Quest Automotive Products UK Limited - Limited company accounts 18.1d

REGISTERED NUMBER: 02925683 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE PERIOD 1 OCTOBER 2016 TO 31 DECEMBER 2017

FOR

QUEST AUTOMOTIVE PRODUCTS UK LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

7

Other Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTORS:

E N G Braggio

J J Miklich

A J Mistysyn

REGISTERED OFFICE:

The Valspar (UK) Corporation Ltd

Avenue One

Station Lane

Witney

Oxfordshire

OX28 4XR

REGISTERED NUMBER:

02925683 (England and Wales)

SENIOR STATUTORY AUDITOR:

Neil Harding

AUDITORS:

Bradshaw Johnson

Chartered Accountants

Statutory Auditor

Croft Chambers

11 Bancroft

Hitchin

Hertfordshire

SG5 1JQ

The directors present their strategic report for the period 1 October 2016 to 31 December 2017.

REVIEW OF BUSINESS

The performance in 2017 is in line with expectations of the directors. The Company made a loss for the financial year,

net of taxation of £86,109 (2016: £10,611,793)

PRINCIPAL RISKS AND UNCERTAINTIES

The Company sees its main risks and uncertainties to be that of;

Business risks associated with health and safety in the workplace, and the use of hazardous products. This has now been

reduced due to the new policies brought in by the parent company.

FINANCIAL INSTRUMENTS

The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities

which are largely conducted in sterling. The company does not enter into any formal hedging arrangements.

ON BEHALF OF THE BOARD:

E N G Braggio - Director

31 May 2018

The directors present their report with the financial statements of the company for the period 1 October 2016 to 31 December 2017.

PRINCIPAL ACTIVITY

The principal activity of the company in the period under review was that of provision of warehousing facilities.

DIVIDENDS

No dividends will be paid for the period ended 31 December 2017.

CURRENT DEVELOPMENTS

During the period The Valspar Corporation was acquired by Sherwin-Williams, details of the ultimate parent company

can be found in note 21.

DIRECTORS

E N G Braggio has held office during the whole of the period from 1 October 2016 to the date of this report.

Other changes in directors holding office are as follows:

T N Treat - resigned 26 October 2017

N R Engh - resigned 26 October 2017

J J Miklich - appointed 26 October 2017

A J Mistysyn - appointed 26 October 2017

DISCLOSURE IN THE STRATEGIC REPORT

Contained within the strategic report is a review of business for this period with a prior year comparative plus the

principle risks and uncertainties the company faces.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements

in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors

have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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

company and of the profit or loss of the company 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;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for

safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken

as a director in order to make himself aware of any relevant audit information and to establish that the company's

auditors are aware of that information.

AUDITORS

The auditors, Bradshaw Johnson, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

E N G Braggio - Director

31 May 2018

Opinion

We have audited the financial statements of Quest Automotive Products UK Limited (the 'company') for the period

ended 31 December 2017 on pages seven to nineteen. The financial reporting framework that has been applied in their

preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102

'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted

Accounting Practice).

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's

members as a body, for our audit work, for this report, or for the opinions we have formed.

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2017 and of its loss for the period then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard,

and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we

conclude that there is a material misstatement of this other information, we are required to report that fact. We have

nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit,

we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you

if, in our opinion:

-	adequate accounting records have not been kept, 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; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and

for such internal control as the directors determine necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a

going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of

accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic

alternative but to do so.

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs

(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Neil Harding (Senior Statutory Auditor)

for and on behalf of Bradshaw Johnson

Chartered Accountants

Statutory Auditor

Croft Chambers

11 Bancroft

Hitchin

Hertfordshire

SG5 1JQ

11 June 2018

TURNOVER

3

1,765,567

9,191,674

Cost of sales

1,390,995

6,183,847

GROSS PROFIT

374,572

3,007,827

Administrative expenses

1,976,161

1,695,637

(1,601,589

)

1,312,190

Other operating income

1,472,162

-

OPERATING (LOSS)/PROFIT

6

(129,427

)

1,312,190

Cost of fundamental

reorganisation

7

-

(1,104,852

)

Profit/loss on sale of intangible fixed assets

7

-

10,300,000

(129,427

)

10,507,338

Interest receivable and similar income

8,981

74,047

(LOSS)/PROFIT BEFORE TAXATION

(120,446

)

