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Company registration number:
00946573
Destec Engineering Ltd
Financial statements
28 February 2023
Just Audit Limited
Chartered Accountants and Statutory Auditors
Strelley Hall
Main Street
Strelley
Nottingham
NG8 6PE
Destec Engineering Ltd
Contents
Directors and other information
Strategic report
Directors report
Independent auditor's report to the members
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Destec Engineering Ltd
Directors and other information
|
|
|
|
Directors |
J A S Maclachlan |
|
|
B Porter |
|
|
K Andrews |
|
|
|
|
|
|
|
Company number |
00946573 |
|
|
|
|
|
|
|
Registered office |
Five Mile Lane |
|
|
Washingborough |
|
|
Lincoln |
|
|
Lincolnshire |
|
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LN4 1AF |
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|
|
|
|
|
|
Business address |
Five Mile Lane |
|
|
Washingborough |
|
|
Lincoln |
|
|
Lincolnshire |
|
|
LN4 1AF |
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|
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Auditor |
Just Audit Limited |
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Strelley Hall |
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Main Street |
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Strelley |
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Nottingham |
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|
NG8 6PE |
|
|
|
|
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|
Accountants |
Coulter & Co (Accountants) Ltd |
|
|
Pera Business Park |
|
|
M03 Tower Building |
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Nottingham Road |
|
|
Melton Mowbray |
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|
LE13 1PB |
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|
Destec Engineering Ltd
Strategic report
Year ended 28 February 2023
The Directors present their strategic report for the year ended 28 February 2023.
Principal activity
The principal activity of the Company is the supply of high pressure containment equipment, portable machine tools and on-site machining services to a global market. The principal markets served are the oil, chemical and petrochemical related industries, power generation, steel, marine, and others. These activities have not changed materially during the year.
Fair review of the business
The Directors consider the state of the Company's affairs to be satisfactory and have continued to invest in new high-tech machinery and production software to meet the changing market for subsea oil products and refineries. The strong statement of financial position has allowed this investment in equipment without relying on any external borrowing. The development of our product range in the year 2020 resulted in an order larger than our typical annual turnover. This order was completed during the current 2023/2024 accounting period and again was self-funded despite amounts owed by customers on construction contracts in respect of work in progress increasing by £2 million. This one order has more than doubled our turnover for the accounting period ending 28 February 2023 and has returned the business to a profitable position, the gross profit margin returning to approximately pre COVID percentage levels, improving as a result of a number of factors, in particular economies of scale. We have maintained a healthy forward order position and expect to continue to be profitable for the foreseeable future. The Company's key financial performance indicators during the year were as follows:
Unit 2023 2022
Turnover £ 14,774,473 7,175,818
Turnover growth % 106 7 Gross margin % 45 31
Profit/(Loss) before tax £ 4,293,341 (18,463)
Stocks £ 2,869,611 2,863,548
Amounts owed by customers on construction contracts £ 3,631,080 1,787,297 Trade debtors £ 2,456,878 1,319,648
Trade creditors £ 729,752 558,758
Cash £ 1,904,457 776,967
Principal risks and uncertainties
The Company is dependent on conditions within the oil industry. In particular, the global price of oil governs any decisions made by the principal customers of the Company such that a decrease in the price of oil can have an effect on turnover. The risk is mitigated by a strong order book, turnover generated on an annual basis by, for example, refurbishment and maintenance work required by the principal customers. This is complemented by the Company staying abreast of technological advances and investing in latest technology.
The risks to the business are managed through the extensive use of ISO registered procedures and management thereof. The business has a history of generating profit and business development is funded from cashflow. As in any business, debt default is a concern, but careful attention and constant customer communication help to minimise this.
Like some businesses we are experiencing some UK supply chain issues. However, these are being managed by sourcing material from overseas.
Finally, even though our turnover more than doubled, we only had a small increase in general overheads, and we are still maintaining a good forward order position.
Development and Performance
The Company has recovered from COVID and at the end of the year the Company retained a strong financial position with continued investment in fixed assets.
As at the year end, the Company retained a strong statement of financial position with investments in fixed assets being in excess of £4.1 million, net current assets being in excess of £12.1 million and overall net assets being over £15.7 million. The management and staff continue to work hard to meet customer expectations and the investment in new equipment is anticipated to ensure that the business remains in a strong position to meet the future requirements of the industry.
This report was approved by the board of directors on 7 February 2024 and signed on behalf of the board by:
B Porter
Director
Destec Engineering Ltd
Directors report
Year ended 28 February 2023
The directors present their report and the financial statements of the company for the year ended 28 February 2023.
