ipswich: Distribution Centre

Zenith Hygiene Today

Oldham Powder: Manufacturing

2 Manufacturing PlantsOur Lisburn Northern Ireland plant is a purpose built factory occupying 52,000 sq ft.

Utilises the latest in production technology, with capacity of 40 million litres per annum.

Our Oldham factory has the capacity to produce 2,500 tonnes of powders per year.

10 Distribution CentresThe acquisition of Rose Hygiene Products Limited added two additional distribution centres in February 2016.

Overview


Strategic Report

Business Model & Strategy

Our vision is simple: to provide quality UK manufactured

cleaning products and hygiene solutions to our customers,

‘Because Hygiene Matters’. Driving our vision is our strong

adherence to placing our customers at the heart of our strategy.

DRI

VIN

G S

ERVI

CE

DRI

VIN

G Q

UA

LITY

Support

Manufacturing

R&D

Delivery

Our Customers

PROVIDING CUSTOMER VALUE

PROVIDING SHAREHOLDER VALUE


Our Growth Strategy

Organic GrowthOur organic growth is achieved through a combination of our existing customer base and the opportunities that new industry segments provide. We continue to expand our customer base and grow alongside our customers.

Acquisition GrowthWe have a solid acquisitional track record. In FY16 we completed a further two acquisitions, Advanced Cleaning and Hygiene Supplies Limited and Rose Hygiene Products Limited. Both companies expand our national footprint, Rose Hygiene in particular strengthens our distribution network by adding two additional depots.

Operational GearingWe continually strive to ensure efficiencies within our business by:

• Utilising our manufacturing capacity

• Strategic decisions to strengthen our national distribution network

• Investments in new software and systems

All complement our operational procedures.

International Export The Group continues to strategically focus on growing our international presence. We place dedicated emphasis on hand picking the right partners in each country and working closely with them to ensure solid success.


Ringo FrancisChief Executive

Founded Zenith Hygiene Group Plc in 1996. 30+ years experience in the hygiene industry. Former MD at Francis Chemicals which was subsequently sold to Sealed Air Diversey in 1993.

Directors

Alison PettittFinance Director

Joined the business in March 2014. Alison is an FCCA qualified accountant with a 25 year career in Manufacturing & Engineering businesses. Prior to joining she spent 10 years with Marshall Land Systems Limited where she was Finance Director.

Lord Stanley FinkChairman

Former CEO and deputy chairman of the Man Group plc. Lord Fink led the management buy out of Zenith Hygiene Group Plc with Ringo Francis in 2008. Currently Chairman of ISAM Funds.

Simon BowerChief Operating Officer

Simon joined in 2011, after 22 years as a Chartered Accountant, specialising in Restructuring and Turnaround. He was National Head of Restructuring at RSM Robson Rhodes, before joining Baker Tilly as Head of Banking in 2007.

Ian SmithNon-Executive Director

Having started with City Vintagers in 1978, Ian has built up an impressive 35 year career within the drinks industry. Currently Deputy Managing Director of Matthew Clark, his vast experience makes him a committed and enthusiastic ambassador for both the drinks and the on-trade industries.

Michael CronkNon-Executive Director

Joined the Zenith Hygiene Group Plc board as a non-executive director in 2010. He worked for over 35 years in the commodity business, largely with E.D.& F. Man, where he was a director of the company’s sugar division.

REGISTERED OFFICEA1(M) Business CentreDixons Hill RoadWelham GreenHertfordshireAL9 7JE

AUDITORPricewaterhouseCoopers LLP10 Bricket RoadSt AlbansHertfordshireAL1 3JX

SOLICITORSCooley (UK) LLP69 Old Broad StreetLondon EC2M 1QS

BANKERSantander UK plcLondon Corporate Banking Centre 4th Floor Santander House100 Ludgate Hill London EC4M 7NJ

Company Registration No. 06707511Secretary: Alison Pettitt


Zenith Hygiene Group Plc

Report and

Financial Statementsfor the year ended 29 February 2016


Chairman’s Statement

Strategic Report

We are very pleased to report another record year in terms of profit and revenue, driven by strong organic and acquisitive growth.Our results show continued strong momentum with revenue up 8.4% to £53.2 million, EBITDA up 48.3% to £4.9 million and Profit Before Tax increasing by 104% to £2.8 million. These results are testament to our successful strategy of forming strong partnerships with customers, driving expansion across multiple sectors and geographies, broadening our product and ecommerce proposition and investing in our staff.

Our customers have continued to place their trust in Zenith Hygiene, evidenced in the 2% year-on-year increase in our customer retention rate, now standing at an industry leading 97% for FY16. The average length of contracts remains in excess of three years whilst many of our customer relationships exceed five years. This positive increase has been achieved by applying our unique industry knowledge to specific customer needs, supplying essential and effective cleaning and hygiene products, as well as providing support, guidance and regular on-site visits to deliver the best service in the industry.

During this financial year, we have also focused on growing our business through targeted and selective acquisitions including Advanced Cleaning and Hygiene Supplies Limited in April 2015 and

Revenue

£53.2MILLION

UP8.4%

Business Highlights for FY16


Rose Hygiene Products Limited in February 2016. Both these acquisitions increase Zenith Hygiene’s geographical coverage and expand and strengthen our position in new sectors and markets in the UK.

Ultimately, this growth could not have been achieved without the tremendously hard work that each and every one of our employees invests in our clients. We in turn, place great value investing in our employees and ensure we provide best-in-class training, support and development. Our people continue to be key to our success and I would like to personally thank them all for their ongoing dedication, hard work and support.

As we enter a new financial year, we continue to seek opportunities to expand our business through strategic acquisitions, organic growth and international expansion. The progress Zenith Hygiene has made over recent years combined with our long-term strategy ensures that we are well positioned for the future. The Board remains confident we will continue to deliver consistently top and bottom line growth in FY17.

Profit Before Tax

£2.8MILLION

UP104%

Customer Retention Rate

97%UP2%

“our customer retention rate, now standing at

an industry leading 97% for FY16”


I am delighted to report another strong year for Zenith Hygiene, delivering substantial operational and financial progress. FY16 was the fifth consecutive year of EBITDA growth, highlighting the strength of our business.Looking back over FY16, there is no doubt that we have had a busy year. We have successfully identified and completed two value enhancing acquisitions and will continue to evaluate additional opportunities as they arise. We have also focused our efforts on growing our international operations, both as a standalone business and in conjunction with our customers.

While maintaining our leadership in the hospitality, restaurant and catering sectors, we have continued to develop and reinforce other target markets, with a particular focus on healthcare, facilities management and food & beverage manufacturing. Specialist talent has been sourced and internal training has been conducted to aid us in winning new major national accounts.

We believe we help our customers to play a vital role in the prevention of disease and spread of infection, something which defines the cleaning and hygiene industry. Our employees are pivotal to this, and enable us to deliver the service and product innovation which we are known for. Each and every single member of staff contributes to the success of our business on a daily basis – for this, I want to say thank you to all our hard working employees.

We have achieved so much as a business and a team since we founded Zenith Hygiene two decades ago. The business has grown significantly and is now the UK’s largest integrated, independent manufacturer, supplier and distributor of cleaning and hygiene chemicals and products. We operate across the full supply chain, from research & development and manufacturing to national delivery and account support and services, with a strong adherence to ensuring quality in the products and services we deliver, enabling us to provide a better customer proposition. All of this sets us apart in an industry that is

CEO Statement

Strategic Report


constantly shifting to adapt to changing customer needs, intense competition and continuous product and service innovation.

As a result of our hard work, we are honoured to have been named as one of the ‘1000 Companies to Inspire Britain’ in the third edition of a report published by the London Stock Exchange. The report is a celebration of the UK’s fastest-growing and most dynamic small and medium sized businesses. It recognises that we have both demonstrated growth in revenues over the past four years as well as outperformed our peers in the sector. The report received cross-party political support including from Chancellor of the Exchequer George Osborne.

Going forward, we will continue to focus on product and service innovation, expanding existing businesses into complementary products and new markets, growing our business both organically and through selective acquisitions, as well as driving international expansion through our export business.

We are extremely confident we have the right strategy in place which will allow us to deliver our long-term growth ambitions and we look forward to the future with confidence.

10

20

30

40

50

60

FY16FY15

FY14FY13

FY12

Revenue

11%CAGR

1

2

3

4

5

FY16

FY15

FY14FY13

FY12

EBITDA

41%CAGR

UP

£‘00

0

£‘00

0

“FY16 was the fifth consecutive year of

EBITDA growth for our business”

UP


The group has produced another strong set of results with improvements in all key financial indicators.

