| AFS Rotel Limited |
| Notes to the Accounts |
| for the year ended 31 December 2017 |
| 1 |
Accounting policies |
|
Basis of preparation |
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The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Freehold buildings |
over 25 years |
(Land at no depreciation) |
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Leasehold land and buildings |
over the lease term |
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Plant and machinery |
10 - 25% straight line |
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Fixtures, fittings, tools and equipment |
10 - 25% straight line |
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
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Work in Progress |
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The company has a contract which started in May 2017 and is expected to continue until December 2018. At the year-end the proportion of work completed, but not invoiced until after the year-end has been included in the accounts in the sum of £59,500 (2016 £Nil). |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that 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, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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| 2 |
Tangible fixed assets |
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Freehold Land and buildings |
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Plant and machinery etc |
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Total |
| £ |
£ |
£ |
|
Cost |
|
At 1 January 2017 |
182,108 |
|
430,304 |
|
612,412 |
|
Additions (incl. £317,108 on finance lease note 7) |
|
- |
|
322,488 |
|
322,488 |
|
Disposals |
- |
|
(4,876) |
|
(4,876) |
|
At 31 December 2017 |
182,108 |
|
747,916 |
|
930,024 |
|
|
|
|
|
|
|
|
|
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Depreciation |
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At 1 January 2017 |
20,864 |
|
264,433 |
|
285,297 |
|
Charge for the year |
4,552 |
|
43,560 |
|
48,112 |
|
At 31 December 2017 |
25,416 |
|
307,993 |
|
333,409 |
|
Net book value |
|
At 31 December 2017 |
156,692 |
|
439,923 |
|
596,615 |
|
At 31 December 2016 |
161,244 |
|
165,871 |
|
327,115 |
|
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|
| 3 |
Debtors |
2017 |
|
2016 |
| £ |
£ |
|
Trade debtors |
8,361 |
|
62,944 |
|
Factoring acct- net |
|
|
|
|
28,861 |
|
4,994 |
|
Karnarva UK Ltd (see note 3a) |
|
|
|
|
4,500 |
|
4,500 |
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Director's account |
- |
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Other debtors |
19,551 |
|
13,736 |
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|
|
|
|
|
61,273 |
|
86,174 |
|
| 3a |
Karnarva UK Ltd is a company jointly held by JS Williams and Mrs D Williams. It is expected this money wil be repaid within the next 12 months. |
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| 4 |
Creditors: amounts falling due within one year |
2017 |
|
2016 |
| £ |
£ |
|
Bank loans and overdrafts (note 6) |
36,548 |
|
25,783 |
|
Finance lease and hire purchase contracts (note 7) |
78,920 |
|
15,500 |
|
Trade creditors |
28,748 |
|
38,609 |
|
Karnarva UK Ltd (see note 3a) |
14,170 |
|
5,497 |
|
Director's account |
29,222 |
|
31,119 |
|
Other taxes and social security costs |
5,896 |
|
5,283 |
|
Retirement benefit scheme (see note 4a and note 12) |
10,694 |
|
10,694 |
|
Other creditors (incl. grant £11,905 (2016 £14,762) * |
118,661 |
|
97,368 |
|
|
|
|
|
|
322,859 |
|
229,853 |
|
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| 4a |
Retirement Benefit Scheme |
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The creditor relates to accumulated rent due on the property at Bolton less payment made to or on behalf of the scheme. The property was vacated on 1 February 2013 and the lease ceased. |
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* A grant was received towards equipment purchase £20,000 of which £2,857 ( 2016 £2,857) has been credited to cost of sales this year |
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| 5 |
Creditors: amounts falling due after one year |
2017 |
|
2016 |
| £ |
£ |
|
|
Bank loans |
34,471 |
|
46,574 |
|
Obligations under finance lease and hire purchase contracts |
266,513 |
|
33,624 |
|
|
|
|
|
|
300,984 |
|
80,198 |
|
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| 6 |
