2013 C Brewer and sons Limited XBRL Filing

Registered number 00203852

     ANNUAL REPORT

AND

CONSOLIDATED FINANCIAL STATEMENTS

     FOR THE YEAR ENDED 31 DECEMBER 2013

     CONTENTS

     Page

Notice of Meeting     2

Directors and Advisers     3

Strategic Report     4-5

Directors' Report     6-8

Independent Auditors' Report to the Members of C Brewer & Sons Limited     9-10

Consolidated Profit and Loss Account     11

Consolidated Note of Historical Cost Profits and Losses      12

Consolidated Statement of Total Recognised Gains and Losses     12

Consolidated Balance Sheet     13

Company Balance Sheet     14

Consolidated Cash Flow Statement     15

Notes (forming part of the Financial Statements)     16-36

NOTICE OF MEETING

NOTICE IS HEREBY GIVEN that the eighty-eighth Annual General Meeting of the Company will be held at the South Lodge Hotel, Lower Beeding on 14 June 2014 at 11.00 am to transact the following business:

1.     To receive and, if approved, to adopt the Strategic Report, Directors' Report and the audited Financial Statements of the Group and Company for the year ended 31 December 2013.

2.     To declare dividends.

3.     To reappoint Directors.

4.     To reappoint PricewaterhouseCoopers LLP as auditors, and to authorise the Directors to fix their remuneration.

5.     To transact any other business which may be properly transacted at an Annual General Meeting.

Albany House     BY ORDER OF THE BOARD

123/127 Ashford Road

Eastbourne     A C Shoesmith

East Sussex     Company Secretary

BN21 3TR

Note:     A member of the Company entitled to attend and vote at the above Meeting may appoint a proxy to attend and vote.  A proxy need not be a member.

 21^st May 2014

DIRECTORS AND ADVISERS

DIRECTORS

M A Brewer (Chairman)               S D Brewer

R C Brewer               C T Brewer (appointed 1 July 2013)

N A Brewer               S J Adams

N M Brewer               R A E Dobbs

A R Lawfield               S R Brewer

B L Hislop               

COMPANY SECRETARY

A C Shoesmith

INDEPENDENT AUDITORS

PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

The Portland Building

25 High Street

Crawley

West Sussex RH10 1BG

BANKERS

Barclays Bank plc

Retail & Wholesale Team

Level 27, 1 Churchill Place

LONDON EC3V 9EX

REGISTERED OFFICE

Albany House

123/127 Ashford Road

EASTBOURNE

East Sussex BN21 3TR

REGISTERED NUMBER

203852

The Directors have pleasure in submitting their Annual Report, together with the audited consolidated financial statements for the year ended 31 December 2013 which were approved by the Board on 21st May 2014.

STRATEGIC REPORT

Principal Activities

The principal activity of the Company and its subsidiaries (the 'group') continues to be the business of wholesale and retail decorators' and builders' merchants.

The Directors foresee no major change in the nature of the Company's activities.

Review of Business and Future Developments

The business continued to make satisfactory progress during the year. Several branches were opened in the year. Sales rose by 6.0% in 2013 compared to 2012 (2012: 5.0%) which the Directors regard as reasonable given the market conditions. Sales per employee were £142K an increase of 4.6% over 2012.  The net deficit in the pension schemes fell by £11,679K (2012: (£4,916K)). The net assets rose to £24,940K (2012: £11,374K). The position at year end is considered by the Directors to be satisfactory. The Directors are of the opinion that future prospects remain encouraging.

The share capital of Robinson & Neal Limited was acquired on 3 February 2014 which operates 4 outlets in the northwest.

Principal Risks and Uncertainties

The main risks facing the Company are the competitive environment in which the Company trades and the increasing rate of technological change, especially related to IT and the web. The Company regularly reviews competitor activity and takes action as necessary. The Company has significant pension liabilities for which plans are in hand to manage. The timing of their resolution is uncertain. The Company incorporated a subsidiary in the United States of America to handle certain administrative functions related to sales there. Cash on deposit is held at rated institutions whose status is periodically reviewed.

Key Performance Indicators

The Company measures financial performance by reference to profitability and revenue.  Operating profit is set out in the consolidated profit and loss account on page 11.

