REGISTRAR
Company Registration No. 00354363 (England and Wales)
BAILEY CARAVANS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
REGISTRAR
BAILEY CARAVANS LIMITED
COMPANY INFORMATION
Directors
Mr S P Howard
Mr N G Howard
Mr S R Howard
Mr C Harvey
Mr A J Rowles
Mr J A Tanner
Mr I Rawlings
Mr S Trossell
(Appointed 21 June 2016)
Secretary
Mr C Harvey
Company number
00354363
Registered office
22/24 South Liberty Lane
Bristol
Avon
BS3 2SS
Auditor
Whitley Stimpson Limited
Penrose House
67 Hightown Road
Banbury
Oxon
OX16 9BE
Business address
22/24 South Liberty Lane
Bristol
Avon
BS3 2SS
REGISTRAR
BAILEY CARAVANS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 23
REGISTRAR
BAILEY CARAVANS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2016
- 1 -
The directors present the strategic report for the year ended 31 December 2016.
Review of the business
The company specialises in the manufacture of caravans and motorhomes.
Sales of caravans and motorhomes continued to grow in 2016 and, in the light of the continued expansion, Bailey developed a new replenishment centre to service its production lines. Another part of the strategy to increase capacity was to move the large panel laminating centre to a new facility in Clevedon. There has been a perceived risk with Bailey operating from a single site and our resilience has been improved in a variety of ways.
Sales growth was predominantly due to increased sales of caravans, but Bailey has recognised the potential growth area of the motorhome market. Up until now production has been focused on a single assembly line, but Bailey now splits it output into two production lines dedicated to caravans and motorhomes.
Bailey has also seen the potential of the aftersales market and Bailey Parts Limited has been set up to take advantage of this growth area. This business used to operate within Bailey Caravans, but it now operates as a separate company, a subsidiary of our parent company, Keenwork Limited.
Principal risks and uncertainties
Economic conditions
Bailey Caravans Limited is succeeding in the current market for touring caravans, but monitors its position in relation to general market conditions and consumer demand.
International trade
Bailey Caravans Limited purchases large quantities of raw materials from Europe and are exposed to logistical issues and exchange rate risk. Purchasing policies look to mitigate these risks where possible, and the company protects itself from falls in the value of sterling by using forward exchange contracts.
Development and performance
The results for the year and the financial position at the year end were considered satisfactory by the directors.
Key performance indicators
Gross profit margin: 18.09% (2015 –19.35%)
Profit for the period after tax: £2,935,230 (2015 – £3,452,834)
The directors expect continued growth in the foreseeable future.
Mr N G Howard
Director
21 December 2017
REGISTRAR
BAILEY CARAVANS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2016
- 2 -
The directors present their report for the year ended 31 December 2016.
Principal activities
The principal activity of the company continues to be the manufacture of caravans and motorhomes. Bailey Caravans Limited continues to be the largest single brand of touring caravans in the UK.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S P Howard
Mr N G Howard
Mr S R Howard
Mr C Harvey
Mr A J Rowles
Mr J A Tanner
Mr I Rawlings
Mr S Trossell
(Appointed 21 June 2016)
Results and dividends
The results for the year are set out on page 7.
There were no interim dividends paid for the the year ended 31 December 2016. The directors recommend that no final dividend be paid on the ordinary shares.
Financial instruments
Treasury operations and financial instruments
The company operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the company’s activities.
The company’s principal financial instruments include derivative financial instruments, the purpose of which is to manage currency risks and interest rate risks arising from the company’s activities.
In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations. Derivative transactions which the company enters into principally comprise forward exchange contracts. In accordance with the company’s treasury policy, derivative instruments are not entered into for speculative purposes.
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
REGISTRAR
BAILEY CARAVANS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 3 -
Price risk
The company is exposed to commodity price risk as a result of its operations. The cost of managing exposure to price risk exceeds any potential benefits. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
Future developments
The directors intend for the company to continue operating its existing activities, whilst taking advantage of opportunities as they arise.