The group is now preparing its accounts under IFRS compared to prior years when UK GAAP was applied.

Year ended 29 February

2016

Year ended 28 February

2015

Profit and total comprehesive income

3,676 1,389

Add back:

Tax (869) (15)

Interest 430 516

Operating profit 3,237 1,890

Add back:

Amortisation 90 75

Depreciation 1,533 1,312

EBITDA 4,860 3,277

Finance Director’s Report

Strategic Report

Operating Profit

£3.2MILLION

UP71.3%

EBITDA

£4.9MILLION

UP48.3%

*The group is now presenting the accounts under IFRS compared to prior years when UK GAAP was applied.


Turnover, margins and costsRevenue rose by £4.1m year-on-year (yoy) or up 8.4% from £49.1m to £53.2m. This reflects continued increasing demand from our existing customer base together with new business wins.

Over the last 5 years, turnover has grown at a compound annual rate of 11%.

Gross profits grew 12.6% yoy from £21.5m to £24.2m. As a percentage of sales gross profits were 45.4% which is an increase of 1.7% from the prior year. This improvement was due in part to changes in sales team incentive schemes, which refocussed efforts to margin improvement rather than revenue improvement. In addition the purchasing team were able to hold purchase costs and negotiate additional year end rebates.

EBITDA rose by 48.3% in the year to a total of £4.9m from last year’s figure of £3.3m. This reflected the operational gearing of the group with much of the improvement in gross profits falling straight to operating profit.

Depreciation charged for the year increased by 16.8% and reflected the increased investment in dosing and dispensing equipment of £1,091k. The majority of new customers have installations of this equipment at the start of their contracts. This equipment is issued on a free on loan basis and installed into customers’ premises. It is typically written off over 3-4 years. During the year the group also investedin IT equipment, fleet cameras, the development of a warehouse bar-coding programme, upgrading of premises, installation of CCTV and racking, and additional vehicles.

Intangible amortisation relates to the customer relationship value arising on acquisition of e-Hygiene Limited, Rose Hygiene Products Limited and Advance Cleaning and Hygiene Supplies Limited. This is being amortised over a 5 to 6 year period.

The group has tax credits arising from historical tax losses that have now been recognised given the improvement in the trading performance of the group and the likelihood that corporation tax will continue to be payable in the medium term.

Cash flow and net debtCash generated through operating activities increased from £3.1m to £3.3m. Year-on-year the improvement in profit before tax more than covered the working capital requirements which increased by £1.1m due to the increase in trade and the requirements of Rose Hygiene Products Limited.

Investment in acquisitions and purchases of plant and equipment consumed £2.6m of cash compared to £1.8m in prior years, and reflected the investment in Rose Hygiene Products Limited.

During the year the group renegotiated its financing with Santander and agreed two new term loans totalling £6.9m which are repayable over 3.5-5 years. These funds were utilised to repay the shareholder loans.

Net debt fell during the year from a level of £10.0m to £8.96m.

AcquisitionsDuring the year the group continued to benefit from the acquisition of e-Hygiene Limited and Advance Cleaning and Hygiene Supplies Limited. In February 2016 the group acquired 100% of the shares of Rose Hygiene Products Limited. It is expected that this will be successfully integrated into the group by the end of June 2016 with synergies realised which will further enhance

the profits.


The Directors present their report and the audited consolidated financial statements for the year ended 29 February 2016.

DirectorsThe Directors who have held office since 1 March 2015 are

set out on page 10.

DividendsThe Board does not propose the payment of a dividend for the year ended 29 February 2016 (2015: £Nil).

Political DonationsThe Group made donations amounting to £Nil (2015: £9,500) to the Conservative party during the year.

EmployeesThe Board recognises that a fundamental key to its success is the ability to develop a strong and highly motivated workforce if it is to achieve its goals. To this extent a number of initiatives have been put in place to improve staff welfare, and to recognise the contribution of employees through various reward and benefit schemes. The Group produces monthly bulletins to keep its employees abreast of the Group’s performance during the course of the year and of any matters that may be of concern to the employees. The success of these initiatives has been recognised through the Investors in People accreditation scheme awarding the Group the bronze award for going beyond the core standards set by the scheme.

Applications for employment by disabled persons are given full and fair consideration for all vacancies in accordance with their particular aptitudes and abilities. In the event of employees becoming disabled, every reasonable effort is made to make reasonable adjustments in line with the Equality Act (2010) in order that their employment with the Group may continue. It is the policy of the Group that training, career development and promotion opportunities should be available to all employees.

The Board thanks its entire staff for the enthusiasm, dedication and efforts over what has been another successful year in the Group’s development.

Indemnities and insurance The Group maintains liability insurance for its Directors and officers. The Directors have also been granted a qualifying third-party indemnity, under section 234 of the Companies Act 2006, which remains in force. Neither the Group’s indemnity nor insurance provides cover in the event that the indemnified individual is proved to have acted fraudulently or dishonestly.

Future DevelopmentsThe likely future developments in the business of the Group are set out in the Strategic Report on page 11.

Financial risk managementThe Group’s operations expose it to a variety of financial risks. Details of these financial risks and how the Group manages such risk are set out in note 18 to the financial statements.

Independent AuditorBaker Tilly UK Audit LLP resigned as auditor during the year and PricewaterhouseCoopers LLP were appointed in their place. A resolution to reappointment PricewaterhouseCoopers LLP will be proposed at the Annual General Meeting.

Statement as to disclosure of information to the auditorsThe Directors have confirmed that, as far as they are aware, there is no relevant audit information of which the auditor is unaware. Each of the Directors have confirmed that they have taken all the steps that they ought to have taken as Directors, in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.

Directors’ Report

Report & Financial Statements


The Directors are responsible for preparing the Annual 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 prepared the Group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Approval

The Directors’ report was approved by the Board on 7 June 2016 and signed on its behalf by:

Ringo Francis Director


Directors’ Responsibilities Statement


Report on the Group financial statements

Our opinion

In our opinion, Zenith Hygiene Group Plc’s group financial statements (the “financial statements”):

• give a true and fair view of the state of the Group’s affairs as at 29 February 2016 and of its profit and cash flows for the year then ended;

• have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the European Union; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

What we have audited

The financial statements, included within the Annual Report, comprise:

• the Consolidated Statement of Financial Position as at 29 February 2016;

• the Consolidated Statement of Comprehensive Income for the year then ended;

• the Consolidated Statement of Cash flows for the year then ended;

• the Consolidated Statement of Changes in Equity for the year then ended; and

• the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and IFRSs as adopted by the European Union.

In applying the financial reporting framework, the Directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

Opinion on other matter prescribed by the Companies Act 2006In our opinion, 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.

Other matters on which we are required to report by exception

Adequacy of information and explanations received

Under the Companies Act 2006 we are required to report to you if, in our opinion, we have not received all the information and explanations we require for our audit. We have no exceptions to report arising from this responsibility.

Directors’ remuneration

Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of Directors’ remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.

Independent Auditor’s Report to the Members of Zenith Hygiene Group Plc



Responsibilities for the financial statements and the audit

Our responsibilities and those of the directors

As explained more fully in the Directors’ Responsibilities Statement set out on page 19, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the parent company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What an audit of financial statements involves

We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

• whether the accounting policies are appropriate to the Group’s circumstances and have been consistently applied and adequately disclosed;

• the reasonableness of significant accounting estimates made by the Directors; and

• the overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the Directors’ judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Other matterWe have reported separately on the parent company financial statements of Zenith Hygiene Group Plc for the year ended 29 February 2016.

