REGISTERED NUMBER: |
STRATEGIC REPORT, DIRECTORS' REPORT AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 OCTOBER 2023 |
FOR |
SHIELD ENGINEERING (SYSTON) LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, DIRECTORS' REPORT AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 OCTOBER 2023 |
FOR |
SHIELD ENGINEERING (SYSTON) LIMITED |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the year ended 31 October 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Directors' Report | 3 |
Report of the Independent Auditors | 4 |
Statement of Comprehensive Income | 6 |
Balance Sheet | 7 |
Statement of Changes in Equity | 8 |
Notes to the Financial Statements | 9 |
SHIELD ENGINEERING (SYSTON) LIMITED |
COMPANY INFORMATION |
for the year ended 31 October 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
Statutory Auditor |
Unit 2, Charnwood Edge Business Park |
Syston Road |
Leicestershire |
LE7 4UZ |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
STRATEGIC REPORT |
for the year ended 31 October 2023 |
The directors present their strategic report for the year ended 31 October 2023. |
REVIEW OF BUSINESS |
The business has performed satisfactorily in this period, despite some supply chain challenges, and the high levels of inflation that have been seen through the period across the industry. Since the previous year, overall customer volumes have generally softened in line with the global economy and interest rate increases, however some customers have been more affected as a result of specific challenges. These various impacts have been offset by a number of new contract wins in the period which has meant that profitability has been acceptable. The business has kept a tight control of costs throughout this period and the Directors are pleased to report good levels of operational performance. |
The business has continued to invest through the year to replace older equipment with newer, more efficient, equipment to reduce costs and improve productivity. The weaker trend in demand has continued into the new year but further successes in new business will offset this and the Directors look forward to continued growth for the business. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The key risks and uncertainties affecting the company are considered to relate to competition from overseas suppliers, global demand for our customer products and labour/energy/raw material costs. The company is well positioned with a capable supply chain, strong workforce/management team and healthy reserves to meet these challenges allowing continued investment into the future. |
FINANCIAL KEY PERFORMANCE INDICATORS |
The company's key performance indicators are as follows: |
Sales |
The 2023 accounts report an increase of 19.7% in the level of sales over the year. |
Gross Margin |
Gross profit margins have decreased from 28.8% to 27.3%. |
OTHER KEY PERFORMANCE INDICATORS |
There are no significant non-financial key performance indicators which are relevant to understanding the position of the business. |
ON BEHALF OF THE BOARD: |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
DIRECTORS' REPORT |
for the year ended 31 October 2023 |
The directors present their report with the financial statements of the company for the year ended 31 October 2023. |
PRINCIPAL ACTIVITIES |
The principal activities of the company in the year under review were those of production machining and assembly of ferrous and non ferrous castings. The company also traded in fixed assets held for resale and undertook farming activities during this period. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 October 2023. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 November 2022 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and 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. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Magma Audit LLP (part of the Dains Group), will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SHIELD ENGINEERING (SYSTON) LIMITED |
Opinion |
We have audited the financial statements of Shield Engineering (Syston) Limited (the 'company') for the year ended 31 October 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 October 2023 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Report of the Auditors thereon. |
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 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 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 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SHIELD ENGINEERING (SYSTON) LIMITED |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Based on our understanding of the group and the industry, we have identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation and breaches with the General Data Protection Regulation, and we have considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries, and management bias in accounting estimates. Audit procedures performed included: |
- | Enquiries with management for consideration of known or suspected instances of non-compliance with laws and regulations and fraud; |
- | Challenging assumptions made by management in their accounting estimates, in particular in relation to recognising stock provisions, work in progress and estimating the useful lives of assets; and |
- | Identifying and testing material journal entries, in particular those journal entries posted with unusual account combinations, journal entries crediting revenue, journal entries crediting cash and journal entries with specific defined descriptions. |
There are inherent limitations in the audit procedures described above. The more 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. Also, 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 forgery or intentional misrepresentation, for example, or through collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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 a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants |
Statutory Auditor |
Unit 2, Charnwood Edge Business Park |
Syston Road |
Leicestershire |
LE7 4UZ |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
STATEMENT OF COMPREHENSIVE |
INCOME |
for the year ended 31 October 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 4 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
469,056 | 1,927,389 |
Other operating income | 5 |
OPERATING PROFIT | 8 |
Interest receivable and similar income |
1,834,878 | 2,787,148 |
Interest payable and similar expenses | 9 | ( |
) | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 10 | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME |
Revaluation of investment property |
Deferred tax charge |
Income tax relating to other comprehensive income |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
BALANCE SHEET |
31 October 2023 |
2023 | 2022 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 12 |
