Hingley & Callow Oils Limited - Limited company accounts 16.3

REGISTERED NUMBER: 00955492 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30TH JUNE 2017

FOR

HINGLEY & CALLOW OILS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Statement of 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:

J D Callow

Mrs A M Callow

Mrs H L Needham

J Callow

SECRETARY:

J D Callow

REGISTERED OFFICE:

Severn House

Sandy Lane Industrial Estate

Stourport-on-Severn

Worcestershire

DY13 9QB

REGISTERED NUMBER:

00955492 (England and Wales)

AUDITORS:

French Ludlam & Co Limited

Statutory Auditors and Accountants

Mountfield House

661 High Street

Kingswinford

West Midlands

DY6 8AL

The directors present their strategic report for the year ended 30th June 2017.

PRINCIPAL ACTIVITIES AND REVIEW OF BUSINESS

The principal activity of the company is the distribution of domestic, agricultural and industrial fuels. However, we also

sell petrol, oils and associated products from petrol filling stations, and have a portfolio of investment properties.

Performance

The key financial performance indicators are as follows:

2017

2016

£

£

Turnover

56,186,766

65,711,108

Gross profit

6,234,846

7,347,507

Operating profit

1,073,131

1,188,279

Gross profit %

11.1%

11.2%

Average number of employees

73

76

Turnover is down 14.5%, mainly as a consequence of falling sales prices within the Petrochemical industry. This has

also affected operating profit, which has decreased by 9.7%. Domestic fuel requirements have remained low due to

another mild winter, but higher margins in the year have resulted in the gross profit percentage being consistent at

11.1%. The company continues to be competitive within the market sector and retains a very good customer base.

The portfolio of land and buildings held by the company continues to provide a good return, with net rental income

increasing by 84.1% to £189,163 as a result of ongoing development work.

Although it has been another challenging year , the directors are pleased with the profit levels achieved.The balance

sheet is strong, with good liquidity, and the company maintains an excellent relationship with its key suppliers.

Going forward there are no plans to acquire or dispose of any operations. The directors long term strategy is to expand

the company's market share and improve efficiency, to maximise future profitability and ensure that the company is able

to respond quickly to increases (and decreases) in the demand for fuel.

PRINCIPAL RISKS AND UNCERTAINTIES

The company is exposed to interest rate risk on any borrowings. However, overdraft use is minimal and therefore this

risk continues to be low. The bank is currently satisfied with the company's financial performance and the directors do

not think there is any risk of facilities being withdrawn.

Fuel prices are monitored daily to minimise price risk and ensure the company remains competitive.

Credit risk is managed by strict credit control and thorough credit checks on new customers. Customers are encouraged

to pay a regular amounts by direct debit, to spread the cost of their fuel bills. This means that for most of the year many

of the sales ledger accounts are in credit.

All sales are to UK customers and all suppliers are UK based. There are therefore no risks relating to exchange rate

movements.

KEY PERFORMANCE INDICATORS (KPI'S)

The company is result orientated. Actual performance is measured against budgeted performance taking into account the

impact of world oil prices. The main KPI's used by the company to measure performance are gross margin, earnings

before interest and tax, evaluation of working capital, capacity.litres sold and cashflow.

ENVIRONMENT

The company continually seeks to minimise the environmental impact of its operations by complying with all relevant

legislation and being aware of its environmental responsibilities.

EMPLOYEES

The directors recognise the importance of investing in the training and development of employees. Retention of key

staff is also an important factor in the ongoing success of the company.

ON BEHALF OF THE BOARD:

J D Callow - Secretary

19th January 2018

The directors present their report with the financial statements of the company for the year ended 30th June 2017.

DIVIDENDS

No dividends will be distributed for the year ended 30th June 2017.

DIRECTORS

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

J D Callow

Mrs A M Callow

Mrs H L Needham

J Callow

DISCLOSURE IN THE STRATEGIC REPORT

The business review, financial key performance indicators and financial management risk objectives are included in the

Strategic Report.

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), including Financial Reporting Standard 102 'The

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

J D Callow - Secretary

19th January 2018

Opinion

We have audited the financial statements of Hingley & Callow Oils Limited (the 'company') for the year ended

30th June 2017 on pages seven to twenty three. The financial reporting framework that has been applied in their

preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102

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

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30th June 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard,

and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we

conclude that there is a material misstatement of this other information, we are required to report that fact. We have

nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the 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

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit,

we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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.

Responsibilities of directors

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, and for such

internal control as the directors determine necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a

going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of

accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic

alternative but to do so.

