Company Registration No. 08689808 (England and Wales)
Blackhill Engineering Services Limited
Financial statements
for the year ended 31 August 2023
Pages for filing with the registrar
Blackhill Engineering Services Limited
Contents
Page
Statement of financial position
1
Notes to the financial statements
2 - 9
Blackhill Engineering Services Limited
Statement of financial position
As at 31 August 2023
1
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
4
510
1,021
Tangible assets
5
179,811
218,843
180,321
219,864
Current assets
Stocks
6
389,466
56,168
Debtors
7
1,452,024
808,965
Cash at bank and in hand
100
100
1,841,590
865,233
Creditors: amounts falling due within one year
8
(1,726,233)
(2,271,594)
Net current assets/(liabilities)
115,357
(1,406,361)
Total assets less current liabilities
295,678
(1,186,497)
Creditors: amounts falling due after more than one year
9
(2,469,120)
(1,162,672)
Provisions for liabilities
(19,516)
Net liabilities
(2,192,958)
(2,349,169)
Capital and reserves
Called up share capital
1
1
Other reserves
100,000
100,000
Profit and loss reserves
(2,292,959)
(2,449,170)
Total equity
(2,192,958)
(2,349,169)
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 21 March 2024 and are signed on its behalf by:
A S Mitchell
Director
Company Registration No. 08689808
Blackhill Engineering Services Limited
Notes to the financial statements
For the year ended 31 August 2023
2
1
Accounting policies
Company information
Blackhill Engineering Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Airfield, Dunkeswell, Honiton, Devon, England, EX14 4LF.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of the parent entity SC Group-Global Limited. These consolidated financial statements are available from its registered office, The Airfield, Dunkeswell Airfield, Honiton, EX14 4LF.
1.2
Going concern
At the time of approving these financial statements, the directors have a reasonable expectation that the business has adequate resources to continue in operational existence for the foreseeable future. true
As part of making the above assessment, the directors continue to review the business in the current trading environment and in particular the adequacy of its current banking facilities and its access to additional facilities should these be required. The Company has an on demand bank facility that is renewable on an annual basis and believe that this will continue to be renewed at the current levels in line with previous years. The directors continue to test their assumptions with forecasts being reviewed regularly and ongoing discussions with lenders and banks to explore opportunities to increase facilities if appropriate.
The latest budget has been reviewed, sensitised and a number of differing scenarios produced under different planning assumptions. A number of UK projects which are under contract, have positively contributed to the underpinning of the revenues for the business for the forthcoming year regardless of which scenario is considered. Although these scenarios, show a reduction of revenues and margins over the period, the plans that remain in place to conserve cash and mitigate the effect drops of this magnitude in the forecast, the scenarios continue to indicate that the business will be able to operate positively and effectively.
Following these reviews, the directors have a reasonable expectation that the business has adequate resources to continue in operational existence for the foreseeable future. Therefore, the directors consider it to be appropriate to prepare the accounts on a going concern basis.
Blackhill Engineering Services Limited
Notes to the financial statements (continued)
For the year ended 31 August 2023
1
Accounting policies (continued)
3
1.3
Turnover
Turnover comprises revenue receivable by the company in respect of goods and services supplied during the year, exclusive of value added tax and trade discounts.
Goods
Turnover from the sale of goods is recognised when the goods are physically delivered to the customer or when substantially all the risks and rewards are transferred, whichever is earlier.
Services
Turnover from the supply of services represents the value of services provided during the year to the extent that there is a right to consideration and is recorded at the fair value of the consideration due.
Long term contract revenue
Where a contract has only partly been complete at the balance sheet date, turnover is calculated by reference to the value of work performed to date as a proportion of the total contract value. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year. Turnover which has not been invoiced is included within amounts recoverable under contracts. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer.
1.4
Intangible fixed assets - goodwill
Goodwill arising on trade and assets represents the excess of the fair value of the consideration over the fair value of the identifiable assets and liabilities acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Tangible fixed assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is charged so as to write off the cost of assets over their estimated useful lives, as follows:
Asset class
Depreciation method and rate
Other property, plant and equipment
25% straight line
Furniture, fixtures and fittings
20% - 25% straight line
1.6
Stocks
Stock and work in progress are valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.
Blackhill Engineering Services Limited
Notes to the financial statements (continued)
For the year ended 31 August 2023
1
Accounting policies (continued)
4
1.7
Financial instruments
Classification
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 net assets of the company.
Recognition and measurement
Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument and derecognised when in the case of assets, the contractual rights to cash flows from the assets expire or substantially all the risks and rewards of ownership are transferred to another party, or in the case of liabilities, when the company's obligations are discharged, expire or are cancelled.
