Charles Warner Limited - Period Ending 2018-12-30

Registration number: 00536160

Charles Warner Limited

Annual Report and Unaudited Financial Statements

for the Year Ended 30 December 2018

 

RWB CA Limited
Northgate House
North Gate
New Basford
Nottingham
NG7 7BQ

Charles Warner Limited

Contents

Company Information	1
Directors' Report	2
Accountants' Report	3
Profit and Loss Account and Statement of Retained Earnings	4
Balance Sheet	5
Statement of Cash Flows	6
Notes to the Financial Statements	7 to 15

Charles Warner Limited

Company Information

Directors

Mr M R Seward Mrs C Seward Mr T E Warner

Company secretary

Mr M R Seward

Registered office

Outer Circle Road Lincoln LN2 4LD

Solicitors

Sills & Betteridge 46 Silver Street Lincoln LN2 1ED

Accountants

RWB CA Limited Northgate House North Gate New Basford Nottingham NG7 7BQ

Page 1

Charles Warner Limited

Directors' Report for the Year Ended 30 December 2018

The directors present their report and the financial statements for the year ended 30 December 2018.

Directors of the company

The directors who held office during the year were as follows:

Mr M R Seward - Company secretary and director

Mrs C Seward

Mr T E Warner

Financial instruments

Objectives and policies

The business' principal financial instruments comprise bank balances, bank overdrafts, trade debtors and trade creditors. The main purpose of these instruments is to finance the business' operations.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Price risk, credit risk, liquidity risk and cash flow risk

The company faces and deals with operational risks as follows:

Price risk is minimised by sound knowledge of the automotive industry and careful attention to trends in vehicle prices.

Credit risk is minimised by credit control. Vehicles are not sold on credit terms.

Liquidity and cash flow risks are monitored through detailed monthly management accounts.

Small companies provision statement

This report has been prepared in accordance with the small companies regime under the Companies Act 2006.

Approved by the Board on 13 May 2019 and signed on its behalf by:

.........................................
Mr M R Seward
Company secretary and director

Page 2

Chartered Accountants' Report to the Board of Directors on the Preparation of the Unaudited Statutory Accounts of
Charles Warner Limited
for the Year Ended 30 December 2018

In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the accounts of Charles Warner Limited for the year ended 30 December 2018 as set out on pages 4 to 15 from the company's accounting records and from information and explanations you have given us.

As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at
http://www.icaew.com/en/members/regulations-standards-and-guidance/.

This report is made solely to the Board of Directors of Charles Warner Limited, as a body, in accordance with the terms of our engagement letter. Our work has been undertaken solely to prepare for your approval the accounts of Charles Warner Limited and state those matters that we have agreed to state to the Board of Directors of Charles Warner Limited, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Charles Warner Limited and its Board of Directors as a body for our work or for this report.

It is your duty to ensure that Charles Warner Limited has kept adequate accounting records and to prepare statutory accounts that give a true and fair view of the assets, liabilities, financial position and profit of Charles Warner Limited. You consider that Charles Warner Limited is exempt from the statutory audit requirement for the year.

We have not been instructed to carry out an audit or a review of the accounts of Charles Warner Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory accounts.

......................................

RWB CA Limited
Northgate House
North Gate
New Basford
Nottingham
NG7 7BQ

13 May 2019

Page 3

Charles Warner Limited

Profit and Loss Account and Statement of Retained Earnings for the Year Ended 30 December 2018

	Note	2018 £	2017 £
Turnover	3	4,250,331	3,833,385
Cost of sales		(3,734,362)	(3,476,356)
Gross profit		515,969	357,029
Administrative expenses		(395,348)	(447,851)
Other operating income	4	24,736	38,142
Operating profit/(loss)	6	145,357	(52,680)
Profit/(loss) before tax		145,357	(52,680)
Taxation	9	(28,971)	2,995
Profit/(loss) for the financial year		116,386	(49,685)
Retained earnings brought forward		1,147,921	1,222,606
Dividends paid		(50,000)	(25,000)
Retained earnings carried forward		1,214,307	1,147,921

The notes on pages 7 to 15 form an integral part of these financial statements.

Page 4

Charles Warner Limited

(Registration number: 00536160)
Balance Sheet as at 30 December 2018

	Note	2018 £	2017 £
Fixed assets
Tangible assets	10	137,208	171,618
Current assets
Stocks	11	724,572	924,773
Debtors	12	332,646	265,044
Cash at bank and in hand		267,000	56,611
		1,324,218	1,246,428
Creditors: Amounts falling due within one year	14	(194,161)	(211,234)
Net current assets		1,130,057	1,035,194
Total assets less current liabilities		1,267,265	1,206,812
Provisions for liabilities	15	(24,260)	(30,193)
Net assets		1,243,005	1,176,619
Capital and reserves
Called up share capital	17	28,698	28,698
Profit and loss account	18	1,214,307	1,147,921
Total equity		1,243,005	1,176,619

For the financial year ending 30 December 2018 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

•	The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and
•	The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

Approved and authorised by the Board on 13 May 2019 and signed on its behalf by:
 

.........................................