Directors
The directors who served the company during the year were as follows:
|
|
B Porter |
K Andrews |
J A S Maclachlan |
|
Directors responsibilities statement
The directors are responsible for preparing the strategic report, 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 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 the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgments and accounting estimates that are reasonable and prudent; and
-
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 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
-
so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on
07 February 2024
and signed on behalf of the board by:
B Porter
Director
Destec Engineering Ltd
Independent auditor's report to the members of
Destec Engineering Ltd
Year ended 28 February 2023
Opinion
We have audited the financial statements of Destec Engineering Ltd (the "company") for the year ended 28 February 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 28 February 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 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 strategic report and the directors' report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is 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 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 where 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 the 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, 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. 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: We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. 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 on the effectiveness of the 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 auditor’s 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 auditor’s 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 (i.e gives a true and fair view). 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 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 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.
Rachel Davis BA FCA
(Senior Statutory Auditor)
For and on behalf of
Just Audit Limited
Chartered Accountants and Statutory Auditors
Strelley Hall
Main Street
Strelley
Nottingham
NG8 6PE
12 February 2024
Destec Engineering Ltd
Statement of comprehensive income
Year ended 28 February 2023
|
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|
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2023 |
|
2022 |
|
|
|
|
Note |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Turnover |
|
4 |
|
14,774,473 |
|
7,175,818 |
|
|
Cost of sales |
|
|
|
(
8,138,695) |
|
(
4,976,375) |
|
|
|
|
|
|
_______ |
|
_______ |
|
|
Gross profit |
|
|
|
6,635,778 |
|
2,199,443 |
|
|
|
|
|
|
|
|
|
|
|
Administrative expenses |
|
|
|
(
2,342,719) |
|
(
2,258,991) |
|
|
|
|
|
|
_______ |
|
_______ |
|
|
Operating profit/(loss) |
|
5 |
|
4,293,059 |
|
(
59,548) |
|
|
|
|
|
|
|
|
|
|
|
Other interest receivable and similar income |
|
9 |
|
282 |
|
41,085 |
|
|
Profit/(loss) before taxation |
|
|
|
4,293,341 |
|
(
18,463) |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit/(loss) |
|
10 |
|
(
759,215) |
|
(
123,729) |
|
|
|
|
|
|
_______ |
|
_______ |
|
|
Profit/(loss) for the financial year and total comprehensive income |
|
|
|
3,534,126 |
|
(
142,192) |
|
|
|
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
|
All the activities of the company are from continuing operations.
Destec Engineering Ltd
Statement of financial position
28 February 2023
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note |
£ |
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
|
Fixed assets |
|
|
|
|
|
|
|
|
|
Tangible assets |
|
11 |
4,120,172 |
|
|
|
3,969,369 |
|
|
Investments |
|
12 |
100 |
|
|
|
100 |
|
|
|
|
|
_______ |
|
|
|
_______ |
|
|
|
|
|
|
|
4,120,272 |
|
|
|
3,969,469 |
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Stocks |
|
13 |
2,869,611 |
|
|
|
2,863,548 |
|
|
Debtors |
|
14 |
9,304,283 |
|
|
|
5,963,248 |
|
|
Cash at bank and in hand |
|
|
1,904,457 |
|
|
|
776,967 |
|
|
|
|
|
_______ |
|
|
|
_______ |
|
|
|
|
|
14,078,351 |
|
|
|
9,603,763 |
|
|
Creditors: amounts falling due |
|
|
|
|
|
|
|
|
|
within one year |
|
15 |
(
1,915,808) |
|
|
|
(
1,056,237) |
|
|
|
|
|
_______ |
|
|
|
_______ |
|
|
Net current assets |
|
|
|
|
12,162,543 |