Auditor
In accordance with the company's articles, a resolution proposing the Whitley Stimpson Limited be reappointed as auditors of the company will be put to a General Meeting.
Strategic Report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr N G Howard
Director
21 December 2017
REGISTRAR
BAILEY CARAVANS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2016
- 4 -
The directors are responsible for preparing the annual report 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 UK 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.
REGISTRAR
BAILEY CARAVANS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF BAILEY CARAVANS LIMITED
- 5 -
We have audited the financial statements of Bailey Caravans Limited for the year ended 31 December 2016 set out on pages 7 to 23. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
This report is made solely to the company’s member, 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 member those matters we are required to state to them in an auditor's 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 member as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2016 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit, the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements, and the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
REGISTRAR
BAILEY CARAVANS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF BAILEY CARAVANS LIMITED
- 6 -
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 identifie
d
material misstatements in the Strategic Report and the Directors' Report
.
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.
Date:
21 December 2017
Laura Adkins (Senior Statutory Auditor)
for and on behalf of Whitley Stimpson Limited
Chartered Accountants
Statutory Auditor
Penrose House
67 Hightown Road
Banbury
Oxon
OX16 9BE
REGISTRAR
BAILEY CARAVANS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
- 7 -
2016
2015
Notes
£
£
Turnover
3
110,335,807
104,749,408
Cost of sales
(90,375,340)
(84,479,778)
Gross profit
19,960,467
20,269,630
Distribution costs
(1,117,645)
(1,341,933)
Administrative expenses
(15,262,939)
(15,250,390)
Other operating income
126,486
57,163
Operating profit
4
3,706,369
3,734,470
Interest receivable and similar income
8
13,428
35,630
Amounts written off investments
9
(87,900)
375,238
Profit before taxation
3,631,897
4,145,338
Tax on profit
10
(696,667)
(692,504)
Profit for the financial year
22
2,935,230
3,452,834
REGISTRAR
BAILEY CARAVANS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2016
31 December 2016
- 8 -
2016
2015
Notes
£
£
£
£
Fixed assets
Tangible assets
12
7,844,781
4,388,444
Current assets
Stocks
14
17,486,784
13,147,938
Debtors
15
18,591,323
13,277,327
Cash at bank and in hand
1,213,777
4,649,761
37,291,884
31,075,026
Creditors: amounts falling due within one year
16
(29,790,759)
(23,273,756)
Net current assets
7,501,125
7,801,270
Total assets less current liabilities
15,345,906
12,189,714
Provisions for liabilities
Provisions
18
9,824,952
9,816,759
Deferred tax liability
19
212,769
-
(10,037,721)
(9,816,759)
Net assets
5,308,185
2,372,955
Capital and reserves
Called up share capital
21
10,000
10,000
Profit and loss reserves
22
5,298,185
2,362,955
Total equity
5,308,185
2,372,955
The financial statements were approved by the board of directors and authorised for issue on 21 December 2017 and are signed on its behalf by:
Mr N G Howard
Director
Company Registration No. 00354363
REGISTRAR
BAILEY CARAVANS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2015
10,000
10,121
20,121
Year ended 31 December 2015:
Profit and total comprehensive income for the year
-
3,452,834
3,452,834
Dividends
11
-
(1,100,000)
(1,100,000)
Balance at 31 December 2015
10,000
2,362,955
2,372,955
Year ended 31 December 2016:
Profit and total comprehensive income for the year
-
2,935,230
2,935,230
Balance at 31 December 2016
10,000
5,298,185
5,308,185
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
- 10 -
1
Accounting policies
Company information
Bailey Caravans Limited is a limited company incorporated in England and Wales.
