Collins (Contractors) Limited
Annual Report and Financial Statements
For the year ended 31 December 2021
Company Registration No. 00236372 (England and Wales)
Collins (Contractors) Limited
Company Information
Directors
P.M. Lavender
E.J. Lavender
B.T. Watson
J. Blake
Secretary
B.T. Watson
Company number
00236372
Registered office
31 Gillian Street
Ladywell
London
SE13 7AJ
Auditor
Moore Kingston Smith LLP
Betchworth House
57-65 Station Road
Redhill
Surrey
RH1 1DL
Business address
31 Gillian Street
Ladywell
London
SE13 7AJ
Bankers
HSBC Bank Plc
47 Rye Lane
Peckham
London
SE15 5ET
Collins (Contractors) Limited
Strategic Report
For the year ended 31 December 2021
Page 1
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
Over the last year the company has continued to perform well, and turnover has significantly increased to £17,158,401 in 2021 compared to £13,579,124 in 2020. The company’s operating profit has increased from £1,506,598 to £1,783,434 which is attributable to the increase in turnover.
The company’s profit before tax is £1,782,521 which is an excellent result for the company.
The company continues to have a strong balance sheet with net assets of £3,377,496 which is a slight decrease on the year before of £3,550,001 but further payments have been made to fund the management buyout.
The first five months of 2022 have seen the company win over £9.40m of new orders.
The company has built strong relationships with existing customers and is committed to winning repeat business.
The company is also carrying out additional due diligence around any new clients.
The company is fully aware of the requirements to resource new projects whilst continuing to provide a high quality service to its clients. The company continues to maintain its reputation with leading Consultants, Surveyors and Architects within London and the South East and is confident that 2022 will be another profitable year.
The directors are aware of the overall reduced profit margin for 2021 but are aware that several large projects were undertaken at a reduced margin, this was following the uncertainty during post covid.
The directors have taken on more management staff and are confident that with the work won to date in 2022, the profit margin will be up to earlier years expectations and are confident that turnover will be similar to 2021.
Staff requirements are constantly under review to meet the increase in turnover, internal promotion and external recruitment are always under consideration.
Principal risks and uncertainties
Currently the company considers its risks to comprise of the following:
i) Liquidity
The principal risk to the company is that clients and suppliers may have their working capital facilities restricted in the current economic climate which would affect the company. The company manages its liquidity risks by imposing strict review processes at project commencement with prompt cash collection and credit control throughout each project. The company has maintained a strong cash balance of £1.97m (2020 £2.96m). The company meets its day to day working capital requirements through the use of existing funds without the need for a bank overdraft or any other external funding.
The company is therefore not exposed to bank interest rate charges.
Collins (Contractors) Limited
Strategic Report (Continued)
For the year ended 31 December 2021
Page 2
ii) Inflation
The company is aware of the current changing inflation rate and has found increases in materials and suppliers’ costs difficult to predict. The directors are taking care and consideration of these factors when entering into any fixed price contracts. The volatility in fuel and material costs make tendering and completion of existing projects challenging. The strong cash balance enables the company to negotiate supply costs and if required, purchase upfront to avoid future price increases.
The company considers itself to be financially robust in the current market.
ii) Health, Safety & Environment
The maintenance of a safe working environment is of prime importance to the company and the company continually monitors and improves its procedures to achieve this. The company continued to further strengthen its health and safety management during the course of the year and funded continuous training and personal development for its employees.
P.M. Lavender
Director
2 August 2022
Collins (Contractors) Limited
Directors' Report
For the year ended 31 December 2021
Page 3
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company throughout the year was that of Specialist Interior and Exterior Refurbishment Contractors.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £1,654,255. 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:
P.M. Lavender
E.J. Lavender
B.T. Watson
J. Blake
Auditor
In accordance with the company's articles, a resolution proposing that Moore Kingston Smith 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.
On behalf of the board
P.M. Lavender
Director
2 August 2022
Collins (Contractors) Limited
Directors' Responsibilities Statement
For the year ended 31 December 2021
Page 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.
Collins (Contractors) Limited
Independent Auditor's Report
To the Members of Collins (Contractors) Limited
Page 5
Opinion
We have audited the financial statements of Collins (Contractors) Limited (the 'company') for the year ended 31 December 2021 which comprise the Statement of Income and Retained Earnings, the Balance Sheet, 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 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 2021 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.
