G J Handy & Company Limited - Limited company accounts 18.2

REGISTERED NUMBER: 00551762 (England and Wales)

G.J.HANDY & COMPANY LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED

30TH NOVEMBER 2017

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

to

4

Report of the Independent Auditors

5

to

6

Statement of Income and Retained Earnings

7

Statement of Financial Position

8

Statement of Cash Flows

9

Notes to the Statement of Cash Flows

10

Notes to the Financial Statements

11

to

22

DIRECTORS:

Mr D L Belcher

Mr S A Belcher

Mrs D S Belcher

Mr S Bartlett

Mr M A Moseley

REGISTERED OFFICE:

Handy Distribution

Murdock Road

Dorcan

SWINDON

Wiltshire

SN3 5HY

REGISTERED NUMBER:

00551762 (England and Wales)

AUDITORS:

Morris Owen

Statutory Auditors

43-45 Devizes Road

SWINDON

Wiltshire

SN1 4BG

BANKERS:

National Westminster Bank Plc

84 Commercial Road

SWINDON

Wiltshire

SN1 5NW

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

REVIEW OF BUSINESS

After a strong start to the season the weather caused the peak season to slow down in May and June,

however a strong final quarter in 2017 recovered some of the lost ground. The impact of this was that

turnover for the year finished at £19,488,500, down by approximately £320,000 from the previous year.

BREXIT and the effect on the USD impacted margin through the tail end of 2016 and into 2017. The drop

of just over 0.5% impacts this financial year due to this unprecedented situation.

As we worked through 2017 our pricing was repositioned to reflect the move in exchange rate and

margins reverted however the true effect of this will not be shown clearly in accounts until the following

trading year.

Due to the timing of the purchase of stock towards the year end, stock levels increased by circa £1.5m

as at the balance sheet date when compared to the previous year, so contributing to a net cash outflow

from operations during the reporting period. The directors have worked with the Company bankers

during the year to look strategically at funding facilities to ensure that they are fit for purpose moving

forward.

Our continued drive to have the best distribution infrastructure in our industry coupled with a highly

skilled and knowledgeable team of staff means we can continue to grow our business and lead in our

sector.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risk and uncertainty that the business faces tends to be the weather, the directors monitor

the outlook and seek to closely manage stock and sales so as to limit the impact of this risk on the

business.

The key business threats outside of the weather are identified as exchange rate fluctuations and changes

in our customer portfolio, again the directors monitor both of these areas closely so as to reduce the risk

to the business, as well as putting in place appropriate forward contracts to hedge the currency risk.

KEY PERFORMANCE INDICATORS

The directors have identified that the key performance indicators when looking at the business are the

monitoring of turnover on a monthly basis compared to a seasonalised budget, margin levels (2017

10.4%, 2016 11.3%), stock turn (2017 3.2, 2016 4.7), control of overheads compared to budget and

cashflow.

FUTURE DEVELOPMENTS

We are committed to developing sustainable business, so we can offer industry leading service and we

will continue to grow the business in a sensible way while the UK navigates through BREXIT. We are

partnered by the leading brands as well as our own brand offerings making us the one stop wholesaler in

our industry, we aim to further cement this position in the coming year.

ON BEHALF OF THE BOARD:

Mr S A Belcher - Director

15th August 2018

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of retailing and distribution of

domestic and professional garden machinery.

DIVIDENDS

Dividends totalling £7.47 per share were paid during the year. The total distribution of dividends for the

year end 30th November 2017 was £127,043.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

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

the date of this report.

Mr D L Belcher

Mr S A Belcher

Mrs D S Belcher

Mr S Bartlett

Mr M A Moseley

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;

-	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, Morris Owen, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

Mr S A Belcher - Director

15th August 2018

Opinion

We have audited the financial statements of G.J.Handy & Company Limited (the 'company') for the year

ended 30th November 2017 which comprise the Statement of Income and Retained Earnings, Statement

of Financial Position, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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).

