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Registered number: 11828930









WHE HOLDINGS LIMITED







CONSOLIDATED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2022

 
WHE HOLDINGS LIMITED
 
 
COMPANY INFORMATION


Directors
R S Alderslade 
S T Abbott 




Registered number
11828930



Registered office
First Floor
Oakwood House

Loughton

Essex

IG10 3TZ




Independent auditors
Haslers
Chartered Accountants & Statutory Auditor

Old Station Road

Loughton

Essex

IG10 4PL





 
WHE HOLDINGS LIMITED
 

CONTENTS



Page
Group Strategic Report
 
1 - 3
Directors' Report
 
4
Directors' Responsibilities Statement
 
5
Independent Auditors' Report
 
6 - 9
Consolidated Statement of Comprehensive Income
 
10
Consolidated Balance Sheet
 
11
Company Balance Sheet
 
12
Consolidated Statement of Changes in Equity
 
13
Company Statement of Changes in Equity
 
14
Consolidated Statement of Cash Flows
 
15 - 16
Consolidated Analysis of Net Debt
 
17
Notes to the Financial Statements
 
18 - 33


 
WHE HOLDINGS LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2022

Introduction
 
The directors present their strategic report for the year ended 31 January 2022.

Business review
 
The company acts as a holding company for a major mechanical and electrical services contractor which constitutes the main part of the group's activities and this business review reflects these activities for the year end 31 January 2022.
The subsidiary company’s turnover for the year remained stable at approximately £36.5 million compared to £35.6 million last year. Whilst the directors remain keen to grow the business, the turnover for the year reflects the company’s continued focus on quality and team development. This ongoing substantial investment in the business has resulted in the company winning contracts from its existing customer base as well as resulting in contracts with new customers. 
Most of the work undertaken in the year related to residential contracts with project sizes of between £5m and £10m. The company also carries out work in the commercial sector where it is satisfied that it has the resources and capability to maintain its high standards. The company achieved a gross margin of 24% an increase of 9% compared to the previous year. Whilst the company remained profitable, it carried out a detailed performance review which led to improvements in the structure of the leadership management team and retained focus on cost control. In addition to investing in and enhancing the management capabilities of the business, the company continues to invest in training for all management and leadership teams.  
During the year, the company had 23 plumbing apprentices (2021 – 32). In addition, 6 of the apprentices qualified as plumbers in the year 2022, 95% were retained by the company (2019 – 100%). Our training programmes involve apprentices working alongside our experienced plumbers & heating engineers so that they develop their skills whilst ensuring that we maintain standards and quality.
Equally important to the company’s growth plans is the ability of the company to retain staff and the company enjoyed an overall staff retention rate of 95% for the year (2021 - 97%).
The directors recognise the challenges ahead for the company and industry following the impact of the Covid-19 pandemic, Brexit and the current rates of inflation. The directors are continuing to monitor and manage the impact of these on the business and are confident in the robust business plans for the current situation which factors in any temporary disruption to the business.

Page 1

 
WHE HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022

Principal risks and uncertainties
 
The principal risks from the group's principal activity arise from:
Commercial relationships risk
The group has developed close commercial relationships with several key clients and suppliers because of its commitment to quality and service. The loss of any of these key clients or suppliers could have a detrimental effect on the groups's results. To minimise this risk, the group invests heavily in training and systems and effective communications to support those relationships.
Competitor risk
The group operates in a highly competitive market. To mitigate the risk of business loss, the group focuses on maintaining and enhancing its unique core differentiators so that it remains highly competitive.
Litigation and regulation risk
The group is subject to a broad range of laws, regulations, and standards. Non-compliance with any of these laws, regulations and standards can significantly damage the reputation and performance of the group. The group operates strong quality control procedures to ensure that any such risks are minimised.
Credit risk
The group derives a significant proportion of its revenue from sales to large private organisations. The failure of any such customer to honour its debts or refuse to approve work completed could materially impact on the group's own working capital. Credit control responsibility for key accounts is assigned to the Commercial Director so as to ensure that the group closely monitors debt collection periods in order to flag up any likely problems before they arise.
Going concern risk
The group recognises that the loss of contracts or a significant rise in costs could affect the company's ability to continue as a going concern. This risk is mitigated by the number of contracts entered and their long-term nature and therefore cash flows generated. The company retains cash reserves sufficient to cope with short term.
Emerging risks
The company has identified the following emerging risk:
• Continuing increase in inflation and interest rates on the UK economy
• The impact of Covid-19 and subsequent ongoing recovery
• The development of the climate change agenda