Collins (Contractors) Limited
Independent Auditor's Report (Continued)
To the Members of Collins (Contractors) Limited
Page 6
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.
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 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 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.
Collins (Contractors) Limited
Independent Auditor's Report (Continued)
To the Members of Collins (Contractors) Limited
Page 7
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Collins (Contractors) Limited
Independent Auditor's Report (Continued)
To the Members of Collins (Contractors) Limited
Page 8
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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 intentional misrepresentations, or through collusion.
Collins (Contractors) Limited
Independent Auditor's Report (Continued)
To the Members of Collins (Contractors) Limited
Page 9
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.
Darren Jordan (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
10 August 2022
Chartered Accountants
Statutory Auditor
Betchworth House
57-65 Station Road
Redhill
Surrey
RH1 1DL
Collins (Contractors) Limited
Statement of Income and Retained Earnings
For the year ended 31 December 2021
Page 10
2021
2020
Notes
£
£
Turnover
3
17,158,401
13,579,124
Cost of sales
(13,625,753)
(10,369,983)
Gross profit
3,532,648
3,209,141
Administrative expenses
(1,768,679)
(1,770,270)
Other operating income
19,465
67,727
Operating profit
1,783,434
1,506,598
Interest receivable and similar income
7
347
412
Interest payable and similar expenses
8
(1,260)
(1,260)
Profit before taxation
1,782,521
1,505,750
Tax on profit
9
(303,864)
(261,721)
Profit for the financial year
1,478,657
1,244,029
Retained earnings brought forward
3,309,371
5,315,252
Dividends
10
(1,654,255)
(3,249,910)
Retained earnings carried forward
3,133,773
3,309,371
The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.
Collins (Contractors) Limited
Balance Sheet
As at 31 December 2021
Page 11
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
11
89,822
138,415
Investments
12
750
750
90,572
139,165
Current assets
Stock
13
5,156
112,590
Debtors
14
4,853,986
3,507,986
Cash at bank and in hand
1,346,003
1,972,988
6,205,145
5,593,564
Creditors: amounts falling due within one year
15
(2,938,950)
(2,202,982)
Net current assets
3,266,195
3,390,582
Total assets less current liabilities
3,356,767
3,529,747
Creditors: amounts falling due after more than one year
16
(16,800)
(16,800)
Provisions for liabilities
Deferred tax liability
17
34,436
37,054
34,436
37,054
Net assets
3,374,403
3,550,001
Capital and reserves
Called up share capital
19
239,057
239,057
Capital redemption reserve
1,573
1,573
Profit and loss reserves
3,133,773
3,309,371
Total equity
3,374,403
3,550,001
The financial statements were approved by the board of directors and authorised for issue on 2 August 2022 and are signed on its behalf by:
P.M. Lavender
E.J. Lavender
Director
Director
Company Registration No. 00236372
Collins (Contractors) Limited
Statement of Cash Flows
For the year ended 31 December 2021
Page 12
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
1,267,147
2,600,846
Interest paid
(1,260)
(1,260)
Income taxes paid
(254,180)
(277,130)
Net cash inflow from operating activities
1,011,707
2,322,456
Investing activities
Purchase of tangible fixed assets
(7,234)
(83,841)
Proceeds on disposal of tangible fixed assets
22,450
25,342
Interest received
347
412
Net cash generated from/(used in) investing activities
15,563
(58,087)
Financing activities
Dividends paid
(1,654,255)
(3,249,910)
Net cash used in financing activities
(1,654,255)
(3,249,910)
Net decrease in cash and cash equivalents
(626,985)
(985,541)
Cash and cash equivalents at beginning of year
1,972,988
2,958,529
Cash and cash equivalents at end of year
1,346,003
1,972,988
Collins (Contractors) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
Page 13
1
Accounting policies
Company information
Collins (Contractors) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 31 Gillian Street, Ladywell, London, SE13 7AJ.
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. The principal accounting policies adopted are set out below.