Financial Risk Management

The Company's operations expose it to a variety of financial risks that include the effects of credit risk, including that with cash and deposits with financial institutions, liquidity risk and interest rate cash flow risk.

Financial Risk Management (continued)

The Company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the Company by monitoring levels of debt finance and the related finance costs.  The Company does not use derivative financial instruments to manage interest rate.

Given the size of the Company, the Directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the Board.  The policies set by the Board of Directors are implemented by the Company's finance department.

Credit Risk

The Company has implemented policies that require appropriate credit checks on potential customers before sales are made.

Liquidity Risk

The Company maintains appropriate debt finance that is designed to ensure that the Company has sufficient available funds for operations and planned expansions.

Interest Rate Cash Flow Risk

The Company has both interest bearing assets and interest bearing liabilities.  Interest bearing assets are cash balances which earn interest at a variable rate. The deposits from Directors, shareholders and staff bear interest at both fixed and variable rates. Loans are matched to cash deposits.  The Directors will revisit the appropriateness of this policy should the Company's operations change in size or nature.

     BY ORDER OF THE BOARD

     A C Shoesmith

     Company Secretary

Albany House

123/127 Ashford Road

Eastbourne

East Sussex BN21 3TR

21^st May 2014

Registered Number

203852

DIRECTORS' REPORT

Results and Dividend

The profit for the financial year is shown in the consolidated profit and loss account on page 11.

An interim dividend for 2012 of £880K was paid on ordinary shares in April 2013.  The following dividends were paid in 2013.

Tangible Fixed Assets

Movements in tangible fixed assets are shown in note 10 to the financial statements. The Company is a trading concern and accordingly the Directors see no advantage in incurring costs from professional advisors for the revaluation of all freehold properties and for the apportionment of such a valuation between land and buildings.

The Directors are always careful to ensure that the Company's properties are maintained in first-class order and are of the opinion that the market value of the freehold and leasehold properties is in excess of their book values.

Directors

The Directors of the Company who held office throughout the year and up to the date of signing the financial statements are listed on page 3.

The Director retiring by rotation is Mr R C Brewer who, being eligible, offers himself for re-election.

No share options are outstanding at 31 December 2013.

Creditors' Payment Policy

The Company's policy is to pay all suppliers to contracted terms.  Creditors' days outstanding at 31 December 2013 are 19 days (2012: 21 days).

Charitable and Political Donations

Charitable donations during the year amounted to £210K (2012: £200K) paid to the Charities Aid Foundation. No political contributions were made during the year (2012: £nil).

Employee Involvement

The Company recognises the importance of good communications and relations with staff and uses a number of methods of keeping staff informed of performance and developments in the Company.

A regular bulletin is issued to all members of staff outlining achievements and planned future activities.

Frequent meetings are held between Head Office specialist managers and Branch managers to discuss particular aspects of operations and to decide on general policy.  Branch managers are encouraged to hold Branch briefing meetings.

Shortly after engagement new members of staff attend an induction course, which gives them an initial understanding of the Company and its business and makes them aware of matters directly concerning their employment.  Great importance is attached to staff training and development at all levels.  An integral part of many of the training programmes is to involve staff in becoming more aware and critical of the Company's performance.

Employment of Disabled Persons

The Company recognises its obligations towards disabled people and endeavours to provide as much employment as the Company's operations demand and the abilities of the disabled persons allow.

Applications for employment from disabled people are studied with care, and if existing employees become disabled, every effort is made to find them appropriate work, and to provide training where required.

Opportunities are offered to disabled employees to develop their knowledge and skills and undertake greater responsibilities.

Statement of Directors' Responsibilities

Directors' Indemnities

As permitted by the Articles of Association, the Directors have the benefit of an indemnity which is a qualifying third party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force. The Company also purchased and maintained throughout the financial year Directors' and Officers' liability insurance in respect of itself and its Directors.

Statement of 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 steps that he or she ought to make himself or herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Independent Auditors

A resolution to re-appoint PricewaterhouseCoopers LLP as auditors to the Company will be proposed at the Annual General Meeting.

