Wickman Coventry Limited - Limited company accounts 11.7

REGISTERED NUMBER: 03134891 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2014

FOR

WICKMAN COVENTRY LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Independent Auditors' Report

6

Profit and Loss Account

8

Balance Sheet

9

Cash Flow Statement

10

Notes to the Financial Statements

11

DIRECTORS:

Mr C P Barrett

Mr O A Coyne

Mr R Dodd

SECRETARY:

Mr I R Gill

REGISTERED OFFICE:

Automatic House Discovery Way

Leofric Business Park

Binley

Coventry

West Midlands

CV3 2TD

REGISTERED NUMBER:

03134891 (England and Wales)

INDEPENDENT AUDITORS:

Gane Jackson Scott LLP

Chartered Certified Accountants

and Statutory Auditor

Second Floor, Kestrel House

Falconry Court

Bakers Lane

Epping

Essex

CM16 5BD

BANKERS:

HSBC Bank Plc

Market Place

Willenhall

West Midlands

WV13 2AF

The directors present their strategic report for the year ended 31 December 2014.

REVIEW OF BUSINESS

The principle activity of the company in the year was that of the sale of machine tools and spares.

RESULTS AND PERFORMANCE

The results for the year on pages 7 to 23 demonstrate strong trading for the company with turnover

of £4.4M (2013 £6.8M). The company is showing a profit for the year of £35,841 before tax (2013

£99,908). Profit and loss reserve has increased from £225,769 in 2013 to £242,173.

The company has continued its intention of reducing its reliance on inter-group debt: the total long

term debt position at the year end stands at £1.3M (2013 £1.5M).

BUSINESS ENVIRONMENT

The company continues to operate in a competitive, niche market with operations in Europe, the

USA, Brazil, India and with an exciting new opportunity in China.

The directors are confident that the company will be able to take advantage of the opportunities in

these developing economies.

STRATEGY

The company have made the strategic decision to invest heavily in the design and development of

new, higher technology products. The first new orders placed for the new machines are close to

being signed off by the customers.

Developing these machines opens up a new market to Wickman and the directors believe the

initial investment the company has made will secure many future orders, some of which orders

have been secured since the year end.

The company continues to maintain a sustained research and development investment

programme as a means to bringing forward a range of new technologically advanced products and

services.

KEY PERFORMANCE INDICATORS

The directors monitor the progress of the company by reference to the following KPI's:

2014

2013

Return on capital employed

1.1%

4.9%

Current Ratio

1.62

1.64

Working Capital

2.4M

2.6M

Creditor Days

182

136

Debtor Days

219

209

Liquid/Acid Test

0.82

1.02

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business operations and the execution of the company's strategy both in

terms of short term budgets and long term goals are subject to a number of risks.

Some of the emerging markets in which the company operates are not as well developed as

modern economies. This can leave the company open to potential bad debts.

The directors of the company approach this by exercising due diligence, gaining a good working

relationship with customers and agreeing terms which reduces the risk of default.

ON BEHALF OF THE BOARD:

Mr C P Barrett - Director

29 September 2015

The directors present their report with the financial statements of the company for the year ended 31 December 2014.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2014.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2014 to

the date of this report.

Mr C P Barrett

Mr O A Coyne

Mr R Dodd

STRATEGIC REPORT

The strategic report as required by the Companies Act 2006 is included on pages 1 and 2 of the

financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing 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). 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;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	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 or she ought to have taken as a director in order to make himself or

herself aware of any relevant audit information and to establish that the company's auditors are

aware of that information.

ON BEHALF OF THE BOARD:

Mr C P Barrett - Director

29 September 2015

We have audited the financial statements of Wickman Coventry Limited for the year ended

31 December 2014 on pages eight to twenty three. 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 shareholders, 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 shareholders those matters we are required to state to them in an Auditors'

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 shareholders as a

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

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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 Strategic Report and the Report of the Directors 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 financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2014 and of its profit for the year 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 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.

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.

Mr Malcolm John Dewhurst FCCA (Senior Statutory Auditor)

for and on behalf of Gane Jackson Scott LLP

Chartered Certified Accountants

and Statutory Auditor

Second Floor, Kestrel House

Falconry Court

Bakers Lane

Epping

Essex

CM16 5BD

29 September 2015

TURNOVER

2

4,433,086

6,834,718

Cost of sales

2,811,352

4,998,023

GROSS PROFIT

1,621,734

1,836,695

Administrative expenses

1,575,071

1,725,203

OPERATING PROFIT

4

46,663

111,492

Interest receivable and similar income

1,769

-

48,432

111,492

Interest payable and similar charges

5

12,591

11,584

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION

35,841

99,908

Tax on profit on ordinary activities

6

18,798

(97,383

)

PROFIT FOR THE FINANCIAL YEAR

17,043

197,291

CONTINUING OPERATIONS

None of the company's activities were acquired or discontinued during the current year or previous

year.

