Company Registration No. 1476898 (England and Wales)
WALLWORK CAMBRIDGE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
WALLWORK CAMBRIDGE LIMITED
COMPANY INFORMATION
Directors
H A Wallwork
R P Carpenter
S P Collins
I C Griffin
M Jarvis
T Pelari
Secretary
C Chettoe
Company number
1476898
Registered office
Lodge Bank Works
Lord Street
Bury
Auditor
AJP Corporate Accountants Ltd.
Unit 9, Brenton Business Complex
Bury
Lancs.
BL9 7BE
Business address
Buckingway Business Park
Swavesey
Cambridge
CB24 4UG
WALLWORK CAMBRIDGE LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
WALLWORK CAMBRIDGE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2017
- 1 -
The directors present the strategic report for the year ended 31 March 2017.
Fair review of the business
The year ending 31 March 2016 saw a continued low level in UK manufacturing and this was reflected in static turnover in most areas of our business with the exception of decorative coating, which enjoyed continued growth. The Oil and gas exploration market remained at a very low level following the collapse in the oil price. Despite the poor trading conditions, we continued with our planned reorganisation and investments to increase capability, although staff numbers were controlled to reflect market conditions. Our participation in world class research and
development projects was reduced, but made possible by part funding from Innovate UK. This resulted in an increased loss on a slightly reduced turnover.
Principal risks and uncertainties
The Directors believe that there is a low level of risk and uncertainty associated with the business, it operates in a stable, mature market mainly within the U.K. and the Directors have consistently adopted conservative policies.
Risks that have been identified are as follows:
-
Continued lack of growth UK manufacturing industry.
-
Effect on UK manufacturing and R & D funding of the Brexit vote.
-
Alteration to regulation or legislation such as environmental or health and safety that may add unexpected costs.
-
Strong competition.
-
The cost of maintaining a market leading position.
Development and performance
The results for the year and the financial position at the year end were considered satisfactory by the directors
under the difficult trading conditions and ongoing reorganisation
.
Key performance indicators
Sales were more or less unchanged over the year, but margins eroded so that gross profit fell by 7%. Increased capacity building led to increased overheads and although research grant income rose by £21,000, operating profit reduced by £305,000.
R P Carpenter
Director
11 September 2017
WALLWORK CAMBRIDGE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2017
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2017.
Principal activities
The principal activity of the company continued to be that of vacuum processing and engineering.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
H A Wallwork
R P Carpenter
S P Collins
I C Griffin
M Jarvis
T Pelari
Results and dividends
The results for the year are set out on page 7.
The directors do not recommend payment of an ordinary dividend.
Research and development
Wallwork Cambridge
is a leading edge technology company offering enabling processes to the engineering community and engag
ing
in world class research for the development of processes in house as well as external projects with academic and multi national commercial partners. Significant opportunities exist to develop coatings for 'green' applications in the aerospace market as well as innovative technical solutions for medical and motorsport applications.
Future developments
The investment and reorganisation program that has been adversely affecting profits is now winding down, leaving the company more efficient and with better balanced capability.
Increased trading towards the end of the year was absorbed well with further scope for increases in the future.
Plans to extend Nadcap aerospace approval for heat treatment and gain UKAS Accreditation for mechanical testing during 2017 should increase turnover.
Delayed Machine building projects during the current financial year will come to fruition during 2017-18 and better marketing and management in this department should lead to increased turnover and efficiency.
The continued training of our staff to ensure their high skill level is essential to the wellbeing of this high tech company. The level of licence fee payments to WHT Holdings Ltd. will be addressed during the current year.