Matthew Mullins (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors St Albans

7 June 2016



for the year ended 29 February 2016 Notes 2016

£’000

2015

£’000

Revenue 4 53,244 49,108

Cost of sales 5 (29,055) (27,630)

Gross profit 24,189 21,478

Other operating income 11 33

Distribution costs 5 (9,176) (8,301)

Administrative expenses 5 (11,787) (11,320)

Operating profit 3,237 1,890

Finance costs 6 (430) (516)

Profit before tax 2,807 1,374

Income tax credit 7 869 15 Profit and total comprehensive income for the year

3,676

1,389

Consolidated Statement of Comprehensive Income



as at 29 February 2016 Notes 2016

£’000 2015 £’000

NON-CURRENT ASSETSIntangible assets 8 15,079 13,055Property, plant and equipment 9 3,487 3,171

18,566 16,226CURRENT ASSETSInventories 10 3,906 3,046Trade and other receivables 11 9,216 8,429Deferred tax 15 854 -Cash and cash equivalents 3,109 775

17,085 12,250CURRENT LIABILITIESTrade and other payables 12 (11,158) (9,809)Borrowings 13 (7,196) (6,548)

(18,354) (16,357)

NET CURRENT LIABILITIES (1,269) (4,107)

NON-CURRENT LIABILITIESBorrowings 13 (4,878) (4,236)Other payables 14 (500) -Deferred tax liability 15 (435) (75)

(5,813) (4,311)

NET ASSETS 11,484 7,808

EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENTShare capital 16 5,292 5,292Share premium 7,352 7,352Retained earnings (1,160) (4,836) TOTAL EQUITY 11,484 7,808

The consolidated financial statements of Zenith Hygiene Group Plc, registered number 06707511, on pages 22 to 46 were approved by the Board of Directors and authorised for issue on 7 June 2016 and were signed on its behalf by:


Consolidated Statement of Financial Position



for the year ended 29 February 2016 Share

Capital£’000

Sharepremium

£’000

Retained earnings

£’000

Total£’000

At 1 March 2014 5,292 7,352 (6,225) 6,419

Total comprehensive income for the year - - 1,389 1,389

At 28 February 2015 5,292 7,352 (4,836) 7,808

Total comprehensive income for the year - - 3,676 3,676

At 29 February 2016 5,292 7,352 (1,160) 11,484

Consolidated Statement of Changes In Equity




£’000 2015 £’000

CASH FLOWS FROM OPERATING ACTIVITIESCash generated from operations 17 4,035 3,571Interest paid (677) (436)

Tax paid - -

NET CASH GENERATED FROM OPERATING ACTIVITIES

3,358 3,135

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of subsidiary 8 (1,000) (125)Purchases of property, plant and equipment (1,606) (1,706)

NET CASH USED IN INVESTING ACTIVITIES (2,606) (1,831)

CASH FLOWS FROM FINANCING ACTIVITIESNew term loan 3,836 -Repayment of borrowings (2,254) (1,119)

NET CASH USED IN FINANCING ACTIVITIES 1,582 (1,119)

NET INCREASE IN CASH AND CASH EQUIVALENTS 2,334 185

Cash and cash equivalents at beginning of year 775 590

CASH AND CASH EQUIVALENTS AT END OF YEAR 3,109 775

Consolidated Statement of Cash Flows



1. GENERAL INFORMATIONZenith Hygiene Group Plc (“the Company”) and its subsidiaries (“the Group”) manufacture and supply cleaning and hygiene products to selected markets primarily within the UK and Ireland. The Group is a privately owned independent manufacturer and supplier of hygiene chemicals and ancillary products.

The Company is a public limited company, which was incorporated and is domiciled in the UK. The address of its registered office is A1 (M) Business Centre, Dixons Hill Road, Welham Green, Hertfordshire AL9 7JE.

2. ACCOUNTING POLICIES

Basis of preparationThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations as endorsed by the EU (“IFRS”) and the requirements of the Companies Act applicable to companies reporting under IFRS. The transition date for the adoption of IFRS is 1 March 2014. Details of the transition and the impact it has on the financial statements are set out in note 23.

The consolidated financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.

Interpretations to existing standards and new or amended standards that are not yet effective and have not been early adopted by the GroupThe following Standards and Interpretations, which have not yet been endorsed by the EU, may be relevant to the Group:

• IFRS 9 - Financial Instruments (effective 1 January 2018)

• IFRS 15 - Revenue from Contracts with Customers (effective 1 January 2018)

• IFRS 16 – Leases (effective 1 January 2019)

The Group is assessing the impact of these standards on the Group’s financial statements.

Other interpretations to existing standards and new or amended standards that are not yet effective are not relevant to the Group.

Going concernThe financial statements have been prepared on the going concern basis. The Directors believe that the Group’s performance continues to improve and the outlook is positive. Internal forecasts and cash flow projections for the next twelve months indicate that the Group will generate positive operating cash flows.

Notes to The Consolidated Financial Statements



The Directors have, after careful consideration of the various matters summarised above, concluded that it is appropriate to adopt the going concern basis for the preparation of these financial statements.

Basis of consolidation The consolidated financial statements of the Group incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 28 or 29 February each year.

SubsidiariesSubsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain economic benefits from their activities. Subsidiaries are consolidated from the date on which control is obtained (the acquisition date) up until the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The consideration transferred in a business combination is measured as the fair value of the assets given, equity instruments issued, contingent consideration and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

Intra-group transactions, balances, and unrealised gains and losses on transactions between group companies are eliminated on consolidation, except to the extent that intra-group losses indicate an impairment.

GoodwillGoodwill arising on consolidation represents the excess of the consideration transferred, the amount of any non-controlling interest and the fair value of any previous interest in the acquired entity over the fair value of the identifiable assets and liabilities of a subsidiary at the date

of acquisition. Goodwill on acquisition of subsidiaries is separately disclosed.

Any deficiency of the consideration transferred, the amount of any non-controlling interest and the fair value of any previous interest in the acquired entity below the fair value of identifiable assets and liabilities of a subsidiary (i.e. discount on acquisition) is recognised directly in profit or loss.

Goodwill is recognised as an asset and reviewed for impairment at least annually. It is allocated to cash generating units which represent the Group’s investment in each country of operation. When determining whether goodwill is impaired, the carrying value of the cash-generating unit is adjusted to include the goodwill attributable to the non-controlling interest when the non-controlling interest has been measured as a proportionate share of the net identifiable assets of the subsidiary. Impairment losses are recognised immediately in profit or loss and allocated to non-controlling interests on the same basis as the profit or loss of the subsidiary. Impairment losses are not subsequently reversed.



On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit and loss on disposal.

Goodwill arising on acquisitions before July 2013 has been retained at the previous UK GAAP carrying amounts subject to being tested for impairment at that date and annually thereafter.

Other intangible assetsCustomer relationships arising on a business combination are measured initially at fair value and are subsequently amortised on a straight-line basis over their estimated useful lives (5 to 6 years). Customer relationship assets are impaired if the relationship with the customer ceases.

Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation of these assets commences when the assets are ready for their intended use.

Subsequent costs, including replacement parts, are capitalised only when it is probable that such costs will generate future economic benefits. Any replaced parts are derecognised. All other costs of repairs and maintenance are charged to profit or loss as incurred.

In accordance with market practice, automatic dosing equipment and dispensing equipment issued free on loan to customers is capitalised at the start of new customer supply agreements and depreciated over their expected useful life or the duration of the agreement.

Depreciation is charged so as to write off the cost or valuation of assets, other than land and properties under construction, over their estimated useful lives, using the straight-line method, on the following bases:

Leasehold improvements Over the life of the lease Automatic dosing equipment 3 - 4 years Dispensing equipment 1 - 4 years Motor vehicles 4 - 5 years Fixtures, fittings & equipment 4 – 10 years

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Impairment of property, plant and equipment and intangible assets exclusing goodwill

At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.

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 the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. 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 (or cash-generating unit) 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 (cash-generating unit) is reduced to its recoverable amount. An impairment




loss is recognised as an expense immediately, 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 (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 (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, 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.

Revenue recognitionRevenue is recognised when revenue and associated costs can be measured reliably and future economic benefits are probable. Revenue is measured at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Sales of goods are recognised when goods are delivered and title has passed. Delivery occurs when the products have arrived at the specified location, and the risks and rewards of ownership have been transferred to the customer.

Operating segments IFRS 8 ‘Operating Segments’ provides for the disclosure of segmental information for the Group based on information reported internally to the chief operating decision-maker for decision-making purposes. The Group considers that the role of chief operating decision-maker is performed by the Company’s board of directors.

LeasingLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is recognised as a finance lease obligation. Lease payments are apportioned between finance charges and the reduction of lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s policy on borrowing costs (see below).

Rentals payable under operating leases are expensed on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

Foreign currenciesTransactions in currencies other than the functional currency of the Group which are in pounds sterling are initially recorded at the exchange rate prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the exchange rate prevailing at the reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in profit or loss for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other comprehensive income when the changes in fair value are recognised directly in other comprehensive income.

Government grantsGovernment grants are credited to deferred revenue. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to profit and loss as the related expenditure is incurred.



Retirement benefit costsPayments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution plans where the Group’s obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit plan.

TaxationThe tax expense represents the sum of the current tax expense and deferred tax expense.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the Statement of Comprehensive Income 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 measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount 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 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 the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or credited in profit or loss, except

when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.

InventoryInventory is stated at the lower of cost and net realisable value. Cost comprises direct material cost and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs to completion and selling costs to be incurred.