1.2
Going concern
At 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. The company has continued to trade profitably this year and has a strong balance sheet and cash position. The company has traded at a profit in the last year, despite the Covid-19 pandemic and expects to continue to do so for the foreseeable future and view the future with confidence. As a result the directors believe that the company will be able to continue in business and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of the financial statements.
1.3
Turnover
Turnover represents the value of work carried out during the period net of value added tax.
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
25% reducing balance
Fixtures, Fittings and Office Equipment
25% reducing balance and 20% straight line
Motor Vehicles
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, associates and jointly controlled entities 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.
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 14
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.
1.7
Construction contracts
Long-term contract balances classified under the balance sheet heading of "Stock" are stated at total costs incurred, net of amounts in respect of work carried out to date less foreseeable losses and applicable payments on account.
Cumulative turnover (i.e. the total turnover recorded in respect of contracts in the profit and loss accounts of all accounting periods since the inception of the contract) is compared with total payments on account. If the turnover exceeds payments on account an "amount recoverable on contracts" is established and separately disclosed within debtors. If the payments on account are greater than turnover to date, the excess is classified as a deduction from any balance on that contract in stocks with any residual balance in excess of cost being classified as creditors.
The attributable profit on long-term contracts is recognised once their outcome can be assessed with reasonable certainty. The profit recognised reflects the proportion of work completed to date on the project.
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.
1.9
Financial instruments
The company only has basic financial instruments measured at amortised cost, with no financial instruments classified as ‘other’ or basic instruments measured at fair value.
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.
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 15
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.
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 as 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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 16
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.
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
The company makes contributions to Collins (Contractors) Limited Directors' Pension Scheme, a defined contribution scheme, the assets of the scheme being held separately from the assets of the company. The company makes contributions on behalf of its employees to both personal pension schemes and defined contribution schemes. Contributions payable are charged to the profit and loss account in the year they are payable.
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.
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 17
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stage of completion on contracts
The stage of completion on contracts is a key area of judgement as it determines the value of profit recognised on a contract in the financial statements.
The directors have a wealth of experience in assessing the work performed on a contract to date and determining the remaining costs to complete, through assessments and judgements being made on the recovery of pre-contract costs, changes in the scope of work, contract programmes, maintenance and change in costs. This enables them to determine the stage of completion on a contract and therefore the gross profit to recognise in the financial statements.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Other significant revenue
Interest income
347
412
Grants received
19,465
67,649
Contract revenue arising on construction contracts
17,158,401
13,579,124
4
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
15,550
14,160
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was 51 (2020: 43).
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
5
Employees
(Continued)
Page 18
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
2,324,619
2,057,255
Social security costs
254,049
227,345
Pension costs
92,263
88,577
2,670,931
2,373,177
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
345,860
190,651
Company pension contributions to defined contribution schemes
36,000
40,000
381,860
230,651
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2020 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
114,505
105,000
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
347
412
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
347
412
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 19
8
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Dividends on redeemable preference shares not classified as equity
1,260
1,260
9
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
301,246
254,180
Deferred tax
Origination and reversal of timing differences
2,618
7,541
Total tax charge
303,864
261,721
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:
2021
2020
£
£
Profit before taxation
1,782,521
1,505,750
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
338,679
286,093
Tax effect of expenses that are not deductible in determining taxable profit