|
|
|
8,547,526 |
|
|
|
|
|
_______ |
|
|
|
_______ |
Total assets less current liabilities |
|
|
|
|
16,282,815 |
|
|
|
12,516,995 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions for liabilities |
|
16 |
|
|
(
550,080) |
|
|
|
(
318,386) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______ |
|
|
|
_______ |
Net assets |
|
|
|
|
15,732,735 |
|
|
|
12,198,609 |
|
|
|
|
|
_______ |
|
|
|
_______ |
|
|
|
|
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
|
|
|
|
Called up share capital |
|
17 |
|
|
25,000 |
|
|
|
25,000 |
Profit and loss account |
|
|
|
|
15,707,735 |
|
|
|
12,173,609 |
|
|
|
|
|
_______ |
|
|
|
_______ |
Shareholders funds |
|
|
|
|
15,732,735 |
|
|
|
12,198,609 |
|
|
|
|
|
_______ |
|
|
|
_______ |
|
|
|
|
|
|
|
|
|
|
These financial statements were approved by the
board of directors
and authorised for issue on
07 February 2024
, and are signed on behalf of the board by:
B Porter
Director
Company registration number:
00946573
Destec Engineering Ltd
Statement of changes in equity
Year ended 28 February 2023
|
|
Called up share capital |
|
Profit and loss account |
Total |
|
|
|
|
|
|
|
£ |
|
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 March 2021 |
|
25,000 |
|
12,465,801 |
12,490,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) for the year |
|
|
|
(
142,192) |
(
142,192) |
|
|
|
|
|
|
|
_______ |
|
_______ |
_______ |
|
|
|
|
|
Total comprehensive income for the year |
|
- |
|
(
142,192) |
(
142,192) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid and payable |
|
|
|
(
150,000) |
(
150,000) |
|
|
|
|
|
|
|
_______ |
|
_______ |
_______ |
|
|
|
|
|
Total investments by and distributions to owners |
|
- |
|
(
150,000) |
(
150,000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______ |
|
_______ |
_______ |
|
|
|
|
|
At 28 February 2022 and 1 March 2022 |
|
25,000 |
|
12,173,609 |
12,198,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) for the year |
|
|
|
3,534,126 |
3,534,126 |
|
|
|
|
|
|
|
_______ |
|
_______ |
_______ |
|
|
|
|
|
Total comprehensive income for the year |
|
- |
|
3,534,126 |
3,534,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______ |
|
_______ |
_______ |
|
|
|
|
|
At 28 February 2023 |
|
25,000 |
|
15,707,735 |
15,732,735 |
|
|
|
|
|
|
|
_______ |
|
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Destec Engineering Ltd
Statement of cash flows
Year ended 28 February 2023
|
|
2023 |
|
2022 |
|
|
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
Profit/(loss) for the financial year |
|
3,534,126 |
|
(
142,192) |
|
|
|
|
|
|
|
Adjustments for: |
|
|
|
|
|
Depreciation of tangible assets |
|
507,849 |
|
440,820 |
|
Other interest receivable and similar income |
|
(
282) |
|
(
41,085) |
|
Gain/(loss) on disposal of tangible assets |
|
(
1,788) |
|
(
6,424) |
|
Tax on profit/loss |
|
759,215 |
|
123,729 |
|
|
|
_______ |
|
_______ |
|
|
|
4,799,120 |
|
374,848 |
|
|
|
|
|
|
|
Changes in: |
|
|
|
|
|
Stocks |
|
(
6,063) |
|
61,500 |
|
Trade and other debtors |
|
(3,109,417 |
) |
(1,328,792 |
) |
Trade and other creditors |
|
321,715 |
|
191,303 |
|
|
|
_______ |
|
_______ |
|
Cash generated from operations |
|
2,005,355 |
|
(701,141 |
) |
|
|
|
|
|
|
Interest received |
|
282 |
|
41,085 |
|
Tax paid |
|
21,565 |
|
(50,356 |
) |
|
|
_______ |
|
_______ |
|
Net cash from operating activities |
|
2,027,202 |
|
(710,412 |
) |
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Purchase of tangible assets |
|
(
954,653) |
|
(640,897 |
) |
Proceeds from sale of tangible assets |
|
11,500 |
|
11,000 |
|
Loan advances to related party |
|
(1,300,000 |
) |
(2,179,437 |
) |
Loan repayments from related party |
|
1,343,441 |
|
491,290 |
|
|
|
_______ |
|
_______ |
|
Net cash from investing activities |
|
(899,712 |
) |
(2,318,044 |
) |
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Equity dividends paid |
|
- |
|
(66,850 |
) |
|
|
_______ |
|
_______ |
|
Net cash from financing activities |
|
- |
|
(66,850 |
) |
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
1,127,490 |
|
(3,095,306 |
) |
Cash and cash equivalents at beginning of year |
|
776,967 |
|
3,872,273 |
|
|
|
_______ |
|
_______ |
|
Cash and cash equivalents at end of year |
|
1,904,457 |
|
776,967 |
|
|
|
_______ |
|
_______ |
|
|
|
|
|
|
|
The directors' loan account and dividend items include non-cash movements.