10,581,385

Tax on (loss)/profit

8

(34,337

)

(30,408

)

(LOSS)/PROFIT FOR THE FINANCIAL PERIOD

(86,109

)

10,611,793

(LOSS)/PROFIT FOR THE PERIOD

(86,109

)

10,611,793

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

(86,109

)

10,611,793

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

17,810

83,085

17,810

83,085

CURRENT ASSETS

Stocks

12

-

1,340,505

Debtors

13

527,266

5,910,646

Cash at bank

2,649,926

509,107

3,177,192

7,760,258

CREDITORS

Amounts falling due within one year

14

994,924

5,557,156

NET CURRENT ASSETS

2,182,268

2,203,102

TOTAL ASSETS LESS CURRENT LIABILITIES

2,200,078

2,286,187

CAPITAL AND RESERVES

Called up share capital

18

1,000

1,000

Retained earnings

2,199,078

2,285,187

SHAREHOLDERS' FUNDS

2,200,078

2,286,187

2,200,078

2,286,187

The financial statements were approved by the Board of Directors on 31 May 2018 and were signed on its behalf by:

E N G Braggio - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 October 2015

1,000

4,773,394

4,774,394

Changes in equity

Dividends

-

(13,100,000

)

(13,100,000

)

Total comprehensive income

-

10,611,793

10,611,793

Balance at 30 September 2016

1,000

2,285,187

2,286,187

Changes in equity

Total comprehensive income

-

(86,109

)

(86,109

)

Balance at 31 December 2017

1,000

2,199,078

2,200,078

1.	STATEMENT OF COMPLIANCE

Quest Automotive Products UK Limited is a limited company incorporated in England. The registered office is:

Avenue One

Station Lane

Witney

Oxfordshire

OX28 4XR

The Company's financial statements have been prepared in compliance with FRS 102 as it applies to the financial

statements for the period ended 31 December 2017.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared in accordance with applicable accounting standards. The financial

statements are prepared in sterling. The company has extended its accounting period to 31 December 2017 to be

consistent across the group. These accounts therefore cover a 15 month period.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements,

as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

Preparation of consolidated financial statements

The financial statements contain information about Quest Automotive Products UK Limited as an individual

company and do not contain consolidated financial information as the parent of a group. The Company is exempt

under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial

statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial

statements of its parent, Sherwin-Williams, a Company registered in the United States of America.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions

that affect the amounts reported for assets and liabilities as at the statement of financial position date and the

amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual

outcomes could differ from those estimates. The following judgements (apart from those involving estimates)

have had the most significant effect on amounts recognised in the financial statements.

Operating lease commitments

The Company, as a lessee, obtains use of property, plant and equipment. The classification of such leases as

operating or finance leases requires the Company to determine, based on an evaluation of the terms and

conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of

these assets and accordingly whether the lease requires an asset and liability to be recognised in the statement of

financial position.

Revenue recognition

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

Revenue is recognised to the extent that the Company obtains the right to consideration in exchange for its

performance. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates,

VAT and other sales taxes or duty. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods

have passed to the buyer, usually on dispatch of the goods, the amount of revenue can be measured reliably, it is

probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred

or to be incurred in respect of the transaction can be measured reliably.

Intangible assets

Intangible assets are measured at cost less accumulated amortisation.

Amortisation is charged so as to allocate the cost of intangibles less their residual values over their estimated

useful lives, using the straight-line method. The intangible assets are amortised over the following useful

economic life:

Software - 4 years

Property, plant and equipment

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Short leasehold

-

over length of lease

Plant and machinery

-

10% on cost

Equipment on loan to customers

-

33% on cost

Motor vehicles

-

25% on cost

Computer & office equipment

-

25% on cost

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow

moving items.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences which are differences between taxable profits and

total comprehensive income that arise from the inclusion of income and expenses in tax assessments in periods

different from those in which they are recognised in the financial statements, except that:

- where there are differences between amounts that can be deducted for tax for assets (other than goodwill) and

liabilities compared with the amounts that are recognised for those assets and liabilities in a business

combination a deferred tax liability/(asset) shall be recognised. The amount attributed to goodwill is adjusted by

the amount of the deferred tax recognised; and

- unrelieved tax losses and other deferred tax assets are recognised only to the extent that the directors consider

that it probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable

profits.

