Edwards Coaches Limited - Limited company accounts 17.3

REGISTERED NUMBER: 04045308 (England and Wales)

EDWARDS COACHES LIMITED

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 March 2017

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

6

Other Comprehensive Income

7

Statement of Financial Position

8

Statement of Changes in Equity

9

Statement of Cash Flows

10

Notes to the Statement of Cash Flows

11

Notes to the Financial Statements

12

DIRECTORS:

Mr M C Edwards

Mr J M Edwards

Mr S M Edwards

Miss K L Edwards

Mrs J R Thomas

SECRETARY:

Mr J M Edwards

REGISTERED OFFICE:

Newtown Industrial Estate

Llantwit Fardre

Pontypridd

Rhondda Cynon Taff

CF38 2EE

REGISTERED NUMBER:

04045308 (England and Wales)

AUDITORS:

O'Brien & Partners

Chartered Accountants

& Statutory Auditors

Highdale House

7 Centre Court

Treforest Industrial Estate

Pontypridd

Rhondda Cynon Taff

CF37 5YR

The directors present their strategic report for the year ended 31 March 2017.

REVIEW OF BUSINESS

The company continues to make reasonable profits, although the past year has been one of investment, which has impacted

profitability. This investment has been across a number of areas including new vehicles to support existing contracts, investment into

new depots in Pembrokeshire and Bristol, the latter being to support a significant expansion of business with the company's largest

customer, National Express, and finally investment into a new site for a new head office in Llantrisant. In the short term these will

impact profitability but longer term will provide a solid, stable base for the business.

The company has several distinct income streams all however derived from the use of its bus and coach fleet. These include the

provision of services to National Express as its exclusive operator for travel in/out of Wales, coach holidays and school bus, private

hire and local bus services.

Essential KPI's are summarised below:

2017

2016

Change

Turnover

£'000

36,841

35,264

1,577

Gross Profit

£'000

7,891

9,002

(1,111

)

Gross Profit %

21.4%

25.5%

(4.1%

)

Net profit

£'000

783

3,107

(2,324

)

Net profit %

2.1%

8.8%

(6.7%

)

PRINCIPAL RISKS AND UNCERTAINTIES

Most of the company's revenue is contractually based however the coach holiday business is subject to shorter term influences.

These include competitive pressures from other coach holiday operators, other holiday types and availability and pricing of hotel

accommodation. Customer demand for particular destinations has particularly been driven by exchange rate movements (influencing

the cost to the customer) and terrorist activity.

The company manages this risk by providing value for money services of a high quality to retain customer loyalty. The company

avoids wherever possible any significant non cancellable forward contracts for accommodation and transport services in order to

have continuous flexibility in its operations.

The company's principal operating costs are those of people, fuel and hotel accommodation. Competition within the transport sector,

particularly for drivers and engineers, is high, which has an impact on remuneration levels to attract and retain quality staff.

The cost of fuel is clearly driven by the global oil price. A large proportion of the company's fuel usage is hedged either through

customer contracts or directly through the purchase of forward fuel contracts.

The company purchases overseas hotel accommodation primarily in Euros and is therefore subject to foreign exchange movement

risks. The company places forward contracts to manage this risk.

ON BEHALF OF THE BOARD:

Mr J M Edwards - Director

29 September 2017

The directors present their report with the financial statements of the company for the year ended 31 March 2017.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of tour operator and coach hire.

DIVIDENDS

The total distribution of dividends for the year ended 31 March 2017 will be £ 204,541 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2016 to the date of this report.

Mr M C Edwards

Mr J M Edwards

Mr S M Edwards

Miss K L Edwards

Mrs J R Thomas

FINANCIAL INSTRUMENTS

Various financial instruments (e.g. trade debtors, trade creditors, accruals and prepayments) arise directly from the company's

operations.

Credit risk

The company monitors credit risk closely and considers that its current policies of credit checks meets its objectives of managing

exposure to credit risk.

The company has no significant concentrations of credit risk. Amounts shown in the balance sheet represent the maximum credit risk

exposure in the event other parties fail to perform their obligations under financial instruments.

Currency risk

The company introduced a euro hedging facility during the prior year which enables the purchasing of euros at a set rate if required.

Use of this facility and close monitoring of exchange rate trends and advance purchasing of euros help to minimise the risk of

adverse exchange rate fluctuations.

POLITICAL DONATIONS AND EXPENDITURE

During the period the company made political donations totalling £16,417 and other general charitable donations of £1,806. Total

donations during the period were £18,223.

DIRECTORS' LIABILITY INSURANCE

A liability insurance was in force during the financial year for the benefit of the directors of the company.