Destec Engineering Ltd
Notes to the financial statements
Year ended 28 February 2023
1.
General information
The company is a private company limited by shares, registered in England and Wales. The registered number is
00946573
and the address of the registered office is Five Mile Lane, Washingborough, Lincoln, Lincolnshire, LN4 1AF.
2.
Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland and the Companies Act 2006.
3.
Accounting policies
Basis of preparation
The financial statements are prepared in sterling, which is the functional currency of the entity.
These financial statements have been prepared using the historical cost convention.
Going concern
At 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 financialstatements.
Turnover
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves. In this case, tax is recognised in other comprehensive income or directly in capital and reserves, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date.
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tangible assets
tangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated depreciation and impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is calculated so as to write off the cost of an asset, less its residual value, over the useful economic life of that asset as follows:
Freehold property
2
%
on cost
Plant and machinery
15
%
on reducing balance
Fittings fixtures and equipment
10
%
on reducing balance
Motor vehicles
25
%
on reducing balance
Computer equipment
25
%
on reducing balance
No depreciation is charged on freehold land or plant in the course of construction.
Fixed asset investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.
Amounts recoverable on contracts, which are included in debtors, are stated at the sales value of work done.
Construction contracts
Where the outcome of construction contracts can be reliably estimated, contract revenue and contract costs are recognised by reference to the stage of completion of the contract activity as at the period end. Where the outcome of construction contracts cannot be estimated reliably, revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable, and contract costs are recognised as an expense in the period in which they are incurred. The entity uses the percentage of completion method to determine the amounts to be recognised in the period. The stage of completion is measured by reference to the contract costs incurred up to the end of the reporting period as a percentage of total estimated costs for each contract. Costs incurred for work performed to date do not include costs relating to future activity, such as for materials or prepayments.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised in finance costs in profit or loss in the period in which it arises.
Accounting policy judgements and key sources of estimation uncertainty
Significant judgements
In the preparation of these financial statements the directors have made the following judgements:
a) Estimated cost of labour and overheads which have been incurred in manufactured stock and work in progress in order to correctly reflect the value of these in the accounts at the year end
b) Estimation in respect of the various stages of completion of contract and service work in progress. The basis for this estimate depends on passing certain key milestones and determines the income, the estimated cost and therefore profit to be recognised at each stage of completion.
c) Determined whether there are factors of impairment of the company's tangible assets. Factors taken into consideration in reaching such a decision include the economic conditions and estimated market value of these assets.
d) Estimation of provision for slow moving stock based on an assessment of expected ability to profitably use the item in the foreseeable future.
Other key sources of estimation uncertainty
Tangible assets are depreciated over their anticipated useful lives taking into account residual values where appropriate. The useful lives of the assets and residual values are assessed annually, and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation and product life cycles are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values
4.
Turnover
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
Sale of goods |
|
13,923,207 |
5,467,633 |
|
Sale of services |
|
851,266 |
1,708,185 |
|
|
|
_______ |
_______ |
|
|
|
14,774,473 |
7,175,818 |
|
|
|
_______ |
_______ |
|
The analysis of the company's turnover for the year by market is as follows: |
|
|
|
|
|
|
|
|
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
UK |
|
2,701,387 |
1,868,538 |
|
Europe |
|
9,443,852 |
3,790,266 |
|
Rest of the World |
|
2,629,234 |
1,517,014 |
|
|
|
_______ |
_______ |
|
|
|
14,774,473 |
7,175,818 |
|
|
|
_______ |
_______ |
|
During the year 82% of the company's turnover related to exports (2022 74%). |
|
|
|
|
|
|
|
|
5.
Operating profit/(loss)
Operating profit/(loss) is stated after charging/(crediting):
|
|
|
|
2023 |
2022 |
|
|
|
|
£ |
£ |
|
Depreciation of tangible assets |
|
|
507,849 |
440,820 |
|
(Gain)/loss on disposal of tangible assets |
|
|
(
1,788) |
(
6,424) |
|
Impairment of trade debtors |
|
|
- |
147,053 |
|
Foreign exchange differences |
|
|
(
97,796) |
42,909 |
|
|
|
|
_______ |
_______ |
|
|
|
|
|
|
6.
Auditors remuneration
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
Audit of the financial statements |
|
22,000 |
18,205 |
|
|
|
_______ |
_______ |
|
|
|
|
|
7.
Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
|
|
|
2023 |
2022 |
|
Production staff |
|
64 |
60 |
|
Administrative and support |
|
16 |
16 |
|
Sales |
|
8 |
6 |
|
|
|
_______ |
_______ |
|
|
|
88 |
82 |
|
|
|
_______ |
_______ |
|
|
|
|
|
The aggregate payroll costs incurred during the year (including directors' remuneration) were:
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
Wages and salaries |
|
3,911,241 |
3,206,793 |
|
Social security costs |
|
433,057 |
332,882 |
|
Other pension costs |
|
101,061 |
98,876 |
|
|
|
_______ |
_______ |
|
|
|
4,445,359 |
3,638,551 |
|
|
|
_______ |
_______ |
|
|
|
|
|
8.
Directors remuneration
The directors aggregate remuneration in respect of qualifying services was:
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
Remuneration |
|
513,986 |
343,802 |
|
Company contributions to pension schemes in respect of qualifying services |
|
7,236 |
6,980 |
|
|
|
_______ |
_______ |
|
|
|
521,222 |
350,782 |
|
|
|
_______ |
_______ |
|
|
|
|
|
The number of directors to whom retirement benefits are accruing under money purchase schemes was 1 (2022 - 1).
Remuneration in respect of the highest paid director was £258,729 (2022: £176,227).
9.
Other interest receivable and similar income
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
Interest income on bank deposits |
|
282 |
41,085 |
|
|
|
_______ |
_______ |
|
|
|
|
|
10.
Tax on profit/(loss)
Major components of tax expense
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
Current tax: |
|
|
|
|
UK current tax expense |
|
521,705 |
- |
|
Adjustments in respect of previous periods |
|
5,816 |
72,618 |
|
|
|
_______ |
_______ |
|
|
|
|
|
|
Deferred tax: |
|
|
|
|
Origination and reversal of timing differences |
|
231,694 |
51,111 |
|
|
|
_______ |
_______ |
|
Tax on profit/(loss) |
|
759,215 |
123,729 |
|
|
|
_______ |
_______ |
|
|
|
|
|
Reconciliation of total tax charge included in profit and loss
The tax assessed on the profit/(loss) for the year is lower than (2022: higher than) the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%).
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
Profit/(loss) before taxation |
|
4,293,341 |
(
18,463) |
|
|
|
_______ |
_______ |
|
|
|
|
|
|
Profit/(loss) multiplied by rate of tax |
|
815,735 |
(
3,508) |
|
Adjustments in respect of prior periods |
|
55,056 |
114,444 |
|
Utilisation of tax losses |
|
(
204,241) |
- |
|
Effect of change in tax rate |
|
132,019 |
16,037 |
|
Effect of super deduction |
|
(39,354) |
(3,244) |
|
|
|
_______ |
_______ |
|
Tax on profit/(loss) |
|
759,215 |
123,729 |
|
|
|
_______ |
_______ |
|
|
|
|
|
|
Factors affecting future tax charge |
|
|
|
|
|
|
|
|
|
From 1 April 2023, the corporation tax main rate for non-ring-fenced profits has been increased from 19% to 25%, applying to profits over £250,000. |
|
|
|
11.
Tangible assets
|
|
Freehold property |
Plant and machinery |
Fixtures, fittings and equipment |
Motor vehicles |
Plant & Machinery under construction |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Cost |
|
|
|
|
|
|
|
At 1 March 2022 |
1,898,278 |
6,903,481 |
880,687 |
241,538 |
300,000 |
10,223,984 |
|
Additions |
- |
660,943 |
29,486 |
72,069 |
- |
762,498 |
|
Disposals |
- |
- |
- |
(
52,460) |
(94,134) |
(146,594) |
|
Transferred |
192,155 |
|
|
|
(192,155) |
- |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
At 28 February 2023 |
2,090,433 |
7,564,424 |
910,173 |
261,147 |
13,711 |
10,839,888 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Depreciation |
|
|
|
|
|
|
|
At 1 March 2022 |
497,786 |
4,826,136 |
746,225 |
184,468 |
- |
6,254,615 |
|
Charge for the year |
41,809 |
410,743 |
25,440 |
29,857 |
- |
507,849 |
|
Disposals |
- |
- |
- |
(
42,748) |
- |
(
42,748) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
At 28 February 2023 |
539,595 |
5,236,879 |
771,665 |
171,577 |
- |
6,719,716 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Carrying amount |
|
|
|
|
|
|
|
At 28 February 2023 |
1,550,838 |
2,327,545 |
138,508 |
89,570 |
13,711 |
4,120,172 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
At 28 February 2022 |
1,400,492 |
2,077,345 |
134,462 |
57,070 |
300,000 |
3,969,369 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
The cost of land included within land and buildings above is insignificant, in the opinion of the directors. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the year end the company had entered into a commitment in respect of building work with a cost of £13,711 (2022: £245,563). |
|
|
|
|
|
|
|
12.
