WALLACE MCDOWALL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Company Registration No. SC046491 (Scotland)
WALLACE MCDOWALL LIMITED
COMPANY INFORMATION
Directors
Mr James Wilson
Mr Logan Collins
Mr William Wilson
Mr Derek Johnstone
Secretary
Mrs Yvonne Ward
Company number
SC046491
Registered office
Bld 11C Spirit Aerosystems
Tarbolton Road
Monkton
Ayrshire
KA9 2RR
Auditor
William Duncan + Co Ltd
30 Miller Road
Ayr
Ayrshire
KA7 2AY
Business address
Bld 11C Spirit Aerosystems
Tarbolton Road
Monkton
Ayrshire
KA9 2RR
Bankers
Royal Bank of Scotland
Ayr Chief Office
30 Sandgate
Ayr
Ayrshire
KA7 1BY
Solicitors
R N Martin & Co Ltd
2 Wellington Square
Ayr
Ayrshire
KA7 1EN
WALLACE MCDOWALL LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 5
Statement of comprehensive income
6
Balance sheet
7
Statement of changes in equity
8
Notes to the financial statements
9 - 20
WALLACE MCDOWALL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 1 -
The directors present the strategic report for the year ended 31 December 2018.
Fair review of the business
We aim to present a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of the business and is written in the context of the risks and uncertainties we face.
Principal risks and uncertainties
The company takes all necessary measures to identify and manage risks to the business. In common with most other businesses, the company still faces challenges in this time of continued economic uncertainty, and fluctuations in the cost of steel can impact on profitability substantially.
Despite these risks and uncertainties the first quarter of the current year has seen a good performance, and the company is now entering its second quarter with a strong order book. Significant investment has been made over the years in plant and equipment to increase production capacity and efficiency. Further investment is planned again for this year. The company has a reputation for delivering high quality products and excellent service and we are confident that the company will continue to grow and strengthen its reserves in the coming year.
Key performance indicators
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross margin and return on capital employed.
The company experienced a very small drop in turnover during the year, this combined with material costs remaining high has resulted in a poorer than expected performance. However the company remains in a strong financial position at the year end. Trading income has decreased by 0.33% to £11.28m (2017 - £11.32m), in addition to the decrease in turnover, a drop in profitability has arisen, with the gross margin decreasing by 0.80% to 7.67% (2017 - 8.47%).
We consider the results for the year to be satisfactory, given the continued challenging trading conditions experienced as a result of the slow recovery from the global economic downturn and the continuing high steel prices.
Mr James Wilson
Director
5 April 2019
WALLACE MCDOWALL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2018.
Principal activities
The principal activities of the company in the year under review continued to be the provision of sub-contract machining and sheet metal work services
as
OEM's
for
major supply chain companies.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr James Wilson
Mr Logan Collins
Mr William Wilson
Mr Derek Johnstone
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
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 James Wilson
Director
5 April 2019
WALLACE MCDOWALL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 3 -
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;
-
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.
WALLACE MCDOWALL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WALLACE MCDOWALL LIMITED
- 4 -
Opinion
We have audited the financial statements of Wallace McDowall Limited (the 'company') for the year ended 31 December 2018 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and 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 FRS 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 31 December 2018 and of its loss 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.
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 Auditor's
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
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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.
Opinions 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' r
eport 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.
WALLACE MCDOWALL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WALLACE MCDOWALL LIMITED
- 5 -
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'
r
eport
.
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 directors'
r
esponsibilities
s
tatement, 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 is 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s 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 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 members as a body, for our audit work, for this report, or for the opinions we have formed.
Robert Fergusson CA (Senior Statutory Auditor)
for and on behalf of William Duncan + Co Ltd
9 April 2019
Chartered Accountants
Statutory Auditor
30 Miller Road
Ayr
Ayrshire
KA7 2AY
WALLACE MCDOWALL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
- 6 -
2018
2017
Notes
£
£
Turnover
3
11,280,487
11,317,351
Cost of sales
(10,415,154)
(10,358,474)
Gross profit
865,333
958,877
Distribution costs
(320,569)
(344,047)
Administrative expenses
(858,822)
(869,559)
Other operating income
113,666
108,333
Operating loss
4
(200,392)
(146,396)
Interest receivable and similar income
7
279
83
Interest payable and similar expenses
8
(89,030)
(78,860)
Loss before taxation
(289,143)
(225,173)
Tax on loss
9
238,730
17,942
Loss for the financial year
(50,413)
(207,231)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WALLACE MCDOWALL LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2018
31 December 2018
- 7 -
2018
2017
Notes
£
£
£
£
Fixed assets
Tangible assets
10
2,320,775
2,733,317
Investments
11
100
100
2,320,875
2,733,417
Current assets
Stocks
13
810,366
759,310
Debtors
14
3,156,790
3,192,230
Cash at bank and in hand
187,791
413,138
4,154,947
4,364,678
Creditors: amounts falling due within one year
15
(4,060,244)
(4,227,304)
Net current assets
94,703
137,374
Total assets less current liabilities
2,415,578
2,870,791
Creditors: amounts falling due after more than one year
16
(650,680)
(1,030,629)
Provisions for liabilities
19
(124,609)
(149,460)
Net assets
1,640,289
1,690,702
Capital and reserves
Called up share capital
23
487,176
487,176
Capital redemption reserve
60,000
60,000
Profit and loss reserves
1,093,113
1,143,526
Total equity
1,640,289
1,690,702
The financial statements were approved by the board of directors and authorised for issue on 5 April 2019 and are signed on its behalf by:
Mr James Wilson
Director
Company Registration No. SC046491
WALLACE MCDOWALL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
- 8 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2017
487,176
60,000
1,350,757
1,897,933
Year ended 31 December 2017:
Loss and total comprehensive income for the year
-
-
(207,231)
(207,231)
Balance at 31 December 2017
487,176
60,000
1,143,526
1,690,702
Year ended 31 December 2018:
Loss and total comprehensive income for the year
-
-
(50,413)
(50,413)
Balance at 31 December 2018
487,176
60,000
1,093,113
1,640,289
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
- 9 -
1
Accounting policies
Company information
Wallace McDowall Limited is a
private
company
limited by shares
incorporated in Scotland.
