Delves & Co Limited - Period Ending 2014-02-28

Delves & Co Limited

Directors' Report and Financial Statements

for the Period from 19 October 2012 to 28 February 2014
 

Delves & Co Limited
Contents

Page

Company Information 1

Strategic Report 2

Directors' Report 3 to 4

Statement of Directors' Responsibilities 5

Independent Auditor's Report 6 to 7

Profit and Loss Account 8

Balance Sheet 9

Cash Flow Statement 10 to 11

Notes to the Financial Statements 12 to 20

Delves & Co Limited
Company Information

Directors

Mr D P Delves Mrs R A Delves Mr R P Delves Mr H T W Delves

Registered office

The Exchange Fiveways Temple Street Llandrindod Wells Powys LD1 5HG

Registered number

8261006

Auditors

Mitchell Meredith Limited Chartered Accountants and Statutory Auditor The Exchange Fiveways Temple Street Llandrindod Wells Powys LD1 5HG

Page 1

Delves & Co Limited
Strategic Report for the Period from 19 October 2012 to 28 February 2014

The directors present their strategic report for the period from 19 October 2012 to 28 February 2014.

Business review

Fair review of the business

This is the first operating period and covers trading for the ten months from 1 May 2013.

The company's key financial and other performance indicators during the period were as follows:

	Unit	2014
Turnover	£	9,210,247
Gross profit margin	%	18
Profit before tax	£	229,930

Principal risks and uncertainties

The company operates an established supermarket and filling station at Craven Arms, Shropshire.

The principal risks and uncertainties are competition from large supermarket operators and global supply and price fluctuations of motor fuel.

Approved by the Board on 17 July 2014 and signed on its behalf by:

.........................................
Mr D P Delves
Director

Page 2

Delves & Co Limited
Directors' Report for the Period from 19 October 2012 to 28 February 2014

The directors present their report and the financial statements for the period from 19 October 2012 to 28 February 2014.

Incorporation

The company was incorporated on 19 October 2012 and commenced trading on 1 May 2013 .

Directors of the company

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

Mr D P Delves (appointed 19 October 2012)

Mrs R A Delves (appointed 19 October 2012)

Mr R P Delves (appointed 17 February 2014)

Mr H T W Delves (appointed 17 February 2014)

The beneficial interests of the directors holding office as at the balance sheet date in the shares of the company, according to the register of directors' interests were as follows:

	28.02.2014	19.10.2013
Ordinary shares of £1 each
Mr D P Delves	1	1
Mrs R A Delves	1	1

The directors did not have any non-beneficial interests in the shares of the company.

Financial instruments

The company's principal financial instruments combine bank balances, sales invoicing, trade creditors, trade debtors and loans to the company. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations.

Due to the nature of the financial instruments used by the company there is no exposure to price risk. The company's approach to managing other risks applicable to the financial instruments concerned is shown below.

In respect of loans, these comprise loans from the directors and external loans. The interest rate on these loans is variable. The company manages the liquidity risk by ensuring there are sufficient funds to meet the repayments when they fall due.

Trade debtors are managed in respect of credit and cashflow risk by policies concerning the credit offer to customers and the regular monitoring of amounts outstanding for both time and credit limits.

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

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and which they know the auditor is unaware of.

Page 3

Delves & Co Limited
Directors' Report for the Period from 19 October 2012 to 28 February 2014

......... continued

Approved by the Board on 17 July 2014 and signed on its behalf by:

.........................................
Mr D P Delves
Director

Page 4

Delves & Co Limited
Statement of Directors' Responsibilities

The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the

directors

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

directors have

elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 apply them consistently;
•
make judgements and accounting estimates that are reasonable and prudent
; and
•
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.

Page 5

Independent Auditor's Report to the Members of
Delves & Co Limited

We have audited the financial statements of Delves & Co Limited for the period from 19 October 2012 to 28 February 2014, set out on pages 8 to 20. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (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 an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Statement of Directors' Responsibilities (set out on page 5), 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). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the financial statements

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 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. In addition, we read all the financial and non-financial information in the Annual Report and Financial Statements 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.

