Company registration number 04687445 (England and Wales)
EVERLAST RAIL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
EVERLAST RAIL LIMITED
COMPANY INFORMATION
Directors
Mr J L Cross
Mr M D Hunter
Mr C H Bott
Mr N Jordan
Mr M A Buttree
Company number
04687445
Registered office
The School House
Parkfield Terrace
Stanningley
Pudsey
West Yorkshire
LS28 6BS
Auditor
Azets Audit Services Limited
33 Park Place
Leeds
LS1 2RY
EVERLAST RAIL LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
EVERLAST RAIL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -

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

Review of the business

The principal activity of the company during the year was that of roofing, building and cladding services. The activities of the division increased significantly year on year.

 

The results for the period show a gross profit of £4,083,005 (2022 - £1,444,202) and pre-tax profits of £2,336,262 (2022 - £113,151). Overall, the directors are satisfied with the results of the company given the economic environment and competitiveness of the sector. There is high confidence that the business will continue to drive performance.

Principal risks and uncertainties

The key business risks and uncertainties affecting the group are considered to relate to competition from other contractors and economic conditions of the construction industry in general. The business has traded successfully through a few years of economic turbulence and continues to develop and evolve. It maintains strong relationships with key customers and suppliers, and has strong support structures throughout.

 

The group does not actively use financial instruments as part of its financial risk management. It is exposed to the usual risk and cash flow risk associated with selling on credit and manages this through credit control procedures. The nature of its financial instruments means that they are not subject to a price risk or liquidity risk.

Key performance indicators

The performance of the business is constantly monitored to the following Financial Performance Indicators:

 

Gross Profit Margin - in total, and by business segment. Across its business categories, Turnover increased by 54.4%, and gross margins were maintained to expectation. The performance in the financial year was strong given the wider economic challenges, demonstrating the division's strength in planning and delivering multiple projects across all sectors.

 

Administrative expenses as a percentage of sales, compared year on year. Administrative expenses as a percentage of turnover for 2023 were 10.0%, being 11.7% in 2022.

 

Profit and loss, balance sheet and cash flow are all monitored through the year by comparison to forecasts and prior year performance.

 

The Directors are pleased with the Group's net asset position, £2,816,785 (2022 £1,196,330) at the Balance Sheet Date.

On behalf of the board

Mr M A Buttree
Director
16 November 2023
EVERLAST RAIL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 2 -

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

Principal activities

The principal activity of the company continues to be that of roofing and building services.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £248,554. 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 J L Cross
Mr M D Hunter
Mr C H Bott
Mr N Jordan
Mr M A Buttree
Auditor

The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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 M A Buttree
Director
16 November 2023
EVERLAST RAIL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -

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.

EVERLAST RAIL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EVERLAST RAIL LIMITED
- 4 -
Opinion

We have audited the financial statements of Everlast Rail Limited (the 'company') for the year ended 31 May 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:

EVERLAST RAIL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EVERLAST RAIL LIMITED
- 5 -
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.

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.

EVERLAST RAIL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EVERLAST RAIL LIMITED
- 6 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we 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.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

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 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.

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 2006. Our 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 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 members as a body, for our audit work, for this report, or for the opinions we have formed.

Matthew Grant
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
16 November 2023
Chartered Accountants
Statutory Auditor
33 Park Place
Leeds
LS1 2RY
EVERLAST RAIL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
17,537,976
11,357,099
Cost of sales
(13,454,971)
(9,912,897)
Gross profit
4,083,005
1,444,202
Administrative expenses
(1,753,577)
(1,330,365)
Other operating income
7,577
681
Operating profit
4
2,337,005
114,518
Interest payable and similar expenses
7
(743)
(1,367)
Profit before taxation
2,336,262
113,151
Tax on profit
8
(467,253)
(25,026)
Profit for the financial year
1,869,009
88,125

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

EVERLAST RAIL LIMITED
BALANCE SHEET
AS AT
31 MAY 2023
31 May 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
24,617
31,815
Current assets
Stocks
11
139,517
90,596
Debtors
12
8,725,033
6,329,275
Cash at bank and in hand
1,183,215
437,605
10,047,765
6,857,476
Creditors: amounts falling due within one year
13
(7,251,998)
(5,678,565)
Net current assets
2,795,767
1,178,911
Total assets less current liabilities
2,820,384
1,210,726
Creditors: amounts falling due after more than one year
14
(3,599)
(14,396)
Net assets
2,816,785
1,196,330
Capital and reserves
Called up share capital
18
2
2
Profit and loss reserves
2,816,783
1,196,328
Total equity
2,816,785
1,196,330
The financial statements were approved by the board of directors and authorised for issue on 16 November 2023 and are signed on its behalf by:
Mr M A Buttree
Director
Company Registration No. 04687445
EVERLAST RAIL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 June 2021
2
1,108,203
1,108,205
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
88,125
88,125
Balance at 31 May 2022
2
1,196,328
1,196,330
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
1,869,009
1,869,009
Dividends
9
-
(248,554)
(248,554)
Balance at 31 May 2023
2
2,816,783
2,816,785
EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 10 -
1
Accounting policies
Company information

Everlast Rail Limited is a company limited by shares incorporated in England and Wales. The registered office is The School House, Parkfield Terrace, Stanningley, Pudsey, LS28 6BS.

