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Registered number: 10065658









J A BROOKS MECHANICAL SERVICES LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
COMPANY INFORMATION


Directors
D G Robson 
A R Dolan (appointed 1 February 2023)
M W Towner (appointed 1 July 2023)




Registered number
10065658



Registered office
4 Beaconsfield Road

St Albans

Hertfordshire

AL1 3RD




Trading Address
23 Christopher Street

London

EC2A 2BS






Independent auditors
WMT

4 Beaconsfield Road

St Albans

Hertfordshire

AL1 3RD





 
J A BROOKS MECHANICAL SERVICES LIMITED
 

CONTENTS



Page
Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 8
Profit and Loss Account
9
Balance Sheet
10 - 11
Statement of Changes in Equity
12
Statement of Cash Flows
13 - 14
Analysis of Net Debt
15
Notes to the Financial Statements
16 - 31


 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

Introduction
 
The Company's principal activity continues to be that of mechanical engineering and installations within the building services sector.

Business review
 
The company achieved its intention to increase turnover. The result of this was an approximate 17% improvement from the previous financial year to £24,650,986 (2022: £17,013,398)
Staff retention continues to be strong and this has enabled the company to attract additional talent and skills across the board from operatives to management level particularly to fulfil project requirements. 
Health & Safety compliance remains a high and legislative changes are consistently reviewed and monitored. Sustainability is increasingly becoming high on the agenda of the company’s strategic planning and reporting together with a focus on maintaining Social Values and Engagement both internally and externally.
Cash reserves remain high and with a steady increase in turnover and profit the company has placed itself in a secure financial and operational position for the year ahead. 

Principal risks and uncertainties
 
The Covid Pandemic (C19) remains a low risk financially although the senior management continue to experience an element of knock on effects from an operational perspective. This risk has been mitigated however so it does not impact the company’s external operations and the effects are felt merely internally and to a limited extent. 
There has been particular focus this year on material price increases and material availability due to anticipated inflated prices. Measures were put in place to limit the company’s exposure to associated financial risk and impact. 
The company remains focussed on employing a significant amount of directly employed tradespeople in line with its intentions to offer skilled opportunities in the construction industry. The company has further strengthened its internal training and development with recruitment of a number of new apprentices with an objective to recruit even more in the coming year. 
In light of the strength of its labour force, strong relationships with its supply chain, and strategic management of materials and stock levels, the company remains strongly positioned to take on projects of varying sizes with a healthy forecast of secured and future work and consequential turnover.   

Financial key performance indicators
 
Financial Year End          March 2023          March 2022
Turnover                            £24,650,986          £17,013,398 
Gross Profit                        £6,186,879            £4,666,216 
Retained Earnings               £5,774,837            £3,714,318

Page 1

 
J A BROOKS MECHANICAL SERVICES LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023


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



D G Robson
Director

Date: 22 December 2023

Page 2

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023

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

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 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 of the profit or loss of the Company for that period.

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


select suitable accounting policies for the Company'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 Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £1,980,072 (2022 - £1,688,814).

Directors

The directors who served during the year were:

D G Robson 
A R Dolan (appointed 1 February 2023)

Future developments

In the coming year, the Company’s objectives remain consistent, with particular emphasis on growing turnover and profitability. 

Page 3

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023


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'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's auditors are aware of that information.

Post balance sheet events

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

Auditors

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

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





D G Robson
Director

Date: 22 December 2023

Page 4

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF J A BROOKS MECHANICAL SERVICES LIMITED
 

Opinion


We have audited the financial statements of J A Brooks Mechanical Services Limited (the 'Company') for the year ended 31 March 2023, which comprise the Profit and Loss Account, the Balance Sheet, the Statement of Cash Flows, the 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 Company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Company 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 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 5

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF J A BROOKS MECHANICAL SERVICES 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 ReportOur 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 Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

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


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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.


Page 6

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF J A BROOKS MECHANICAL SERVICES 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 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:

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity. 
The following laws and regulations were identified as being of significance to the entity: 
Those laws and regulations considered to have a direct effect on the financial statements include:
 • UK financial reporting standards
 • Company Law
 • Tax legislation
 • Distributable profits legislation
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include health and safety legislation, employment law, information legislation including data protection. 
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).


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.


Page 7

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF J A BROOKS MECHANICAL SERVICES LIMITED (CONTINUED)


As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:


Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.


We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


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.





