J.WAREING & SON (WREA GREEN) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Company registration number 00710413 (England and Wales)
J.WAREING & SON (WREA GREEN) LIMITED
COMPANY INFORMATION
Directors
Mr A N Wareing
Mr C J Wareing
Mr P J Wareing
Mr R G Wareing
Mr R N Wareing
Mr R P Wareing
Secretary
Cosec UK Services Limited
Company number
00710413
Registered office
Whinbrick Works
Blackpool Road
Kirkham
Preston
Lancashire
PR4 2RJ
Auditor
Champion Accountants LLP
7-9 Station Road
Hesketh Bank
Preston
Lancashire
PR4 6SN
J.WAREING & SON (WREA GREEN) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
J.WAREING & SON (WREA GREEN) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The Company's trading performance as measured by gross profit amount has reduced by 27% following the exceptional year in 2022 where sales and profit margins were much higher following the increase in steel prices internationally which was reflected in sales as well as purchases.
The Balance Sheet, as detailed on page 9, shows a good position with shareholder funds amounting to £14,296,098.
The Board is continuing its policy of reviewing its product range and services to customers with the intention of passing on increased supplier costs and continue to maintain good gross profit margins.
Principal risks and uncertainties
The company used various basic financial instruments. The main purpose of these financial instruments is to raise finance for the company's operations.
The directors agree policies for merging the risks arising from the company's financial trading, these are as follows:
Credit risk
In order to manage credit risk, the directors only give credit to customers with an anticipation of a good payment record. Debts are reviewed regularly in conjunction with debt ageing and collection history. The Company has a good success rate of collecting payments with very few bad debts.
Interest rate risk
The Company finances its operation through retained profits and as such, is not adversely affected by changes in the Bank of England base rate.
Sector and Competitor Risk
The Company operates in a competitive market sector with some major national players. It is believed, however, that with the development of our specific products that this will continue to ensure a high quality level of service to our customers.
The Company continues to invest in new plant and machinery and continues to improve systems to reduce risk and gain efficiencies, wherever possible.
Customer Risk
The Directors are always mindful of this and negotiate carefully with their customers on all material projects.
Key performance indicators
The key financial indicators of the Company during the year were as follows:
Turnover 2023: £16,439,075, 2022: £19,395,718 being a 15.7% decrease
Gross Profit 2023: £3,703,043, 2022: £5,065,172 being a 26.9% decrease
Profit before tax 2023: £1,251,502, 2022: £2,604,391 being a 51.9% decrease
Cosec UK Services Limited
Secretary
26 September 2024
J.WAREING & SON (WREA GREEN) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of manufacture and erection of agricultural and industrial buildings.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £918,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A N Wareing
Mr C J Wareing
Mr P J Wareing
Mr R G Wareing
Mr R N Wareing
Mr R P Wareing
Auditor
In accordance with the company's articles, a resolution proposing that Champion Accountants LLP be reappointed as auditor of the company will be put at a General Meeting.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
By order of the board
Cosec UK Services Limited
Secretary
26 September 2024
J.WAREING & SON (WREA GREEN) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 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.
J.WAREING & SON (WREA GREEN) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF J.WAREING & SON (WREA GREEN) LIMITED
- 4 -
Opinion
We have audited the financial statements of J.Wareing & Son (Wrea Green) Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 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.
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
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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' 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.
J.WAREING & SON (WREA GREEN) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF J.WAREING & SON (WREA GREEN) LIMITED (CONTINUED)
- 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 identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which 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 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' responsibilities statement, 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
J.WAREING & SON (WREA GREEN) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF J.WAREING & SON (WREA GREEN) LIMITED (CONTINUED)
- 6 -
- We obtained an understanding of the legal and regulatory frameworks applicable to the Company and the sector in which they operate. We determined that the following laws and regulations were most significant; the Companies Act 2006, UK corporate taxation laws, Employment regulation and Health and Safety legislation.
- We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making inquiries to the management.
- We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the audit engagement team included:
- Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud:
- Understanding how those charged with governance considered and addressed the potential for override of
controls or other inappropriate influence over the financial reporting process;
- Challenging assumptions and judgements made by management in its significant accounting estimates;
- Identifying and testing journal entries; in particular any journal entries posted with unusual account
combinations;
- Reviewing material variation from our expectations in the income, expenses and balances; and
- Assessing the extent of compliance with the relevant laws and regulations.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or inherent misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.