Page 2

 
WHE HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022

Financial key performance indicators
 
The directors monitor the performance of the group by reference to the following key performance indicators:
Contract value  
The group invests heavily in its workforce and is most effective in delivering value within a range of pre-set contract values. 
Gross margin
This year there was a gross margin of 24% (15% - 2021). Contract gross margins are managed monthly to ensure that the group is achieving sufficient profitability levels to support its investment programmes and quality standards.
Sales applications against budget (target 98%)
Detailed financial contract reviews are carried out monthly to ensure that work is in line with the planned programme. 

Other key performance indicators
 
Management to labour ratio (target 10%)
The group monitors the adequacy of supervision and management to maintain our quality and health & safety standards.
Health & safety
The Board reviews the Accident Log monthly as a primary indicator of health and safety standards. In addition, the group audits all sites at least once per month by an independent specialist, to which an average score of 98% is achieved.
Contract Pipeline
Having a clear view of future work is key to the Board’s strategic decision making.
Whilst the directors remain keen to grow the business, the turnover for the year reflects the groups’s continued focus on quality and team development. This ongoing substantial investment in the business has resulted in the group winning contracts from its existing customer base as well as resulting in contracts with new customers. 


This report was approved by the board on 24 August 2022 and signed on its behalf.



S T Abbott
Director

Page 3

 
WHE HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2022

The directors present their report and the financial statements for the year ended 31 January 2022.

Results and dividends

The profit for the year, after taxation, amounted to £1,567,637 (2021 - £868,796).

The directors did not pay any interim dividends in the year.

Directors

The directors who served during the year were:

R S Alderslade 
S T Abbott 

Future developments

There have been no significant post balance sheet events to note.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditorsHaslerswill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 24 August 2022 and signed on its behalf.
 





S T Abbott
Director

Page 4

 
WHE HOLDINGS LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2022

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:

select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 5

 
WHE HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WHE HOLDINGS LIMITED
 

Opinion


We have audited the financial statements of WHE Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 January 2022, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 Group's and of the parent Company's affairs as at 31 January 2022 and of the Group's 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.


Basis for opinion


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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 Group's or the parent 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.


Page 6

 
WHE HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WHE HOLDINGS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
WHE HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WHE HOLDINGS LIMITED (CONTINUED)


Auditors' 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 Auditors' 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 Group 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:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and determined that the most significant are those that:
•  had a direct effect on the determination of material amounts and disclosures in the financial statements. These included the UK Companies Act and tax legislation etc; and 
•  do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These include operational and employment laws and regulations including health and safety regulations, environmental regulations, GDPR and Subcontractor  requirements. 
We obtained an understanding of how the company are complying with those legal and regulatory frameworks by making enquiries with management and those responsible for legal and compliance frameworks. We corroborated our enquiries through review of correspondence with regulatory bodies and gaining an understanding of the entity level controls of the company in respect of these areas and the controls in place to reduce opportunity for fraudulent transactions. 
We discussed among the audit engagement team including relevant internal tax specialists, regarding the opportunities and incentives, including management override of controls, that may exist within the organisation for fraud and how and where fraud might occur in the financial statements. We also communicated the applicable laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. 
As a result of performing the above, we identified the greatest potential for fraud in the following areas, and our specific procedures performed to address it are described below:
The principal risks related to management override in relation to posting of non-standard manual journals in respect of revenue and misstatement of expenses in relation to work in progress.  
Procedures performed to address these were as follows:
• Walkthrough testing was carried out to identify and assess the design effectiveness of controls, management have in place to prevent and detect fraud, including known of suspected instances or non-compliance with laws and regulations and 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, 
• Using analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud, 
 
Page 8

 
WHE HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WHE HOLDINGS LIMITED (CONTINUED)


