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Registration number: 13198809

Prepared for the registrar

Watkins & Gunn Limited

Annual Report and Unaudited Financial Statements

for the Year Ended 30 June 2023

 

Watkins & Gunn Limited

Contents

Company Information

1

Balance Sheet

2

Notes to the Unaudited Financial Statements

3 to 9

 

Watkins & Gunn Limited

Company Information

Directors

L J Guscott

S C Hughes

J M Imperato

K Roberts

C R Thomas

J M Wellington

Registered office

Glantorfaen House
Hanbury Road
Pontypool
Gwent
NP4 6XY

Accountants

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

Watkins & Gunn Limited

(Registration number: 13198809)
Balance Sheet as at 30 June 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

5

978,000

1,304,000

Tangible assets

6

232,576

82,672

 

1,210,576

1,386,672

Current assets

 

Debtors

7

778,737

722,967

Cash at bank and in hand

 

570,526

309,215

 

1,349,263

1,032,182

Creditors: Amounts falling due within one year

8

(1,808,949)

(1,978,092)

Net current liabilities

 

(459,686)

(945,910)

Total assets less current liabilities

 

750,890

440,762

Creditors: Amounts falling due after more than one year

8

(165,974)

(291,667)

Provisions

 

(60,000)

(60,000)

Net assets

 

524,916

89,095

Capital and reserves

 

Called up share capital

1,000

1,000

Profit and loss account

523,916

88,095

Shareholders' funds

 

524,916

89,095

For the financial year ending 30 June 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 18 January 2024 and signed on its behalf by:
 


C R Thomas
Director

 

Watkins & Gunn Limited

Notes to the Unaudited Financial Statements for the Year Ended 30 June 2023

 

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Glantorfaen House
Hanbury Road
Pontypool
Gwent
NP4 6XY
United Kingdom

These financial statements were authorised for issue by the Board on 18 January 2024.

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Going concern

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Critical accounting 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 amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
 

Judgements

No significant judgements have been made by management in preparing these financial statements.

 

Watkins & Gunn Limited

Notes to the Unaudited Financial Statements for the Year Ended 30 June 2023

Key sources of estimation uncertainty

Amounts recoverable on contracts - The process of assessing amounts recoverable on contracts requires various estimates and judgements to be made. Fee earners are required to record time spent on client assignments and this is used as the basis for the amounts recoverable on contracts and work in progress estimates. At the year end, contigent work in progress is removed and a recovery rate is applied. The carrying amount is £363,271 (2022 -£358,467).

Bad debt provision - due to the nature of the business, there are high levels of trade receivables at the year end, and therefore a risk that some of these balances maybe irrecoverable. A bad debt review is carried out, where debts are assessed and provided against when recoverability of these balances is considered to be uncertain. The carrying amount is £72,037 (2022 -£123,942).

Revenue recognition

Fees receivable represent the fair value of services provided during the year on client assignments. Fair value reflects the amounts expected to be recoverable from clients based on time spent, skills provided and expenses incurred, and excludes VAT. Income is recognised as contract activity progresses and the right to consideration is secured, except where the final outcome cannot be assessed with reasonable certainty.

Income in respect of contingent fee assignments is recognised in the period when the contingent event occurs and collectability of the fee is assured.

Unbilled income on individual client assignments is included as amounts recoverable on contracts within debtors.

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Fixtures, fittings and equipment

20% - 25% Straight line

Goodwill

Goodwill is amortised over its useful life, which shall not exceed five years if a reliable estimate of the useful life cannot be made.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

Straight line over 5 years

 

Watkins & Gunn Limited

Notes to the Unaudited Financial Statements for the Year Ended 30 June 2023

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Provisions

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Watkins & Gunn Limited

Notes to the Unaudited Financial Statements for the Year Ended 30 June 2023

Financial instruments


Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

 

3

Staff numbers

The average number of persons employed by the company (including directors) during the year, was 60 (2022 - 47).

 

Watkins & Gunn Limited

Notes to the Unaudited Financial Statements for the Year Ended 30 June 2023

 

4

Taxation

Tax charged in the profit and loss account

2023
 £

2022
 £

Current taxation

UK corporation tax

251,586

93,831

 

5

Intangible assets

Goodwill
 £

Cost

At 1 July 2022

1,630,000

At 30 June 2023

1,630,000

Amortisation

At 1 July 2022

326,000

Amortisation charge

326,000

At 30 June 2023

652,000

Carrying amount

At 30 June 2023

978,000

At 30 June 2022

1,304,000

 

6

Tangible assets

Furniture, fittings and equipment
 £

Cost

At 1 July 2022

106,883

Additions

198,086

At 30 June 2023

304,969

Depreciation

At 1 July 2022

24,211

Charge for the year

48,182

At 30 June 2023

72,393

Carrying amount

At 30 June 2023

232,576

At 30 June 2022

82,672

 

Watkins & Gunn Limited

Notes to the Unaudited Financial Statements for the Year Ended 30 June 2023

 

7

Debtors

2023
 £

2022
 £

Trade debtors

280,440

262,810

Prepayments

98,554

101,690

Gross amount due from customers for contract work

399,743

358,467

 

778,737

722,967

 

8

Creditors

Note

2023
 £

2022
 £

Due within one year

 

Loans and borrowings

10

1,169,396

1,653,789

Trade creditors

 

59,505

20,680

Social security and other taxes

 

238,505

161,700

Other creditors

 

9,478

7,572

Accrued expenses

 

80,479

40,520

Corporation tax liability

251,586

93,831

 

1,808,949

1,978,092

Included with other loans due within one year are bank loans of £100,000 (2022: £100,000) which are secured by way of a fixed charge over all assets, both present and future.

Note

2023
£

2022
£

Due after one year

 

Loans and borrowings

10

165,974

291,667

Included with other loans due after one year are bank loans of £165,974 (2022: £291,667) which are secured by way of a fixed charge over all assets, both present and future.

 

9

Provisions

Dilapidations provision
£

Client claims provision
£

At 1 July 2022

30,000

30,000

At 30 June 2023

30,000

30,000

 

Watkins & Gunn Limited

Notes to the Unaudited Financial Statements for the Year Ended 30 June 2023

 

10

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

Bank borrowings

100,000

100,000

Bank overdrafts

22,129

-

Other borrowings

1,047,267

1,553,789

1,169,396

1,653,789

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

165,974

291,667