Peter Buck FCA, DChA
Senior Statutory Auditor
For and on behalf of Champion Accountants LLP
26 September 2024
Chartered Accountants
Statutory Auditor
7-9 Station Road
Hesketh Bank
Preston
Lancashire
PR4 6SN
J.WAREING & SON (WREA GREEN) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
16,439,075
19,395,718
Cost of sales
(12,736,032)
(14,330,546)
Gross profit
3,703,043
5,065,172
Administrative expenses
(2,680,761)
(2,544,658)
Other operating income
74,680
70,863
Operating profit
4
1,096,962
2,591,377
Interest receivable and similar income
7
154,540
13,014
Profit before taxation
1,251,502
2,604,391
Tax on profit
8
(298,526)
(361,277)
Profit for the financial year
952,976
2,243,114
The profit and loss account has been prepared on the basis that all operations are continuing operations.
J.WAREING & SON (WREA GREEN) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
Profit for the year
952,976
2,243,114
Other comprehensive income
-
-
Total comprehensive income for the year
952,976
2,243,114
J.WAREING & SON (WREA GREEN) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
2,735,127
2,613,291
Investment property
11
927,720
927,720
3,662,847
3,541,011
Current assets
Stocks
12
1,204,673
1,866,891
Debtors
13
3,998,777
3,613,929
Investments
14
5,941,752
Cash at bank and in hand
3,502,341
8,636,877
14,647,543
14,117,697
Creditors: amounts falling due within one year
15
(3,551,081)
(2,971,873)
Net current assets
11,096,462
11,145,824
Total assets less current liabilities
14,759,309
14,686,835
Provisions for liabilities
Deferred tax liability
16
463,211
425,713
(463,211)
(425,713)
Net assets
14,296,098
14,261,122
Capital and reserves
Called up share capital
18
30,000
30,000
Profit and loss reserves
14,266,098
14,231,122
Total equity
14,296,098
14,261,122
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 26 September 2024 and are signed on its behalf by:
Mr A N Wareing
Mr P J Wareing
Director
Director
Company registration number 00710413 (England and Wales)
J.WAREING & SON (WREA GREEN) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
30,000
12,753,008
12,783,008
Year ended 31 December 2022:
Profit and total comprehensive income
-
2,243,114
2,243,114
Dividends
9
-
(765,000)
(765,000)
Balance at 31 December 2022
30,000
14,231,122
14,261,122
Year ended 31 December 2023:
Profit and total comprehensive income
-
952,976
952,976
Dividends
9
-
(918,000)
(918,000)
Balance at 31 December 2023
30,000
14,266,098
14,296,098
J.WAREING & SON (WREA GREEN) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
2,227,593
2,184,733
Income taxes (paid)/refunded
(53,859)
474,162
Net cash inflow from operating activities
2,173,734
2,658,895
Investing activities
Purchase of tangible fixed assets
(617,058)
(362,981)
Proceeds from disposal of tangible fixed assets
14,000
7,564
Proceeds from disposal of investments
(5,941,752)
4,412,619
Interest received
154,540
13,014
Net cash (used in)/generated from investing activities
(6,390,270)
4,070,216
Financing activities
Dividends paid
(918,000)
(765,000)
Net cash used in financing activities
(918,000)
(765,000)
Net (decrease)/increase in cash and cash equivalents
(5,134,536)
5,964,111
Cash and cash equivalents at beginning of year
8,636,877
2,672,766
Cash and cash equivalents at end of year
3,502,341
8,636,877
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
J.Wareing & Son (Wrea Green) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Whinbrick Works, Blackpool Road, Kirkham, Preston, Lancashire, PR4 2RJ.
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 amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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 for the provision of professional services 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 it is probable will be recovered.
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:
Leasehold land and buildings
5% reducing balance
Plant and equipment
25% reducing balance
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.
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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.
1.7
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.8
Cash and cash equivalents
Cash and cash equivalents 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.
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
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.
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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 payments 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.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest 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 subsequently 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 through 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.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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.