• Assessing the appropriateness of accounting estimates and challenging any significant assumptions or  judgements made by management, 
• Incorporating testing of manual journal entries that were posted throughout the year. In particular, we focused on material journal entries, journal entries posted with unusual account combinations, and journal entries crediting revenue or cash. These were scrutinised for evidence of unusual entries, 
• Reviewing revenue recognition policies and general policies in relation to work in progress. We assessed the accuracy and completeness of the management’s estimates through developing a detailed understanding of the contract stage and reviewing post year end activity.  
• Evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business. 
• Reviewing compliance with the Health & Safety accreditations and confirming no breaches in the year.
• Considering any changes to the control environment as a result of the Covid-19 pandemic.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Use of our 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 2006Our 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 Auditors' 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.





Laura Ambrose (Senior Statutory Auditor)
for and on behalf of
Haslers
Chartered Accountants
Statutory Auditor
Old Station Road
Loughton
Essex
IG10 4PL

24 August 2022
Page 9

 
WHE HOLDINGS LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2022

2022
2021
Note
£
£

  

Turnover
 4 
36,496,620
35,569,713

Cost of sales
  
(27,856,918)
(30,167,348)

Gross profit
  
8,639,702
5,402,365

Administrative expenses
  
(6,444,897)
(5,599,999)

Other operating income
 5 
63,271
1,127,906

Other operating charges
  
(589,110)
(589,109)

Operating profit
 6 
1,668,966
341,163

Interest receivable and similar income
 10 
318
2,345

Interest payable and similar expenses
 11 
(5,695)
(9,053)

Profit before taxation
  
1,663,589
334,455

Tax on profit
 12 
(95,952)
534,341

Profit for the financial year
  
1,567,637
868,796

  

There were no recognised gains and losses for 2022 or 2021 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for 2022 (2021:£NIL).

The notes on pages 18 to 33 form part of these financial statements.

Page 10

 
WHE HOLDINGS LIMITED
REGISTERED NUMBER: 11828930

CONSOLIDATED BALANCE SHEET
AS AT 31 JANUARY 2022

2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 14 
10,014,861
10,603,971

Tangible assets
 15 
154,054
262,311

  
10,168,915
10,866,282

Current assets
  

Stocks
 17 
289,944
398,215

Debtors: amounts falling due within one year
 18 
12,443,396
12,494,171

Cash at bank and in hand
 19 
1,884,826
2,678,131

  
14,618,166
15,570,517

Creditors: amounts falling due within one year
 20 
(9,672,215)
(10,773,809)

Net current assets
  
 
 
4,945,951
 
 
4,796,708

Total assets less current liabilities
  
15,114,866
15,662,990

Creditors: amounts falling due after more than one year
 21 
-
(41,362)

Provisions for liabilities
  

Net assets
  
15,114,866
15,621,628


Capital and reserves
  

Called up share capital 
 22 
200,000
200,000

Share premium account
 23 
19,800,000
19,800,000

Profit and loss account
 23 
(4,885,134)
(4,378,372)

  
15,114,866
15,621,628


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 August 2022.



S T Abbott
Director

The notes on pages 18 to 33 form part of these financial statements.

Page 11

 
WHE HOLDINGS LIMITED
REGISTERED NUMBER: 11828930

COMPANY BALANCE SHEET
AS AT 31 JANUARY 2022

2022
2021
Note
£
£

Fixed assets
  

Investments
 16 
20,000,000
20,000,000

  
20,000,000
20,000,000

  

Total assets less current liabilities
  
 
20,000,000
 
20,000,000

  

  

Net assets
  
20,000,000
20,000,000


Capital and reserves
  

Called up share capital 
 22 
200,000
200,000

Share premium account
 23 
19,800,000
19,800,000

  
20,000,000
20,000,000


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 August 2022.


S T Abbott
Director

The notes on pages 18 to 33 form part of these financial statements.