     BY ORDER OF THE BOARD

     A C Shoesmith

     Company Secretary

Albany House

123/127 Ashford Road

Eastbourne

East Sussex BN21 3TR

21 May 2014

Registered Number

203852

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF C BREWER & SONS LIMITED

Report on the financial statements

Our opinion

What we have audited

The group financial statements and parent company financial statements (the "financial statements"), which are prepared by C Brewer & Sons Limited, comprise:

• the consolidated and company balance sheet as at 31 December 2013;

• the consolidated profit and loss account, consolidated note of historical cost profits and losses and consolidated statement of total recognised gains and losses for the year then ended;

• the consolidated cash flow statement for the year then ended; and

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

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).

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.

What an audit of financial statements involves

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) ("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 and 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. 

In addition, we read all the financial and non-financial information in the Annual Report and Consolidated 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 other matter prescribed by the Companies Act 2006

In 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 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 parent company 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. 

Responsibilities for the financial statements and the audit

Our responsibilities and those of the directors

As explained more fully in the Statement of Directors' Responsibilities set out on pages 7 and 8, 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 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 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.

Rosemary Shapland (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Gatwick

21 May 2014

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013

1.     Accounting Policies

Basis of Preparation

These financial statements are prepared on the going concern basis, under the historical cost convention, as modified by the revaluation of certain freehold properties held as investments, and in accordance with the Companies Act 2006 and applicable accounting standards in the United Kingdom.  The principal accounting policies, which have been applied consistently throughout the year, are set out below.

Basis of Consolidation

The group financial statements consolidate the financial statements of C Brewer & Sons Limited and all of its subsidiary undertakings. The results of subsidiary undertakings have been included from the date of acquisition or up to the date of disposal being the date control passes.  Uniform accounting policies are followed within the group.

In accordance with Section 408 of the Companies Act 2006, C Brewer & Sons Limited is exempt from the requirement to present its own profit and loss account. The company has taken advantage of the exemption from preparing a cash flow statement under the terms of FRS1 (revised 1996).

Tangible and Intangible Fixed Assets and Depreciation

Tangible fixed assets, except for investment properties, are stated at historic cost, comprising the purchase price plus incidental expenses or fair value when acquired, less accumulated depreciation.

Depreciation is provided at rates calculated to write off the cost of fixed assets less estimated residual value on a straight line basis over the expected useful economic lives of the assets concerned. The annual rates used from the date of purchase are:

Freehold land and buildings          -     since 1978 1.0% of cost which, in the opinion of the Directors, is considered to be an adequate percentage for the buildings alone

Leasehold land and buildings     -     in equal annual instalments over the period of the lease

Freehold investment properties     -     no depreciation charged

Plant, vehicles, fittings and          -     at varying rates between 10.0% and 25.0% pa on cost

equipment, computer software

Stocks

Stocks are valued at the lower of weighted average cost and net realisable value.

Deferred Taxation

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date.

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013 (continued)

1.     Accounting Policies (continued)

Deferred Taxation (continued)

A net deferred tax asset is recognised as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future reversal of underlying timing differences can be deducted.

Deferred tax is measured at the tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.  Deferred tax is measured on an undiscounted basis.

Operating Leases

The amounts payable under operating leases are charged to the profit and loss account in the year in which they are incurred. Rent free periods or any inducement to enter into operating lease agreements are released to the profit and loss account over the period to the date on which the rent is first expected to be adjusted to the prevailing market rate.

Leasehold Properties

Provision is made in the financial statements for rent or costs of vacant leasehold properties where the Directors consider that rent will not be recovered for the foreseeable future.

Pension Costs - Defined Benefit

The Company operates two defined benefit pension schemes for some employees, the assets of which are held separately from those of the Company in independently administered funds.  The Retirement Benefit Scheme was closed to new members on 1 October 2007. The Executive Scheme was closed to new members on 1 November 2009.  Future accruals in both Schemes ceased from 1 November 2009.  Pension assets are measured using market values at the year end.  Pension liabilities are measured using the projected unit actuarial method and are discounted at the current rate of return on a high quality corporate bond of equivalent terms to the liability. The expected return on the Scheme's assets and the increase in the year in the present value of the Scheme's liabilities arising from the passage of time are included in other finance income/expense.  Actuarial gains and losses are recognised in the consolidated statement of total recognised gains and losses.  Since the Scheme is closed for new accruals there is no current service charge in the current/prior year.