In our opinion the financial statements:

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

Auditors' 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.

Use of our report

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.

Mr Ian Sumbler (Senior Statutory Auditor)

for and on behalf of Morris Owen

Statutory Auditors

43-45 Devizes Road

SWINDON

Wiltshire

SN1 4BG

21st August 2018

TURNOVER

3

19,488,500

19,810,092

Cost of sales

17,452,922

17,562,198

GROSS PROFIT

2,035,578

2,247,894

Administrative expenses

1,745,483

1,622,404

290,095

625,490

Other operating income

4

50,594

10,143

OPERATING PROFIT

6

340,689

635,633

Interest receivable and similar income

6,641

6,093

347,330

641,726

Interest payable and similar expenses

7

26,926

45,927

PROFIT BEFORE TAXATION

320,404

595,799

Tax on profit

8

60,359

101,275

PROFIT FOR THE FINANCIAL YEAR

260,045

494,524

Retained earnings at beginning of year

6,112,366

5,810,843

Dividends

9

(127,043

)

(193,001

)

RETAINED EARNINGS AT END OF YEAR

6,245,368

6,112,366

FIXED ASSETS

Intangible assets

10

11,725

16,125

Tangible assets

11

237,917

238,309

249,642

254,434

CURRENT ASSETS

Stocks

12

4,746,942

3,221,904

Debtors

13

6,665,752

4,933,022

Cash at bank and in hand

899

784,016

11,413,593

8,938,942

CREDITORS

Amounts falling due within one year

14

5,263,506

2,964,926

NET CURRENT ASSETS

6,150,087

5,974,016

TOTAL ASSETS LESS CURRENT LIABILITIES

6,399,729

6,228,450

CREDITORS

Amounts falling due after more than one year

15

(82,581

)

(48,732

)

PROVISIONS FOR LIABILITIES

20

(45,780

)

(41,352

)

NET ASSETS

6,271,368

6,138,366

CAPITAL AND RESERVES

Called up share capital

21

17,000

17,000

Capital redemption reserve

22

9,000

9,000

Retained earnings

22

6,245,368

6,112,366

SHAREHOLDERS' FUNDS

6,271,368

6,138,366

The financial statements were approved and authorised for issue by the Board of Directors on 15th August 2018 and were signed on its behalf by:

Mr S A Belcher - Director

Mr D L Belcher - Director

Cash flows from operating activities

Cash generated from operations

1

(972,204

)

1,030,899

Interest paid

(20,657

)

(57,279

)

Interest element of hire purchase payments paid

(5,424

)

(6,284

)

Tax paid

(120,310

)

(86,371

)

Net cash from operating activities

(1,118,595

)

880,965

Cash flows from investing activities

Purchase of intangible fixed assets

-

(11,000

)

Purchase of tangible fixed assets

(50,068

)

(38,557

)

Sale of tangible fixed assets

92,025

3,231,417

Net cash from investing activities

41,957

3,181,860

Cash flows from financing activities

Loan repayments in year

-

(2,094,388

)

Capital repayments in year

(97,573

)

(72,234

)

Amount introduced by directors

658,000

305,388

Amount withdrawn by directors

(244,052

)

(738,757

)

Equity dividends paid

(127,043

)

(193,001

)

Net cash from financing activities

189,332

(2,792,992

)

(Decrease)/increase in cash and cash equivalents

(887,306

)

1,269,833

Cash and cash equivalents at beginning of year

2

784,016

(485,817

)

Cash and cash equivalents at end of year

2

(103,290

)

784,016

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

2017

2016

£

£

Profit before taxation

320,404

595,799

Depreciation charges

162,106

149,025

Profit on disposal of fixed assets

(62,511

)

(63,428

)

Increase/(Decrease) in provision

52

(39,083

)

Finance costs

26,926

45,927

Finance income

(6,641

)