Opinion on the financial statements

In our opinion the financial statements:
•
give a true and fair view of the state of the company's affairs as at

28 February 2014

and of its

profit

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.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements.

Page 6

Independent Auditor's Report to the Members of
Delves & Co Limited
 ......... continued

Matters on which we are required to report by exception

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.

......................................
M L Barnes (Senior Statutory Auditor)
For and on behalf of Mitchell Meredith Limited, Statutory Auditor

The Exchange
Fiveways
Temple Street
Llandrindod Wells
Powys
LD1 5HG

17 July 2014

Page 7

Delves & Co Limited
Profit and Loss Account for the Period from 19 October 2012 to 28 February 2014

		Note			19 October 2012 to 28 February 2014 £
Turnover					9,210,247
Cost of sales					(7,574,710)
Gross profit					1,635,537
Administrative expenses					(1,306,795)
Operating profit		2			328,742
Other interest receivable and similar income		5			1,144
Interest payable and similar charges		6			(99,956)
Profit on ordinary activities before taxation					229,930
Tax on profit on ordinary activities		7			(72,601)
Profit for the financial period		17			157,329

Turnover and operating profit derive wholly from continuing operations.

The company has no recognised gains or losses for the period other than the results above.

The notes on pages 12 to 20 form an integral part of these financial statements.
Page 8

Delves & Co Limited
(Registration number: 8261006)
Balance Sheet at 28 February 2014

		Note			28 February 2014 £
Fixed assets
Intangible fixed assets		8			160,000
Tangible fixed assets		9			3,428,900
Investments		10			17,300
					3,606,200
Current assets
Stocks		11			592,558
Debtors		12			401,391
Cash at bank and in hand					563,208
					1,557,157
Creditors: Amounts falling due within one year		13			(1,193,212)
Net current assets					363,945
Total assets less current liabilities					3,970,145
Creditors: Amounts falling due after more than one year		14			(3,749,225)
Provisions for liabilities		15			(63,589)
Total net assets					157,331
Capital and reserves
Called up share capital		16			2
Profit and loss account		17			157,329
Shareholders' funds		18			157,331

Approved and authorised for issue by the Board on 17 July 2014 and signed on its behalf by:

.........................................
Mr D P Delves
Director

The notes on pages 12 to 20 form an integral part of these financial statements.
Page 9

Delves & Co Limited
Cash Flow Statement for the Period from 19 October 2012 to 28 February 2014

Reconciliation of operating profit to net cash flow from operating activities

		19 October 2012 to 28 February 2014 £
Operating profit		328,742
Depreciation, amortisation and impairment charges		129,645
Increase in stocks		(592,558)
Increase in debtors		(401,391)
Increase in creditors		981,671
Net cash inflow from operating activities		446,109

Cash flow statement

		19 October 2012 to 28 February 2014 £
Net cash inflow from operating activities		446,109
Returns on investments and servicing of finance
Interest received		1,144
Interest paid		(99,956)
		(98,812)
Capital expenditure and financial investment
Purchase of intangible fixed assets		(200,000)
Purchase of tangible fixed assets		(3,518,545)
Purchase of investments		(17,300)
		(3,735,845)
Net cash outflow before management of liquid resources and financing		(3,388,548)
Financing
Repayment of loans and borrowings		3,951,754
Issue of shares		2
		3,951,756
Increase in cash		563,208

The notes on pages 12 to 20 form an integral part of these financial statements.
Page 10

Delves & Co Limited
Cash Flow Statement for the Period from 19 October 2012 to 28 February 2014......... continued

Reconciliation of net cash flow to movement in net debt

		Note			19 October 2012 to 28 February 2014 £
Increase in cash					563,208
Cash outflow from repayment of loans					(3,951,754)
Change in net debt resulting from cash flows		20			(3,388,546)
Movement in net debt		20			(3,388,546)
Net funds/(debt) at start of period		20			-
Net debt at end of period		20			(3,388,546)

The notes on pages 12 to 20 form an integral part of these financial statements.
Page 11

Delves & Co Limited
Notes to the Financial Statements for the Period from 19 October 2012 to 28 February 2014
......... continued

1	Accounting policies

Basis of preparation

The financial statements have been prepared under the historical cost convention.