Auditor
The auditors, AJP Corporate Accountants Ltd., are deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
WALLWORK CAMBRIDGE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 3 -
On behalf of the board
R P Carpenter
Director
11 September 2017
WALLWORK CAMBRIDGE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2017
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
• select suitable accounting policies and then apply them consistently;
-
• make judgements and accounting estimates that are reasonable and prudent;
-
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
WALLWORK CAMBRIDGE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WALLWORK CAMBRIDGE LIMITED
- 5 -
We have audited the financial statements of Wallwork Cambridge Limited for the year ended 31 March 2017 set out on pages 7 to 24. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
This report is made solely to the company’s 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.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:
-
• give a true and fair view of the state of the company's affairs as at 31 March 2017 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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit, the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements
, and the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
WALLWORK CAMBRIDGE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WALLWORK CAMBRIDGE LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the Strategic Report and the Directors' Report
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
• the financial statements are not in agreement with the accounting records and returns; or
-
• certain disclosures of directors' remuneration specified by law are not made; or
-
• we have not received all the information and explanations we require for our audit.
Andrew Pearce FCA (Senior Statutory Auditor)
for and on behalf of AJP Corporate Accountants Ltd.
11 September 2017
Chartered Accountants
Statutory Auditor
Unit 9, Brenton Business Complex
Bury
Lancs.
BL9 7BE
WALLWORK CAMBRIDGE LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2017
- 7 -
2017
2016
Notes
£
£
Turnover
3
5,155,257
5,229,925
Cost of sales
(3,741,205)
(3,711,732)
Gross profit
1,414,052
1,518,193
Distribution costs
(475,768)
(403,320)
Administrative expenses
(1,669,136)
(1,519,297)
Other operating income
70,005
49,064
Loss before taxation
(660,847)
(355,360)
Taxation
7
304,849
124,975
Loss for the financial year
(355,998)
(230,385)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WALLWORK CAMBRIDGE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2017
- 8 -
2017
2016
£
£
Loss for the year
(355,998)
(230,385)
Other comprehensive income
-
-
Total comprehensive income for the year
(355,998)
(230,385)
WALLWORK CAMBRIDGE LIMITED
BALANCE SHEET
AS AT
31 MARCH 2017
31 March 2017
- 9 -
2017
2016
Notes
£
£
£
£
Fixed assets
Intangible assets
8
39,511
41,649
Tangible assets
9
1,681,051
1,639,484
1,720,562
1,681,133
Current assets
Stocks
10
119,845
121,245
Debtors
11
980,882
1,441,811
Cash at bank and in hand
1,163
1,046
1,101,890
1,564,102
Creditors: amounts falling due within one year
12
(2,641,868)
(2,733,567)
Net current liabilities
(1,539,978)
(1,169,465)
Total assets less current liabilities
180,584
511,668
Provisions for liabilities
13
(63,174)
(70,148)
Net assets
117,410
441,520
Capital and reserves
Called up share capital
17
2,500
2,500
Profit and loss reserves
114,910
439,020
Total equity
117,410
441,520
The financial statements were approved by the board of directors and authorised for issue on 11 September 2017 and are signed on its behalf by:
R P Carpenter
Director
Company Registration No. 1476898
WALLWORK CAMBRIDGE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2017
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2015
2,500
669,405
671,905
Year ended 31 March 2016:
Loss and total comprehensive income for the year
-
(230,385)
(230,385)
Balance at 31 March 2016
2,500
439,020
441,520
Year ended 31 March 2017:
Loss and total comprehensive income for the year
-
(355,998)
(355,998)
Credit to equity for equity settled share-based payments
16
-
38,888
38,888
Deferred tax on share-based payment transactions
-
(7,000)
(7,000)
Balance at 31 March 2017
2,500
114,910
117,410
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
- 11 -
1
Accounting policies
Company information
Wallwork Cambridge Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Lodge Bank Works, Lord Street, Bury.
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.
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 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
provision of services or the
sale of goods is recognised when the significant risks and rewards of ownership have passed to the buyer (usually on
completion of the service or
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.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date if the fair value can be measured reliably.