Page 12

 
WHE HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022


Called up share capital
Share premium account
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£
£

At 1 February 2021
200,000
19,800,000
(4,378,372)
15,621,628
15,621,628


Comprehensive income for the year

Profit for the year
-
-
1,567,637
1,567,637
1,567,637

Capital contribution
-
-
(2,074,399)
(2,074,399)
(2,074,399)
Total comprehensive income for the year
-
-
(506,762)
(506,762)
(506,762)


At 31 January 2022
200,000
19,800,000
(4,885,134)
15,114,866
15,114,866



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2021


Called up share capital
Share premium account
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£
£

At 1 February 2020
200,000
19,800,000
(4,397,168)
15,602,832
15,602,832


Comprehensive income for the year

Profit for the year
-
-
868,796
868,796
868,796

Capital contribution
-
-
(850,000)
(850,000)
(850,000)
Total comprehensive income for the year
-
-
18,796
18,796
18,796


At 31 January 2021
200,000
19,800,000
(4,378,372)
15,621,628
15,621,628


The notes on pages 18 to 33 form part of these financial statements.

Page 13

 
WHE HOLDINGS LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022


Called up share capital
Share premium account
Total equity

£
£
£

At 1 February 2021
200,000
19,800,000
20,000,000
Total comprehensive income for the year
-
-
-


At 31 January 2022
200,000
19,800,000
20,000,000



COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2021


Called up share capital
Share premium account
Total equity

£
£
£

At 1 February 2020
200,000
19,800,000
20,000,000
Total comprehensive income for the year
-
-
-


At 31 January 2021
200,000
19,800,000
20,000,000


The notes on pages 18 to 33 form part of these financial statements.

Page 14

 
WHE HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2022

2022
2021
£
£

Cash flows from operating activities

Profit for the financial year
1,567,637
868,796

Adjustments for:

Amortisation of intangible assets
589,110
589,109

Depreciation of tangible assets
71,206
100,290

Loss on disposal of tangible assets
(8,847)
-

Government grants
(63,271)
(1,127,906)

Interest paid
5,695
9,053

Interest received
(318)
(2,345)

Taxation charge
95,952
(534,341)

Decrease in stocks
108,271
283,945

(Increase) in debtors
(152,656)
(2,036,243)

(Decrease)/increase in creditors
(1,121,424)
2,821,558

Corporation tax received
147,988
288,877

Net cash generated from operating activities

1,239,343
1,260,793


Cash flows from investing activities

Purchase of tangible fixed assets
(11,962)
(11,117)

Sale of tangible fixed assets
57,861
7,858

Government grants received
63,271
1,127,906

Interest received
318
2,345

HP interest paid
(2,367)
(3,551)

Net cash from investing activities

107,121
1,123,441
Page 15

 
WHE HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022


2022
2021

£
£



Cash flows from financing activities

Repayment of/new finance leases
(62,042)
(11,680)

Capital contribution
(2,074,399)
(850,000)

Interest paid
(3,328)
(5,502)

Net cash used in financing activities
(2,139,769)
(867,182)

Net (decrease)/increase in cash and cash equivalents
(793,305)
1,517,052

Cash and cash equivalents at beginning of year
2,678,131
1,161,079

Cash and cash equivalents at the end of year
1,884,826
2,678,131


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,884,826
2,678,131

1,884,826
2,678,131


The notes on pages 18 to 33 form part of these financial statements.

Page 16

 
WHE HOLDINGS LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 JANUARY 2022




At 1 February 2021
Cash flows
At 31 January 2022
£

£

£

Cash at bank and in hand

2,678,131

(793,305)

1,884,826

Finance leases

(62,042)

62,042

-


2,616,089
(731,263)
1,884,826

The notes on pages 18 to 33 form part of these financial statements.

Page 17

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

1.


General information

WHE Holdings Limited is a private company, limited by shares, registered in England and Wales, with aregistration number of 11828930. The registered address is First Floor, Oakwood House, Oakwood Hill Industrial Estate, Loughton, Essex, IG10 3TZ. The principal activity is that of a holding company. The principal activity of the group is mechanical and electrical building services to the new build sector in private, social housing and the commercial sector.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The financial statements are presented in pounds sterling, which is the functional currency of the company, rounded to the nearest £.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 18

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

2.Accounting policies (continued)

 
2.3

Going concern

The financial statements have been prepared on the going concern basis despite the profit and loss account reserves totalling a negative balance of £4,885,134
Included in the profit and loss account is a capital contribution totalling £2,074,399 (2021: £850,000). On consolidation as a result of the group restructure in February 2019 a new holding company was formed with no brought forward profit and loss reserves. The capital contribution therefore has come out of pre acquisition reserves as shown in the subsidiary company Woodford Heating and Energy Limited. At the year end, both the single entity holding company and trading subsidiary Woodford Heating and Energy Limited both have positive reserves.
There is substantial cash balances at the year end and the group cash flow forecast shows that the group has sufficient working capital to fund the business.
The directors therefore consider the going concern basis to be appropriate.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

  
2.6

Government grants

Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 19

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

2.Accounting policies (continued)

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.