Elizabeth Wicks (Senior Statutory Auditor)
  
for and on behalf of
WMT
 
Chartered Accountants and Statutory Auditors
  
4 Beaconsfield Road
St Albans
Hertfordshire
AL1 3RD

22 December 2023
Page 8

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
Note
£
£

  

Turnover
 4 
24,650,986
17,013,398

Cost of sales
  
(18,464,107)
(12,347,182)

Gross profit
  
6,186,879
4,666,216

Administrative expenses
  
(4,140,899)
(3,323,870)

Other operating income
 5 
-
63,123

Operating profit
  
2,045,980
1,405,469

Interest receivable and similar income
 9 
8,222
406

Profit before tax
  
2,054,202
1,405,875

Tax on profit
 10 
(74,130)
282,939

Profit for the financial year
  
1,980,072
1,688,814

The notes on pages 16 to 31 form part of these financial statements.

Page 9

 
J A BROOKS MECHANICAL SERVICES LIMITED
REGISTERED NUMBER: 10065658

BALANCE SHEET
AS AT 31 MARCH 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
15,003
20,003

Tangible assets
 13 
309,654
101,436

Investments
  
24,201
-

  
348,858
121,439

Current assets
  

Stocks
 15 
116,337
186,476

Debtors: amounts falling due after more than one year
 16 
432,664
529,876

Debtors: amounts falling due within one year
 16 
5,414,803
5,077,322

Cash at bank and in hand
 17 
4,562,104
3,371,087

  
10,525,908
9,164,761

Creditors: amounts falling due within one year
 18 
(5,180,251)
(5,571,290)

Net current assets
  
 
 
5,345,657
 
 
3,593,471

Total assets less current liabilities
  
5,694,515
3,714,910

Provisions for liabilities
  

Deferred tax
 20 
-
(467)

Net assets
  
5,694,515
3,714,443


Capital and reserves
  

Called up share capital 
 21 
125
125

Profit and loss account
 22 
5,694,390
3,714,318

  
5,694,515
3,714,443


Page 10

 
J A BROOKS MECHANICAL SERVICES LIMITED
REGISTERED NUMBER: 10065658
    
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




D G Robson
Director

Date: 22 December 2023

The notes on pages 16 to 31 form part of these financial statements.

Page 11

 
J A BROOKS MECHANICAL SERVICES LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 April 2021
125
3,025,504
3,025,629



Profit for the year
-
1,688,814
1,688,814

Dividends: Equity capital
-
(1,000,000)
(1,000,000)



At 1 April 2022
125
3,714,318
3,714,443



Profit for the year
-
1,980,072
1,980,072


At 31 March 2023
125
5,694,390
5,694,515


The notes on pages 16 to 31 form part of these financial statements.

Page 12

 
J A BROOKS MECHANICAL SERVICES LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,980,072
1,688,814

Adjustments for:

Amortisation of intangible assets
5,000
5,000

Depreciation of tangible assets
61,539
55,084

Loss on disposal of tangible assets
(9,813)
(37,061)

Government grants
-
(63,123)

Interest received
(8,222)
(406)

Taxation charge
74,130
(282,939)

Decrease in stocks
70,139
31,207

Decrease/(increase) in debtors
1,220,140
(479,131)

(Increase)/decrease in amounts owed by groups
(1,733,270)
-

(Decrease)/increase in creditors
(394,903)
1,319,402

Increase in amounts owed to groups
2,063
-

Corporation tax received/(paid)
450,065
(349,281)

Net cash generated from operating activities

1,716,940
1,887,566


Cash flows from investing activities

Purchase of tangible fixed assets
(305,194)
(78,443)

Sale of tangible fixed assets
45,250
50,000

Government grants received
-
63,123

Purchase of fixed asset investments
(24,201)
-

Interest received
8,222
406

Net cash from investing activities

(275,923)
35,086

Cash flows from financing activities

New secured loans
-
250,000

Repayment of loans
(250,000)
-

Dividends paid
-
(1,000,000)

Net cash used in financing activities
(250,000)
(750,000)

Net increase in cash and cash equivalents
1,191,017
1,172,652

Cash and cash equivalents at beginning of year
3,371,087
2,198,435

Cash and cash equivalents at the end of year
4,562,104
3,371,087


Cash and cash equivalents at the end of year comprise:
Page 13

 
J A BROOKS MECHANICAL SERVICES LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023


2023
2022

£
£


Cash at bank and in hand
4,562,104
3,371,087

4,562,104
3,371,087


The notes on pages 16 to 31 form part of these financial statements.

Page 14

 
J A BROOKS MECHANICAL SERVICES LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2023




At 1 April 2022
Cash flows
At 31 March 2023
£

£

£

Cash at bank and in hand

3,371,087

1,191,017

4,562,104

Debt due within 1 year

(250,000)

250,000

-


3,121,087
1,441,017
4,562,104

The notes on pages 16 to 31 form part of these financial statements.