Financial instrumentsFinancial assets and financial liabilities are recognised when the Group has become a party to the contractual provisions of the instrument.

Financial assets

Trade receivables

Trade receivables are classified as loans and receivables and are initially recognised at fair value. They are subsequently measured at their amortised cost using the effective interest method less any provision for impairment. The carrying value of the receivable is reduced through the use of an allowance account and any impairment loss is recognised in profit or loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and other short-term deposits held by the Group with maturities of less than three months.

Bank overdrafts are presented within current liabilities.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.




Bank borrowings

Interest-bearing bank loans and overdrafts are recorded initially at their fair value, net of direct transaction costs. Such instruments are subsequently carried at their amortised cost and finance charges, including premiums payable on settlement or redemption, are recognised in profit or loss over the term of the instrument using an effective rate of interest.

Trade payables

Trade payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

Equity instruments

Equity instruments issued by the Company are recorded at fair value on initial recognition net of transaction costs.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSIn the course of the preparation of the financial statements, management necessarily makes estimates and judgments that affect the application of policies and reported amounts.

The estimates and assumptions which have the most significant risk of resulting in a material adjustment to the carrying value of assets and liabilities are:

Inventories

Inventory is stated at the lower of cost and net realisable value. Management judgement may be required to ascertain estimated net realisable value.

Trade receivables

Trade receivables are reduced by a provision for impairment. The provision for doubtful debts requires the use of management’s judgement.

Acquisition of Advance Cleaning and Hygiene Supplies Limited and Rose Hygiene Products Limited

The Group acquired the trade of Advance Cleaning and Hygiene Supplies Limited on 1 April 2015 and the shares of Rose Hygiene Products Limited on 19 February 2016. Management judgement is required to ascertain the fair value of assets acquired, especially intangible assets.



4. SEGMENTAL INFORMATIONIFRS 8 ‘Operating Segments’ requires operating segments to be determined based on the Group’s internal reporting to the Chief Operating Decision Maker. The Chief Operating Decision maker has been determined to be the Executive Board and it has determined that the primary segmental reporting format of the Group is be market sector based on the Group’s management and internal reporting structure.

The Executive Board monitor performance on revenue and gross profit by reference to each market segment.



Food Service Hotels Healthcare Facilities Management

Public Sector Food & Beverage Manufacturing

Total

£,000 £,000 £,000 £,000 £,000 £,000 £,000

Revenue 35,695 3,900 4,162 7,081 1,351 1,055 53,244

Cost of sales (19,344) (2,017) (1,938) (4,547) (771) (438) (29,055)

Gross Profit 16,351 1,883 2,224 2,534 580 617 24,189

Operational Overheads (9,176)

Administrative Overheads (11,697)

Other Income 11

3,327

Amortisation of intangibles (90)

Operating Profit 3,237

Finance Costs (430)

Profit before tax 2,807

5. EXPENSESThe Group’s expenses for the year have been analysed by nature as set out below.

2016 £’000

2015 £’000

Cost of materials 27,960 26,508Manufacturing overheads 1,095 1,122Staff costs (excluding manufacturing) 11,210 10,703Warehousing and operational expenses 1,846 1,703Distribution costs 2,250 2,242Marketing and sales support 2,140 2,063Depreciation and amortisation 1,623 1,387Other expenses 1,945 1,479(Gain) / loss on foreign exchange transactions (51) 44

50,018 47,251


During the year, the Group received the following services from the Company’s auditor and its associates.

2016 £’000

2015 £’000

Audit of parent company and consolidated financial statements 18 18Audit of the financial statements of the Company’s subsidiaries 60 59Tax services 15 18Company secretarial services 4 18

97 113

Staff CostsThe average monthly number of employees, including the directors, analysed by function is set out below.

2016 No.

2015 No.

Management 14 12Selling and distribution 235 220Manufacturing 48 48Administration 56 53Installation engineers 18 19

371 352

£’000 £’000Wages and salaries 10,933 10,104Social security costs 1,015 946Other pension costs 153 146

12,101 11,196

Included within wages and salaries is £488,000 (2015: £426,000) relating to temporary workers.

The Group operates defined contribution pension schemes for the benefit of employees and directors. The assets of the schemes are administered by trustees in funds independent from those of the Group. The total contributions payable by the Group for the year was £154,000 (2015: £138,000). Included in other payables as at 29 February 2016 were unpaid contributions of £20,000 (2015: £36,000).

Information concerning the Directors’ remuneration is given in note 21 below.

Other IncomeIncluded within Other Income are government grants amounting to £11,000 (2015: £33,000) received from Invest NI in respect of research undertaken at our manufacturing operation in Northern Ireland.

6. FINANCE COSTS2016 £’000

2015 £’000

Interest payable and similar charges on bank loan 84 151Interest payable and arrangement fees on invoice financing facility 248 259Interest payable on shareholder loans 66 64Finance lease charges 32 42

430 516



7. TAXATION2016 £’000

2015 £’000

Current tax charge - -Deferred tax credit:- Origination and reversal of temporary differences (918) (15)- Tax rate changes 49 -

(869) (15)

The income tax credit for the year differs from the theoretical amount that would arise using the standard corporation tax rate in the UK of 20.08% (2015: 21.17%) as explained below. Further details concerning the deferred tax movement are given in note 15.

2016 £’000

2015 £’000

Profit before tax 2,807 1,374

Theoretical tax calculated at 20.1% (2015: 21.2%) 564 291

Tax effects of:- Expenses not deductible for

tax purposes 89 116- Tax losses utilised - (278)- Capital allowances in excess

of depreciation - (128)- Utilisation of amounts not

previously recognised (1,553) -- Income not taxable (18) -- Effects of other tax rates 49 (16)

Tax credit for the year (869) (15)

8. INTANGIBLE ASSETS

Goodwill

£’000

Customer

relationship

£’000

Total

£’000CostAt 1 March 2014 and at 28

February 2015 12,679 476 13,155

Additions 336 1,778 2,114

At 29 February 2016 13,015 2,254 15,269

Accumulated amortisationAt 1 March 2014 - 25 25Amortisation charge - 75 75

At 28 February 2015 - 100 100Amortisation charge - 90 90

At 29 February 2016 - 190 190

Net book valueAt 29 February 2016 13,015 2,064 15,079

At 28 February 2015 12,679 376 13,055

Goodwill is tested annually for impairment with the recoverable amount determined using value-in-use calculations. The key assumptions for the value-in-use calculations as at the year-end are the long-term growth rates and the discount rates. The value-in-use is calculated using cash flow projections for five years based on financial forecasts approved by the Board.

The short term growth rate based on management expectations and future forecasts is estimated to be 7.2% and takes into account past growth and business churn whilst the pre-tax discount rate is set at 12.5%. Long term growth rates have been estimated to fall in line with UK government GDP forecasts. There is no reasonably possible change in the key assumptions or financial forecasts that would indicate any impairment of goodwill.

On 19 February 2016, the Company acquired 100% of the shares of Rose Hygiene Products Limited for a total consideration of £2,000,000.




9. PROPERTY, PLANT AND EQUIPMENT

Land and buildings

£’000

Fixtures, fittings and equipment

£’000

Dosing and dispensing equipment

£’000Motor vehicles

£’000Total

£’000CostAt 1 March 2014 624 707 4,043 1,400 6,774Additions 122 344 938 302 1,706Disposals - - - (83) (83)

At 28 February 2015 746 1,051 4,981 1,619 8,397Additions 189 422 1,091 151 1,853Disposals - - (226) (6) (232)

At 29 February 2016 935 1,473 5,846 1,764 10,018

Accumulated depreciationAt 1 March 2014 281 309 2,822 585 3,997Depreciation charge 65 178 740 329 1,312On disposals - - - (83) (83)

At 28 February 2015 346 487 3,562 831 5,226Depreciation charge 90 208 881 354 1,533On disposals - - (226) (2) (228)

At 29 February 2016 436 695 4,217 1,183 6,531

Net book valueAt 29 February 2016 499 778 1,629 581 3,487

At 28 February 2015 400 564 1,419 788 3,171

Property, plant and equipment as at 29 February 2016 include assets under finance leases with an original cost of £1,785,000 (2015: £1,633,000) and a net book value of £526,000 (2015: £713,000). Depreciation charged for the year on these assets was £339,000 (2015: £312,000).


8. INTANGIBLE ASSETS CONT...The fair value of the assets acquired amounted to £322,000, represented primarily by tangible fixed assets of £242,000: current assets (stock, trade debtors and cash) of £1,133,000: current liabilities (trade and other creditors) £993,000: and non current liabilities of £60,000 resulting in an intangible asset of £1,678,000 in respect of customer relationships.