 
2.10

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

 
2.11

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Page 20

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

2.Accounting policies (continued)

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the basis below.

Depreciation is provided on the following basis:

Short-term leasehold property and improvements
-
over the lease term
Motor vehicles
-
25%
reducing balance
Fixtures, fittings and equipment
-
20%
straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

 
2.14

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.15

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 21

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

2.Accounting policies (continued)

 
2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.17

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.18

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Page 22

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In applying the Company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
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, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The company uses the percentage of completion method to recognise revenue for long term contracts. This method requires the directors to estimate the level of services performed at each reporting date as a proportion of the total services to be performed to complete the contract. Variations to estimates could result in the over or under recognition of revenue.


4.


Turnover

An analysis of turnover by class of business is as follows:


2022
2021
£
£

Mechanical and electrical building services
36,496,620
35,569,713

36,496,620
35,569,713


All turnover arose within the United Kingdom.


5.


Other operating income

2022
2021
£
£

Government grants receivable
63,271
1,127,906

63,271
1,127,906


Page 23

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

6.


Operating profit

The operating profit is stated after charging:

2022
2021
£
£

Other operating lease rentals
38,926
31,155


7.


Auditors' remuneration

2022
2021
£
£


Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
23,055
21,750


Fees payable to the Group's auditor and its associates in respect of:


Taxation compliance services
2,120
2,000

2,120
2,000

Page 24

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£


Wages and salaries
10,028,286
9,546,031
-
-

Social security costs
983,801
891,347
-
-

Cost of defined contribution scheme
162,969
167,366
-
-

11,175,056
10,604,744
-
-


The average monthly number of employees, including the directors, during the year was as follows:



Group
Group
Company
Company
        2022
        2021
        2022
        2021
            No.
            No.
            No.
            No.









Administrative
28
29
2
2



Contract management and support
32
37
-
-



Site staff
109
127
-
-

169
193
2
2


9.


Directors' remuneration

2022
2021
£
£

Directors' emoluments
630,526
485,013

Group contributions to defined contribution pension schemes
6,290
19,066

636,816
504,079


During the year retirement benefits were accruing to no directors (2021 - NIL) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £603,967 (2021 - £440,317).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £6,290 (2021 - £19,066).

Page 25

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

10.


Interest receivable

2022
2021
£
£


Other interest receivable
318
2,345

318
2,345


11.


Interest payable and similar expenses

2022
2021
£
£


Finance leases and hire purchase contracts
2,367
3,551

Other interest payable
3,328
5,502

5,695
9,053


12.


Taxation


2022
2021
£
£

Corporation tax


Current tax on profits for the year
438,355
191,788

Adjustments in respect of previous periods
(342,403)
(726,129)


Total current tax
95,952
(534,341)
Page 26

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
£
£


Profit on ordinary activities before tax
1,663,589
334,455


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
316,082
63,546

Effects of:


Non-tax deductible amortisation of goodwill and impairment
111,931
111,931

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
10,342
14,411

Adjustments to tax charge in respect of prior periods
-
(423,411)

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
(342,403)
(302,718)

Other differences leading to an increase (decrease) in the tax charge
-
1,900

Total tax charge for the year
95,952
(534,341)


Factors that may affect future tax charges

During March 2021 the UK chancellor announced an expected change to the UK’s main  corporation tax rates from 19% to 25% which was subsequently enacted into the Finance Act in June 2021. The main rate will increase to 25% from 1 April 2023 and will impact the corporation tax provision of the Company from that date. 


13.


Parent company profit for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was £Nil (2021 - £NIL).