DISABLED EMPLOYEES

The company gives full consideration to applications for employment from disabled persons where the requirements of the job can be

adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the company's policy

wherever practicable to provide continuing employment under normal terms and conditions and to provide training and career

development and promotion to disabled employees wherever appropriate.

EMPLOYEE INVOLVEMENT

During the year, the policy of providing employees with information about the company has been continued through internal media

methods in which employees have also been encouraged to present their suggestions and views on the company's performance.

Regular meetings are held between local management and employees to allow a free flow of information and ideas.

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). 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.

AUDITORS

The auditors, O'Brien & Partners, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr J M Edwards - Director

29 September 2017

We have audited the financial statements of Edwards Coaches Limited for the year ended 31 March 2017 on pages six to twenty one.

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), including Financial Reporting Standard 102 'The Financial

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

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.

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 March 2017 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, based on the work undertaken in the course of our 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

has been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the company

and its environment, we have not identified any material misstatements in the Strategic Report or the Report of the Directors.

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.

Lewis Van Emden (Senior Statutory Auditor)

for and on behalf of O'Brien & Partners

Chartered Accountants

& Statutory Auditors

Highdale House

7 Centre Court

Treforest Industrial Estate

Pontypridd

Rhondda Cynon Taff

CF37 5YR

29 September 2017

TURNOVER

3

36,841,492

35,263,525

Cost of sales

(28,950,029

)

(26,261,336

)

GROSS PROFIT

7,891,463

9,002,189

Administrative expenses

(6,920,628

)

(5,712,168

)

970,835

3,290,021

Other operating income

65,296

70,290

OPERATING PROFIT

5

1,036,131

3,360,311

Interest receivable and similar income

54,735

114,675

1,090,866

3,474,986

Interest payable and similar expenses

6

(307,549

)

(367,934

)

PROFIT BEFORE TAXATION

783,317

3,107,052

Tax on profit

7

(168,348

)

(683,233

)

PROFIT FOR THE FINANCIAL YEAR

614,969

2,423,819

PROFIT FOR THE YEAR

614,969

2,423,819

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

614,969

2,423,819

FIXED ASSETS

Intangible assets

9

433,470

577,962

Tangible assets

10

15,373,156

15,274,338

15,806,626

15,852,300

CURRENT ASSETS

Stocks

11

201,010

233,728

Debtors

12

5,001,628

3,618,229

Cash at bank and in hand

2,297,107

3,560,570

7,499,745

7,412,527

CREDITORS

Amounts falling due within one year

13

(7,841,206

)

(7,413,946

)

NET CURRENT LIABILITIES

(341,461

)

(1,419

)

TOTAL ASSETS LESS CURRENT LIABILITIES

15,465,165

15,850,881

CREDITORS

Amounts falling due after more than one year

14

(4,504,722

)

(5,293,875

)

PROVISIONS FOR LIABILITIES

18

(1,067,228

)

(1,074,219

)

NET ASSETS

9,893,215

9,482,787

CAPITAL AND RESERVES

Called up share capital

19

41,602

41,602

Capital redemption reserve

20

1,400,000

1,400,000

Retained earnings

20

8,451,613

8,041,185

SHAREHOLDERS' FUNDS

24

9,893,215

9,482,787

The financial statements were approved by the Board of Directors on 29 September 2017 and were signed on its behalf by:

Mr J M Edwards - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 April 2015

791,602

6,559,292

650,000

8,000,894

Changes in equity

Issue of share capital

(750,000

)

-

-

(750,000

)

Dividends

-

(191,926

)

-

(191,926

)

Total comprehensive income

-

1,673,819

750,000

2,423,819

Balance at 31 March 2016

41,602

8,041,185

1,400,000

9,482,787

Changes in equity

Dividends

-

(204,541

)

-

(204,541

)

Total comprehensive income

-

614,969

-

614,969

Balance at 31 March 2017

41,602

8,451,613

1,400,000

9,893,215

Cash flows from operating activities

Cash generated from operations

1

2,002,742

6,141,416

Interest paid

(6,642

)

(833

)

Interest element of hire purchase payments paid

(300,907

)

(367,101

)

Tax paid

(452,131

)

(396,349

)

Net cash from operating activities

1,243,062

5,377,133

Cash flows from investing activities

Purchase of tangible fixed assets

(2,179,947

)

(358,341

)

Sale of tangible fixed assets

174,850

726,365

Interest received

54,735

114,675

Net cash from investing activities

(1,950,362

)

482,699

Cash flows from financing activities

Loan repayments in year

(83,597

)

(8,864

)

Capital repayments in year

(476,882

)

(3,157,670

)

Amount introduced by directors

666,608

55,534

Amount withdrawn by directors

(457,751

)

(413,321

)

Share buyback

-

(750,000

)