The registered office is
Bld 11C Spirit Aerosystems, Tarbolton Road, Monkton, Ayrshire, KA9 2RR.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares
;
-
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash
f
low and related notes and disclosures
;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
WMD Holdings Limited
. These consolidated financial statements are available from its registered office,
Bld 11C Spirit Aerosystems, Tarbolton Road, Monkton, Ayrshire, KA9 2RR.
.
The company has taken advantage of the exemption under section
399
of the
Companies Act 2006 not to prepare consolidated accounts
, on the basis that the group of which this is the parent qualifies as a small group
. The financial statements present information about the company as an individual entity and not about its group
.
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 the sale of goods and services of sub-contract machining and sheet metal work, exclusive of VAT and trade discounts.
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 10 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, 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.
Revenue from contracts is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
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
15% - 50% straight line
Motor vehicles
15% - 25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting end date, the
company
reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.7
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.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 11 -
1.8
Cash at bank and in hand
Cash at bank and in hand
are basic financial assets
and
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. Bank overdrafts are shown within borrowings in current liabilities.
1.9
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.
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 receipts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
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.
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 12 -
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.
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
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 13 -
1.15
Government grants
Grants are credited to deferred revenue. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.
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.
3
Turnover and other revenue
2018
2017
£
£
Other significant revenue
Interest income
279
83
Grants received
113,666
108,333
2018
2017
£
£
Turnover analysed by geographical market
United Kingdom
9,652,096
10,158,397
Europe
1,078,841
963,550
USA
525,146
187,617
Brazil
24,404
7,787
11,280,487
11,317,351
4
Operating loss
2018
2017
Operating loss for the year is stated after charging/(crediting):
£
£
Government grants
(113,666)
(108,333)
Fees payable to the company's auditor for the audit of the company's financial statements
10,500
10,500
Depreciation of owned tangible fixed assets
389,439
376,797
Depreciation of tangible fixed assets held under finance leases
367,839
293,754
Profit on disposal of tangible fixed assets
(14,145)
(36,719)
Cost of stocks recognised as an expense
4,289,193
4,292,511
Operating lease charges
253,587
248,000
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 14 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2018
2017
Number
Number
Production
182
181
Administration
3
4
Technical
8
4
Selling/Purchasing
6
5
199
194
Their aggregate remuneration comprised:
2018
2017
£
£
Wages and salaries
4,426,841
4,505,711
Social security costs
370,385
378,779
Pension costs
76,188
58,965
4,873,414
4,943,455
6
Directors' remuneration
2018
2017
£
£
Remuneration for qualifying services
427,178
410,827
Company pension contributions to defined contribution schemes
21,280
20,700
448,458
431,527
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2017 - 4).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2018
2017
£
£
Remuneration for qualifying services
212,989
205,296
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 15 -
7
Interest receivable and similar income
2018
2017
£
£
Interest income
Interest on bank deposits
279
83
8
Interest payable and similar expenses
2018
2017
£
£
Interest on bank overdrafts and loans
53,331
43,618
Interest on finance leases and hire purchase contracts
35,699
35,242
89,030
78,860
9
Taxation
2018
2017
£
£
Current tax
Adjustments in respect of prior periods
(213,879)
(33,572)
Deferred tax
Origination and reversal of timing differences
(24,851)
15,630
Total tax credit
(238,730)
(17,942)
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2018
2017
£
£
Loss before taxation
(289,143)
(225,173)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2017: 19.00%)
(54,937)
(42,783)
Tax effect of expenses that are not deductible in determining taxable profit
226
226
Group relief
32,996
26,293
Permanent capital allowances in excess of depreciation
21,716
(15,630)
Under/(over) provided in prior years
(133)
(33,572)
Utilisation of tax losses carried back
-
31,894
Deferred tax provision
(24,851)
15,630