In addition, a further £100,000 of intangible assets arose through the purchase of the trade of Advanced Cleaning and Hygiene Supplies Limited during the year.

The intangible assets derived from customer relationships are being amortised over a 6 year period.


10. INVENTORIES2016 £’000

2015 £’000

Raw materials 358 315Work-in-progress 57 29Finished goods and goods for resale 3,491 2,702

3,906 3,046

The cost of inventories recognised as an expense and included in cost of sales amounted to £27,960,000 (2015: £26,508,000).

11. TRADE & OTHER RECEIVABLES2016 £’000

2015 £’000

Trade receivables 9,055 8,043Less: provision for doubtful debts (263) (207)

Trade receivables 8,792 7,836Other receivables 93 110Prepayments 331 483

9,216 8,429

The fair value of trade and other receivables is not materially different from their carrying value. The maximum exposure to credit risk as at the reporting date is the carrying value of each class of receivables disclosed above.

As at 29 February 2016, trade receivables of £1,191,000 (2015: £657,000) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

2016 £’000

2015 £’000

Up to 1 month 630 2381 to 2 months 160 321Over 2 months 400 98

1,191 657




As at 29 February 2016, trade receivables of £390,000 (2015: £315,000) required some impairment. No other classes of assets within trade and other receivables are impaired. The amount of the trade receivables impairment provision was £263,000 (2015: £207,000). The ageing analysis of these impaired trade receivables is as follows:

2016 £’000

2015 £’000

Up to 2 months 108 632 to 3 months 6 17Over 3 months 276 235

390 315

Movements on the Group provision for impairment of trade receivables are as follows:

2016 £’000

2015 £’000

At 1 March 207 259Provision for receivables impairment 182 170Receivables written off in the year as uncollectible (116) (162)Unused provision reversed (10) (60)

At 29 February 263 207

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:

2016 £’000

2015 £’000

UK Pound sterling 9,063 8,284Euros 153 145

9,216 8,429

12. TRADE & OTHER PAYABLES2016 £’000

2015 £’000

Trade payables 8,747 6,873Other taxation and social security 448 795Other payables 574 173Accruals 1,389 1,968

11,158 9,809

The fair value of trade and other payables is not materially different from their carrying value.



13. BORROWINGS2016 £’000

2015 £’000

Amounts falling due within one year:Bank loan 1,144 750Invoice financing facility 5,688 5,458Finance lease obligations 364 340

7,196 6,548Amounts falling due after more than one yearBank loan 4,646 1,954Directors’ loans (note 21) - 1,878Finance lease obligations 232 404

4,878 4,236

12,074 10,784

The bank loan bears interest at 2% (2015: 3%) above LIBOR and is secured by fixed and floating charges over the Group’s assets. The bank loan is due for repayment by 2020. Under the terms of the loan agreement, the Group is measured on both its interest cover and its debt leverage against EBITDA. The Group remained compliant with its covenants throughout the year.

Directors’ loans were unsecured and subordinate to the bank loan with interest accruing on the directors’ loans at 3% (2015: 3%) above LIBOR. These loans were repaid during the year.

The invoice financing facility is secured against Group’s trade receivables. Interest is charged on this facility at a rate of 1.75% (2015: 2.75%) above the Santander base rate and is subject to an annual management fee of £17,500.

Finance lease obligations are secured on the related assets and bear an effective interest rate of 4.8% (2015: 5.1%) per annum.

All of the Group’s borrowings are denominated in UK Pounds and the fair value of the Group’s borrowings is not materially different from their carrying value.

14. OTHER PAYABLESOther payables represent a part of the deferred consideration in relation to the acquisition of Rose Hygiene Products Limited which was acquired on 19 February 2016. The amount of £500,000 (2015: £nil) falls due in March 2017.




15. DEFERRED TAXAn analysis of the recognised deferred tax liability movements is set out below.

Temporary differences arising on acquired intangible assets

2016 £’000

2015 £’000

1 March 75 90Reversal of temporary difference (15) (15)Deferred tax arising on acquisition of Rose Hygiene 375 -

29 February 435 75

The Group has tax losses of approximately £5,343,000 (2015: £7,945,000) available to carry forward to future periods to offset against taxable profits arising in the relevant entities. A deferred tax asset is recognised for the first time in the current year in respect of all of the tax losses attributable to Zenith Hygiene Systems Limited as there is reasonable certainty of them being utilised in the future. These tax losses were not recognised in the prior year.

The Group’s deferred tax asset is set out below:

Recognised 2016 £’000

Unrecognised 2015 £’000

Fixed assets 478 550Unutilised trading tax losses 300 947Unutilised other tax losses - 744Other temporary differences 76 78

854 2,319

16. SHARE CAPITAL2016 £’000

2015 £’000

Issued, allotted and fully paid:- 102,019,742 A ordinary shares of 5p each 5,101 5,101- 19,128,700 C ordinary shares of 1p each 191 191

5,292 5,292



17. CASH GENERATED FROM OPERATIONS

2016 £’000

2015 £’000

Profit before tax 2,807 1,374 Adjustments for:- Depreciation 1,533 1,312- Amortisation 90 75- Finance costs 430 516 Changes in working capital- Inventories (860) (187)- Trade and other receivables (780) (170)- Trade and other payables 815 651

4,035 3,571

18. FINANCIAL INSTRUMENTS

Categories of financial instrument

2016 £’000

2015 £’000

Financial assetsLoans and receivables 12,707 8,721

Financial liabilitiesAmortised cost 22,784 19,798

Loans and receivables comprise cash and cash equivalents and trade and other receivables, excluding prepayments.

Financial liabilities at amortised cost comprise borrowings, trade payables, accruals and other payables.

Risk ManagementThe Group’s operations expose it to a variety of financial risks including the effects of changes in interest rates on debts, foreign currency exchange rates, credit risk, and liquidity risk.

The Group’s principal financial instruments comprise sterling cash and bank deposits, bank loans and invoice financing, and other obligations under finance and operating leases together with trade debtors and trade creditors that arise directly from its operations. It also has Euro cash balances and small amounts of trade debtors and trade creditors denominated in Euros.

The Group aims to reduce exposure to capital risk, liquidity risk, credit risk, interest rate risk and foreign currency risk, to ensure liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Group does not engage in speculative trading in financial instruments and transacts only in relation to underlying business requirements.




Capital risk

The Group’s objective when managing capital (defined as cash and cash equivalents plus equity attributable to owners of the parent) are to safeguard the Group’s ability to continue as a going concern in order to provide returns to shareholders and benefits for other stakeholders through an appropriate balance of debt and equity funding, whilst maintaining a strong credit rating and sufficient headroom. The Group continues to monitor the situation and will adjust its structure as considered appropriate because of changes to the economic conditions and its strategic objectives. As at the 29 February 2016, the Group had equity of £11.5m (2015: £7.8m).

Liquidity risk

The Group manages it exposure to liquidity risk by continuously monitoring short and long-term forecasts and actual cash flows together with its immediate working capital requirements to ensure that it has the necessary banking and reserve facilities available to meet the requirements of the business. The Group operates with an invoice financing facility to meet day-to-day cash requirements. At 29 February 2016 the available headroom, including cash balances was £3,194,000 (2015: £830,000).

Credit risk

The Group’s credit risk is primarily attributable to its trade and other receivables. The amounts presented in the consolidated Statement of Financial Position are net of rebates due and allowances for doubtful debts estimated by the Group’s management based on prior experience of the market sectors served and the current economic climate. Before engaging in business with new clients management will assess the credit risk associated with such clients and determine the appropriate terms and conditions to be offered. It is considered that the Group has a relatively low credit risk due to the nature of its transactions, high volume, low value and short maturity. The Group has a large client base and a high customer retention level and consequently the Group has long-standing relationships with its customers thereby

helping to reduce the risk of default and the write off of bad debts. In addition, the Group has since 2015 insured its debtor’s ledger in respect of all new debts and thus mitigate future credit risk. Whilst there are some exclusions to the extent of cover, it is considered that this will protect the Group from any adverse exposure.

Interest rate risk

The Group interest rate risk arises from its medium term borrowings and its invoice financing function. The medium term loan interest is fixed at 2% over base plus LIBOR and the invoice financing facility attracts 1.75% over base plus LIBOR. Taking into account the current economic conditions and the exposure to interest rate movements, the Group does not consider any benefit in entering into hedging arrangements to mitigate the interest rate risk in the present circumstances.

