JAMES FREW LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Company registration number SC036286 (Scotland)
JAMES FREW LIMITED
COMPANY INFORMATION
Directors
Mr Roddy Frew (Managing Director)
Mr Alan Stewart
Mr Andrew Fogarty
Mr Daniel Gibson
Company number
SC036286
Registered office
83 New Street
Stevenston
Ayrshire
KA20 3HD
Auditor
William Duncan + Co (Audit) Ltd
Ellersley House
30 Miller Road
Ayr
Ayrshire
KA7 2AY
Business address
83 New Street
Stevenston
Ayrshire
KA20 3HD
Bankers
Bank of Scotland
57 Dockhead Street
Saltcoats
Ayrshire
KA21 5EY
Solicitors
James Campbell & Co
Solicitors
Bank of Scotland Buildings
57 Dockhead Street
Saltcoats
Ayrshire
KA21 5EH
JAMES FREW LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
JAMES FREW LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The directors present the strategic report for the year ended 31 March 2023.

Fair review of the business

The Board of Directors is hereby reporting very challenging trading conditions with revenue levels down in all areas with the exception of installs.

 

The company continues to be successful in being awarded contracts during the year, at competitive margins, and going forward we are confident that we will increase revenue and profitability in the next financial year with tenders allowing for increased fuel, material and staffing costs.

 

Principal risks and uncertainties

The principal risks and uncertainties within the industry relate to the control of both onsite contract operations and completion of final valuations with contractors.

 

The Board is pleased that the previous year's improvements and efficiencies have continued, which has been a major factor in the increase in gross profit. The Board feels the company is in a strong position to react quickly to any perceived threats and minimise future risks to the company.

 

Development and performance

The company’s integrated management system continues to meet the needs of the business and has maintained certification to ISO 9001:2015; ISO 14001, and OHSAS 45001.

 

Key performance indicators

The Board is reasonably pleased with the performance achieved across all business units. Whilst we have not yet returned to pre-Covid 19 revenue levels we expect significant growth within 23-24.

 

Investment valuations reflect the difficult market conditions prevailing during the period, however, the company’s balance sheet remains strong with significant reserves.

On behalf of the board

Mr Roddy Frew (Managing Director)
Director
12 October 2023
JAMES FREW LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 March 2023.

Principal activities

James Frew Limited is one of the largest privately owned building services companies in Scotland providing integrated building services, including plumbing, heating, mechanical services, gas maintenance, property upgrades and renewable energy solutions, for the public and private sectors, including design, installation, and maintenance.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr Roddy Frew (Managing Director)
Mr Alan Stewart
Mr Andrew Fogarty
Mr Daniel Gibson
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

JAMES FREW LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
Employee involvement

The company's objective is to be an equal opportunities employer in all respects. This applies to recruitment, training, pay, benefits, promotion, maternity, parenthood, discipline and grievance, but is not limited to these areas.

 

The Company takes seriously its duty not to unlawfully discriminate upon the basis of sex, race, nationality, colour, disability, religion, marital status, sexual orientation or age and criminal record (in some cases) and is committed to supporting the all relevant legislation.

 

This policy is designed to ensure that all employees and managers understand their rights and responsibilities in relation to equal opportunities.

 

The Company will endeavor to promote job applications from all sections of the community and to interview the most suitable candidates for each position regardless of sex, race, ethnic origin, nationality, disability, religion, marital status, sexual orientation or age.

 

Selection criteria for positions within the Company shall not discriminate against any section of the community. The Company is committed to employing people who best meet its selection criteria. Employment will be based on merit, of meeting the requirements of the job and all applicants will be considered equally on that basis.

 

The Company will ensure that all employees have equal access to the training they require to carry out their jobs and to progress in their careers. Basic training on awareness and on the appreciation of the importance of equal opportunities will be made available to all employees as part of our induction training.