The registered office is
22/24 South Liberty Lane, Bristol, Avon, BS3 2SS.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest
pound
.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
Reporting exemptions:
The company has consent from its shareholder to exclude from its financial reports the following, as detailed in paragraph 1.12 of FRS 102:
The disclosure exemptions are taken on the basis that the company is included in group accounts prepared by Keenwork Limited, which are publicly available.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for goods net of VAT and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(when goods are physically delivered to the customer)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred
,
or to be incurred
,
in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
10% - 33% straight line
Fixtures, fittings and equipment
10% - 33% straight line
Motor vehicles
25% straight line
Other assets
10% staight line
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 11 -
1.5
Impairment of fixed assets
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Cost is calculated using the first in first out method.
1.7
Cash at bank and in hand
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 12 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Derivatives
The company uses derivative financial instruments in the form of forward exchange contracts to economically hedge risks associated with movements in exchange rates. The company does not hold or issue derivatives for trading purposes.
Such instruments are initially measured at fair value on the date the contract is entered into and are subsequently remeasured at fair value. Financial derivatives are recognised as current and non-current based on the maturity profile of the associated cash flows.
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 13 -
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Provisions
Provisions are recognised when the
company
has a legal or constructive present obligation as a result of a past event, it is probable that the
company
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Warranty provision
The company offers a six year warranty on all caravans and motorhomes. The warranty provision is made for the future estimated liability on all caravans and motorhomes still under warranty and is based on previous costs incurred and the expertise and judgement of the directors.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 14 -
1.15
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The only significant accounting estimates included in the financial statements are the warranty provision and the provision for bad and doubtful debts, where the directors made their best estimate at the balance sheet date. The directors' estimate of the warranty provision, is based on the number of vans produced, previous warranty spend and known issues. The directors' estimate for the bad and doubtful debt provision is based on past experience of bad debts.
There were no critical judgements apart from accounting estimates.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2016
2015
£
£
Turnover analysed by class of business
Sale of goods
110,335,807
104,749,408
2016
2015
£
£
Other significant revenue
Interest income
13,428
35,630
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
3
Turnover and other revenue
(Continued)
- 15 -
2016
2015
£
£
Turnover analysed by geographical market
United Kingdom
108,717,274
102,460,360
Europe
16,818
240
Rest of the world
1,601,715
2,288,808
110,335,807
104,749,408
4
Operating profit
2016
2015
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(1,435,524)
375,891
Depreciation of owned tangible fixed assets
1,000,122
1,171,519
Loss/(profit) on disposal of tangible fixed assets
6,354
(8,043)
Cost of stocks recognised as an expense
79,505,250
74,924,708
Operating lease charges
412,942
369,200
5
Auditor's remuneration
2016
2015
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
76,450
20,000
For other services
All other non-audit services
8,978
10,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2016
2015
Number
Number
Sales
7
4
Production
333
277
Administration
29
16
369
297
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
6
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2016
2015
£
£
Wages and salaries
15,595,445
12,725,792
Social security costs
1,080,392
986,346
Pension costs
495,682
508,818
17,171,519
14,220,956
7
Directors' remuneration
2016
2015
£
£
Remuneration for qualifying services
660,454
688,144
Company pension contributions to defined contribution schemes
66,212
68,358
Compensation for loss of office
-
68,335
726,666
824,837
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 6 (2015 - 7).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2016
2015
£
£
Remuneration for qualifying services
133,477
143,279
Company pension contributions to defined contribution schemes
15,356
15,261
8
Interest receivable and similar income
2016
2015
£
£
Interest income
Interest on bank deposits
12,954
33,311
Other interest income
474
2,319
Total income
13,428
35,630
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 17 -
9
Amounts written off investments
fixed asset investments
2016
2015
£
£
Fair value gains/(losses) on financial instruments
(Loss)/gain on hedge item in a fair value hedge
(87,900)
375,238
The company is exposed to currency exchange rate risk due to a significant proportion of receivables and operating expenses being denominated in non-sterling currencies. The net exposure of each currency is monitored and managed by the use of forward exchange contracts.