Turnover

Turnover represents amounts chargeable, net of value added tax, in respect of the sale of goods and services to customers.

Amortisation

Amortisation is provided on intangible fixed assets so as to write off the cost, less any estimated residual value, over their expected useful economic life as follows:

Asset class	Amortisation method and rate
Goodwill	Over 5 years

Depreciation

Depreciation is provided on tangible fixed assets so as to write off the cost or valuation, less any estimated residual value, over their expected useful economic life as follows:

Asset class	Depreciation method and rate
Freehold Property	Over 50 years
Fixtures and fittings	15 % on reducing balance
Motor vehicles	25 % on reducing balance

Fixed asset investments

Fixed asset investments are stated at historical cost less provision for any diminution in value.

Stock

Stock is valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving stocks.

Deferred tax

Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes, which have arisen but not reversed by the balance sheet date, except as required by FRS19. Deferred tax is measured at the rates that are expected to apply in the periods when the timing differences are expected to reverse, based on the tax rates and law enacted at the balance sheet date.

Hire purchase and leasing

Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over the lease term.

Page 12

Delves & Co Limited
Notes to the Financial Statements for the Period from 19 October 2012 to 28 February 2014
......... continued

Pensions

The company operates a defined contribution pension scheme. Contributions are recognised in the profit and loss account in the period in which they become payable in accordance with the rules of the scheme.

2	Operating profit

Operating profit is stated after charging:

		19 October 2012 to 28 February 2014 £
Operating leases - plant and machinery		11,884
Auditor's remuneration		5,000
Depreciation of owned assets		89,645
Amortisation		40,000

3	Particulars of employees

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

		19 October 2012 to 28 February 2014 No.
Employed by the company		70

The aggregate payroll costs were as follows:

		19 October 2012 to 28 February 2014 £
Wages and salaries		670,462
Social security costs		45,152
Staff pensions		102,797
		818,411

Page 13

Delves & Co Limited
Notes to the Financial Statements for the Period from 19 October 2012 to 28 February 2014
......... continued

4	Directors' remuneration

The directors' remuneration for the period was as follows:

		19 October 2012 to 28 February 2014 £
Remuneration		5,167
Company contributions paid to money purchase schemes		100,000

5	Other interest receivable and similar income

		19 October 2012 to 28 February 2014 £
Bank interest receivable		1,144

6	Interest payable and similar charges

		19 October 2012 to 28 February 2014 £
Interest on other loans		99,956
		99,956

Page 14

Delves & Co Limited
Notes to the Financial Statements for the Period from 19 October 2012 to 28 February 2014
......... continued

7

Taxation

Tax on profit on ordinary activities

		19 October 2012 to 28 February 2014 £
Current tax
Corporation tax charge		9,012
Deferred tax
Origination and reversal of timing differences		63,589
Total tax on profit on ordinary activities		72,601

8	Intangible fixed assets

		Goodwill £			Total £
Cost
Additions		200,000			200,000
At 28 February 2014		200,000			200,000
Amortisation
Charge for the period		40,000			40,000
At 28 February 2014		40,000			40,000
Net book value
At 28 February 2014		160,000			160,000

9	Tangible fixed assets

		Freehold land and buildings £			Fixtures and fittings £			Motor vehicles £			Total £
Cost or valuation
Additions		3,158,598			344,447			15,500			3,518,545
Depreciation
Charge for the period		43,360			43,056			3,229			89,645
Net book value
At 28 February 2014		3,115,238			301,391			12,271			3,428,900

Page 15

Delves & Co Limited
Notes to the Financial Statements for the Period from 19 October 2012 to 28 February 2014
......... continued