(6,093

)

440,336

682,147

(Increase)/decrease in stocks

(1,525,038

)

391,478

Increase in trade and other debtors

(2,205,490

)

(686,199

)

Increase in trade and other creditors

2,317,988

643,473

Cash generated from operations

(972,204

)

1,030,899

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 November 2017

30.11.17

1.12.16

£

£

Cash and cash equivalents

899

784,016

Bank overdrafts

(104,189

)

-

(103,290

)

784,016

Year ended 30th November 2016

30.11.16

1.12.15

£

£

Cash and cash equivalents

784,016

962

Bank overdrafts

-

(486,779

)

784,016

(485,817

)

1.	STATUTORY INFORMATION

G J Handy & Company Limited is private company, limited by shares, registered in England and

Wales.

The registered office address is Murdock Road, Dorcan, Swindon, Wiltshire, SN3 5HY.

These financial statements are presented in British Pounds (GBP), which is the company's

functional and presentational currency.

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.

Significant judgements and estimates

The directors have calculated an annual stock provision for any slowing moving or obsolete third

party stock. The directors believe the most accurate way to calculate this provision is to review

each stock line held at the year end and compare this to sales post year end. All stock lines that

have had less than 20% sales are deemed to be slowing moving and/or obsolete. Of this total of

slowing moving and/or obsolete stock, the directors believe that 25% should be provided for, and

so has been calculated as £154,009 (2016: £269,354). The period for the post year end review is

considered to capture the seasonality of the business.

The directors also have determined an appropriate provision for bad and doubtful debts by

assessing the recoverability of all balances on a balance by balance basis.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of vat,

discounts, and rebates. Turnover is recognised when goods are despatched or made available for

collection. Turnover in foreign currencies is translated into sterling at the rates published by

HMRC.

Intangible fixed assets

Amortisation is provided over 3 years to write off the website costs over its estimated useful life.

Tangible fixed assets

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

Property improvements

-

10% on cost

Plant and machinery

-

20% on cost

Fixtures and fittings

-

20% on cost

Motor vehicles

-

40% on reducing balance

Computer equipment

-

20% on cost

Stocks and work in progress

Stocks are valued at the lower of cost and net realisable value, after make due allowance for

obsolete and slow moving items. The cost of inventories is measured using the first-in first-out

basis.

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.

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.

Foreign currencies

Transactions in all other 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.

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

ruling at the statement of financial position date.

The company enters into a forward agreements to minimise against the risk of fluctuations in the

dollar.

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 for employees. The assets of the

scheme are held separately from those of the company. The annual contributions payable are

charged to the profit and loss account.

Financial instruments

Financial instruments are classified by the directors as basic or advanced following the conditions

in FRS 102 Section 11. Basic financial instruments are recognised at amortised cost using the

effective interest method. The only advanced instruments recognised by the company are

derivatives (being forward foreign exchange contracts). Derivative financial instruments are

initially recorded at cost and thereafter at fair value with changes recognised in arriving at profit

before tax. Derivative assets are included in other debtors and derivative liabilities are included in

other creditors.

3.

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:

2017

2016

£

£

Sale of goods

19,488,500

19,810,092

19,488,500

19,810,092

4.	OTHER OPERATING INCOME

2017

2016

£

£

Other income

46,086

-

Equipment rental

4,508

10,143

50,594

10,143

5.	EMPLOYEES AND DIRECTORS

2017

2016

£

£

Wages and salaries

1,444,276

1,433,176

Social security costs

141,646

135,832

Other pension costs

20,013

20,532

1,605,935

1,589,540

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

2017

2016

Management staff

5

5

Administration staff

16

17

Sales, distribution & workshop staff

44

47

65

69

2017

2016

£

£

Directors' remuneration

196,455

179,915

Directors' pension contributions to money purchase schemes

4,499

4,215

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

Money purchase schemes

3

2