Deferred tax is measured on an undiscounted basis at the tax rates that they are expected to apply in the periods

in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the statement

of financial position date.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of

exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the

operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at banks and in hand and short

term deposits with an original maturity date of three months or less.

Short-term debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at

transaction price. Any losses arising from impairment are recognised in the income statement in other operating

income.

3.

TURNOVER

The turnover and loss (2016 - profit) before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

Period

1.10.16

to

Year Ended

31.12.17

30.9.16

£

£

United Kingdom

1,590,293

5,423,088

Europe

174,099

2,114,085

United States of America

1,175

1,654,501

1,765,567

9,191,674

4.	EMPLOYEES AND DIRECTORS

Period 1.10.16 to 31.12.17

Year ended 30.09.16

£

£

Wages and salaries

1,358,523

1,552,930

Social security costs

105,136

132,543

Other pension costs

11,745

25,728

1,475,404

1,711,201

The average monthly number of employees during the period was as follows:

Period 1.10.16 to 31.12.17

Year ended 30.09.16

Manufacturing

-

23

Logisitics

7

6

Sales

3

10

Administration

7

1

17

40

5.	DIRECTORS' REMUNERATION

Period

1.10.16

to

Year Ended

31.12.17

30.9.16

£

£

Directors' remuneration

-

62,820

Directors' remuneration for the period ended 31 December 2017 and year ended 30 September 2016 have been

borne by the ultimate parent Company. The directors of the Company are also directors or officers of other

companies within the Sherwin-Williams group. The directors' services to the Company do not occupy a

significant amount of their time. As such, the directors do not consider that they have received any remuneration

for their incidental services to the Company for the period ended 31 December 2017 and year ended 30

September 2016. All directors have retirement benefits accruing to them under pension schemes with

Sherwin-Williams.

Share options in the ultimate parent undertaking are granted to the directors. During the period no directors

exercised share options (2016: nil).

6.	OPERATING (LOSS)/PROFIT

Period 1.10.16 to 31.12.17

Year ended 30.9.16

£

£

Hire of plant and machinery

43,697

55,191

Other operating leases

382,500

306,000

Depreciation - owned assets

9,079

270,718

Loss on disposal of fixed assets

154,055

-

Auditors' remuneration

5,200

14,280

Auditors' remuneration for non audit work

-

10,070

Other non-audit services

1,245

2,837

Hire of vehicles

13,575

32,334

7.	EXCEPTIONAL ITEMS

Period

1.10.16

to

Year Ended

31.12.17

30.9.16

£

£

Cost of fundamental

reorganisation

-

(1,104,852

)

Profit/loss on sale of intangible fixed assets

-

10,300,000

-

9,195,148

In 2016 the Company underwent a restructuring programme in respect of the cessation of production at the

Biggleswade facility following the decision to move production to another group Company.

2017

2016

£

£

Site related costs

-

258,901

Employee related costs

-

845,951

Profit on sale of intangible fixed asset

-

(10,300,000

)

-

(9,195,148

)

8.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the period was as follows:

Period

1.10.16

to

Year Ended

31.12.17

30.9.16

£

£

Deferred tax

(34,337

)

(30,408

)

Tax on (loss)/profit

(34,337

)

(30,408

)

Reconciliation of total tax credit included in profit and loss

The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

Period

1.10.16

to

Year Ended

31.12.17

30.9.16

£

£

(Loss)/profit before tax

(120,446

)

10,581,385

(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19% (2016 - 20%)

(22,885

)

2,116,277

Effects of:

Expenses not deductible for tax purposes

1,504

3,637

Depreciation in excess of capital allowances

30,995

30,409

Deferred tax charge for the period

(34,337

)

(30,408

)

Group loss relief

(9,614

)

(90,323

)

Intra group transfer

-

(2,060,000

)

Total tax credit

(34,337

)

(30,408

)

9.

DIVIDENDS

Period

1.10.16

to

Year Ended

31.12.17

30.9.16

£

£

Ordinary shares of £1 each

Final

-

13,100,000

10.	INTANGIBLE FIXED ASSETS

Computer

software

£

COST

At 1 October 2016

and 31 December 2017

7,490

AMORTISATION

At 1 October 2016

and 31 December 2017

7,490

NET BOOK VALUE

At 31 December 2017

-

At 30 September 2016

-