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Stephen B Ludlam (Senior Statutory Auditor)

for and on behalf of French Ludlam & Co Limited

22nd January 2018

TURNOVER

3

56,186,766

65,711,108

Cost of sales

49,951,920

58,363,601

GROSS PROFIT

6,234,846

7,347,507

Distribution costs

1,398,073

1,437,931

Administrative expenses

3,987,416

4,848,509

5,385,489

6,286,440

849,357

1,061,067

Other operating income

253,774

127,212

OPERATING PROFIT

5

1,103,131

1,188,279

Profit on sale of investments

6

20,465

1,907

1,123,596

1,190,186

Interest receivable and similar income

47,474

39,063

1,171,070

1,229,249

Value adjustments in respect

of investment properties

7

(27,007

)

(324,364

)

1,198,077

1,553,613

Interest payable and similar expenses

8

3,223

16,660

PROFIT BEFORE TAXATION

1,194,854

1,536,953

Tax on profit

9

189,221

298,797

PROFIT FOR THE FINANCIAL YEAR

1,005,633

1,238,156

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,005,633

1,238,156

FIXED ASSETS

Intangible assets

10

40,838

64,175

Tangible assets

11

4,250,599

4,375,355

Investment property

12

6,478,180

6,370,680

10,769,617

10,810,210

CURRENT ASSETS

Stocks

13

1,113,758

1,047,687

Debtors

14

3,299,780

4,143,226

Investments

15

353,784

307,397

Cash at bank and in hand

8,875,688

8,856,410

13,643,010

14,354,720

CREDITORS

Amounts falling due within one year

16

6,185,953

7,882,393

NET CURRENT ASSETS

7,457,057

6,472,327

TOTAL ASSETS LESS CURRENT LIABILITIES

18,226,674

17,282,537

PROVISIONS FOR LIABILITIES

20

303,892

365,388

NET ASSETS

17,922,782

16,917,149

CAPITAL AND RESERVES

Called up share capital

21

2,000

2,000

Non distributable reserves

22

2,631,698

2,540,776

Retained earnings

22

15,289,084

14,374,373

SHAREHOLDERS' FUNDS

17,922,782

16,917,149

The financial statements were approved by the Board of Directors on 19th January 2018 and were signed on its behalf by:

Mrs A M Callow - Director

Called up

Non

share

Retained

distributable

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1st July 2015

2,000

13,430,145

2,246,848

15,678,993

Changes in equity

Total comprehensive income

-

944,228

293,928

1,238,156

Balance at 30th June 2016

2,000

14,374,373

2,540,776

16,917,149

Changes in equity

Total comprehensive income

-

914,711

90,922

1,005,633

Balance at 30th June 2017

2,000

15,289,084

2,631,698

17,922,782

Cash flows from operating activities

Cash generated from operations

1

1,906,547

3,115,970

Interest paid

(9,198

)

(13,272

)

Tax paid

(220,063

)

(272,084

)

Net cash from operating activities

1,677,286

2,830,614

Cash flows from investing activities

Purchase of tangible fixed assets

(606,384

)

(782,983

)

Purchase of investment property

(80,493

)

(98,160

)

Sale of tangible fixed assets

30,043

71,171

Purchase of current asset investments

(175,691

)

(55,476

)

Sale of current asset investments

164,959

49,228

Interest received

47,474

32,138

Dividends received

9,380

6,925

Net cash from investing activities

(610,712

)

(777,157

)

Cash flows from financing activities

Amount introduced by directors

1,506,058

400,687

Amount withdrawn by directors

(530,525

)

(1,247,358

)

Net cash from financing activities

975,533

(846,671

)

Increase in cash and cash equivalents

2,042,107

1,206,786

Cash and cash equivalents at beginning of year

2

6,833,581

5,626,795

Cash and cash equivalents at end of year

2

8,875,688

6,833,581

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

2017

2016

£

£

Profit before taxation

1,194,854

1,536,953

Depreciation charges

739,394

727,136

Profit on disposal of fixed assets

(14,959

)

(46,011

)

Fair value adjustments

(24,571

)

(13,629

)

Profit on sale of investments

(20,465

)

(1,907

)

Fairvalue adjustment investment property

(27,007

)

(324,364

)

Finance costs

3,223

16,660

Finance income

(47,474

)

(39,063

)

1,802,995

1,855,775

(Increase)/decrease in stocks

(66,071

)

27,995

Decrease in trade and other debtors

449,228

450,808

(Decrease)/increase in trade and other creditors

(279,605

)

781,392

Cash generated from operations

1,906,547

3,115,970

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 30th June 2017

30.6.17

1.7.16

£

£

Cash and cash equivalents

8,875,688

8,856,410

Bank overdrafts

-

(2,022,829

)

8,875,688

6,833,581

Year ended 30th June 2016

30.6.16

1.7.15

£

£

Cash and cash equivalents

8,856,410

7,086,135

Bank overdrafts

(2,022,829

)

(1,459,340

)

6,833,581

5,626,795

1.	STATUTORY INFORMATION

Hingley & Callow Oils 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.