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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
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
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss 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 leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 17 -
2023
2022
£
£
Turnover analysed by geographical market
UK
16,439,075
19,395,718
2023
2022
£
£
Other revenue
Interest income
154,540
13,014
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
8,000
7,950
Depreciation of owned tangible fixed assets
493,966
430,245
Profit on disposal of tangible fixed assets
(12,744)
(5,850)
Operating lease charges
107,000
107,000
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
6
6
Office
10
9
Production
48
50
Total
64
65
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,422,821
3,371,106
Social security costs
269,783
271,409
Pension costs
256,479
297,445
3,949,083
3,939,960
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
894,783
967,284
Company pension contributions to defined contribution schemes
103,978
160,000
998,761
1,127,284
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
358,936
212,327
Company pension contributions to defined contribution schemes
10,532
40,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
93,109
29,771
Other interest income
61,431
(16,757)
Total income
154,540
13,014
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
93,109
29,771
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
261,028
449,146
Adjustments in respect of prior periods
(175,133)
Total current tax
261,028
274,013
Deferred tax
Origination and reversal of timing differences
37,498
87,264
Total tax charge
298,526
361,277
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 19 -
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:
2023
2022
£
£
Profit before taxation
1,251,502
2,604,391
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
312,876
494,834
Permanent capital allowances in excess of depreciation
(14,350)
(165)
Under/(over) provided in prior years
(220,656)
Deferred tax adjustments in respect of prior years
87,264
Taxation charge for the year
298,526
361,277
9
Dividends
2023
2022
£
£
Final paid
918,000
765,000
10
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Total
£
£
£
Cost
At 1 January 2023
1,969,867
5,028,300
6,998,167
Additions
617,058
617,058
Disposals
(113,265)
(113,265)
At 31 December 2023
1,969,867
5,532,093
7,501,960
Depreciation and impairment
At 1 January 2023
925,018
3,459,858
4,384,876
Depreciation charged in the year
52,241
441,725
493,966
Eliminated in respect of disposals
(112,009)
(112,009)
At 31 December 2023
977,259
3,789,574
4,766,833
Carrying amount
At 31 December 2023
992,608
1,742,519
2,735,127
At 31 December 2022
1,044,849
1,568,442
2,613,291
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Investment property
2023
£
Fair value
At 1 January 2023 and 31 December 2023
927,720
Investment property comprises of 2 properties in Wrea Green, these being valued at the current market value by reviewing property information held in the public domain. Additionally included in Investment property are buildings situated at Brook Mill, Wrea Green. The fair value of the investment property at Brook Mill has been arrived at on the basis of a valuation carried out at 1st December 2023 by P Wilson & Company LLP, Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
12
Stocks
2023
2022
£
£
Raw materials and consumables
674,534
1,382,181
Work in progress
530,139
484,710
1,204,673
1,866,891
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,387,509
3,434,796
Other debtors
431,177
Prepayments and accrued income
180,091
179,133
3,998,777
3,613,929
14
Current asset investments
2023
2022
£
£
Listed investments
5,941,752
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
913,804
683,473
Corporation tax
261,028
53,859
Other taxation and social security
414,159
458,036
Other creditors
1,962,090
1,776,505
3,551,081
2,971,873
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
463,211
425,713
2023
Movements in the year:
£
Liability at 1 January 2023
425,713
Charge to profit or loss
37,498
Liability at 31 December 2023
463,211
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
256,479
297,445
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.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
5,000
5,000
5,000
5,000
Ordinary 'A' shares of £1 each
25,000
25,000
25,000
25,000
30,000
30,000
30,000
30,000
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
19
Financial commitments, guarantees and contingent liabilities
Contingent Liability
During the period to 31 December 2023 there was an incident that resulted in a serious injury to a member of the construction team. We are pleased to say the person involved has recovered and continues to work, however due to the nature of the circumstances there needed to be a review by the Health and Safety Executive (HSE). This review is ongoing at the time of approving the Financial Statements and we are advised not to comment on the specific circumstances until the review is complete. It is expected that the company will need to pay a financial penalty in respect of the event and whilst this has not been quantified, the Directors can confirm that even at the highest estimate envisaged, the Company has sufficient resources to meet the liability and that the Company can continue to trade as normal, meeting all other liabilities as they come due.
20
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:
2023
2022
£
£
Within one year
105,000
105,000
Between two and five years
420,000
210,000
525,000
315,000
21
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
1,252,800
-
22
Related party transactions
Remuneration of key management personnel
During the year, total dividends of £918,000 were paid to the directors.
The Key Management Personnel are also considered to be the Directors of the Company. As such, their remuneration has already been disclosed and further disclosure is not considered necessary.
The Company occupies premises on land owned by its pension scheme, The Wareing Family Pension Fund. The Directors of the Company are also trustees of the pension scheme. The rent payable was £105,000 (2022: £105,000) and at the balance sheet date no amount was outstanding.
The Company occupies premises on land owned by Mr J P Wareing and Mr A N Wareing. The rent payable was £2,000 (2022: £2,000) and at the balance sheet date no amount was outstanding.
23
Ultimate controlling party
J.WAREING & SON (WREA GREEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Ultimate controlling party
(Continued)
- 23 -
The Company is under the ultimate control of Mr A N Wareing and close family members,
24
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
952,976
2,243,114
Adjustments for:
Taxation charged
298,526
361,277
Investment income
(154,540)
(13,014)
Gain on disposal of tangible fixed assets
(12,744)
(5,850)
Depreciation and impairment of tangible fixed assets
493,966
430,245
Movements in working capital:
Decrease/(increase) in stocks
662,218
(322,128)
Increase in debtors
(384,848)
(393,364)
Increase/(decrease) in creditors
372,039
(115,547)
Cash generated from operations
2,227,593
2,184,733
25
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
8,636,877
(5,134,536)
3,502,341
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