TOTAL RECOGNISED GAINS AND LOSSES

The company has no recognised gains or losses other than the profits for the current year or

previous year.

FIXED ASSETS

Intangible assets

7

70,364

103,954

Tangible assets

8

305,929

328,424

Investments

9

106,878

14,952

483,171

447,330

CURRENT ASSETS

Stocks

10

3,054,175

2,374,174

Debtors

11

3,014,765

4,018,789

Cash at bank and in hand

107,142

18,655

6,176,082

6,411,618

CREDITORS

Amounts falling due within one year

12

3,797,358

3,812,323

NET CURRENT ASSETS

2,378,724

2,599,295

TOTAL ASSETS LESS CURRENT LIABILITIES

2,861,895

3,046,625

CREDITORS

Amounts falling due after more than one year

13

(1,328,352

)

(1,526,568

)

PROVISIONS FOR LIABILITIES

17

(10,800

)

(14,357

)

NET ASSETS

1,522,743

1,505,700

CAPITAL AND RESERVES

Called up share capital

18

1,173,410

1,173,410

Share premium

19

106,521

106,521

Profit and loss account

19

242,812

225,769

SHAREHOLDERS' FUNDS

25

1,522,743

1,505,700

The financial statements were approved by the Board of Directors on 29 September 2015 and were signed on its behalf by:

Mr C P Barrett - Director

Net cash inflow

from operating activities

26

511,201

48,026

Returns on investments and

servicing of finance

27

(10,822

)

(11,584

)

Taxation

97,034

(45,136

)

Capital expenditure

and financial investment

27

(94,294

)

(15,706

)

503,119

(24,400

)

Financing

27

(198,216

)

(228,393

)

Increase/(decrease) in cash in the period

304,903

(252,793

)

Reconciliation of net cash flow

to movement in net debt

28

Increase/(decrease)

in cash in the period

304,903

(252,793

)

Cash outflow

from decrease in debt and lease financing

198,216

240,609

Change in net debt resulting

from cash flows

503,119

(12,184

)

Movement in net debt in the period

503,119

(12,184

)

Net debt at 1 January

(1,747,197

)

(1,735,013

)

Net debt at 31 December

(1,244,078

)

(1,747,197

)

1.	ACCOUNTING POLICIES

ACCOUNTING CONVENTION

The financial statements have been prepared under the historical cost convention and are in

accordance with applicable accounting standards.

TURNOVER

Turnover represents revenue recognised, excluding VAT and trade discounts. Revenue is

recognised to the extent that there is a right to consideration in exchange for performance of

the contractual obligations. Where payments are received from customers in advance of

contractual performance, then these amounts are recorded as payments on account and

included within creditors due within one year.

GOODWILL

Goodwill, being the amount paid in connection with the acquisition of a business in 1996, is being amortised evenly over its estimated useful life of twenty years.

PATENTS

Patents are valued at cost less accumulated amortisation. Amortisation is calculated to write

off cost in equal annual instalments from the patent filing date to its expiry date.

TANGIBLE FIXED ASSETS

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

Freehold property

-

2.5% on cost

Plant and machinery

-

10% on cost

Fixtures and fittings

-

10% and 20% on reducing balance

Motor vehicles

-

25% on cost

STOCKS

Stock is valued at the lower of cost and net realisable value. Cost of spares stock is

determined on a first in first out basis. Cost of machine stock includes purchase cost

together with all direct materials and direct labour costs. Provision is made for slow moving,

obsolete or damaged stock where the net realisable value is less than cost. Net realisable

value represents estimated selling price less costs to complete and sell.

DEFERRED TAX

The charge for taxation takes into account taxation deferred as a result of timing differences

between the treatment of certain items for taxation and accounting purposes. In general,

deferred taxation is recognised in respect of all timing differences that have originated but

not reversed at the balance sheet date. However, deferred tax assets are only recognised to

the extent that the directors consider it more likely than not that there will be suitable taxable

profits from which the future reversal of the underlying timing differences can be deducted.

Deferred taxation is measured on a non-discounted basis at the tax rates that are expected

to apply in the periods in which the timing differences reverse, based on tax rates and the

law enacted or substantively enacted at the balance sheet date.