The company holds the following financial instruments:
All of the financial instruments of the company are considered to be basic financial instruments. Such instruments are initially measured at transaction price, including transaction costs. Those instruments considered current are subsequently carried at the undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments. Long term instruments are subsequently measured at amortised cost using the effective interest rate method.
1.8
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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
Blackhill Engineering Services Limited
Notes to the financial statements (continued)
For the year ended 31 August 2023
1
Accounting policies (continued)
5
1.9
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.
The company operates an employee share ownership plan (ESOP) trust and has de facto control of the shares held by the trust and bears their benefits and risks. The company records assets and liabilities of the trust as its own. Consideration paid by the ESOP scheme for shares of the company is deducted from equity. Finance costs and administrative expenses incurred by the company in relation to the ESOP are recognised on an accruals basis.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
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 statement of financial position 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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.12
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
Blackhill Engineering Services Limited
Notes to the financial statements (continued)
For the year ended 31 August 2023
1
Accounting policies (continued)
6
1.13
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.
2
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 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Recognition of costs on long term contracts
Revenue in relation to long term contracts is recognised under a stage of completion basis. The costs attributable to the contracts are subsequently recognised applying a gross profit margin that is estimated to be achieved on the completion of the contract. Calculation of these margins requires judgements to be made, which include monitoring forecasts and updates to the budget for the contract. The areas effected by these judgements are costs of sales and stock (work in progress).
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
6
7
Blackhill Engineering Services Limited
Notes to the financial statements (continued)
For the year ended 31 August 2023
7
4
Intangible fixed assets
Goodwill
£
Cost
At 1 September 2022 and 31 August 2023
5,106
Amortisation and impairment
At 1 September 2022
4,085
Amortisation charged for the year
511
At 31 August 2023
4,596
Carrying amount
At 31 August 2023
510
At 31 August 2022
1,021
5
Tangible fixed assets
Asset class
Other property, plant and equipment
Furniture, fixtures and fittings
Total
£
£
£
£
Cost
At 1 September 2022
429,595
446,360
83,227
959,182
Additions
23,625
7,543
31,168
At 31 August 2023
429,595
469,985
90,770
990,350
Depreciation and impairment
At 1 September 2022
260,608
402,558
77,173
740,339
Depreciation charged in the year
42,960
24,669
2,571
70,200
At 31 August 2023
303,568
427,227
79,744
810,539
Carrying amount
At 31 August 2023
126,027
42,758
11,026
179,811
At 31 August 2022
168,987
43,802
6,054
218,843
6
Stocks
2023
2022
£
£
Raw materials and consumables
96,956
55,238
Work in progress
292,510
930
389,466
56,168
Blackhill Engineering Services Limited
Notes to the financial statements (continued)
For the year ended 31 August 2023
8
7
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
34,448
Amounts owed by group undertakings
938,431
243,454
Other debtors
138,761
7,823
Prepayments and accrued income
374,832
523,240
1,452,024
808,965
8
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
1,237,170
2,110,135
Obligations under finance leases
12,805
Trade creditors
315,554
127,903
Amounts owed to group undertakings
98,916
Taxation and social security
6,914
5,462
Other creditors
15,282
16,822
Accruals and deferred income
39,592
11,272
1,726,233
2,271,594
Finance lease liabilities are secured over the assets in which they relate.
9
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
2,296
15,139
Amounts owed to group undertakings
2,466,824
1,147,533
2,469,120
1,162,672
Finance lease liabilities are secured over the assets in which they relate.
10
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Neil Davies
Statutory Auditors:
Saffery LLP
Blackhill Engineering Services Limited
Notes to the financial statements (continued)
For the year ended 31 August 2023
9
11
Financial commitments, guarantees and contingent liabilities
An unlimited multilateral company guarantee has been given to the group's bankers by SC Group-Global Limited, SC Marine Limited, SC Innovation-Global Limited, Proteum Limited, Blackhill Engineering Services Limited and Supacat Limited covering all the present and future indebtedness and liabilities to the bank howsoever arising. All amounts owed to the group's bankers are secured by fixed and floating charges over the assets of the companies.
12
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
122,466
182,466
The amount of non-cancellable operating lease payments recognised as an expense during the year was £60,000 (2022: £61,500).
13
Related party transactions
The company has taken advantage of the exemption in FRS 102 Section 1A from disclosing transactions with its parent company and other members of the group.
Balances owed to and from group companies are disclosed within the notes to the financial statements.
14
Parent company
The company's immediate parent and ultimate controlling party is SC Group-Global Limited, incorporated in England and Wales. SC Group-Global Limited is the parent company of the smallest group for which consolidated financial statements are drawn up of which the company is a member.
These financial statements are available upon request from Companies House. The address of the parent company's registered office is that of the company as stated in note 1.
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