The presentation currency of the financial statements is the Pound Sterling (£).

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 as modified by the revaluation of certain assets.

Significant judgements and estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors,

including expectations of future events, that are believed to be reasonable under the circumstances.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will,

by definition, seldom equal the related actual results. In the opinion of the directors there are no estimates or

assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and

liabilities within the next financial year.

Turnover

Turnover is measured at the fair value of the consideration received or receivable in respect of goods and

services supplied, exclusive of value added tax and trade discounts.

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.

Single Farm Payment entitlements are being amortised evenly over their estimated useful life of nil years.

Tangible fixed assets

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

Short leasehold

-

10% on cost

Plant and machinery

-

10% on cost and 10% on reducing balance

Motor vehicles

-

33% on reducing balance

No depreciation has been charged on freehold property as the estimated remaining useful economic life of the

properties exceeds 50 years and a continuous policy of renewal and maintenance is undertaken. A full review of

impairment of freehold property has been completed at the end of the accounting period with no adjustments

being considered necessary to the value at which these properties are shown in the financial statements.

Impairment of assets

At each reporting date assets are reviewed to determine whether there is any indication that those assets have

suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any

affected asset is estimated and compared with its carrying amount. If the estimated recoverable amount is lower,

the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is immediately

recognise in profit or loss.

If an impairment loss subsequently reverses, the carry amount af the asset is increased to the revised estimate of

its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss

been recognised for the asst in prior years. A reversal in an impairment loss is recognised immediately in profit

or loss.

Investment property

Investment properties for which fair value can be measured reliably without undue cost or effort are measured at

fair value at each reporting date with changed in fair value being recognised in profit or loss.

Stocks

Stocks are valued at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first

in, first out basis.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is

reduced to its selling price less costs to sell. The impairment loss is recognised immediately in profit or loss.

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured

initially at fair value, net of transaction costs and are measured subsequently at amortised cost using the effective

interest method, less any impairment.

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice

of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than 3 months

from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of

change in value.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are

measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using

the effective interest method.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive

Income, 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.

Current and deferred taxation

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.

Pension costs and other post-retirement benefits

The company operates two pension schemes, a self administered scheme (assets held in independently

administered funds) for the directors, and an automatic enrolment scheme for the employees. Contributions

payable for the year are charged in the profit and loss account.

Provisions for liabilities

Provisions are recognised where an event has taken place that gives the company a legal or constructive

obligation that probably requires settlement by transfer of economic benefit, and a reliable estimate can be made

of the amount of the obligation.

Provisions are charged as an expense to profit or loss in the year that the company becomes aware of the

obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle

the obligation, taking into account relevant risks and uncertainties.

Investments

Investments comprise investments in quoted shares which are measured at fair value. Changes in fair value are

recognised in profit or loss.

Goodwill and single farm payment entitlements

Goodwill, being the amount paid in connection with the acquisition of two businesses, is being amortised evenly

over its estimated useful economic life, with impairment adjustment where appropriate. If a reliable estimate

cannot be made, the useful life of goodwill is presumed to be 5 years.

The remaining estimated useful economic lives of the two business acquired is less than 5 years and therefore

the directors consider that it is reasonable and appropriate to continue the policy to depreciate the goodwill over

its remaining useful life. Provision is made for any impairment.

Operating leases

Gross earnings from operating leases are recognised in the profit and loss account on a straight line basis over

the period of each lease. Any direct costs in arranging the leases are charged to the profit and loss account in the

period in which they are incurred.

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the

period of the lease.

3.

TURNOVER

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

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

2017

2016

£

£

Fuel distribution division

49,638,810

59,823,483

Petrol filling stations

6,538,016

5,878,812

Farming

9,940

8,813

56,186,766

65,711,108

4.	EMPLOYEES AND DIRECTORS

2017

2016

£

£

Wages and salaries

2,708,067

3,060,274

Social security costs

288,590

331,824

Other pension costs

44,286

184,600

3,040,943

3,576,698

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

2017

2016

Administration

17

18

Sales and distribution

53

54

Works

3

4

73

76

The company operates two pension schemes, a self administered scheme for the directors and an automatic

enrolment scheme for the benefit of the employees. The assets of the schemes are administered by independent

pension providers. Pension payments recognised as an expense during the year amount to £44,286 (2016:

£184,600).

2017

2016

£

£

Directors' remuneration

959,548

1,269,782

Directors' pension contributions to money purchase schemes

20,000

160,000

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

Money purchase schemes

2

2

Information regarding the highest paid director is as follows:

2017

2016

£

£

Emoluments etc

378,199

533,275

Pension contributions to money purchase schemes

10,000

80,000