FOREIGN CURRENCIES

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

exchange ruling at the balance sheet 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

Assets purchased under hire purchase contracts and finance leases are capitalised as

tangible fixed assets. Assets acquired under finance leases are depreciated over the shorter

of the lease term and their useful lives. Assets acquired under hire purchase contracts are

depreciated over their useful lives. Finance leases are those where substantially all of the

benefits and risks of ownership are assumed by the company. Obligations under such

agreements are included in creditors net of the finance charge allocated to future periods.

The finance element of the rental payment is charged to the profit and loss account so as to

produce a constant periodic rate of charge on the net obligations outstanding in each period.

Rentals payable under operating leases where substantially all of the benefits and risks of

ownership remain with the lessor are charged to profit and loss account as incurred.

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 the profit and loss account in the period to which

they relate.

INVESTMENTS

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

2.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the

company.

An analysis of turnover by class of business is given below:

2014

2013

£

£

Sales of spares

1,696,073

1,578,384

Sales of machines

2,176,720

4,146,556

Miscellaneous sales

560,293

1,109,778

4,433,086

6,834,718

An analysis of turnover by geographical market is given below:

2014

2013

£

£

United Kingdom

1,558,328

4,159,401

Europe

1,065,499

1,044,674

Rest of the world

1,809,259

1,630,643

4,433,086

6,834,718

3.	STAFF COSTS

2014

2013

£

£

Wages and salaries

1,287,840

1,310,200

Social security costs

120,654

119,218

Other pension costs

28,717

25,892

1,437,211

1,455,310

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

2014

2013

Production staff

22

22

Administrative staff

27

27

49

49

4.	OPERATING PROFIT

The operating profit is stated after charging:

2014

2013

£

£

Other operating leases

151,411

122,131

Depreciation - owned assets

24,863

24,517

Goodwill amortisation

29,250

29,250

Patents and licences amortisation

4,340

4,340

Auditors' remuneration

7,495

8,900

Foreign exchange differences

3,543

7,138

Directors' remuneration

101,174

90,875

Directors' pension contributions to money purchase schemes

4,550

4,550

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

2

5.

INTEREST PAYABLE AND SIMILAR CHARGES

2014

2013

£

£

Bank loan interest

12,591

8,392

Hire purchase

-

3,192

12,591

11,584

6.

TAXATION

Analysis of the tax charge/(credit)

The tax charge/(credit) on the profit on ordinary activities for the year was as follows:

2014

2013

£

£

Current tax:

UK corporation tax

22,355

(26,016

)

Corporation tax re previous ye

ar

-

(71,018

)

Total current tax

22,355

(97,034

)

Deferred tax

(3,557

)

(349

)

Tax on profit on ordinary activities

18,798

(97,383

)

FACTORS AFFECTING THE TAX CHARGE/(CREDIT)

The tax assessed for the year is higher than the standard rate of corporation tax in the UK.

The difference is explained below:

2014

2013

£

£

Profit on ordinary activities before tax

35,841

99,908

Profit on ordinary activities

multiplied by the standard rate of corporation tax

in the UK of 21.332% (2013 - 0%)

7,646

-

Effects of:

Expenses not deductible for tax purposes

3,593

-

Depreciation in excess of capital allowances

11,116

-

Adjustments to tax charge in respect of previous periods

-

(71,018

)

Research & development enhanced expenditure

-

(26,016

)

Current tax charge/(credit)

22,355

(97,034

)

7.	INTANGIBLE FIXED ASSETS

Patents

and

Goodwill

licences

Totals

£

£

£

COST

At 1 January 2014

and 31 December 2014

585,000

86,800

671,800

AMORTISATION

At 1 January 2014

502,866

64,980

567,846

Amortisation for year

29,250

4,340

33,590

At 31 December 2014

532,116

69,320

601,436

NET BOOK VALUE

At 31 December 2014

52,884

17,480

70,364

At 31 December 2013

82,134

21,820

103,954

8.	TANGIBLE FIXED ASSETS

Fixtures

Freehold

Plant and

and

Motor

property

machinery

fittings

vehicles

Totals

£

£

£

£

£

COST

At 1 January 2014

295,839

125,860

204,007

19,302

645,008

Additions

-

-

2,368

-

2,368

At 31 December 2014

295,839

125,860

206,375

19,302

647,376

DEPRECIATION

At 1 January 2014

52,414

74,445

171,237

18,488

316,584

Charge for year

7,396

6,283

10,759

425

24,863

At 31 December 2014

59,810

80,728

181,996

18,913

341,447

NET BOOK VALUE

At 31 December 2014

236,029

45,132

24,379

389

305,929

At 31 December 2013

243,425

51,415

32,770

814

328,424