Investments | 13 |
Investment property | 14 |
CURRENT ASSETS |
Stocks | 15 |
Debtors | 16 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 17 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
18 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 22 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 23 |
Capital redemption reserve | 24 |
Fair value reserve | 24 |
Retained earnings | 24 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
STATEMENT OF CHANGES IN EQUITY |
for the year ended 31 October 2023 |
Called up | Capital | Fair |
share | Retained | redemption | value | Total |
capital | earnings | reserve | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 November 2021 |
Changes in equity |
Dividends in specie | - | ( |
) | - | - | ( |
) |
Total comprehensive income | - | ( |
) |
Balance at 31 October 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 October 2023 |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS |
for the year ended 31 October 2023 |
1. | STATUTORY INFORMATION |
Shield Engineering (Syston) Limited is a private limited company, limited by shares, registered in England and Wales. Its registered office address is 365 Fosse Way, Syston, Leicester LE7 1NL and the registered number is 00495735. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements are prepared in sterling, which is the functional currency of the company, and rounded to the nearest £. |
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 are included in the profit and loss account for the period. |
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 financial statements. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 3.17(d); |
• | the requirement of paragraph 33.7. |
The information is included in the consolidated financial statements of Shield Engineering Group Holdings Limited as at 31 October 2023 and these financial statements may be obtained from Shield Engineering Group Holdings Limited, First Floor, One Colton Square, Leicester, LE1 1QH. |
Turnover |
Turnover represents amounts receivable for goods and services net of VAT and trade discounts and is recognised when goods are despatched. |
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, both the straight line and reducing balance method as detailed below. |
Depreciation is provided on the following basis: |
Freehold buildings | On cost over 20 years |
Freehold land | Not depreciated |
Improvements to property | On cost between 2 and 10 years |
Plant and machinery | On cost between 5 and 7 years |
Fixtures and fittings | 15% on a reducing balance basis |
Computer equipment | On cost over 4 years |
Motor vehicles | 25% on a reducing balance basis |
Assets under construction | Not depreciated |
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
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 recognised in the profit and loss account. |
Assets held for resale |
Assets held for resale are stated at cost less provision for impairment. |
Assets under construction |
Assets under construction are those assets that are currently in development and are not in use by the company. The costs relating to the development of the projects are capitalised however no depreciation is charged until the asset is available for use. |
Investments in subsidiaries |
Investments in subsidiaries are held at cost less accumulated impairment losses. |
Investment property |
Investment property is carried at fair value derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any differences in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in the Profit and Loss Account. |
Stocks |
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads. |
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss. |
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. |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
(i) 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. |
(ii) Financial liabilities |
Basic financial liabilities, including creditors and bank loans 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 receipts 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. |
Equity instruments |
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. |
Taxation |
The tax expense for the year comprises current and deferred tax. |
Tax is recognised in profit or loss except that a change attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. |
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that: |
- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and |
- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. |
Both current and deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Research and development |
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
Finance leases |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of those obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
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 the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability. |
Operating leases |
Rentals payable under operating leases, including and lease incentives received, are charged to income 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 lease asset are consumed. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. |
The contributions are recognised as an expense in the Profit and Loss Account when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the company in independently administered funds. |
Provisions for liabilities |
Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation. |
Provisions are charged as an expense to the Profit and Loss Account in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. |
When payments are eventually made, they are charged to the provision carried in the Balance Sheet. |
Unlisted investments |
Associates and joint ventures are held at cost less impairment. |
Finance costs |
Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument. |
Interest income |
Interest income is recognised in the Profit and Loss Account using the effective interest rate method. |
Borrowing costs |
All borrowing costs are recognised in the Profit and Loss Account in the year in which they are incurred. |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
3. | 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. |
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: |
Depreciation of tangible assets |
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual lives of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 12 for the carrying amount of the assets and the tangible fixed assets accounting policy for the useful economic lives for each class of asset. |
Stock provisioning |
The company has products which are subject to changing consumer demands. As a result it is necessary to consider the recoverability of the cost of the stock and the associated provisioning required. When calculating the stock provision, management considers the nature, age and condition of the stock, as well as applying assumptions around the saleability/useability of the stock. |