Amortisation 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:
Patents
Equal annual installments over 7 years
Development Costs
Equal annual installments over 7 years
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 12 -
1.6
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
20% of net book value
Fixtures and fittings
20% of net book value
Computer equipment
20% of net book value
Motor vehicles
20% of net book value
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
.
1.7
Impairment of fixed assets
At each reporting
period
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.
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.
1.8
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.
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 13 -
1.9
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.
1.10
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.
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 14 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts 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
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
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.
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 15 -
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.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.15
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted
.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
1.16
Leases
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.
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.
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 16 -
1.17
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.
1.18
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2017
2016
£
£
Turnover
Processing sales
4,730,810
4,826,044
Machine sales
424,447
403,881
5,155,257
5,229,925
Other significant revenue
Grants received
66,645
45,704
Rental income from property
3,360
3,360
Turnover analysed by geographical market
2017
2016
£
£
Euro area
61,466
61,601
UK
5,072,353
5,147,197
Other
21,438
21,127
5,155,257
5,229,925
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 17 -
4
Operating loss
2017
2016
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange gains
(2,329)
(1,439)
Research and development costs
47,448
45,342
Government grants
(66,645)
(45,704)
Fees payable to the company's auditor for the audit of the company's financial statements
5,000
5,000
Depreciation of owned tangible fixed assets
352,599
301,242
Loss on disposal of tangible fixed assets
1,131
11,228
Amortisation of intangible assets
22,849
19,891
Profit on disposal of intangible assets
-
(56,758)
Cost of stocks recognised as an expense
580,598
622,997
Share-based payments
38,888
-
Operating lease charges
453,293
455,636
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2017
2016
Number
Number
Management
3
3
Administration
7
7
Production
71
68
81
78
Their aggregate remuneration comprised:
2017
2016
£
£
Wages and salaries
2,380,716
2,230,525
Social security costs
210,143
204,702
Pension costs
201,086
186,555
2,791,945
2,621,782
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 18 -
6
Directors' remuneration
2017
2016
£
£
Remuneration for qualifying services
86,425
-
Company pension contributions to defined contribution schemes
25,904
-
112,329
-
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2016 - 0).
The number of directors who are entitled to receive shares under long term incentive schemes during the year was 2 (2016 - 0).
7
Taxation
2017
2016
£
£
Current tax
UK corporation tax refund on loss for the current period
(4,995)
-
Group tax relief
(285,880)
(115,504)
Total current tax
(290,875)
(115,504)
Deferred tax
Origination and reversal of timing differences
(6,974)
(9,471)
Deferred tax on share-based payments charge
(7,000)
-
Total deferred tax
(13,974)
(9,471)
Total tax charge
(304,849)
(124,975)
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
7
Taxation
(Continued)
- 19 -
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:
2017
2016
£
£
Loss before taxation
(660,847)
(355,360)
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2016: 20.00%)
(132,169)
(71,072)
Tax effect of expenses that are not deductible in determining taxable profit
7,868
57
Effect of change in corporation tax rate
776
(8,931)
Research and development tax credit for previous years
(94,190)
-
Research and development tax credit
(80,134)
(45,029)
Tax relief on share options
(7,000)
-
Tax expense for the year
(304,849)
(124,975)
In addition to the amount credited to the income statement and other comprehensive income, the following amounts relating to tax have been recognised directly in equity:
2017
2016
£
£
Deferred tax:
Change in estimated future tax deductions related to share based payments
7,000
-
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 20 -
8
Intangible fixed assets
Patents
Development Costs
Total
£
£
£
Cost
At 1 April 2016
53,390
85,850
139,240
Additions - separately acquired
20,710
-
20,710
At 31 March 2017
74,100
85,850
159,950
Amortisation and impairment
At 1 April 2016
30,127
67,463
97,590
Amortisation charged for the year
10,585
12,264
22,849
At 31 March 2017
40,712
79,727
120,439
Carrying amount
At 31 March 2017
33,388
6,123
39,511
At 31 March 2016
23,262
18,387
41,649
9
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2016
5,818,109
277,588
154,078
140,497
6,390,272
Additions
353,439
25,075
2,755
16,028
397,297
Disposals
-
(750)
-
(6,690)
(7,440)
At 31 March 2017
6,171,548
301,913
156,833
149,835
6,780,129
Depreciation and impairment
At 1 April 2016
4,432,756
152,903
110,161
54,968
4,750,788
Depreciation charged in the year
298,815
26,072
9,209
18,503
352,599
Eliminated in respect of disposals
-
(732)
-
(3,577)
(4,309)
At 31 March 2017
4,731,571
178,243
119,370
69,894
5,099,078
Carrying amount
At 31 March 2017
1,439,977
123,670
37,463
79,941
1,681,051
At 31 March 2016
1,385,353
124,685
43,917
85,529
1,639,484
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 21 -
10
Stocks
2017
2016
£
£
Raw materials and consumables
119,845
121,245
11
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
806,423
1,046,711
Corporation tax recoverable
4,995
-
Other debtors
1,750
3,114
Prepayments and accrued income
167,714
391,986
980,882
1,441,811
12
Creditors: amounts falling due within one year
2017
2016
£
£
Trade creditors
325,764
359,676
Amounts due to group undertakings
1,964,911
2,070,912
Other taxation and social security
216,254
227,864
Accruals and deferred income
134,939
75,115
2,641,868
2,733,567
13
Provisions for liabilities
2017
2016
Notes
£
£
Deferred tax liabilities
14
63,174
70,148
63,174
70,148
14
Deferred taxation
Liabilities
Liabilities
2017
2016
Balances:
£
£
Accelerated capital allowances
63,174
70,148
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
14
Deferred taxation
(Continued)
- 22 -
2017
Movements in the year:
£
Liability at 1 April 2016
70,148
Credit to profit or loss
(6,974)
Liability at 31 March 2017
63,174
15
Retirement benefit schemes
2017
2016
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
201,086
186,555
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.
16
Share-based payment transactions
On 23 June 2016 the parent company established an unapproved share option scheme. On the same day the parent company granted two of the company's directors options to subscribe for shares in the parent company. These options are exercisable after 23 June 2024.
Number of share options
Weighted average exercise price
2017
2016
2017
2016
Number
Number
£
£
Outstanding at 1 April 2016
-
-
-
-
Granted
48
-
1.00
-
Outstanding at 31 March 2017
48
-
1.00
-
Exercisable at 31 March 2017
-
-
-
-
The weighted average fair value of options granted in the year was determined using the same model that was used by the company when undertaking previous company purchases of own shares. This model was considered most appropriate because once the options have been exercised it is anticipated that the shares will be subject to company purchase using this pricing model.
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 23 -
17
Share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
2,500 Ordinary shares of £1 each
2,500
2,500
There is a single class of ordinary shares. The shares carry one vote each and there are no restrictions on the distribution of dividends and repayment of capital.
18
Financial commitments, guarantees and contingent liabilities
The company has an ongoing obligation to pay 5% of its annual turnover to it's parent company, WHT Holdings Limited, as a licence fee for the use of intellectual property
19
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:
2017
2016
£
£
Within one year
167,817
176,057
Between two and five years
635,587
626,927
In over five years
75,000
225,000
878,404
1,027,984
20
Capital commitments
Amounts contracted for but not provided in the financial statements:
2017
2016
£
£
Acquisition of tangible fixed assets
-
29,760
WALLWORK CAMBRIDGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 24 -
21
Controlling party
The
company is a wholly owned subsidiary of WHT Holdings Limited, whose registered office is at:
Wallwork Offices
69 Hacking street
Bury
BL9 0RG
The ultimate controlling party are trusts for the benefit of the Wallwork family and the
full time
working directors
of WHT Holdings Limited and its wholly owned subsidiaries.
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