Hingley & Callow Oils Limited - Limited company accounts 18.2

REGISTERED NUMBER: 00955492 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30TH JUNE 2018

FOR

HINGLEY & CALLOW OILS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Statement of Cash Flows

12

Notes to the Financial Statements

13

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 2018.

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:

2018

2017

£

£

Turnover

60,096,733

56,186,766

Gross profit

7,536,151

6,234,846

Operating profit

1,772,920

1,103,131

Gross profit %

12.5%

11.1%

Average number of employees

76

73

Turnover has increased by 7.0% mainly as a consequence of rising sales prices within the Petrochemical industry. Domestic

fuel requirements increased due to a harsh winter and higher margins in the year resulted in the gross profit percentage rising

to 12.5%. This has also affected operating profit, which has increased by 60.7%. 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 6.7% to £201,890. Development work on the investment properties has continued throughout the year.

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)

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

4th January 2019

The directors present their report with the financial statements of the company for the year ended 30th June 2018.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the distribution of domestic, agricultural and

industrial fuels. However, the company also sells petrol, oils and associated products from petrol filling stations, and has a

portfolio of investment properties.

DIVIDENDS

No dividends will be distributed for the year ended 30th June 2018.

DIRECTORS

The directors shown below have held office during the whole of the period from 1st July 2017 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). 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

4th January 2019

Opinion

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

30th June 2018 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of

Changes in Equity, 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 June 2018 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, except to the extent otherwise explicitly

stated in our report, 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 we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material

misstatement of the other information. 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.

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.

Stephen B Ludlam (Senior Statutory Auditor)

for and on behalf of French Ludlam & Co Limited

Statutory Auditors and Accountants

Mountfield House

661 High Street

Kingswinford

West Midlands

DY6 8AL

7th January 2019

TURNOVER

3

60,096,733

56,186,766

Cost of sales

52,560,582

49,951,920

GROSS PROFIT

7,536,151

6,234,846

Distribution costs

1,484,771

1,398,073

Administrative expenses

4,494,819

3,987,416

5,979,590

5,385,489

1,556,561

849,357

Other operating income

216,359

253,774

1,772,920

1,103,131

Profit on sale of investments

5

4,939

20,465

1,777,859

1,123,596

Interest receivable and similar income

43,315

47,474

1,821,174

1,171,070

Value adjustments in respect

of investment properties

6

-

(27,007

)

1,821,174

1,198,077

Interest payable and similar expenses

7

24,118

3,223

PROFIT BEFORE TAXATION

8

1,797,056

1,194,854

Tax on profit

9

356,819

189,221

PROFIT FOR THE FINANCIAL YEAR

1,440,237

1,005,633

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,440,237

1,005,633

FIXED ASSETS

Intangible assets

10

17,501

40,838

Tangible assets

11

4,300,865

4,250,599

Investment property

12

7,673,602

6,478,180

11,991,968

10,769,617

CURRENT ASSETS

Stocks

13

1,535,121

1,113,758

Debtors

14

4,382,745

3,299,780

Investments

15

363,550

353,784

Cash at bank and in hand

9,168,264

8,875,688

15,449,680

13,643,010

CREDITORS

Amounts falling due within one year

16

7,783,115

6,185,953

NET CURRENT ASSETS

7,666,565

7,457,057

TOTAL ASSETS LESS CURRENT LIABILITIES

19,658,533

18,226,674

PROVISIONS FOR LIABILITIES

19

295,514

303,892

NET ASSETS

19,363,019

17,922,782

CAPITAL AND RESERVES

Called up share capital

20

2,000

2,000

Non distributable reserves

21

2,633,759

2,631,698

Retained earnings

21

16,727,260

15,289,084

SHAREHOLDERS' FUNDS

19,363,019

17,922,782

The financial statements were approved by the Board of Directors on 4th January 2019 and were signed on its behalf by:

J D Callow - Director

Called up

Non

share

Retained

distributable

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1st July 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

Changes in equity

Total comprehensive income

-

1,438,176

2,061

1,440,237

Balance at 30th June 2018

2,000

16,727,260

2,633,759

19,363,019

Cash flows from operating activities

Cash generated from operations

1

2,415,321

1,906,547

Interest paid

(15,108

)

(9,198

)

Tax paid

(250,717

)

(220,063

)

Net cash from operating activities

2,149,496

1,677,286

Cash flows from investing activities

Purchase of tangible fixed assets

(797,928

)

(606,384

)

Purchase of investment property

(1,300,982

)

(80,493

)

Sale of tangible fixed assets

16,500

30,043

Sale of investment property

110,500

-

Purchase of current asset investments

(77,809

)

(175,691

)

Sale of current asset investments

78,081

164,959

Interest received

36,409

47,474

Dividends received

6,907

9,380

Net cash from investing activities

(1,928,322

)

(610,712

)

Cash flows from financing activities

Amount introduced by directors

870,555

1,506,058

Amount withdrawn by directors

(799,153

)

(530,525

)

Net cash from financing activities

71,402

975,533

Increase in cash and cash equivalents

292,576

2,042,107

Cash and cash equivalents at beginning of year

2

8,875,688

6,833,581

Cash and cash equivalents at end of year

2

9,168,264

8,875,688

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

2018

2017

£

£

Profit before taxation

1,797,056

1,194,854

Depreciation charges

751,663

739,394

Loss/(profit) on disposal of fixed assets

2,835

(14,959

)

Fair value adjustments

(5,099

)

(24,571

)

Profit on sale of investments

(4,939

)

(20,465

)

Fairvalue adjustment investment property

-

(27,007

)

Profit on sale of investment property

(4,940

)

-

Finance costs

24,118

3,223

Finance income

(43,315

)

(47,474

)

2,517,379

1,802,995

Increase in stocks

(421,363

)

(66,071

)

(Increase)/decrease in trade and other debtors

(1,082,965

)

449,228

Increase/(decrease) in trade and other creditors

1,402,270

(279,605

)

Cash generated from operations

2,415,321

1,906,547

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 2018

30.6.18

1.7.17

£

£

Cash and cash equivalents

9,168,264

8,875,688

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

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.

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, excluding discounts, rebates,

value added tax and other sales taxes.

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 assumed to be 5 years.

The remaining estimated useful economic life of the two businesses 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.

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 the

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 asset in prior years. A reversal in an impairment loss is recognised immediately in profit or loss.

Investment property

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

fair value at each reporting date, with changes to fair value being recognised in profit or loss.

Investments

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

recognised in profit or loss.

Stocks

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

moving items.

Cost is based on the cost of purchased 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.

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.

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.

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 one principal activity of the company.

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

2018

2017

£

£

Fuel distribution

53,512,399

49,638,810

Petrol filling stations

6,577,253

6,538,016

Farming

7,081

9,940

60,096,733

56,186,766

4.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

3,109,292

2,708,067

Social security costs

339,221

288,590

Other pension costs

45,667

44,286

3,494,180

3,040,943