Foreign currency risk

The Group operates internationally and is therefore exposed to foreign currency transaction risk, primarily on sales denominated in Euros. The Group’s policy is to match foreign currency transaction exposures where possible. Where appropriate, the Group will use Letters of Credit denominated in US dollars to meet forward transactions, such transactions and commitments are assessed on an individual consignment basis.

Financial instrument sensitivities

Interest rate sensitivity

The Group has determined that as at 29 February 2016 and 28 February 2015 that there was no significant sensitivity to changes in market interest rates.



19. OPERATING LEASE COMMITMENTSThe Group had future aggregate minimum lease payments under non-cancellable operating leases as follows:

2016 £’000

2015 £’000

Within one year 1,057 857Within two to five years 3,263 1,961In more than five years 1,960 945

6,280 3,763

20. CONTINGENT LIABILITIESThe Group has entered into a number of letters of credit through its bankers, Santander UK plc. The total liability outstanding as at 29 February 2016 in respect of these letters was £78,000 (2015: £113,000). No liability is recognised in the financial statements in relation to this matter.




21. RELATED PARTY TRANSACTIONSThe Group is controlled by Lord Fink by virtue of his majority shareholding.

a) Key management compensation

Key management comprises the directors of the Company. The compensation paid or payable to key management for employee services is shown below:

2016 £’000

2015 £’000

Wages and salaries (including performance related bonus) 865 833Social security costs 111 106Pension costs 8 6

984 945

b) Highest paid director

Included within the emoluments for key management disclosed above are emoluments for the highest paid director:

2016 £’000

2015 £’000

Aggregate emoluments 316 316

316 316

c) Transactions and balances with key management personnel

Two directors provided loans to the Group, which were unsecured and subordinate to the bank debt. These loans were repaid during the year. As at 28 February 2015, the Group owed £1,651,000 to Lord Fink and £227,000 to Michael Cronk, including accrued loan interest. During the year, further loan interest was accrued on these loans of £66,000 (2015: £64,000), which was settled at the same time as the loans were repaid. Further details of these loans are disclosed in note 13.

d) Transactions with related parties

During the year the parent company entered into transactions in the ordinary course of busness with its subsidiaries amounting to £2,381,000 (2015 : £866,000).

22. EVENTS AFTER THE REPORTING PERIOD

On the 29 March 2016 the Company acquired 100% of the share capital of ABC Hygiene Limited, a company providing hygiene services to businesses.

On 13 April 2016 Zenith Hygiene Group Plc held a general meeting and passed a special resolution to reduce the nominal value of the A ordinary shares from £0.05p to £0.01p and to transfer the share premium account to retained earnings.

23. TRANSITION TO IFRS

a) Introduction

The consolidated financial statements for the year ended 29 February 2016 have been prepared using accounting policies compliant with International Financial Reporting Standards as adopted by the EU (“IFRS”) for the first time. The comparative information in the consolidated financial statements has been restated to comply with IFRS. The disclosures concerning the transition from UK Generally Accepted Accounting Practice (“UK GAAP”) are explained below.

Accounting standard IFRS 1, First-Time Adoption of IFRS, outlines how to apply IFRS for the first time. The transition date for the adoption of IFRS is 1 March 2014. The Group has taken advantage of the option not to restate business combinations that occurred prior to the acquisition of e-Hygiene Systems Limited, which took place on 1 July 2013.

b) IFRS Adjustments

i) IFRS 3 – Business Combinations

Under IFRS 3, acquisition costs on business combinations are recognised as an expense, whereas under UK GAAP these costs were added to the cost of the investment. This has resulted in a transition adjustment at 1 March 2014 of £5,000.



Also, under IFRS 3, intangible assets acquired in a business combination, such as customer relationships, are recognised as a separate asset in the consolidated financial statement. Transition to IFRS has resulted in a reclassification from goodwill to intangible customer relationships of £451,000 at 1 March 2014.

Under IFRS, a deferred tax liability is recognised in relation to any timing differences arising as a result of fair value adjustments and therefore as a result of the recognition of intangible assets. The transition adjustment at 1 March 2014 to recognise a deferred tax liability on the intangible assets was £90,000. In the prior year 28 February 2015 comparatives, £15,000 of the deferred tax liability was utlitised in line with the amortisation of the intangible assets.

c) Consolidated income statement reconciliation for the comparative year ended 28 February 2015

UK GAAP UK GAAP ADJUSTMENTS IFRS IFRS

Goodwille-Hygiene

acquisition(note i) (note i)

£’000 £’000 £’000 £’000

Turnover 49,108 - - 49,108 RevenueCost of sales (27,630) - - (27,630) Cost of sales

Gross profit 21,478 - - 21,478 Gross profitOther income 33 - - 33 Other operating incomeDepreciation and General administrative expenses (19,546) - - (19,546)

Operational overheads and administrative expenses

Goodwill amortisation (930) 930 (75) (75)Amortisation of intangible assets

Operating profit 1,035 930 (75) 1,890 Operating profit

Interest payable and similar charges (516) - - (516) Finance costs

Profit on ordinary activities before tax 519 930 (75) 1,374 Profit before taxTax on ordinary activities - - 15 15 Income tax expense

Profit for the financial year 519 930 (60) 1,389 Profit for the financial year


Under IFRS, goodwill is not amortised, as it previously was under UK GAAP, and instead is subject to annual impairment reviews. The impact on the prior year comparatives, as at 28 February 2015, is to reverse the

goodwill amortisation of £930,000.

ii) IAS 19 – Employee Benefits

Under UK GAAP, no provision is recognised for annual leave accrued. IAS 19 requires the recognition of the expected cost of compensated short-term absences, such as holiday pay at the time that the related service is provided. This resulted in a transition adjustment to recognise the accrual for £80,000.

iii) IAS 19 – Other adjustments

The application of the IFRS standards for the first time has not led to any changes in the cash flow statement.


d) Consolidated statement of financial position reconciliation as at the comparative date 28 February 2015


Goodwill Employee

benefits(note i) (note ii)

£’000 £’000 £’000 £’000FIXED ASSETS NON-CURRENT ASSETSIntangible assets - 376 - 376 Intangible assets Goodwill 12,115 564 12,679

Tangible assets 3,171 - - 3,171Property, plant and equipment

15,286 940 - 16,226

CURRENT ASSETS CURRENT ASSETSStocks 3,046 - - 3,046 InventoriesDebtors 8,429 - - 8,429 Trade and other receivables

Cash at bank and in hand 775 - - 775Cash at bank and cash equivalents

12,250 - - 12,250CURRENT LIABILITIES CURRENT LIABILITIESCreditors: amounts falling due within one year (9,729) - (80) (9,809) Trade and other payables

(6,548) - - (6,548) Borrowings

NET CURRENT LIABILITIES (4,027) - (80) (4,107) NET CURRENT LIABILITIES

NON-CURRENT LIABILITIES NON-CURRENT LIABILITIESCreditors: amounts falling due after more than one year (4,236) - - (4,236) BorrowingsProvision for liabilities - (75) - (75) Deferred taxation

NET ASSETS 7,023 865 (80) 7,808 NET ASSETS

EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENTShare capital 5,292 5,292 Share capitalShare premium 7,352 7,352 Share premiumRetained earnings (5,621) 865 (80) (4,836) Retained earnings

TOTAL EQUITY 7,023 865 (80) 7,808 TOTAL EQUITY



e) Consolidated statement of financial position reconciliation as at the transition date, 1 March 2014


Goodwill Employee

benefits(note i) (note ii)

£’000 £’000 £’000 £’000FIXED ASSETS NON-CURRENT ASSETSIntangible assets - 451 - 451 Intangible assets Goodwill 13,045 (366) 12,679

Tangible assets 2,777 - - 2,777Property, plant and equipment

15,822 85 - 15,907

CURRENT ASSETS CURRENT ASSETSStocks 2,859 - - 2,859 InventoriesDebtors 8,259 - - 8,259 Trade and other receivables

Cash at bank and in hand 590 - - 590Cash at bank and cash equivalents

11,708 - - 11,708CURRENT LIABILITIES CURRENT LIABILITIESCreditors: amounts falling due within one year (9,442) - (80) (9,522) Trade and other payables

(6,660) - - (6,660) Borrowings

NET CURRENT LIABILITIES (4,394) - (80) (4,474) NET CURRENT LIABILITIES

NON-CURRENT LIABILITIES NON-CURRENT LIABILITIESCreditors: amounts falling due after more than one year (4,924) - - (4,924) BorrowingsProvision for liabilities - (90) - (90) Deferred taxation

NET ASSETS 6,504 (5) (80) 6,419 NET ASSETS

EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENTShare capital 5,292 5,292 Share capitalShare premium 7,352 7,352 Share premiumRetained earnings (6,140) (5) (80) (6,225) Retained earnings

TOTAL EQUITY 6,504 (5) (80) 6,419 TOTAL EQUITY




Report on the parent company financial statements

Our opinion

In our opinion, Zenith Hygiene Group Plc’s parent company financial statements (the “financial statements”):

• give a true and fair view of the state of the parent company’s affairs as at 29 February 2016 and of its cash flows for the year then ended;

• have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

What we have audited

The financial statements, included within the Annual Report, comprise:

• the Balance Sheet as at 29 February 2016;

• the Statement of Cashflows for the year then ended;

• the Statement of Changes in Equity for the year then ended; and

• the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006.