Mr M R Seward
Company secretary and director

The notes on pages 7 to 15 form an integral part of these financial statements.

Page 5

Charles Warner Limited

Statement of Cash Flows for the Year Ended 30 December 2018

	Note	2018 £	2017 £
Cash flows from operating activities
Profit/(loss) for the year		116,386	(49,685)
Adjustments to cash flows from non-cash items
Depreciation and amortisation	6	33,238	29,367
Loss on disposal of tangible assets	5	25,301	-
Income tax expense	9	28,971	(2,995)
		203,896	(23,313)
Working capital adjustments
Decrease/(increase) in stocks	11	200,201	(104,835)
(Increase)/decrease in trade debtors	12	(67,602)	26,943
(Decrease)/increase in trade creditors	14	(51,977)	22,452
Net cash flow from operating activities		284,518	(78,753)
Cash flows from investing activities
Acquisitions of tangible assets		(26,147)	(13,017)
Proceeds from sale of tangible assets		2,018	-
Net cash flows from investing activities		(24,129)	(13,017)
Cash flows from financing activities
Dividends paid		(50,000)	(25,000)
Net increase/(decrease) in cash and cash equivalents		210,389	(116,770)
Cash and cash equivalents at 31 December		56,611	173,381
Cash and cash equivalents at 30 December		267,000	56,611

The notes on pages 7 to 15 form an integral part of these financial statements.

Page 6

Charles Warner Limited

Notes to the Financial Statements for the Year Ended 30 December 2018

1	General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Outer Circle Road
Lincoln
LN2 4LD

These financial statements were authorised for issue by the Board on 13 May 2019.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Departure from requirements of FRS 102

The company operates a funded pension scheme of the defined benefit type, providing retirement benefits based on final salary. The last available valuation of the scheme was at 30 December 2014, and as a consequence the company cannot determine either the liability to be recognised in the balance sheet as required by FRS102, or the asset to be disclosed.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Page 7

Charles Warner Limited

Notes to the Financial Statements for the Year Ended 30 December 2018

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Short leasehold land and buildings	10% reducing balance
Plant and machinery	10% to 25% reducing balance
Fixtures and fittings	15% to 40% reducing balance
Office equipment	15% to 40% reducing balance

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Page 8

Charles Warner Limited

Notes to the Financial Statements for the Year Ended 30 December 2018

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

The company operates two defined contribution pension schemes. The assets of these schemes are held separately from those of the company
Contributions for the defined contribution scheme are charged to profits in the year in which they are made.

Defined benefit pension obligation

The company operates a defined benefit pension scheme. The assets of the scheme are held separately from those of the company. Pension scheme liabilities are measured on an actuarial basis and discounted to present value. The pension scheme value is measured by reference to the latest valuation.

3

Revenue

The analysis of the company's revenue for the year from continuing operations is as follows:

	2018  £	2017  £
Sale of goods	4,250,331	3,833,385

4	Other operating income

The analysis of the company's other operating income for the year is as follows:

	2018  £	2017  £
Miscellaneous other operating income	24,736	38,142

Page 9

Charles Warner Limited

Notes to the Financial Statements for the Year Ended 30 December 2018

5	Other gains and losses

The analysis of the company's other gains and losses for the year is as follows:

	2018  £	2017  £
Gain (loss) on disposal of property, plant and equipment	(25,301)	-

6	Operating profit

Arrived at after charging/(crediting)

	2018  £	2017  £
Depreciation expense	33,238	29,367
Operating lease expense - plant and machinery	120	120
Loss on disposal of property, plant and equipment	25,301	-

7	Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

	2018  £	2017  £
Wages and salaries	497,420	655,198
Social security costs	42,585	52,812
Pension costs, defined contribution scheme	6,629	8,136
Pension costs, defined benefit scheme	85,100	104,934
Other employee expense	952	1,176
	632,686	822,256

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

	2018 No.	2017 No.
Production	16	18
Administration and support	4	4
Other departments	4	5
	24	27

Page 10

Charles Warner Limited

Notes to the Financial Statements for the Year Ended 30 December 2018

8	Directors' remuneration

The directors' remuneration for the year was as follows:

	2018  £	2017  £
Remuneration	94,000	97,000

9

Taxation

Tax charged/(credited) in the income statement

	2018  £	2017  £
Current taxation
UK corporation tax	34,904	-
Deferred taxation
Arising from origination and reversal of timing differences	(5,933)	(2,995)
Tax expense/(receipt) in the income statement	28,971	(2,995)

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2017 - the same as the standard rate of corporation tax in the UK) of 19% (2017 - 19%).