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 £1.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The ultimate parent company is Everlast (Group) Holdings Limited, a company incorporated in England and Wales with a registered office of The School House, Parkfield Terrace, Pudsey, Leeds, LS28 6BS. The immediate parent company is Everlast (Group) Limited, a company incorporated in England and Wales with a registered office of The School House, Parkfield Terrace, Pudsey, Leeds, LS28 6BS. Everlast (Group) Holdings Limited is the smallest and largest group into which Everlast Rail Limited is consolidated.

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 is recognised at the fair value of the consideration received or receivable for rail works and construction services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from contracts for the provision of rail works and construction services 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 it is probable will be recovered.

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.

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:

Fixtures, fittings and equipment
Straight line over 3 years
Motor vehicles
Straight line over 5 years

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.

EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 11 -
1.5
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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
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.

1.7
Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

 

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

 

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of work certified at the year end compared to the estimated total contract value. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 12 -
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.

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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 13 -
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 and loans from fellow group companies, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

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. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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.

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.

EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 14 -
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 profit or loss 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 leases asset are consumed.

1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 15 -
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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Long term contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

 

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

 

Where the outcome of a construction contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.

Bad and doubtful debt provision

Outstanding trade debtor balances are reviewed on a line by line basis by management to identify possible amounts where a provision is required. Management closely manage the collection of trade debtors and therefore are able to identify balances where there is uncertainty about its recoverability, and determine what provision is required (if any).

3
Turnover

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

2023
2022
£
£
Turnover analysed by class of business
Roofing
17,537,976
11,357,099
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
17,537,976
11,357,099
EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
11,300
9,000
Depreciation of owned tangible fixed assets
-
369
Depreciation of tangible fixed assets held under finance leases
7,198
8,388
Profit on disposal of tangible fixed assets
(1,458)
(2,573)
Operating lease charges
41,445
52,308
5
Employees

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

2023
2022
Number
Number
Directors
5
5
Administration
15
11
Roofers
5
7
Total
25
23

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,178,453
929,606
Social security costs
167,596
107,484
Pension costs
43,550
27,036
1,389,599
1,064,126
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
105,960
93,251
Company pension contributions to defined contribution schemes
7,259
3,056
113,219
96,307

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4)

EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 17 -
7
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
743
1,367
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
467,253
25,026

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

2023
2022
£
£
Profit before taxation
2,336,262
113,151
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
467,252
21,499
Tax effect of expenses that are not deductible in determining taxable profit
843
4,563
Other
(842)
(1,036)
Taxation charge for the year
467,253
25,026
9
Dividends
2023
2022
£
£
Interim paid
248,554
-
0
EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 18 -
10
Tangible fixed assets
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
Cost
At 1 June 2022
4,418
54,566
58,984
Disposals
-
0
(18,575)
(18,575)
At 31 May 2023
4,418
35,991
40,409
Depreciation and impairment
At 1 June 2022
4,418
22,751
27,169
Depreciation charged in the year
-
0
7,198
7,198
Eliminated in respect of disposals
-
0
(18,575)
(18,575)
At 31 May 2023
4,418
11,374
15,792
Carrying amount
At 31 May 2023
-
0
24,617
24,617
At 31 May 2022
-
0
31,815
31,815

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
24,617
31,815
11
Stocks
2023
2022
£
£
Work in progress
139,517
90,596
EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 19 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
918,877
699,390
Gross amounts owed by contract customers
2,058,855
2,491,017
Amounts owed by group undertakings
5,717,400
2,906,460
Other debtors
19,901
222,408
8,715,033
6,319,275
Deferred tax asset (note 16)
10,000
10,000
8,725,033
6,329,275
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
15
10,797
10,797
Trade creditors
1,370,795
1,915,448
Amounts owed to group undertakings
2,748,828
1,749,456
Corporation tax
467,253
25,025
Other taxation and social security
46,424
53,686
Other creditors
181,742
142,842
Accruals and deferred income
2,426,159
1,781,311
7,251,998
5,678,565

Obligations under finance leases are secured by the assets to which they relate.

14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
15
3,599
14,396

Obligations under finance leases are secured by the assets to which they relate.

EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
11,052
11,337
In two to five years
3,619
14,672
14,671
26,009
Less: future finance charges
(275)
(816)
14,396
25,193

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. 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 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

16
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
10,000
10,000
There were no deferred tax movements in the year.
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
43,550
27,036

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

18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
EVERLAST RAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
19
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
1,088
7,504
Between two and five years
-
0
1,251
1,088
8,755
20
Ultimate controlling party

The ultimate parent company is Everlast (Group) Holdings Limited, a company incorporated in England and Wales with a registered office of The School House, Parkfield Terrace, Pudsey, Leeds, LS28 6BS. The immediate parent company is Everlast (Group) Limited, a company incorporated in England and Wales with a registered office of The School House, Parkfield Terrace, Pudsey, Leeds, LS28 6BS. Everlast (Group) Holdings Limited is the smallest and largest group into which Everlast Rail Limited is consolidated.

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