In applying the financial reporting framework, the Directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

Opinion on other matter prescribed by the Companies Act 2006In our opinion, 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.

Other matters on which we are required to report by exceptionAdequacy of accounting records and information and explanations received

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or

• 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 financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Directors’ remuneration

Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of Directors’ remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.

Independent Auditor’s Report to the Members of Zenith Hygiene Group Plc



Responsibilities for the financial statements and the audit

Our responsibilities and those of the directors

As explained more fully in the Directors’ Responsibilities Statement set out on page 19, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the parent company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What an audit of financial statements involves

We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

• whether the accounting policies are appropriate to the parent company’s circumstances and have been consistently applied and adequately disclosed;

• the reasonableness of significant accounting estimates made by the Directors; and

• the overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the directors’ judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Other matterWe have reported separately on the group financial statements of Zenith Hygiene Group Plc for the year ended 29 February 2016.

Matthew Mullins (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors St Albans

7 June 2016




£’000 2015 £’000

NON-CURRENT ASSETSInvestments 3 4,918 2,918

CURRENT ASSETSTrade and other receivables 4 7,034 9,241Cash and cash equivalents 2,010 5

9,044 9,246

CURRENT LIABILITIESTrade and other payables 5 (614) (191)Borrowings 6 (1,144) (750)

(1,758) (941)

NET CURRENT ASSETS 7,286 8,305

NON-CURRENT LIABILITIESBorrowings 6 (4,646) (3,832)Other payables (500) -

NET ASSETS 7,058 7,391

EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENTShare capital 7 5,292 5,292Share premium 7,352 7,352Retained earnings (5,586) (5,253) TOTAL EQUITY 7,058 7,391

The Company financial statements of Zenith Hygiene Group Plc, registered number 06707511, on pages 49 to 55 were approved by the Board of Directors and authorised for issue on 7 June 2016 and signed on its behalf by:


Company Statement of Financial Position



for the year ended 29 February 2016Attributable to owners of the parent

Share capital

£’000

Share premium

£’000

Retained earnings

£’000

Total

£’000

At 1 March 2014 5,292 7,352 (4,859) 7,785

Total comprehensive income for the year - - (394) (394)

At 28 February 2015 5,292 7,352 (5,253) 7,391

Total comprehensive income for the year - - (333) (333)

At 29 February 2016 5,292 7,352 (5,586) 7,058

Company Statement of Changes In Equity




£’000 2015 £’000

CASH FLOWS FROM OPERATING ACTIVITIESCash generated from operations 8 1,901 640Interest paid (397) (216)Tax paid - -

NET CASH GENERATED FROM OPERATING ACTIVITIES 1,504 424

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of subsidiary (1,000) -

NET CASH USED IN INVESTING ACTIVITIES (1,000) -

CASH FLOWS FROM FINANCING ACTIVITIESBank loan received 3,836 -Repayment of borrowings (750) (600)Repayment of directors’ loans (1,585) -

NET CASH USED IN FINANCING ACTIVITIES 1,501 (600)

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 2,005 (176)

Cash and cash equivalents at beginning of year 5 181

CASH AND CASH EQUIVALENTS AT END OF YEAR 2,010 5

Company Statement of Cash Flows



1. ACCOUNTING POLICIES

Basis of preparationThe Company financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations as endorsed by the EU (“IFRS”) and the requirements of the Companies Act applicable to companies reporting under IFRS.

The Company financial statements have been prepared on the historical cost basis.

The principal accounting policies adopted are set out below.

InvestmentsInvestments in subsidiaries are recorded at cost in the Statement of Financial Position. They are tested for impairment when there is objective evidence of impairment. Any impairment losses are recognised in profit or loss in the period they occur.

Trade and other receivablesTrade and other receivables are classified as loans and receivables and are initially recognised at fair value. They are subsequently measured at their amortised cost using the effective interest method less any provision for impairment.

Trade and other payablesTrade payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

Equity instrumentsEquity instruments issued by the Company are recorded at fair value on initial recognition net of transaction costs.

2. LOSS FOR THE YEARAs permitted by s408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company’s loss for the financial year was £333,000 (2015: £394,000).

3. INVESTMENTSThe Company had the following subsidiaries as at 29 February 2016, of which all were 100% owned.

Name of company Nature of business

Zenith Hygiene Food and Beverage Limited

Holding company

Zenith Hygiene Systems Limited

Manufacture and supply of cleaning and hygiene products

Zenith Hygiene Systems (Ireland) Limited

Dormant

SB Chemicals Limited Dormant

e-Hygiene Systems Limited

Dormant

Rose Hygiene Products Limited

Supplier of cleaning and hygiene products

The shares held in Zenith Hygiene Food and Beverage Limited and e-Hygiene Systems Limited are held directly by the Company. All other shares are held indirectly. All of the subsidiaries were incorporated in the United Kingdom.

On 19 February 2016, the Company acquired 100% of the shares of Rose Hygiene Products Limited for a total consideration of £2,000,000. The fair value of the assets acquired amounted to £322,000, represented primarily by tangible fixed assets of £242,000: current assets (stock, trade debtors and cash) of £1,133,000: current liabilities (trade and other creditors) £993,000: and non current liabilities of £60,000 resulting in an intangible asset of £1,678,000 in respect of customer relationships.

Notes to The Company Financial Statements



4. OTHER RECEIVABLES2016 £’000

2015 £’000

Amounts due from subsidiary undertakings 7,034 9,241

The fair value of other receivables is not materially different to their carrying value, which is also the maximum exposure to credit risk.

Amounts due from subsidiary undertakings are considered by management to be fully recoverable and are unimpaired.

5. TRADE AND OTHER PAYABLES2016 £’000

2015 £’000

Other payables 502 127Accruals 112 64

614 191

The fair value of other payables is not materially different to their carrying value.

Included in other payables is the deferred consideration of £500,000 in respect of the acquisition of the share capital of Rose Hygiene Products Limited which is due within six months. A further £500,000 becomes payable 12 months after acquisition and is included in note 6.



6. BORROWINGS2016 £’000

2015 £’000

Amounts falling due within one year:Bank loans 1,144 750

1,144 750Amounts falling due after more than one year:Bank loans 4,646 1,954Directors’ loans - 1,878Other payables 500 -

5,146 3,832

6,290 4,582

The bank loan bears interest at 2% (2015: 3%) above LIBOR and is secured by fixed and floating charges over the Group’s assets. The bank loan is due for repayment by 2020.

Directors’ loans were unsecured and subordinate to the bank loan with interest accruing on the directors’ loans at 3% (2015: 3%) above LIBOR. These loans were repaid during the year.

All of the Company’s borrowings are denominated in UK Pounds and the fair value of the Company’s borrowings is not materially different from their carrying value.

7. SHARE CAPITAL2016 £’000

2015 £’000

Issued, allotted and fully paid:- 102,019,742 A ordinary shares of 5p each 5,101 5,101- 19,128,700 C ordinary shares of 1p each 191 191

5,292 5,292

8. CASH GENERATED FROM OPERATIONS

2016 £’000

2015 £’000

Loss before tax (333) (394) Adjustments for:- Finance costs 150 216 Changes in working capital- Trade and other receivables 2,201 958- Trade and other payables (117) (140)

1,901 640

Notes to The Company Financial Statements



9. FINANCIAL INSTRUMENTS2016 £’000

2015 £’000

Financial assetsLoans and receivables 9,044 9,246

Financial liabilitiesAmortised cost 6,904 4,773

Loans and receivables comprise cash and cash equivalents and amounts due from subsidiary undertakings.

Financial liabilities at amortised cost comprise borrowings and other payables.