The differences are reconciled below:

	2018  £	2017  £
Profit/(loss) before tax	145,357	(52,680)
Corporation tax at standard rate	27,618	(10,009)
Effect of tax losses	(1,330)	-
Deferred tax expense (credit) relating to changes in tax rates or laws	(5,933)	(2,995)
Tax increase (decrease) from effect of capital allowances and depreciation	8,622	3,116
Tax increase (decrease) arising from group relief	(6)	6,893
Total tax charge/(credit)	28,971	(2,995)

Deferred tax

Deferred tax assets and liabilities

2018	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	24,260

Page 11

Charles Warner Limited

Notes to the Financial Statements for the Year Ended 30 December 2018

2017	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	30,193

10	Tangible assets

	Land and buildings £	Other tangible assets £	Total £
Cost or valuation
At 31 December 2017	18,534	692,831	711,365
Additions	-	26,147	26,147
Disposals	(18,534)	(160,833)	(179,367)
At 30 December 2018	-	558,145	558,145
Depreciation
At 31 December 2017	10,322	529,425	539,747
Charge for the year	7,000	26,238	33,238
Eliminated on disposal	(17,322)	(134,726)	(152,048)
At 30 December 2018	-	420,937	420,937
Carrying amount
At 30 December 2018	-	137,208	137,208
At 30 December 2017	8,212	163,406	171,618

Included within the net book value of land and buildings above is £Nil (2017 - £8,212) in respect of short leasehold land and buildings.
 

11

Stocks

	2018  £	2017  £
Raw materials and consumables	18,289	31,187
Work in progress	2,056	(11,685)
Finished goods and goods for resale	704,227	905,271
	724,572	924,773

Page 12

Charles Warner Limited

Notes to the Financial Statements for the Year Ended 30 December 2018

12

Debtors

	2018  £	2017  £
Trade debtors	282,339	208,253
Other debtors	-	6,677
Prepayments	50,307	50,114
Total current trade and other debtors	332,646	265,044

13	Cash and cash equivalents

	2018  £	2017  £
Cash on hand	82	408
Cash at bank	266,918	56,203
	267,000	56,611

14

Creditors

	Note	2018  £	2017  £
Due within one year
Trade creditors		77,229	75,136
Amounts due to related parties	20	-	97,000
Social security and other taxes		40,594	18,950
Other payables		11,163	7,081
Accrued expenses		30,271	13,067
Income tax liability	9	34,904	-
		194,161	211,234

15	Deferred tax and other provisions

	Deferred tax £	Total £
At 31 December 2017	30,193	30,193
Increase (decrease) in existing provisions	(5,933)	(5,933)
At 30 December 2018	24,260	24,260

Page 13

Charles Warner Limited

Notes to the Financial Statements for the Year Ended 30 December 2018

16	Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £6,629 (2017 - £8,136).

 

Defined benefit pension schemes

Charles Warner Limited section of the Motor Industry Pension Plan

The section is a funded scheme of the defined benefit type, providing retirement benefits based on final salary.

The company has not obtained a year end valuation under FRS 17 for either the current or the previous year, and as a consequence cannot include the year end disclosures or comparative values that would otherwise be required to be made. The last valuation of the scheme available was at 30 December 2014.

The pension scheme has not invested in any of the company's own financial instruments or in properties or other assets used by the company.

17	Share capital

Allotted, called up and fully paid shares

	2018		2017
	No.	£	No.	£
Ordinary shares of £1 each	28,698	28,698	28,698	28,698

18

Reserves

Profit and loss account

The profit and loss account represents cumulative profits and losses net of dividends and other adjustments.

19	Commitments

Other financial commitments

This commitment is undertaken on behalf of any parent undertaking or any fellow subsidiary undertaking.
The total amount of other financial commitments not provided in the financial statements was £381,699 (2017 - £537,405).

Page 14

Charles Warner Limited

Notes to the Financial Statements for the Year Ended 30 December 2018

20	Related party transactions

Key management compensation

	2018 £	2017 £
Salaries and other short term employee benefits	94,000	97,000

Summary of transactions with parent

Parent of company
 Dividends paid
 No outstanding balance
 

Summary of transactions with other related parties

Fellow subsidiary
 Rent
 No conditions attached
 

Expenditure with and payables to related parties

2018	Other related parties £
Leases	89,917

2017	Other related parties £
Leases	90,500
Amounts payable to related party	97,000

21	Parent and ultimate parent undertaking

The company's immediate parent is CW Lincoln Limited, incorporated in England and Wales.

 

Page 15