 

The Company supports the aims of the Equal Pay Act 1970 and the National Living Wage as defined in our “Living Wage Policy”, which from the 1st April 2016 has been aligned with the "Living Wage Foundation". The company shall continue to review pay and benefits structures on a timely basis to ensure compliance with the Act.

 

The Company aims to ensure that employees are given promotion opportunities solely on the basis of ability. All suitably qualified employees will normally have the opportunity to apply for promoted posts.

Auditor

In accordance with the company's articles, a resolution proposing that William Duncan + Co (Audit) Ltd 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
Mr Roddy Frew (Managing Director)
Director
12 October 2023
JAMES FREW LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 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:

 

 

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.

JAMES FREW LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF JAMES FREW LIMITED
- 5 -
Opinion

We have audited the financial statements of James Frew Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

JAMES FREW LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF JAMES FREW LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

JAMES FREW LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF JAMES FREW LIMITED
- 7 -

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Mr Stephen Bargh CA
Senior Statutory Auditor
For and on behalf of William Duncan + Co (Audit) Ltd
13 October 2023
Chartered Accountants
Statutory Auditor
Ellersley House
30 Miller Road
Ayr
Ayrshire
KA7 2AY
JAMES FREW LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
29,693,653
30,779,408
Cost of sales
(27,545,871)
(28,722,398)
Gross profit
2,147,782
2,057,010
Administrative expenses
(2,288,196)
(2,087,204)
Other operating income
113,819
86,355
Operating (loss)/profit
4
(26,595)
56,161
Interest receivable and similar income
8
12,781
12,199
Gain/(loss) on Investments
9
(105,877)
95,724
(Loss)/profit before taxation
(119,691)
164,084
Tax on (loss)/profit
10
45,455
83,906
(Loss)/profit for the financial year
(74,236)
247,990

The profit and loss account has been prepared on the basis that all operations are continuing operations.

JAMES FREW LIMITED
BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,712,011
2,785,507
Investments
13
1,308,658
1,664,535
4,020,669
4,450,042
Current assets
Stocks
14
569,200
534,630
Debtors
15
6,215,613
5,648,500
Cash at bank and in hand
488,031
605,999
7,272,844
6,789,129
Creditors: amounts falling due within one year
16
(4,207,190)
(4,086,987)
Net current assets
3,065,654
2,702,142
Total assets less current liabilities
7,086,323
7,152,184
Creditors: amounts falling due after more than one year
17
(53,830)
-
0
Provisions for liabilities
Deferred tax liability
19
319,720
365,175
(319,720)
(365,175)
Net assets
6,712,773
6,787,009
Capital and reserves
Called up share capital
22
1,401
1,401
Capital redemption reserve
23
3,599
3,599
Profit and loss reserves
24
6,707,773
6,782,009
Total equity
6,712,773
6,787,009
The financial statements were approved by the board of directors and authorised for issue on 12 October 2023 and are signed on its behalf by:
Mr Roddy Frew (Managing Director)
Director
Company Registration No. SC036286
JAMES FREW LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2021
3,100
1,900
8,562,742
8,567,742
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
247,990
247,990
Dividends
11
-
-
(35,000)
(35,000)
Own shares acquired
-
-
(1,993,723)
(1,993,723)
Redemption of shares
22
(1,699)
1,699
-
0
-
0
Balance at 31 March 2022
1,401
3,599
6,782,009
6,787,009
Year ended 31 March 2023:
Loss and total comprehensive income for the year
-
-
(74,236)
(74,236)
Balance at 31 March 2023
1,401
3,599
6,707,773
6,712,773
JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
1
Accounting policies
Company information

James Frew Limited is a private company limited by shares incorporated in Scotland. The registered office is 83 New Street, Stevenston, Ayrshire, KA20 3HD.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of James Frew Group Limited. These consolidated financial statements are available from its registered office, 83 New Street, Stevenston, Scotland, KA20 3HD.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts.

Revenue from contracts is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

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.

JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 12 -

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:

Freehold Land and buildings
Straight line over 50 years
Plant and machinery
25% straight line
Fixtures, fittings & equipment
25% straight line
Computer equipment
33.3% 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 listed investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in profit or loss. Transaction costs are expensed to profit or loss as incurred.

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
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.15
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
MPS
11,124,158
13,332,909
Modernisation
4,793,170
5,456,661
Maintenance
8,007,166
9,375,793
Installs
5,769,159
2,614,045
29,693,653
30,779,408
2023
2022
£
£
Other revenue
Interest income
12,781
12,199
Grants received
-
74,865
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
HMRC Job Retention Scheme
-
(74,865)
Depreciation of owned tangible fixed assets
709,418
582,972
Depreciation of tangible fixed assets held under finance leases
2,719
98,721
Profit on disposal of tangible fixed assets
(54,287)
(63,637)
Operating lease charges
26,766
19,112
JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 16 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
18,000
14,500
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Operational
247
252
Buying
3
3
Administration
110
110
Total
360
365

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
11,748,728
11,420,717
Social security costs
1,126,994
1,065,009
Pension costs
418,439
404,103
13,294,161
12,889,829
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
253,901
131,969
Company pension contributions to defined contribution schemes
41,200
-
295,101
131,969
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
97,623
92,083
JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
12,781
12,199
9
Amounts written off investments
2023
2022
£
£
Fair value gains/(losses) on financial instruments
(Loss)/gain on financial assets held at fair value through profit or loss
(105,877)
95,724
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
(121,306)
Deferred tax
Origination and reversal of timing differences
(45,455)
37,400
Total tax credit
(45,455)
(83,906)

The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(119,691)
164,084
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(22,741)
31,176
Tax effect of expenses that are not deductible in determining taxable profit
1,913
3,666
Tax effect of income not taxable in determining taxable profit
(17,100)
(17,220)
Gains not taxable
6,302
-
0
Effect of change in corporation tax rate
2,296
87,642
Permanent capital allowances in excess of depreciation
(9,160)
22,130
Depreciation on assets not qualifying for tax allowances
6,135
5,774
Adjustments in respect of financial assets
-
0
6,495
Research and development tax credit
-
0
(210,886)
Other permanent differences
(13,100)
(12,683)
Taxation credit for the year
(45,455)
(83,906)
JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
11
Dividends
2023
2022
£
£
Interim paid
-
0
35,000
12
Tangible fixed assets
Freehold Land and buildings
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2022
1,830,030
78,985
35,118
245,508
2,521,959
4,711,600
Additions
-
0
8,385
665
84,836
550,359
644,245
Disposals
-
0
-
0
-
0
-
0
(161,247)
(161,247)
At 31 March 2023
1,830,030
87,370
35,783
330,344
2,911,071
5,194,598
Depreciation and impairment
At 1 April 2022
335,692
44,642
15,143
160,650
1,369,966
1,926,093
Depreciation charged in the year
36,120
19,684
8,946
53,355
594,032
712,137
Eliminated in respect of disposals
-
0
-
0
-
0
-
0
(155,643)
(155,643)
At 31 March 2023
371,812
64,326
24,089
214,005
1,808,355
2,482,587
Carrying amount
At 31 March 2023
1,458,218
23,044
11,694
116,339
1,102,716
2,712,011
At 31 March 2022
1,494,338
34,343
19,975
84,858
1,151,993
2,785,507

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Motor vehicles
127,785
258,053
13
Fixed asset investments
2023
2022
£
£
Listed investments
1,308,658
1,664,535

The company has not designated any financial assets that are not classified as financial assets at fair value through profit or loss.

JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
13
Fixed asset investments
(Continued)
- 19 -
Fixed asset investments revalued

The investments consist of amounts held in listed portfolio's managed by 2 separate investment houses. The historical cost of these investments is £1,160,778 (2022: £1,383,856).

Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 April 2022
1,664,535
Valuation changes
(105,877)
Disposals
(250,000)
At 31 March 2023
1,308,658
Carrying amount
At 31 March 2023
1,308,658
At 31 March 2022
1,664,535
14
Stocks
2023
2022
£
£
Raw materials and consumables
569,200
534,630
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,404,679
1,917,915
Gross amounts owed by contract customers
2,904,435
2,773,622
Corporation tax recoverable
-
0
139,779
Other debtors
153,206
129,388
Prepayments and accrued income
753,293
687,796
6,215,613
5,648,500
JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
18
39,966
62,489
Trade creditors
2,299,293
2,609,951
Corporation tax
7,769
-
0
Other taxation and social security
539,252
376,442
Other creditors
1,076,931
501,516
Accruals and deferred income
243,979
536,589
4,207,190
4,086,987

Obligations under finance leases are secured on the assets being purchased.

17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
53,830
-
0

Obligations under finance leases are secured on the assets being purchased.

18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
39,966
62,489
In two to five years
53,830
-
0
93,796
62,489

Finance lease payments represent rentals payable by the company for certain items within motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is three years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

19
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
ACAs
319,720
365,175
JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
19
Deferred taxation
(Continued)
- 21 -
2023
Movements in the year:
£
Liability at 1 April 2022
365,175
Credit to profit or loss
(45,455)
Liability at 31 March 2023
319,720
20
Government grants

Grants receivable under the Coronavirus Job Retention Scheme have been recognised as income in the periods to which they relate.

21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
418,439
404,103

The company operates a defined contribution pension scheme for certain employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The company contributes to an industry-wide multi-employer defined benefit pension scheme on behalf of certain employees.  The assets of this scheme are held separately from those of the company in an independently administered fund. 

 

The fund exposes participating employers to actuarial risks associated with current and former employees of other entities with the result that there is no consistent and reliable basis for allocating the obligation, scheme assets and costs to individual companies participating in the scheme and the company therefore does not have access to sufficient information to enable it to account for the pension scheme costs using defined benefit accounting regulations.  As a result, the company has accounted for the pension scheme as a defined contribution scheme under the regulations permitted by FRS102.  The latest formal actuarial valuation as at 5 April 2020 showed that the scheme had a funding level of 99%. 

 

The total cost charged to income of £418,439 (2022 - £384,103) represents contributions payable to these schemes by the company at rates specified in the scheme rules.

 

Within a defined benefit scheme, it is possible that any individual employer can become liable for other scheme members’ obligations under a multi employer industry scheme.  When an employer ceases to participate in such a scheme, they can become liable under legislation to pay “Section 75” employer debt, which could be a significant sum.  The Plumbing and Mechanical Services (UK) Industry Pension Scheme cannot currently calculate Section 75 employer debts.  Consultation has been carried out with the member employers and legal advice is being sought on the way forward.  At present, the company’s directors are not aware of any circumstances which would lead to a Section 75 employer debt becoming payable and therefore no provision is included within the accounts for same.

JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,401
1,401
1,401
1,401
23
Capital redemption reserve
2023
2022
£
£
At the beginning of the year
3,599
1,900
Transfers
-
1,699
At the end of the year
3,599
3,599
24
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
6,782,009
8,562,742
(Loss)/profit for the year
(74,236)
247,990
Dividends declared and paid in the year
-
(35,000)
Own shares acquired
-
0
(1,993,723)
At the end of the year
6,707,773
6,782,009

Included within the profit and loss reserve is an amount of £100,574 which relates to the fair value movement of the listed share investments. The opening balance had an equivalent amount of £280,426. These reserves are not distributable until realised.

25
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
2,135,316
-

The above relates to the upgrade of the van fleet. These will be additions over a 2 year period and will be offset by disposal proceeds of current fleet. The company intends utilising vehicle finance options as appropriate.

JAMES FREW LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
26
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Purchases
Purchases
2023
2022
£
£
Other related parties
-
4,177
27
Ultimate controlling party

James Frew Group Limited, a company registered in Scotland, owns 100% of the share capital and is the ultimate parent company.

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