Ken Mallinson & Sons Limited - Limited company accounts 18.1.1

REGISTERED NUMBER: 03230756 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 August 2017

for

Ken Mallinson & Sons Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Independent Auditors' Report

4

to

5

Statement of Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Cash Flow Statement

9

Notes to the Cash Flow Statement

10

Notes to the Financial Statements

11

to

17

DIRECTORS:

Mr S R Mallinson

Mrs R Mallinson

SECRETARY:

Mr S R Mallinson

REGISTERED OFFICE:

Claycliffe Road

Barugh Green

Barnsley

South Yorkshire

S75 1LR

REGISTERED NUMBER:

03230756 (England and Wales)

AUDITORS:

Harris & Co Limited

Chartered Accountants & Statutory Auditor

Marland House

13 Huddersfield Road

Barnsley

South Yorkshire

S70 2LW

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

REVIEW OF BUSINESS

The directors aim to present a balanced and comprehensive review of the development and performance of

our business during the year and its position at the year-end. Our review is consistent with the size and

non-complex nature of our business and is written in the context of the risks and uncertainties we face.

The company continues to provide a good quality haulage service to its customers. Turnover has increased by

3.1% and the gross profit margin has remained consistent at 15.8% (2016: 15.9%). Consequently overall profit

before tax increased to £147,015 (2016: £130,503). After taxation and dividends, £107,410 has been retained

to be added to reserves (2016: £29,689). Particulars of dividends paid and proposed are detailed in the notes

to the financial statements.

As for many businesses of our size, the business environment in which we operate continues to be

challenging and the haulage services industry is increasingly competitive. With these risks and uncertainties in

mind we are aware that plans for future development of the business may be subject to unforeseen future

events outside of our control. However the company remains competitive, is well managed and well placed to

respond to future developments.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's operations expose it to a variety of financial risks that include the effects of price risk, credit

risk, liquidity risk and interest rate risk. The company does not use derivative financial instruments to manage

interest rate costs and as such, no hedge accounting is applied.

The board of directors is responsible for monitoring financial risk and for deciding where it would be

appropriate to use financial instruments to manage this risk.

Price Risk - The company has no exposure to equity securities price risk as it holds no listed or other equity

investments.

Credit Risk - The company has implemented policies that require appropriate credit checks on potential

customers before credit sales are made.

Liquidity Risk - The company actively maintains a mixture of long-term and short-term debt and overdraft

finance that is designed to ensure that the company has sufficient available funds for operations and planned

expansions.

Interest Rate Cashflow Risk - The company has interest bearing liabilities including both short-term and

long-term debt. The board of directors regularly review interest rates on this debt to manage interest rate risk.

The directors will revisit the appropriateness of this policy should the company's operations change in size or

nature.

KEY PERFORMANCE INDICATORS

We consider that our key financial performance indicators are those that communicate the financial

performance of the company, these being turnover, operating profit, profit before taxation and EBITDA.

ON BEHALF OF THE BOARD:

Mr S R Mallinson - Director

18 May 2018

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

PRINCIPAL ACTIVITY

The principal activity of the Company in the year under review was that of a haulage contractor.

DIVIDENDS

The total distribution of dividends for the year ended 31 August 2017 will be £ 60,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 September 2016 to the date

of this report.

Mr S R Mallinson

Mrs R Mallinson

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;

-	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, Harris & Co Limited, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

Mr S R Mallinson - Director

18 May 2018

Opinion

We have audited the financial statements of Ken Mallinson & Sons Limited (the 'Company') for the year ended

31 August 2017 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of

Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial

Statements, including 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, 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 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 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 31 August 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

Auditors' Report 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 three, 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 an Auditors' Report 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

Auditors' Report.