(1,846)
Tax effect of income not taxable in determining taxable profit
(1,346)
Group relief
(38,818)
(23,026)
Permanent capital allowances in excess of depreciation
3,231
(7,541)
Deferred tax adjustments in respect of prior years
2,618
7,541
Taxation charge for the year
303,864
261,721
10
Dividends
2021
2020
£
£
Final paid
1,654,255
3,249,910
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 20
11
Tangible fixed assets
Plant and machinery
Fixtures, Fittings and Office Equipment
Motor Vehicles
Total
£
£
£
£
Cost
At 1 January 2021
4,812
84,211
253,468
342,491
Additions
7,234
7,234
Disposals
(44,870)
(44,870)
At 31 December 2021
4,812
91,445
208,598
304,855
Depreciation and impairment
At 1 January 2021
4,812
72,424
126,840
204,076
Depreciation charged in the year
7,214
48,613
55,827
Eliminated in respect of disposals
(44,870)
(44,870)
At 31 December 2021
4,812
79,638
130,583
215,033
Carrying amount
At 31 December 2021
11,807
78,015
89,822
At 31 December 2020
11,787
126,628
138,415
12
Fixed asset investments
2021
2020
£
£
Unlisted investments
750
750
13
Stock
2021
2020
£
£
Work in progress
1,991
106,304
Finished goods and goods for resale
3,165
6,286
5,156
112,590
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 21
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
3,105,913
1,977,320
Amounts recoverable on contracts
1,665,659
1,456,085
Other debtors
2,639
4,550
Prepayments and accrued income
79,775
70,031
4,853,986
3,507,986
15
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
1,557,287
1,388,842
Amounts owed to group undertakings
4,550
4,550
Corporation tax
301,246
254,180
Other taxation and social security
910,255
374,706
Other creditors
2,365
6,340
Accruals and deferred income
163,247
174,364
2,938,950
2,202,982
16
Creditors: amounts falling due after more than one year
2021
2020
£
£
Preference shares classed as a financial liability
16,800
16,800
Preference shares classified as financial liabilities
In more than five years
16,800
16,800
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 22
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2021
2020
Balances:
£
£
ACAs
(3,739)
(100)
General provisions
(30,697)
(36,954)
(34,436)
(37,054)
2021
Movements in the year:
£
Asset at 1 January 2021
(37,054)
Charge to profit or loss
2,618
Asset at 31 December 2021
(34,436)
The deferred tax asset set out above is expected to reverse within 12 months and relates to a general provision, that is expected to mature within the same period.
18
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
92,263
88,577
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.
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 23
19
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
239,057 Ordinary shares of £1 each
239,057
239,057
16,800 7.5% cumulative non-participating preference shares of £1 each
16,800
16,800
255,857
255,857
Shares classed as liabilities
16,800
16,800
Shares classed within shareholders' funds
239,057
239,057
255,857
255,857
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:
2021
2020
£
£
Within one year
76,990
53,227
Between two and five years
218,333
186,730
In over five years
225,000
295,323
464,957
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 24
21
Related party transactions
Collins (Contractors) Limited Directors' Pension Scheme charged rent to the company, of which P.M. Lavender and E.J. Lavender are the benficiaries, at open market value, amounting to £15,000 (2020: £45,000).
During the year the company incurred management expenses of £66,670 (2020: £67,174) from Victoria Project Management Limited. P.M. Lavender and E.J. Lavender are directors of Victoria Project Management Limited.
During the year the company incurred rental expenses of £40,000 (2020: nil) from Eynsford Property Investements Limited. P.M. Lavender and E.J. Lavender are directors of Eynsford Property Investements Limited.
Preference dividends totalling £1,035 (2020: £1,035) were paid to P.M. Lavender during the year.
Ordinary dividends totalling £1,654,255 (2020: £3,249,910) were paid to Collins Ladywell Limited during the year.
Preference dividends totalling £225 (2020: £225) were paid to N. D. Cardiff during the year.
22
Ultimate controlling party
The company is controlled by its parent, Collins Ladywell Limited, a company incorporated in England and Wales. The registered office is 31 Gillian Street, Ladywell, London, SE13 7AJ.
The ultimate controlling party are the directors of the company.
23
Subsidiaries
These financial statements are separate company financial statements for Collins (Contractors) Limited.
Details of the company's subsidiaries at 31 December 2021 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Wall Plastics Limited
England & Wales
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Wall Plastics Limited
4,579
Collins (Contractors) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 25
24
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
1,478,657
1,244,029
Adjustments for:
Taxation charged
303,864
261,721
Finance costs
1,260
1,260
Investment income
(347)
(412)
Gain on disposal of tangible fixed assets
(22,450)
(24,028)
Depreciation and impairment of tangible fixed assets
55,827
51,704
Movements in working capital:
Decrease/(increase) in stock
107,434
(107,884)
(Increase)/decrease in debtors
(1,346,000)
745,759
Increase in creditors
688,902
428,697
Cash generated from operations
1,267,147
2,600,846
25
Analysis of changes in net funds
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
1,972,988
(626,985)
1,346,003
Borrowings excluding overdrafts
(16,800)
-
(16,800)
1,956,188
(626,985)
1,329,203
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