10. CONTINGENT LIABILITIESThe Company has entered into a composite guarantee in favour of Santander UK plc, the Group’s bankers, covering the borrowings of the Group. As at 29 February 2016, the contingent liability in respect of borrowings by other Group companies was £4,703,000 (2015: £4,688,000).

11. RELATED PARTY TRANSACTIONSDuring the year, the Company entered into the transactions in the ordinary course of business with related parties as follows:

2016 £’000

2015 £’000

Payments by subsidiary undertakings on the Company’s behalf 2,381 866

Details of transactions with directors of the Company are disclosed in note 21 to the consolidated financial statements.

12. EVENTS AFTER THE REPORTING PERIODOn the 29 March 2016 the Company acquired 100% of the share capital of ABC Hygiene Limited, a company providing hygiene services to businesses, for a cash consideration of £260,000 and a deferred consideration of £25,000 and £75,000 due six months and twelve months respectively after acquisition.

On 13 April 2016 the Company held a general meeting and passed a special resolution to reduce the nominal value of the A ordinary shares from £0.05p to £0.01p and to transfer the share premium to reserves.

13. TRANSITION TO IFRS

The Company financial statements for the year ended

29 February 2016 have been prepared using accounting

policies compliant with International Financial Reporting

Standards as adopted by the EU (“IFRS”) for the first time.

The comparative information in the consolidated financial

statements has been restated to comply with IFRS.

The transition date for the adoption of IFRS was 1 March

2014. There was no material impact of transition to IFRS

and hence reconciliations from UK GAAP to IFRS have not

been presented.



Springboard Peru Trek 2016

Giving Something Back

From 11th - 22nd March 2016 a group of 38 from within the

hospitality industry travelled to one of the most isolated regions of

Peru. When there they embarked on a gruelling 5 day trek followed

by a community project which brought sustainable energy to a

remote Peruvian school. They taught computer skills, gave English

lessons, held sports days and really integrated with the locals. Two of

our employees share their incredible experience.

Why did you want to do the trek?

Aylish: I really wanted to do the trek as it was something completely out of my comfort zone, to go somewhere and do things that I would never get the chance to do again.

I never imagined how hard but yet amazing trekking through the Peruvian mountains would be. Being with the local communities getting to know them and helping them with things they would not ordinarily be able to do was very fulfilling and also very emotional. After this amazing experience I would definitely go back to Peru one day even though it was a country I had never even thought about going to before.

Sophie: To be in the position where I am able to help people less fortunate is extremely humbling. Growing up I was involved in organising a lot of charity events but in the last 10 years not so much. So when I heard about the trip it was a no brainer that I would put my name forward.

I knew Peru was going to push my limits and I couldn’t wait to take on the challenge with my other fellow trekkers.

What was your highlight?

Aylish: The highlight for me was definitely going to our 3rd and final school and community, it was the poorest out of the three we had been too and it was lovely to see how grateful the people were that we had come to see them. The children were so polite and were so proud to put on a dance show for us.

Sophie: To choose one is difficult but I have to agree with Aylish- the final afternoon of the community project really stands out- the kids were just a massive pleasure to be around and the atmosphere was amazing. Giving out the donations we had brought from the UK and seeing their smiles was emotional but so rewarding!



What was the most challenging?

Aylish: The most physical challenge for me was the first part of the trek (uphill walking). The altitude really does effect you and it effects everyone completely differently. It makes you feel so unfit! A few steps uphill and you can’t catch your breath plus the headaches and sickness!

Sophie: The trek was gruelling and if I’m honest a lot harder than I had anticipated. On the fourth day we walked for 13.5 hours and covered over 17.5 miles. A huge challenge in itself considering the heat, altitude and terrain. Due to one of the routes on our decent being blocked we got caught in the dark while scaling the ledges of the mountain- some of them were no wider than half a metre with a sheer drop. Having a massive fear of heights this was easily the most frightening thing I have ever done.

How will it affect you now you are back?

Aylish: I definitely feel like I want to see more of the world now and not just the tourist countries that everybody goes to, I would definitely like to do another trek and charity work in another country in the near future as well.After meeting these people who have basically nothing, not even electric but yet are so proud and live such happy lives has definitely taught me not to take even the small things for granted.

Sophie: I want to make more time to get involved with charities in my local community. When you witness first-hand how little people have you can’t help but get a lump in the back of your throat. I hope that when I am having ‘a bad day’ I will now take a step back and realise just how lucky I am.

What advice we would give to people interested in future trips

Aylish: Just to go for it! It was definitely one of the best things I have ever done and I enjoyed every minute of it. I’ve met new friends and will definitely not forget the experience.

Sophie: This trip was emotionally, mentally and physically exhausting but still the best experience I have ever had. As cliché as it may sound it really was a once in a lifetime opportunity. It was far from a holiday but I would strongly recommend it to anyone who is considering it!

We have already had a great response to our fundraising events but would like one last push to reach our targets. Our efforts to fundraise will go towards the Springboard Charity to improve the lives of young people who face difficulties and hardship in the UK. Please donate to:

http://uk.virginmoneygiving.com/team/sophieandaylish


Springboard London to Paris Challenge


The Team Velo Challenge is one of the most exhilarating, challenging and exciting events in The Springboard Charity’s calendar. Last year, Bakhtiar Hanan: Purchasing Director, Alison Pettitt: Finance Director, Sebastian Ward: Territory Sales Manager, George Mason: Business Development Manager and Maxwell Ngangira: Finance Graduate all took part in the 3 day, 2 country challenge. Find below more information on how it went.

Day 1

Alison: The first day we cycled 82 miles in total and the hills around Petersfield were a killer! The Zenith team comprised two oldies and three youngsters. Needless to say the young ones split off from us and found their own way there. The oldies were incredibly pleased to beat them on the first day though.

Day 2

Alison: The second day started after a night trying to sleep on the ferry. 70 Miles in the rain, not helped by my bike suffering 5 separate punctures. Changing them at the side of the dual carriageway with HGV’s thundering past is not my idea of fun. We did get very good at it and the last puncture 3 miles from our destination was not going to beat us!

Sebastian: Day 1 we left St Pancras and headed down to Portsmouth. It was a beautiful day and once we got out of the hustle and bustle of London the ride was thoroughly enjoyable. A few leg burning hills put the team to the test but we all rose to the challenge and climbed each one with ferocity, a small break once we reached the summit but hey, we’re not pros just yet. As the day wore on and the sun started to set, it was just Max, George and myself together, ‘Mum and Dad’ (Alison & Bakhtiar) were long gone enjoying a well deserved glass of wine. Max was suffering with cramp in both legs but we stuck together and after a few road side leg stretches and funny looks from passers by we made it to the pub and enjoyed a lovely warm meal.

“The first day we cycled 82 milesin total and the hills around

Petersfield were a killer!”

“70 miles in the rain & 5 separate punctures was not fun!”



George: The hardest aspect would have to be the conditions we faced on day two. With 70 miles to complete, the shortest distance of the journey, this day was by far the most testing. We faced torrential rain, powerful winds, and long daunting roads that appeared to never end! The weather split a lot of groups up, and left me in a bit of a mess 20 miles out from the finish. Luckily we all finished, although I’m sure you’ll agree after reading my colleague Alison’s experience of the day, mine was a breeze!

Sebastian: Today was the day I wanted to hit the hardest however we had 2 set backs.1, a walk through a muddy forest that seemed to go on forever! 2, the Rain! And when I say it rained I mean it RAINED! I lost the team during my focus to get to the end through the rain. 25 miles alone in the rain and cold was not fun! I was so happy to see the support van and the hotel though. What made it even better was that I had finished the day 10th! I couldn’t believe it but was so happy!

Day 2 cont...

Max: The last day was the best day, I had no feeling of fatigue, I was in pain but became numb to it. When the first sight of the Eiffel Tower popped up we were just so elated, OUR GOAL WAS IN REACH! The weather was lush and the city made the ride such a beautiful experience. Sadly that was the curtains on an amazing journey filled with awesome memories I will hold on to for a long time all for a good cause.

Day 3

“When the first sight of the Eiffel Tower popped up we were just so elated,

OUR GOAL WAS IN REACH!”

Bakhtiar: Undoubtedly the toughest, most mentally challenging and physically demanding 3 days of my life.

ZENITH HYGIENE GROUP PLC are proud sponsors of

Cotswolds Cycle Challenge 2015 & 2016!

Hosp

itality

Action’s Cotswold Cycle Challenge

The Cotswold Cycle Challenge

Tour Sticker v3 PRESS.pdf 1 30/11/2015 09:12


Notes

www.zhgplc.com

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another record year - zenith hygiene group · 2016-08-01 · our vision is simple: ... we are very...

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