Page 27

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

14.


Intangible assets

Group and Company





Goodwill

£



Cost


At 1 February 2021
11,782,189



At 31 January 2022

11,782,189



Amortisation


At 1 February 2021
1,178,218


Charge for the year on owned assets
589,110



At 31 January 2022

1,767,328



Net book value



At 31 January 2022
10,014,861



At 31 January 2021
10,603,971



Page 28

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

15.


Tangible fixed assets

Group






Short-term leasehold property and improvements
Motor vehicles
Fixtures, fittings and equipment
Total

£
£
£
£



Cost or valuation


At 1 February 2021
60,826
83,887
284,095
428,808


Additions
-
-
11,962
11,962


Disposals
-
(83,887)
(3,020)
(86,907)



At 31 January 2022

60,826
-
293,037
353,863



Depreciation


At 1 February 2021
16,856
26,356
123,285
166,497


Charge for the year on owned assets
8,794
9,648
52,764
71,206


Disposals
-
(36,004)
(1,890)
(37,894)



At 31 January 2022

25,650
-
174,159
199,809



Net book value



At 31 January 2022
35,176
-
118,878
154,054



At 31 January 2021
43,970
57,531
160,810
262,311

Page 29

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

16.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 February 2021
20,000,000



At 31 January 2022
20,000,000





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Woodford Heating & Energy Limited
England and Wales
Ordinary
100%

The aggregate of the share capital and reserves as at 31 January 2022 and the profit or loss for the year ended on that date for the subsidiary undertaking were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)

Woodford Heating & Energy Limited

5,100,005
2,156,747


17.


Stocks

Group
Group
2022
2021
£
£

Finished goods and goods for resale
289,944
398,215

289,944
398,215


Page 30

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

18.


Debtors

Group
Group
2022
2021
£
£


Trade debtors
11,618,039
11,257,503

Other debtors
230,369
659,036

Prepayments and accrued income
594,988
577,632

12,443,396
12,494,171



19.


Cash and cash equivalents

Group
Group
2022
2021
£
£

Cash at bank and in hand
1,884,826
2,678,131

1,884,826
2,678,131



20.


Creditors: Amounts falling due within one year

Group
Group
2022
2021
£
£

Trade creditors
7,826,943
9,345,041

Corporation tax
40,510
-

Other taxation and social security
264,153
259,019

Obligations under finance lease and hire purchase contracts
-
20,681

Other creditors
411,114
403,325

Accruals and deferred income
1,129,495
745,743

9,672,215
10,773,809


Page 31

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

21.


Creditors: Amounts falling due after more than one year

Group
Group
2022
2021
£
£

Net obligations under finance leases and hire purchase contracts
-
41,362

-
41,362





22.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



200,000 (2021 - 200,000) Ordinary shares of £1.00 each
200,000
200,000



23.


Reserves

Share premium account

The share premium represents the difference between the par value of shares issued and the subscription price.

Profit and loss account

The profit and loss account represents cumulative profit and losses net of dividends and other adjustments.


24.


Pension commitments

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £162,969 (2021 - £167,366).
Contributions totaling £9,744 (2021: £10,771) were payable to the fund at the balance sheet date and are included in creditors.

Page 32

 
WHE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

25.


Commitments under operating leases

At 31 January 2022 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2022
2021
£
£

Not later than 1 year
188,858
164,883

Later than 1 year and not later than 5 years
65,095
171,782

253,953
336,665

26.


Related party transactions

During the year the following related party transactions occurred:
Key management personnel remuneration for the year totalled £636,816 (2021: £485,013).
Capital contributions totalling £2,074,399 (2021: £850,000) were paid to Woodford Heating & Energy Trustees Limited.
The following balance were due from related parties at the year end:


2022
2021
£
£

Key management personnel
748
-


27.


Controlling party

The Woodford Heating & Energy Employee Ownership Trust (‘the Trust’) is the beneficial owner of the Company, The ultimate controlling party is the corporate trustee of the Trust, Woodford Heating & Energy Trustees Limited.
The ultimate controlling party is Woodford Heating & Energy Trustees Limited, the corporate trustee of the Woodford Heating & Energy Employee Ownership Trust.

Page 33