04942685
ELMEC (SOUTHERN) LIMITED
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MARCH 2023
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ELMEC (SOUTHERN) LIMITED
REGISTERED NUMBER:04942685
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BALANCE SHEET
AS AT 31 MARCH 2023
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Debtors due after more than 1 year
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Debtors due within 1 year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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ELMEC (SOUTHERN) LIMITED
REGISTERED NUMBER:04942685
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BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2023
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 21 September 2023.
The notes on pages 4 to 13 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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Capital redemption reserve
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Shares issued during the year
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Release of merger reserve
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The notes on pages 4 to 13 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Elmec (Southern) Limited ("the Company") is a company limited by shares that is domiciled and incorporated in England and Wales.
The address of its registered office and principal place of business is 6 Lagoon Road, Orpington, England, BR5 3QX.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
Monetary amounts in these financial statements are stated in pounds sterling and are rounded to the nearest whole £1, except where otherwise indicated.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has a healthy order book and continues with profitable contracts. The directors are aware of the continued operating loss in the year but note the significant improvement in the year and having put in sufficient measures to return the Company to profitability expect to see an operating profit going forward.
The directors have taken into account all available information about the Company’s trading prospects and cash flow requirements for 12 months from the date of approval of the financial statements, the directors consider that the Company is a going concern.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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 Company 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.
Revenue comprises the value of mechanical and electrical construction work certified during the year and the invoiced value of goods and services supplied by the Company, exclusive of the value added tax and trade discounts.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to the Statement of comprehensive income on a straight-line basis over the lease term.
Grants are accounted under the accruals model as permitted by FRS 102.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.
Interest income is recognised in profit or loss using the effective interest method.
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company 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 Company in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. 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 operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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.
Investments in subsidiaries are measured at cost less accumulated impairment.
Profit on long term contracts is recognised as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year-end by recording turnover and related costs as contract activity progresses. Revenue and corresponding work in progress is calculated as that proportion of total contract value to which costs incurred bear to total expected costs for that contract. Full provision is made for losses on contracts in the year in which they are first foreseen.
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.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
Short-term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
The Company 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.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Company makes judgements in relation to long term contracts and the corresponding costs associated with the contracts. This includes the measurement and recognition of WIP and accrued income, in accordance with the stage of completion of a job. The Company has control and review procedures in place to monitor and evaluate the estimates being made to ensure that they are consistent and appropriate. This includes reviewing the independent certification of work done, the progress of work against contracted timescales and costs incurred against the agreed overheads.
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The average monthly number of employees, including directors, during the year was 29 (2022 - 27).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 2 directors (2022 - 2) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £94,255 (2022 - £111,428).
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The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £11,031 (2022 - £10,994).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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Investments in subsidiary companies
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At 1 April 2022 and 31 March 2023
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Due after more than one year
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Amounts owed by companies under common control
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Amounts owed by companies under common control
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Prepayments and accrued income
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Amounts recoverable on long term contracts
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Amounts owed to companies under common control
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Other taxation and social security
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Accruals and deferred income
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On 30 March 2022, an existing guarantee with the Bank of Scotland PLC between Andara Limited and Bryen & Langley (Holdings) Limited, was extended to also cover Elmec (Southern) Limited. Each Company has a fixed charge over any overdraft held within Bryen & Langley Limited, with an overdraft limit of £350,000. At 31 March 2023 there was no overdraft held within Elmec (Southern) Limited (2022: £Nil) and the Company had positive bank balances totalling £87,412 (2022: £318,760).
Loans are secured by a debenture over all the assets of the Company and a legal charge over its assets with interest payable at the default rate.
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Creditors: Amounts falling due after more than one year
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Charged to profit or loss
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
11.Deferred taxation (continued)
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Charged to profit or loss
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Capital redemption reserve
The nominal value of shares repurchased and still held at the year end.
Merger Reserve
The cumulative value of the merger relief arisen on acquisition of shares in a share for share exchange.
Profit and loss account
The cumulative profit and loss, net of distribution to owners.
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Commitments under operating leases
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At 31 March 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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Related party transactions
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At the balance sheet date, a loan of £3,500 (2022: £266,504) was owed to a company under common control. This loan is interest free and repayable on demand. During the year, management charges of £46,899 (2022: £55,200) were charged to the Company by a company under common control.
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The auditors' report on the financial statements for the year ended 31 March 2023 was unqualified.
The audit report was signed on 5 October 2023 by Jeff Fletcher BA (Hons) FCCA (Senior statutory auditor) on behalf of Creaseys Group Limited.
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