Page 15

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


General information

J A Brooks Mechanical Services Limited is a private Company, limited by shares, incorporated in England, United Kingdom. The registered address is 2nd Floor 4 Beaconsfield Road, St. Albans, AL1 3RD and the company trades from 23 Christopher Street, London, United Kingdom, EC2A 2BS. The registered number is 10065658.

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 management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Profit and Loss Account within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 16

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.3

Revenue

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.

 
2.4

Operating leases: the Company as lessee

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

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.5

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Profit and Loss Account in the same period as the related expenditure.

 
2.6

Interest income

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

 
2.7

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 17

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.8

Pensions

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.

 
2.9

Current and deferred taxation

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.

Page 18

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.10

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 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 Profit and Loss Account 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.

 The estimated useful lives range as follows:

Goodwill
-
10
years

 
2.11

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, using the straight-line method.

Depreciation is provided on the following basis:

Plant and machinery
-
25%
per annum straight line
Motor vehicles
-
20%
per annum straight line
Fixtures and fittings
-
33%
per annum straight line
Office equipment
-
33%
per annum 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.

Page 19

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Company 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 Profit and Loss Account for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.

 
2.13

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 on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

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.

 
2.14

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.

 
2.15

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 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 Company's cash management.

 
2.16

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.

Page 20

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.17

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.18

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Financial liabilities

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

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Page 21

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.19

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

There were a number of critical judgments made in the process of applying the Company's accounting policies.
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. The nature of estimation means the actual outcomes could differ from those estimates.
In the financial statements, turnover is recognised on long term contracts as work is carried out. The amount of turnover recognised on contracts is agreed with clients on a monthly basis. Timing differences between invoicing and incurring costs on contracts are recognised through work in progress and income in advance. Margins on individual contracts are estimated using management’s best judgment. Due to the nature of these estimations, actual timing of turnover recognition may differ from that disclosed in the financial statements.


4.


Turnover

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


2023
2022
£
£

Sales
24,650,986
17,013,398


All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£

Government grants receivable
-
63,123


Page 22

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
15,500
15,500

7.


Employees

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


2023
2022
£
£

Wages and salaries
3,690,801
3,236,217

Social security costs
417,774
301,346

Cost of defined contribution scheme
293,583
116,851

4,402,158
3,654,414


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


        2023
        2022
            No.
            No.







Directors
2
1



Staff
64
55

66
56


8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
143,686
61,432

Company contributions to defined contribution pension schemes
148,772
-

292,458
61,432


During the year retirement benefits were accruing to 2 directors (2022 - NIL) in respect of defined contribution pension schemes.

Page 23

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

9.


Interest receivable

2023
2022
£
£


Other interest receivable
8,222
406


10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
380,178
299,784

Adjustments in respect of previous periods
(304,081)
(567,894)


Total current tax
76,097
(268,110)

Deferred tax


Origination and reversal of timing differences
(1,967)
(14,829)


Taxation on profit/(loss) on ordinary activities
74,130
(282,939)

Factors affecting tax charge for the year

The tax assessed for the year is the same as (2022 - the same as) the standard rate of corporation tax in the UK of 19% (2022 - 19%) as set out below:

2023
2022
£
£


Profit on ordinary activities before tax
2,054,202
1,405,875


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
390,298
267,116

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
745
17,997

Capital allowances for year in excess of depreciation
(15,173)
(180)

Adjustments to tax charge in respect of prior periods
(304,081)
(567,984)

Changes in provisions leading to an increase (decrease) in the tax charge
2,341
112

Total tax charge for the year
74,130
(282,939)

Page 24

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
 
10.Taxation (continued)


Factors that may affect future tax charges

There were no factors that may affect future tax charges. 


11.


Dividends

2023
2022
£
£


Dividends paid
-
1,000,000

-
1,000,000


12.


Intangible assets




Goodwill

£



Cost


At 1 April 2022
50,003



At 31 March 2023

50,003



Amortisation


At 1 April 2022
30,000


Charge for the year on owned assets
5,000



At 31 March 2023

35,000



Net book value



At 31 March 2023
15,003



At 31 March 2022
20,003



Page 25

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

13.