Paul Hinchliffe BA FCA (Senior Statutory Auditor)

for and on behalf of Harris & Co Limited

Chartered Accountants & Statutory Auditor

Marland House

13 Huddersfield Road

Barnsley

South Yorkshire

S70 2LW

18 May 2018

TURNOVER

4

9,537,580

9,249,373

Cost of sales

8,032,119

7,775,673

GROSS PROFIT

1,505,461

1,473,700

Administrative expenses

1,222,551

1,183,944

282,910

289,756

Other operating income

-

2,240

OPERATING PROFIT

6

282,910

291,996

Interest payable and similar expenses

7

135,895

161,493

PROFIT BEFORE TAXATION

147,015

130,503

Tax on profit

8

(20,395

)

12,814

PROFIT FOR THE FINANCIAL YEAR

167,410

117,689

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

167,410

117,689

FIXED ASSETS

Tangible assets

10

2,890,117

3,781,372

CURRENT ASSETS

Stocks

11

62,763

46,376

Debtors

12

2,397,235

2,121,322

Cash at bank and in hand

93,336

51,543

2,553,334

2,219,241

CREDITORS

Amounts falling due within one year

13

(3,687,829

)

(3,594,996

)

NET CURRENT LIABILITIES

(1,134,495

)

(1,375,755

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,755,622

2,405,617

CREDITORS

Amounts falling due after more than one year

14

(972,749

)

(1,606,571

)

PROVISIONS FOR LIABILITIES

19

(98,039

)

(221,622

)

NET ASSETS

684,834

577,424

CAPITAL AND RESERVES

Called up share capital

20

10,000

10,000

Retained earnings

21

674,834

567,424

SHAREHOLDERS' FUNDS

684,834

577,424

The financial statements were approved by the Board of Directors on 18 May 2018 and were signed on its behalf by:

Mr S R Mallinson - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 September 2015

10,000

537,735

547,735

Changes in equity

Dividends

-

(88,000

)

(88,000

)

Total comprehensive income

-

117,689

117,689

Balance at 31 August 2016

10,000

567,424

577,424

Changes in equity

Dividends

-

(60,000

)

(60,000

)

Total comprehensive income

-

167,410

167,410

Balance at 31 August 2017

10,000

674,834

684,834

Cash flows from operating activities

Cash generated from operations

1

954,440

1,061,390

Interest paid

(37,561

)

(43,497

)

Interest element of hire purchase payments paid

(98,334

)

(117,996

)

Tax paid

(35,711

)

(1,983

)

Net cash from operating activities

782,834

897,914

Cash flows from investing activities

Purchase of tangible fixed assets

(210,079

)

(50,776

)

Sale of tangible fixed assets

156,500

203,850

Net cash from investing activities

(53,579

)

153,074

Cash flows from financing activities

New loans in year

-

230,000

Loan repayments in year

(31,951

)

-

Capital repayments in year

(725,001

)

(1,036,233

)

Amount introduced by directors

12,589

465

Equity dividends paid

(60,000

)

(88,000

)

Net cash from financing activities

(804,363

)

(893,768

)

(Decrease)/increase in cash and cash equivalents

(75,108

)

157,220

Cash and cash equivalents at beginning of year

2

(1,309,452

)

(1,466,672

)

Cash and cash equivalents at end of year

2

(1,384,559

)

(1,309,452

)

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

2017

2016

£

£

Profit before taxation

147,015

130,503

Depreciation charges

1,077,401

1,051,934

Profit on disposal of fixed assets

(132,567

)

(125,729

)

Finance costs

135,895

161,493

1,227,744

1,218,201

Increase in stocks

(16,387

)

(532

)

Increase in trade and other debtors

(275,913

)

(307,354

)

Increase in trade and other creditors

18,996

151,075

Cash generated from operations

954,440

1,061,390

2.	CASH AND CASH EQUIVALENTS

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

respect of these Balance Sheet amounts:

Year ended 31 August 2017

31/8/17

1/9/16

£

£

Cash and cash equivalents

93,336

51,543

Bank overdrafts

(1,477,895

)

(1,360,995

)

(1,384,559

)

(1,309,452

)

Year ended 31 August 2016

31/8/16

1/9/15

£

£

Cash and cash equivalents

51,543

41,646

Bank overdrafts

(1,360,995

)

(1,508,318

)

(1,309,452

)

(1,466,672

)

1.	STATUTORY INFORMATION

Ken Mallinson & Sons 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 functional and presentation currency of the financial statements is the Pound Sterling (£).

2.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

Significant judgements and estimates

The significant judgements and estimates applied in the preparation of these financial statements are

set out below. The following accounting policies, judgements and estimates have been consistently

applied to all years presented unless otherwise stated.