Equity dividends paid

(204,541

)

(191,926

)

Net cash from financing activities

(556,163

)

(4,466,247

)

(Decrease)/increase in cash and cash equivalents

(1,263,463

)

1,393,585

Cash and cash equivalents at beginning of year

2

3,560,570

2,166,985

Cash and cash equivalents at end of year

2

2,297,107

3,560,570

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.3.17

31.3.16

£

£

Profit before taxation

783,317

3,107,052

Depreciation charges

1,951,821

1,912,704

Loss on disposal of fixed assets

98,951

84,973

Finance costs

307,549

367,934

Finance income

(54,735

)

(114,675

)

3,086,903

5,357,988

Decrease/(increase) in stocks

32,718

(108,452

)

(Increase)/decrease in trade and other debtors

(1,510,509

)

890,242

Increase in trade and other creditors

393,630

1,638

Cash generated from operations

2,002,742

6,141,416

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these

Statement of Financial Position amounts:

Year ended 31 March 2017

31.3.17

1.4.16

£

£

Cash and cash equivalents

2,297,107

3,560,570

Year ended 31 March 2016

31.3.16

1.4.15

£

£

Cash and cash equivalents

3,560,570

2,166,985

1.	STATUTORY INFORMATION

Edwards Coaches Limited is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in

these financial statements are rounded to the nearest £.

Within the year, the directors updated their accounting estimate of the useful economic life of tangible fixed assets and now

recognise a residual value for motor vehicles. The cost less residual value is depreciated at 10% on a straight line basis. The

effect of this change was an increase in depreciation charge for the year of £80,501.

Significant judgements and estimates

The application of the company's accounting policies, the management is required to make judgements, estimates and

assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates

and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual

results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the

revision and future periods if the revision affects both current and future periods.

Turnover

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

tax and other sales taxes.

The VAT exclusive turnover shown in the profit and loss account represents:

1. Holidays - amounts receivable at the completion of a tour or trip.

2. Coach hire, private hire contracts and school contracts - goods and services invoiced during the year.

3. Local bus services - cash received during the year.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2008, was previously being amortised

over an estimated useful life of twenty years. During the year ended 31 March 2016 the directors have revised their

estimation of the remaining useful life to 5 years, with the remaining book value being amortised evenly over this period.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any

accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Leasehold property

-

2% on cost

Plant and machinery

-

25% on reducing balance

Motor vehicles

-

25% on reducing balance, 10% on cost and 10% on reducing balance

Equipment

-

25% on reducing balance

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and

any impairment losses.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying

value of the asset, and is credited or charged to profit and loss.

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 year 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 that have originated but not reversed at the statement of

financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in

which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted

or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire

purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over

their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the

future payments is treated as a liability.

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.

Employee benefits

The cost of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be

recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate

the employment of an employee or to provide termination benefits.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either

financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual

interest in the assets of the company after deducting all of its liabilities.

Investments

All investments are initially recorded at cost, being the fair value of the consideration given and including acquisition costs

associated with the investment. All purchases and sales of investments are recognised using trade date accounting.

After initial recognition, investments, which are classified as held for trading and available-for-sale, are measured at fair

value. Gains or losses on investments held for trading are recognised in the profit and loss account. Gains or losses on

available-for-sale investments are recognised as a separate component of equity until the investment is disposed of through

the profit and loss account.

Investments classified as held-to-maturity are subsequently measured at amortised cost using the effective interest method.

Gains and losses are recognised in the profit and loss account when the investment is derecognised, or impaired, as well as

through the amortisation process.

Investments are fair valued using quoted market prices, independent appraisals, discounted cash flow analysis ot other

appropriate valuation models at the balance sheet date.

Interest bearing loans and borrowings

All loans and borrowings are recognised initially at cost, which is the fair value of the consideration received, net of issue

costs associated with the borrowing.

After initial recognition, interest-bearing loans and borrowings are measured at amortised cost using the effective interest

method. Gains or losses are recognised in the profit and loss account when liabilities are derecognised or impaired, as well as

through the amortisation process.

Derivative financial instruments

The company introduced a euro hedging facility during the year which enables the purchasing of euros at a set rate if

required

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate

resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going

concern basis of accounting in preparing the financial statements.

3.

TURNOVER

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

An analysis of turnover by geographical market is given below:

31.3.17

31.3.16

£

£

United Kingdom

36,841,492

35,263,525

36,841,492

35,263,525

4.	EMPLOYEES AND DIRECTORS

31.3.17

31.3.16

£

£

Wages and salaries

10,600,278

9,103,494

Social security costs

900,136

850,961

Other pension costs

78,731

62,375

11,579,145

10,016,830