Bank loans and overdraft |
2017 |
|
2016 |
| £ |
£ |
|
Amounts falling due within one year |
10,500 |
|
10,500 |
|
Amounts falling due after one year |
34,471 |
|
46,574 |
|
Total bank loan |
44,971 |
|
57,074 |
|
|
Bank overdraft |
26,048 |
|
15,283 |
|
|
|
|
|
|
71,019 |
|
72,357 |
|
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The loan was borrowed in April 2012 to assist finance the purchase of the building. Interest is payable to Lloyds TSB at 4% p.a. on the balance outstanding with the loan repayable over 9 years. It is secured on the freehold property. The bank overdraft and borrowings on any account are secured by fixed and floating charges. |
|
| 7 |
Obligations under Finance Lease and Hire Purchase contracts |
|
2017 |
|
2016 |
| £ |
£ |
|
Amounts falling due within one year |
78,920 |
|
15,500 |
|
Amounts falling due after one year |
266,513 |
|
33,624 |
|
Apportioned capital amount |
345,433 |
|
49,124 |
|
The Hire Purchase was used to purchase equipment and is secured on the same. The Finance lease is shown in note 13b |
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| 8 |
Provisions for liabilities |
2017 |
|
2016 |
| £ |
£ |
|
Deferred taxation: |
|
Accelerated capital allowances |
8,000 |
|
28,094 |
|
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|
2017 |
|
2016 |
| £ |
£ |
|
At 1 January |
28,094 |
|
28,094 |
|
Deferred tax (credit)/charge in profit and loss account |
(20,094) |
|
- |
|
|
|
|
|
|
8,000 |
|
28,094 |
|
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| 9 |
Share capital |
Nominal |
|
2017 |
|
2017 |
|
2016 |
| value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
50p each |
|
200 |
|
100 |
|
100 |
|
| 10 |
Controlling party |
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The ultimate controlling party is J S Williams. |
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| 11 |
Other information |
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AFS Rotel Limited is a private company limited by shares and incorporated in England. Its registered office is: Unit 1 Broadclough Mill, Burnley Road, BACUP OL13 8PJ |
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| 12 |
Related party transactions |
2017 |
|
2016 |
| £ |
£ |
|
The directors loan due from (to) J S Williams to the company is |
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(Included in creditors/debtors) J S Williams loaned the company £25,000, of which £5,530 (2016 £6,706)is outstanding. Mrs D Williams loaned the company £24,413 during the previous years of which £23,692 is outstanding |
|
(29,222) |
|
(31,119) |
|
|
Owed to the Retirement Benefit Scheme for rent less payments |
|
10,694 |
|
10,694 |
|
|
Owed to the Retirement Benefit Scheme for pension premiums |
|
26,100 |
|
20,700 |
|
|
Equipment rental is owed to/(from) Karnarva (UK) Ltd of |
|
14,170 |
|
5,497 |
|
The amount charged in the year being |
|
11,198 |
|
5,600 |
|
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The company loaned Karnarva (UK) Ltd a net of £4,500 in previous years. This balance has not changed in 2017 or 2016. |
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| 13 |
Other commitments |
| a) |
Company vehicles hire - operating leases |
|
The company entered into 2 hire agreements for 2 company vehicles in July 2017 over 48 months. Total monthly commitment £1,985 plus VAT. Commitments outstanding at December 2017 are over 42 months being £23,820 in next 12 months and the remaining £59,550 due after more than 1 year payable monthly to the end of the remaining term. At the end of this term the vehicles will be returned to the hirer. |
| £ |
|
Annual commitments |
2018 |
|
23,820 |
|
|
2019 |
|
23,820 |
|
|
2020 |
|
23,820 |
|
|
2021 |
|
11,910 |
|
| b) |
Company plant - finance lease |
|
The company entered into a rental agreement facility in December 2017 for use of equipment. The rental agreement runs for 60 months at £5,934 plus VAT per month. The total commitment outstanding at 31/12/2017 is apportioned between capital and finance charge. The total apportioned capital amount of £311,823 is included in note 7. The contract states the title to the equipment does not pass to the company. There is a secondary rental period available at £3,171 annually. |
|
This is considered to represent finance leases in accordance with the accounting policy. The asset and finance lease liability are included in the accounts. |