As at 31 December 2016 the fair value of the forward exchange contracts amounted to an asset of £321,212 (2015 - liability of £233,312).
The company enters into foreign currency contracts to mitigate the exchange rate risk for certain foreign currency debtors. As at 31 December 2016 the outstanding contracts mature within 11 months (2015 - 10 months) of the year end. The company is committed to buy €12,306,000 (2015 - €11,742,500) and to buy $nil (2015 - $2,291,250) and pay a fixed sterling amount.
The forward currency contracts are measured at fair value using quoted forward exchange rates.
10
Taxation
2016
2015
£
£
Current tax
UK corporation tax on profits for the current period
565,657
698,583
Adjustments in respect of prior periods
(110,473)
-
Total current tax
455,184
698,583
Deferred tax
Origination and reversal of timing differences
241,483
(6,079)
Total tax charge
696,667
692,504
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
10
Taxation
(Continued)
- 18 -
2016
2015
£
£
Profit before taxation
3,631,897
4,145,338
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2015: 20.25%)
726,379
839,290
Tax effect of expenses that are not deductible in determining taxable profit
4,823
11,913
Effect of change in corporation tax rate
(11,200)
2,158
Under/(over) provided in prior years
(110,473)
-
Deferred tax adjustments in respect of prior years
109,771
-
Patent box adjustment
(22,633)
-
Other tax adjustments
-
(160,857)
Taxation charge for the year
696,667
692,504
11
Dividends
2016
2015
£
£
Interim paid
-
1,100,000
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 19 -
12
Tangible fixed assets
Assets under construction
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Other assets
Total
£
£
£
£
£
£
Cost
At 1 January 2016
464,166
12,738,310
1,511,421
92,621
-
14,806,518
Additions
4,111,689
1,943,795
740,108
35,000
127,103
6,957,695
Disposals
(2,469,882)
-
-
(35,000)
-
(2,504,882)
At 31 December 2016
2,105,973
14,682,105
2,251,529
92,621
127,103
19,259,331
Depreciation and impairment
At 1 January 2016
-
9,198,177
1,158,750
61,147
-
10,418,074
Depreciation charged in the year
-
742,517
231,915
25,690
-
1,000,122
Eliminated in respect of disposals
-
-
-
(3,646)
-
(3,646)
At 31 December 2016
-
9,940,694
1,390,665
83,191
-
11,414,550
Carrying amount
At 31 December 2016
2,105,973
4,741,411
860,864
9,430
127,103
7,844,781
At 31 December 2015
464,166
3,540,133
352,671
31,474
-
4,388,444
13
Financial instruments
2016
2015
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
17,127,805
11,496,353
Instruments measured at fair value through profit or loss
321,212
233,312
Carrying amount of financial liabilities
Measured at amortised cost
29,426,721
22,007,949
14
Stocks
2016
2015
£
£
Raw materials and consumables
10,408,304
9,676,784
Work in progress
158,939
140,210
Finished goods and goods for resale
6,919,541
3,330,944
17,486,784
13,147,938
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 20 -
15
Debtors
2016
2015
Amounts falling due within one year:
£
£
Trade debtors
348,317
304,526
Corporation tax recoverable
75,185
-
Amounts due from group undertakings
16,779,488
11,191,827
Derivative financial instruments
321,212
233,312
Other debtors
222,372
-
Prepayments and accrued income
844,749
1,518,948
18,591,323
13,248,613
Deferred tax asset (note 19)
-
28,714
18,591,323
13,277,327
16
Creditors: amounts falling due within one year
2016
2015
Notes
£
£
Bank loans and overdrafts
17
4,766,101
-
Trade creditors
15,522,984
12,639,454
Corporation tax
-
236,780
Other taxation and social security
364,038
1,029,027
Other creditors
83,318
59,290
Accruals and deferred income
9,054,318
9,309,205
29,790,759
23,273,756
17
Loans and overdrafts
2016
2015
£
£
Bank overdrafts
4,766,101
-
Payable within one year
4,766,101
-
The bank overdraft is secured via an omnibus guarantee and set off agreement with Lloyds Bank Plc who have a charge of the assets of the company.