Investments
|
|
Other investments other than loans |
Total |
|
|
|
|
|
|
£ |
£ |
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
At 1 March 2022 and 28 February 2023 |
100 |
100 |
|
|
|
|
|
|
_______ |
_______ |
|
|
|
|
|
Impairment |
|
|
|
|
|
|
|
At 1 March 2022 and 28 February 2023 |
- |
- |
|
|
|
|
|
|
_______ |
_______ |
|
|
|
|
|
Carrying amount |
|
|
|
|
|
|
|
At 28 February 2023 |
100 |
100 |
|
|
|
|
|
|
_______ |
_______ |
|
|
|
|
|
At 28 February 2022 |
100 |
100 |
|
|
|
|
|
|
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
|
|
13.
Stocks
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
Raw materials and consumables |
|
1,682,684 |
1,629,646 |
|
Work in progress |
|
108,441 |
119,199 |
|
Finished goods and goods for resale |
|
1,078,486 |
1,114,703 |
|
|
|
_______ |
_______ |
|
|
|
2,869,611 |
2,863,548 |
|
|
|
_______ |
_______ |
|
|
|
|
|
14.
Debtors
|
|
|
2023 |
2022 |
|
|
|
|
|
|
|
Note |
£ |
£ |
|
Trade debtors |
|
2,456,878 |
1,319,648 |
|
Amounts owed by related parties |
|
3,000,383 |
2,741,385 |
|
Amounts owed by customers on construction contracts |
|
3,631,080 |
1,787,297 |
|
Prepayments and accrued income |
|
39,852 |
4,078 |
|
Other debtors |
|
176,090 |
110,841 |
|
|
|
_______ |
_______ |
|
|
|
9,304,283 |
5,963,249 |
|
|
|
_______ |
_______ |
|
|
|
|
|
15.
Creditors: amounts falling due within one year
|
|
|
2023 |
2022 |
|
|
|
|
|
|
|
|
£ |
£ |
|
Trade creditors |
|
729,752 |
558,758 |
|
Accruals and deferred income |
|
83,653 |
53,875 |
|
Corporation tax |
|
521,705 |
- |
|
Social security and other taxes |
|
252,029 |
131,086 |
|
Director loan accounts |
|
328,669 |
312,518 |
|
|
|
_______ |
_______ |
|
|
|
1,915,808 |
1,056,237 |
|
|
|
_______ |
_______ |
|
|
|
|
|
16.
Provisions
|
|
Deferred tax |
Total |
|
|
|
|
|
£ |
£ |
|
|
|
|
At 1 March 2022 |
318,386 |
318,386 |
|
|
|
|
Movement on provisions |
231,694 |
231,694 |
|
|
|
|
|
_______ |
_______ |
|
|
|
|
At 28 February 2023 |
550,080 |
550,080 |
|
|
|
|
|
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
The balance of the deferred taxation account consists of the effect of timing differences in respect of the excess of taxation allowances over depreciation.
17.
Share Capital
Allotted, called up and fully paid shares
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
No |
|
£ |
|
No |
|
£ |
|
Ordinary shares of £1 each (2022: £1) |
|
25,000 |
|
25,000 |
|
25,000 |
|
25,000 |
|
|
|
_______ |
|
_______ |
|
_______ |
|
_______ |
|
|
|
|
|
|
|
|
|
|
18.
Related party transactions
During the year dividends of £0 (2022 - £150,000) were paid to the directors.
Creditors includes an amount of £328,669 (2022 - £312,518) payable to the directors. The amounts are payable on demand and there is no interest on these amounts.
During the year the company advanced £1,300,000 (2022 - £2,179,437) to an associated company and received repayments of £1,327,290 (2022 - £436,753) from the associated company. This company also carried out building work on behalf of Destec Engineering Limited. In 2022 the value of these works were estimated and provided for at £300,000 - see note 11. The final cost of these works was actually £205,863, the difference of £94,134 being written off as a disposal. Debtors includes £3,000, 383 (2022 - £2,741,385) in respect of this debt. The amount accrues interest of 3% per annum, and is payable on demand.
19.
Controlling party
The controlling party is Mr
B Porter
.