Tangible fixed assets





Plant and machinery
Motor vehicles
Fixtures and fittings
Office equipment
Total

£
£
£
£
£



Cost or valuation


At 1 April 2022
82,927
151,396
32,806
44,938
312,067


Additions
141,355
153,656
-
10,183
305,194


Disposals
-
(71,500)
-
-
(71,500)



At 31 March 2023

224,282
233,552
32,806
55,121
545,761



Depreciation


At 1 April 2022
48,978
89,981
32,522
39,150
210,631


Charge for the year on owned assets
21,320
33,679
284
6,256
61,539


Disposals
-
(36,063)
-
-
(36,063)



At 31 March 2023

70,298
87,597
32,806
45,406
236,107



Net book value



At 31 March 2023
153,984
145,955
-
9,715
309,654



At 31 March 2022
33,949
61,415
284
5,788
101,436


14.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


Additions
24,201



At 31 March 2023
24,201




Page 26

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

J A Brooks AB
Sweden
Ordinary
100%
J A Brooks GmbH
Germany
Ordinary
100%

The aggregate of the share capital and reserves as at 31 March 2023 and the profit or loss for the year ended on that date for the subsidiary undertakings was as follows:

Name
Aggregate of share capital and reserves
£

J A Brooks AB
2,603

J A Brooks GmbH
22,138


15.


Stocks

2023
2022
£
£

Raw Materials
-
155,226

Work in progress on L/T contracts
116,337
31,250

116,337
186,476


Page 27

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

16.


Debtors

2023
2022
£
£

Due after more than one year

Other debtors
15,582
67,130

Amounts recoverable on L/T contracts
417,082
462,746

432,664
529,876


2023
2022
£
£

Due within one year

Trade debtors
2,614,920
3,780,400

Amounts owed by group undertakings
1,733,270
-

Other debtors
344,287
809,388

Called up share capital not paid
-
25

Prepayments and accrued income
720,826
487,509

Deferred taxation
1,500
-

5,414,803
5,077,322



17.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
4,562,104
3,371,087


Page 28

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

18.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank loans
-
250,000

Trade creditors
2,452,040
2,497,503

Amounts owed to group undertakings
2,063
-

Corporation tax
251,801
-

Other taxation and social security
224,092
211,386

Other creditors
100,678
73,061

Accruals and deferred income
2,149,577
2,539,340

5,180,251
5,571,290


The following liabilities were secured:

2023
2022
£
£



Bank Loan
-
250,000

Details of security provided:

The bank loan was secured by fixed and floating charges over all of the assets and undertakings of the Company.


19.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets measured at fair value through profit or loss
5,998,105
5,533,704




Financial assets measured at fair value through profit or loss comprise cash and cash equivalents.

Page 29

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

20.


Deferred taxation




2023


£






At beginning of year
(467)


Charged to profit or loss
1,967



At end of year
1,500

The deferred taxation balance is made up as follows:

2023
2022
£
£


Accelerated capital allowances
1,500
(467)

1,500
(467)


21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



100 (2022 - 100) Ordinary shares of £1.00 each
100
100

Allotted, called up and partly paid



24 (2022 - 24) Ordinary B shares of £1.00 each
24
24
1 (2022 - 1) Ordinary Z share of £1.00
1
1

25

25



22.


Reserves

Profit and loss account

The Profit and loss account represents distributable cumulative profits and losses net of dividends and other adjustments.

Page 30

 
J A BROOKS MECHANICAL SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

23.


Pension commitments

The Company operates a defined contributions 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 £373,583 (2022 - £116,851). Contributions totalling £33,136 (2022 - £20,817) were payable to the fund at the balance sheet date and are included in creditors.


24.


Commitments under operating leases

At 31 March 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
159,806
164,171

Later than 1 year and not later than 5 years
417,801
324,658

Later than 5 years
-
32,423

577,607
521,252


25.


Related party transactions

During the year, the Company made interest-free advances to the director totalling £nil (2022 - £nil). Repayments made by the director totalled £2,000,000 (2022 - £2,000,000) and the amount owed to the Company at the year end was £nil (2022 - £nil).
JA Brooks Mechanical Services Limited is a wholly owned subsidiary of J A Brooks Holdings Limted and hence a related party. FRS102 does not require disclosure of transactions entered into between two or more members of a group,provided that any subsidary which is a party to the transaction is wholly owned by such a member.
Included in debtors are amounts owed by fellow subsidiaries of J A Brooks Holdings Limted of £1,799,263 (2022 - £nil).
There is a charge over the assets of the Company with the bank which relates to J A Brooks Properties Limited.


26.


Controlling party

The controlling party is the parent company J A Brooks Holdings Limted.
The ultimate controlling party is considered to be D Robson by virtue of his majority shareholding.
 
Page 31