Turnover

Turnover is recognised at the point of delivery and measured at the fair value of the consideration

received or receivable for goods and services supplied, excluding discounts, rebates, value added tax

and other sales taxes.

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.

Plant and machinery

- Straight line over 4 to 20 years

Motor vehicles:

General motor vehicles

- Straight line over 4 to 5 years

Wagons

- Straight line over 5 to 6 years

Trailers (new)

- Straight line over 10 years

Trailers (second hand)

- Straight line over 5 years

All fixed assets are initially recorded at cost.

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 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 balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at

the balance sheet 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

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.

Going concern

The company meets its day to day working capital requirements through invoice financing facilities and

a bank overdraft. The bank overdraft facility was renewed in May 2018. Its forecasts and projections

show that the company should be able to operate within the level of the current overdraft facilities and

invoice financing facilities for 12 months from the date that these accounts are signed. Accordingly, the

directors believe it is appropriate to prepare the accounts on a going concern basis.

4.

TURNOVER

Turnover represents amounts earned on goods and services provided during the year and derives from

the provision of goods falling within the company's ordinary activities.

5.	EMPLOYEES AND DIRECTORS

2017

2016

£

£

Wages and salaries

2,728,389

2,698,336

Social security costs

244,559

243,973

Other pension costs

24,736

22,604

2,997,684

2,964,913

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

2017

2016

Production staff

88

88

Administrative staff

27

30

115

118

2017

2016

£

£

Directors' remuneration

12,512

12,512

6.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2017

2016

£

£

Hire of plant and machinery

37,363

34,820

Other operating leases

122,325

103,453

Depreciation - owned assets

1,077,401

1,051,935

Profit on disposal of fixed assets

(132,567

)

(125,729

)

Auditors' remuneration

5,110

5,250

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2017

2016

£

£

Bank interest

36,441

41,291

Loan interest

1,120

2,206

Hire purchase

98,334

117,996

135,895

161,493

8.

TAXATION

Analysis of the tax (credit)/charge

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

2017

2016

£

£

Current tax:

UK corporation tax

103,188

35,711

Deferred tax

(123,583

)

(22,897

)

Tax on profit

(20,395

)

12,814

UK corporation tax was charged at 20%) in 2016.

Reconciliation of total tax (credit)/charge included in profit and loss

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

difference is explained below:

2017

2016

£

£

Profit before tax

147,015

130,503

Profit multiplied by the standard rate of corporation tax in the UK of 20% (2016 - 20%)

29,403

26,101

Effects of:

Expenses not deductible for tax purposes

2,595

1,552

Depreciation in excess of capital allowances

71,445

8,058

Deferred taxation

(123,583

)

(22,897

)

Change in corporation tax rate during the year

(255

)

-

Total tax (credit)/charge

(20,395

)

12,814

9.

DIVIDENDS

2017

2016

£

£

Interim

60,000

88,000

10.	TANGIBLE FIXED ASSETS

Plant and

Motor

machinery

vehicles

Totals

£

£

£

COST

At 1 September 2016

548,258

7,627,599

8,175,857

Additions

20,289

189,790

210,079

Disposals

-

(558,392

)

(558,392

)

At 31 August 2017

568,547

7,258,997

7,827,544

DEPRECIATION

At 1 September 2016

335,443

4,059,042

4,394,485

Charge for year

58,960

1,018,441

1,077,401

Eliminated on disposal

-

(534,459

)

(534,459

)

At 31 August 2017

394,403

4,543,024

4,937,427

NET BOOK VALUE

At 31 August 2017

174,144

2,715,973

2,890,117

At 31 August 2016

212,815

3,568,557

3,781,372

Included within the net book value of £2,890,117 is £2,418,420 (2016: £2,890,603) relating to assets

held under hire purchase agreements. The depreciation charged to the financial statements in the year

in respect of such assets amounted to £569,151 (2016: £503,057).

11.

STOCKS

2017

2016

£

£

Finished goods

62,763

46,376

Stock as an expense during the year was £1,969,793 (2016: £1,975,464).

12.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2017

2016

£

£

Trade debtors

2,171,884

1,858,010

Other debtors

55,905

103,508

Prepayments and accrued income

169,446

159,804

2,397,235

2,121,322