Research and development claim for prior years
(213,747)
-
Taxation credit for the year
(238,730)
(17,942)
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 16 -
10
Tangible fixed assets
Plant and machinery
Motor vehicles
Total
£
£
£
Cost
At 1 January 2018
7,546,786
440,953
7,987,739
Additions
288,325
72,517
360,842
Disposals
(133,915)
(107,709)
(241,624)
At 31 December 2018
7,701,196
405,761
8,106,957
Depreciation and impairment
At 1 January 2018
5,058,533
195,889
5,254,422
Depreciation charged in the year
677,326
79,952
757,278
Eliminated in respect of disposals
(133,030)
(92,488)
(225,518)
At 31 December 2018
5,602,829
183,353
5,786,182
Carrying amount
At 31 December 2018
2,098,367
222,408
2,320,775
At 31 December 2017
2,488,253
245,064
2,733,317
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2018
2017
£
£
Plant and machinery
1,459,769
1,870,605
Depreciation charge for the year in respect of leased assets
367,839
293,754
11
Fixed asset investments
2018
2017
Notes
£
£
Investments in subsidiaries
12
100
100
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
11
Fixed asset investments
(Continued)
- 17 -
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 January 2018 & 31 December 2018
100
Carrying amount
At 31 December 2018
100
At 31 December 2017
100
12
Subsidiaries
Separate company financial statements are required to be prepared by law. Consolidated financial statements for the group of WMD Holdings Limited are prepared and publicly available.
Details of the company's subsidiaries at 31 December 2018 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
SPS (Ayr) Limited
Scotland
Dormant
Ordinary
100.00
The investment in the above subsidiary is stated at cost.
13
Stocks
2018
2017
£
£
Raw materials and consumables
268,616
313,884
Work in progress
541,750
445,426
810,366
759,310
14
Debtors
2018
2017
Amounts falling due within one year:
£
£
Trade debtors
2,102,407
2,185,651
Corporation tax recoverable
213,747
33,572
Amounts owed by group undertakings
665,588
802,293
Prepayments and accrued income
175,048
170,714
3,156,790
3,192,230
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 18 -
15
Creditors: amounts falling due within one year
2018
2017
Notes
£
£
Bank loans and overdrafts
17
1,878,653
1,936,308
Obligations under finance leases
18
377,642
471,115
Trade creditors
1,152,807
1,288,935
Amounts due to group undertakings
21,458
2,298
Other taxation and social security
298,096
240,182
Government grants
21
83,000
108,333
Other creditors
6,684
100
Accruals and deferred income
241,904
180,033
4,060,244
4,227,304
16
Creditors: amounts falling due after more than one year
2018
2017
Notes
£
£
Obligations under finance leases
18
505,843
837,459
Government grants
21
144,837
193,170
650,680
1,030,629
17
Loans and overdrafts
2018
2017
£
£
Bank overdrafts
1,878,653
1,936,308
Payable within one year
1,878,653
1,936,308
Bank overdrafts includes advances arising from the company's debt financing arrangement.
Amounts relating to debt financing advances are secured over the company's debtors.
The bank facility is secured by a bond and floating charge over all assets of the company.
18
Finance lease obligations
2018
2017
Future minimum lease payments due under finance leases:
£
£
Within one year
377,642
471,115
In two to five years
505,843
837,459
883,485
1,308,574
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
18
Finance lease obligations
(Continued)
- 19 -
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets.
Finance lease obligations are secured upon the assets to which the finance relates.
19
Provisions for liabilities
2018
2017
Notes
£
£
Deferred tax liabilities
20
124,609
149,460
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2018
2017
Balances:
£
£
ACAs
124,609
149,460
2018
Movements in the year:
£
Liability at 1 January 2018
149,460
Credit to profit or loss
(24,851)
Liability at 31 December 2018
124,609
21
Government grants
Deferred income is included in the financial statements as follows:
2018
2017
£
£
Current liabilities
83,000
108,333
Non-current liabilities
144,837
193,170
227,837
301,503
WALLACE MCDOWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 20 -
22
Retirement benefit schemes
2018
2017
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
76,188
58,965
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.
23
Share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
320,000 Ordinary shares of £1 each
320,000
320,000
167,176 Deferred ordinary shares of £1 each
167,176
167,176
487,176
487,176
The deferred ordinary shares do not carry any rights to participate in any profits of the company.
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:
2018
2017
£
£
Within one year
191,604
191,604
25
Capital commitments
Amounts contracted for but not provided in the financial statements:
2018
2017
£
£
Acquisition of tangible fixed assets
23,000
108,214
26
Controlling party
The company is controlled by the director, Jim Wilson, by virtue of his shareholding in the parent company, WMD Holdings Ltd.
2018-12-31
2018-01-01
false
CCH Software
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