Denwire Limited
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Notes to the Abridged Accounts |
for the year ended 31 December 2018
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1 |
Accounting policies |
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Basis of preparation |
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The abridged accounts have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard).
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs.
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Tangible fixed assets |
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Land and buildings include a freehold warehouse complex with offices which are part owner occupied and part tenanted. Land and buildings are carried at their revalued amounts, being fair value at the date of valuation less subsequent depreciation and impairment losses. Revaluations are performed by professionally qualified valuers with sufficient regularity to ensure that the carrying amounts do not differ materially from those that would be determined using fair values at the end of each reporting period. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Any revaluation increase in the carrying amount of land and buildings is recognised in other comprehensive income and included in a revaluation reserve in equity, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is credited to profit and loss to the extent of the decrease previously expended. Decreases that offset previous increases of the same asset are charged in other comprehensive income and debited against revaluation reserve in equity; decreases exceeding the balance in revaluation reserve relating to an asset are recognised in profit or loss. Each year the difference between depreciation based on the revalued carrying amount of the asset recognised in profit or loss and depreciation based on the asset’s original cost is transferred from revaluation reserve to retained earnings.
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Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Freehold buildings |
2% straight line |
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Plant and machinery |
25% reducing balance |
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Fixtures, fittings, tools and equipment |
25% reducing balance |
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Motor vehicles |
25% reducing balance |
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Investment property |
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Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties are initially measured at cost, including transaction costs. Subsequently, investment properties whose fair value can be measured reliably without undue cost or effort on an on-going basis are measured at fair value. Gains and losses arising from changes in the fair value of investment properties are included in profit or loss in the period in which they arise. |
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised.
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts.
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method.
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted.
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably.
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss.
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term.
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate.
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2 |
Employees |
2018 |
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2017 |
Number |
Number |
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Average number of persons employed by the company |
21 |
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21 |
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3 |
Tangible fixed assets |
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Total |
£ |
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Cost or valuation |
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At 1 January 2018 |
1,804,492 |
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Additions |
65,983 |
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Disposals |
(20,845) |
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At 31 December 2018 |
1,849,630 |
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Depreciation |
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At 1 January 2018 |
188,570 |
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Charge for the year |
64,048 |
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On disposals |
(18,860) |
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At 31 December 2018 |
233,758 |
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Net book value |
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At 31 December 2018 |
1,615,872 |
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At 31 December 2017 |
1,615,922 |
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Freehold land and buildings: |
2018 |
£ |
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Historical cost |
1,314,868 |
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Cumulative depreciation based on historical cost |
71,215 |
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1,243,653 |
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The freehold land and buildings complex were revalued on 1 December 2017 by an independent valuer, Messrs Sellers Chartered Surveyors, qualified chartered surveyors, with fair values prepared in accordance with RICS Valuation - Global Standards 2017. The freehold part tenanted has been reclassified as investment property - see note 4. The directors do not consider it necessary to update the valuation as, in their opinion, there has been no change in material value since the last valuation. |
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The carrying amount of freehold land and buildings included at valuation at 31 December 2018 was £1,474,738. |
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The company has allowed a floating charge over the company's assets, including a fixed charge over freehold land and buildings, as security for the bank loans and overdrafts. |
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4 |
Investments |
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Property |
£ |
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Fair value |
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At 1 January 2018 |
470,000 |
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At 31 December 2018 |
470,000 |
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Historical cost |
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At 1 January 2018 |
412,040 |
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At 31 December 2018 |
412,040 |
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The investment property relates to part of the company's freehold property complex that is tenanted on a commercial basis. The investment property was valued at fair value on 1 December 2017 by Messrs. Sellers Chartered Surveyors, qualified chartered surveyors, in accordance with RICS Standards - Global Standards 2017 - see also note 3. |
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The directors do not consider it necessary to update the valuation of the investment property as, in their opinion, there has been no change in material value since the last valuation. |
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The company has allowed a floating charge over the company's assets, including a fixed charge on the investment property as security for the bank loans and overdrafts. |
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5 |
Loans |
2018 |
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2017 |
£ |
£ |
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Creditors include: |
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Instalments falling due for payment after more than five years |
309,108 |
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464,212 |
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Secured bank loans |
704,358 |
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856,189 |
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Bank loans and overdrafts are secured by a first legal mortgage over the freehold property complex of Denwire Limited and by a fixed and floating charge over all the other assets of the company.
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6 |
Revaluation reserve |
2018 |
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2017 |
£ |
£ |
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At 1 January 2018 |
185,803 |
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- |
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Gain on revaluation of land and buildings |
- |
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229,386 |
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Deferred taxation arising on the revaluation of land and buildings |
- |
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(43,583) |
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Transfer to retained reserves - depreciation net of tax |
(5,267) |
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- |
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At 31 December 2018 |
180,536 |
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185,803 |
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7 |
Other financial commitments |
2018 |
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2017 |
£ |
£ |
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Total future minimum payments under non-cancellable operating leases |
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68,885 |
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8 |
Contingent liabilities |
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The company has given a guarantee amounting to £40,000 in respect of the VAT duty deferment scheme. No liability is expected to arise under the guarantee.
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9 |
Controlling party |
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Plan B UK ApS, a company registered in Denmark, is the immediate parent company and controlling company. The registered office of its parent company is:
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Baltorpbakken 12A, DK-2750 Ballerup, Denmark. |
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10 |
Other information |
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Denwire Limited is a private company limited by shares and incorporated in England. Its registered office is: |
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Blackbrook Road |
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Narrowboat Way |
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Dudley |
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West Midlands |
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DY2 0AF |