10	Investments held as fixed assets

		28 February 2014 £
Other investments		17,300

Other investments

		Unlisted investments £			Total £
Cost
Additions		17,300			17,300
At 28 February 2014		17,300			17,300
Net book value
At 28 February 2014		17,300			17,300

11

Stocks

		28 February 2014 £
Stocks		592,558

12

Debtors

		28 February 2014 £
Trade debtors		43,782
Amounts owed by related companies		340,000
VAT		14,436
Prepayments and accrued income		3,173
		401,391

Page 16

Delves & Co Limited
Notes to the Financial Statements for the Period from 19 October 2012 to 28 February 2014
......... continued

13	Creditors: Amounts falling due within one year

		28 February 2014 £
Trade creditors		757,812
Other loans		202,529
Corporation tax		9,012
Other taxes and social security		21,196
Directors' current accounts		202,663
		1,193,212

Creditors amounts falling due within one year includes the following liabilities, on which security has been given by the company:

		28 February 2014 £
Other loans		202,529

The loan is secured by a charge against freehold property.

14	Creditors: Amounts falling due after more than one year

		28 February 2014 £
Other loans		3,749,225

Page 17

Delves & Co Limited
Notes to the Financial Statements for the Period from 19 October 2012 to 28 February 2014
......... continued

Creditors amounts falling due after more than one year includes the following liabilities, on which security has been given by the company:

		28 February 2014 £
Other loans		3,749,225

The loan is secured by a charge against freehold property.

Included in the creditors are the following amounts due after more than five years:

		28 February 2014 £
After more than five years by instalments		2,819,720

15	Provisions

		Deferred tax £			Total £
At 19 October 2012		-			-
Charged to the profit and loss account		63,589			63,589
At 28 February 2014		63,589			63,589

Analysis of deferred tax

		28 February 2014 £
Difference between accumulated depreciation and amortisation and capital allowances		63,589

16	Share capital

Allotted, called up and fully paid shares

	28 February 2014
		No.			£
Ordinary of £1 each		2			2

Page 18

Delves & Co Limited
Notes to the Financial Statements for the Period from 19 October 2012 to 28 February 2014
......... continued

New shares allotted

During the period 2 Ordinary shares having an aggregate nominal value of £2 were allotted for an aggregate consideration of £2.

17

Reserves

		Profit and loss account £			Total £
Profit for the period		157,329			157,329
At 28 February 2014		157,329			157,329

18	Reconciliation of movement in shareholders' funds

		19 October 2012 to 28 February 2014 £
Profit attributable to the members of the company		157,329
New share capital subscribed		2
Net addition to shareholders' funds		157,331
Shareholders' funds at end of period		157,331

19	Pension schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the company to the scheme and amounted to £102,797.

20	Analysis of net debt

	At 19 October 2012 £	Cash flow £	At 28 February 2014 £
Cash at bank and in hand	-	563,208	563,208
Debt due within one year	-	(202,529)	(202,529)
Debt due after more than one year	-	(3,749,225)	(3,749,225)
Net debt	-	(3,388,546)	(3,388,546)

Page 19

Delves & Co Limited
Notes to the Financial Statements for the Period from 19 October 2012 to 28 February 2014
......... continued

21	Related party transactions

Other related party transactions

During the period the company made the following related party transactions:

R R Finance Limited ( A company owned by the parents of D P Delves. ) During the period the company borrowed £4,000,000 from R R Finance Limited. Interest is charged at a commercial rate of 2.5% above Bank of England base rate. At the balance sheet date the amount due to R R Finance Limited was £3,937,086 .

Delfin Investments Limited ( A company owned by the parents of D P Delves ) At the balance sheet date the amount due from Delfin Investments Limited was £150,000 .

The Montgomery Natural Spring Water Company Limited ( a wholly owned subsidiary of Delfin Investments Limited ) At the balance sheet date the amount due from The Montgomery Natural Spring Water Company Limited was £190,000 .

22

Control

The company is controlled by the director s Mr D P and Mrs R A Delves who own 100% of the called up share capital .

Page 20