The deficit on the schemes is recognised in full and is presented on the face of the balance sheet net of the associated deferred tax asset (see note 23).

The Company operates a Group Personal Pension Plan with the Legal & General Assurance Society Limited where employees hold individual contracts to enable them to save for a private retirement income.  Both the Company and staff contribute to the Pension Plan. The Company contributions are recognised in the financial statements when incurred.

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013 (continued)

1.   Accounting Policies (continued)

Goodwill

Lease Dilapidations

The cost of dilapidations arising at the end of leases is provided for during the life of the lease.

Fixed Asset Investments

Investments are stated at historical cost, less any impairment in value.

Turnover

Turnover is recognised when goods are invoiced and despatched to customers and is stated net of returns of goods sold and exclusive of value added tax.

Royalty Income

Royalty income is recognised in the period the income arises.

Investment Properties

Certain of the Group's properties are held for long-term investment.  In accordance with SSAP 19, investment properties are revalued annually.  The surplus or deficit on revaluation is transferred to the revaluation reserve unless a deficit below original cost, or its reversal, on an individual investment property is expected to be permanent, in which case it is recognised in the profit and loss account for the financial year.

Although the Companies Act 2006 would normally require the systematic annual depreciation of fixed assets, the Directors believe that the policy of not providing depreciation is necessary in order for the accounts to give a true and fair view, since the current value of investment properties, and changes to that current value, are of prime importance rather than a calculation of systematic annual depreciation.  Depreciation is only one of the many factors reflected in the annual valuation, and the amount which might otherwise have been included cannot be separately identified or quantified.

Financial Instruments

The Group's financial instruments comprise cash, trade debtors, creditors and loans.  A financial asset or a financial liability is recognised on the balance sheet when the Group becomes a party to the contractual provisions of the instrument.  The de-recognition of a financial instrument takes place when the Group no longer controls substantially all such risks and rewards of ownership that comprise the financial asset.

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013 (continued)

1.     Accounting Policies (continued)

Related Party Transactions

FRS 8 'Related Party Transactions' requires disclosure of the details of material transactions between the Company and related parties.

2.     Turnover

The whole of the turnover is attributable to the business of wholesale and retail decorators' and builders' merchants.

Turnover by geographical market is:

3.     Profit on Ordinary Activities before Taxation

Profit on ordinary activities before taxation is stated after taking into account the following items:

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013 (continued)

4.  Employee Information 

5.     Directors' Emoluments

The average number of Directors in service with the Company during the year was 10 (2012: 10). 

Retirement benefits accruing to Directors under a defined benefit pension scheme is £nil (2012: £nil).

The aggregate emoluments of the highest paid Director amounted to £404K (2012: £418K).

Contributions to money purchase schemes for Directors are £153K (2012: £105K); highest paid Director £nil (2012: £ nil).

6.  Interest Receivable and Similar Income

7.  Interest Payable and Similar Charges

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013 (continued)

8.  Tax on Profit on Ordinary Activities

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013 (continued)

  8.  Tax on Profit on Ordinary Activities (continued)

No provision has been made for deferred tax on gains recognised on the revaluation of investment properties to their market values or on the sale of properties where potentially taxable gains have been rolled over into replacement assets.  Such tax would become payable only if the property were sold without it being possible to claim rollover relief.  The total amount unprovided is £650K (2012: £796K).  At present, it is not envisaged that any tax will be payable in the future.

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013 (continued)

9.   Dividends Paid  

10. Tangible Fixed Assets

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013 (continued)

10. Tangible Fixed Assets (continued)

Certain properties are classified as investment properties and are accounted for in accordance with SSAP19.  The Company's policy is to have an independent valuation every five years and the next valuation is due in 2017.  The properties have been professionally valued in 2012 made in accordance with the RICS Appraisal and Valuation Manual with the surplus or deficit being taken to the revaluation reserve. In 2013 the properties are valued by the company on the basis of external advice. The historical cost of investment properties is £1,086K (2012: £1,305K).

NOTES FOR THE YEAR ENDED 31 DECEMBER 2013 (continued)

10. Tangible Fixed Assets (continued)