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 21 -
18
Provisions for liabilities
2016
2015
£
£
Warranty provision
9,824,952
9,816,759
Movements on provisions:
Warranty provision
£
At 1 January 2016
9,816,759
Additional provisions in the year
8,193
At 31 December 2016
9,824,952
A provision of £9,824,952 has been recognised for expected warranty claims on caravans and motor homes sold during the last six to ten financial years. It is expected that the majority of this expenditure will be incurred within two years, and all will be incurred within ten years. During the year, £3,566,690 of the provision brought forward was utilised and an increase in the provision of £3,574,883 was made.
This represents the directors' best estimate at the balance sheet date.
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Assets
Assets
2016
2015
2016
2015
Balances:
£
£
£
£
Accelerated capital allowances
152,816
-
-
(17,948)
Other timing differences
59,953
-
-
46,662
212,769
-
-
28,714
2016
Movements in the year:
£
Asset at 1 January 2016
(28,714)
Charge to profit or loss
241,483
Liability at 31 December 2016
212,769
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 22 -
20
Retirement benefit schemes
2016
2015
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
495,682
508,818
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2016
2015
£
£
Ordinary share capital
Issued and fully paid
10,000 ordinary shares of £1 each
10,000
10,000
10,000
10,000
22
Profit and loss reserves
2016
2015
£
£
At the beginning of the year
2,362,955
10,121
Profit for the year
2,935,230
3,452,834
Dividends declared and paid in the year
-
(1,100,000)
At the end of the year
5,298,185
2,362,955
The profit and loss account reserve represents cumulative profits and losses, net of dividends paid and other adjustments.
23
Financial commitments, guarantees and contingent liabilities
On 28 May 2014, the company, together with its parent, Keenwork Limited, entered into an omnibus guarantee and set off agreement with Lloyds Bank Plc, which was amended on 9 February 2017 to include its sister company, Bailey Parts Limited. At the year end £4,767,712 (2015 - £nil) was outstanding to Lloyds Bank Plc.
As at 31 December 2016 the company was committed to purchasing £10,500,000 (2015 - £10,050,000) of foreign currency under forward exchange contracts. They are intended to hedge exchange rate movements on anticipated future material import transactions.
REGISTRAR
BAILEY CARAVANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 23 -
24
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2016
2015
£
£
Within one year
630,000
369,200
25
Capital commitments
Amounts contracted for but not provided in the financial statements:
2016
2015
£
£
Acquisition of tangible fixed assets
240,163
2,274,481
26
Related party transactions
The disclosure exemption conferred by FRS 102 Section 33.1A has been utilised,
whereby
the company
has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
During the year, sales of £915,533 (2015 - £1,575,272) were made to Bailey Leisure Pty Ltd. Bailey Leisure Pty Ltd is a subsidiary of Bailey Leisure Holdings Pty. Ltd, which is an 80% (2015 - 80%) subsidiary of Keenwork Limited. As at 31 December 2016, Bailey Leisure Pty Ltd owed the company £3,983,545 (2015 - £3,068,032).
During the year, sales of £336,892 (2015 - nil) were made to Bailey Leisure (Manufacturing) Pty Ltd, a wholly owned subsidiary of Bailey Leisure Holdings Pty Ltd. At 31 December 2016 the company owed Bailey Caravans Limited £336,892 (2015 - £nil).
27
Controlling party
The immediate and ultimate parent company is Keenwork Limited, a company registered in England and Wales.
Keenwork Limited prepares group financial statements and copies can be obtained from the Registrar of Companies.
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