Carrying value of assets held for resale |
The company holds assets which are held for resale. The asset values are continually monitored for any fall in value and adjusted accordingly. |
Revaluation of investment property |
The company carries its investment property at fair value as set out in note 2 above. The directors obtain independent advice from a firm of Chartered Surveyors and estimate fair value using this information together with market data, the nature and location of specific properties and terms of tenancies. |
4. | TURNOVER |
The turnover and profit before taxation are attributable to the principal activities of the company. |
An analysis of turnover by class of business is given below: |
2023 | 2022 |
£ | £ |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom |
Europe |
Rest of the World | 113,894 | 199,514 |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
5. | OTHER OPERATING INCOME |
2023 | 2022 |
£ | £ |
Rents received |
Grants received | 792,756 | 325,216 |
1,352,334 | 853,852 |
6. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Production and supervisory | 122 | 104 |
Administration | 19 | 19 |
7. | DIRECTORS' EMOLUMENTS |
2023 | 2022 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc |
8. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Auditors' remuneration |
Foreign exchange differences | ( |
) |
9. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank loan interest |
Hire purchase interest |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
10. | TAXATION |
Analysis of the tax charge/(credit) |
The tax charge/(credit) on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | ( |
) |
Adjustment to prior years | 24,719 | (361,626 | ) |
Total current tax | ( |
) |
Deferred tax |
Tax on profit | ( |
) |
Reconciliation of total tax charge/(credit) included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Income not taxable for tax purposes | ( |
) |
Capital allowances in excess of depreciation | - | ( |
) |
Depreciation in excess of capital allowances | - |
Utilisation of tax losses | ( |
) | ( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) |
Change in rate on deferred tax | - | 122,146 |
Deferred tax movement | 24,719 | 386,796 |
R&D tax credit | (112,470 | ) | (160,685 | ) |
Total tax charge/(credit) | 249,778 | (62,610 | ) |
Tax effects relating to effects of other comprehensive income |
There were no tax effects for the year ended 31 October 2023. |
2022 |
Gross | Tax | Net |
£ | £ | £ |
Revaluation of investment property |
Deferred tax charge | - | 190,861 |
190,861 | - | 190,861 |
11. | DIVIDENDS IN SPECIE |
2023 | 2022 |
£ | £ |
Ordinary shares of £1.00 each |
Interim |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
12. | TANGIBLE FIXED ASSETS |
Freehold | Improvements |
land & | to | Plant and |
buildings | property | machinery |
£ | £ | £ |
COST |
At 1 November 2022 |
Additions |
Disposals | ( |
) |
Reclassification/transfer |
At 31 October 2023 |
DEPRECIATION |
At 1 November 2022 |
Charge for year |
Eliminated on disposal | ( |
) |
At 31 October 2023 |
NET BOOK VALUE |
At 31 October 2023 |
At 31 October 2022 |
Fixtures | Assets |
and | Motor | under |
fittings | vehicles | construction | Totals |
£ | £ | £ | £ |
COST |
At 1 November 2022 |
Additions |
Disposals | ( |
) | ( |
) |
Reclassification/transfer | ( |
) |
At 31 October 2023 |
DEPRECIATION |
At 1 November 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 October 2023 |
NET BOOK VALUE |
At 31 October 2023 |
At 31 October 2022 |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
12. | TANGIBLE FIXED ASSETS - continued |
The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows: |
2023 | 2022 |
£ | £ |
Plant and machinery | 740,130 | 2,140,280 |
The depreciation charge for the year on assets held under finance leases or hire purchase contracts, included above, are as follows: |
2023 | 2022 |
£ | £ |
Plant and machinery | 164,019 | 423,166 |
13. | FIXED ASSET INVESTMENTS |
Unlisted |
investments |
£ |
COST |
At 1 November 2022 |
Impairments | ( |
) |
At 31 October 2023 |
NET BOOK VALUE |
At 31 October 2023 |
At 31 October 2022 |
The company's investments at the Balance Sheet date in the share capital of companies include the following: |
Registered office: England |
Nature of business: |
% |
Class of shares: | holding |
Registered office: England |
Nature of business: |
% |
Class of shares: | holding |
Since the balance sheet date a company that Shield Engineering (Syston) Limited held an investment, of £644,253, in went into administration on 29 November 2023. The investment has been impaired in full. |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
14. | INVESTMENT PROPERTY |
Total |
£ |
FAIR VALUE |
At 1 November 2022 |
and 31 October 2023 |
NET BOOK VALUE |
At 31 October 2023 |
At 31 October 2022 |
The investment property is stated at directors' valuation, on the basis of open market value at 31 October 2023. The valuation is guided by independent advice from a firm of chartered surveyors in previous years. |
Fair value at 31 October 2023 is represented by: |
£ |
Valuation in 2020 | 907,266 |
Valuation in 2021 | 1,089,655 |
Cost | 481,027 |
2,477,948 |
15. | STOCKS |
2023 | 2022 |
£ | £ |
Raw materials |
Finished goods |
16. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Amounts owed by participating interests | 3,329,878 | 2,498,466 |
Other debtors |
Fixed assets held for sale | 9,856,083 | 9,856,083 |
Directors' current accounts | 6,857 | 55,442 |
Corporation tax |
Prepayments and accrued income |
17. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans and overdrafts (see note 19) |
Hire purchase contracts (see note 20) |
Trade creditors |
Amounts owed to participating interests | 9,151,675 | 9,953,594 |
Tax |
Social security and other taxes |
Other creditors |
Accruals and deferred income |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
18. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans (see note 19) |
Hire purchase contracts (see note 20) |
19. | LOANS |
An analysis of the maturity of loans is given below: |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
20. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable | operating leases |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
Obligations under finance leases and hire purchase contracts are secured upon the asset concerned. Finance lease payments represent rentals payable by the company for 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 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payment. |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
21. | SECURED DEBTS |
The following secured debts are included within creditors: |
2023 | 2022 |
£ | £ |
Bank loans |
Hire purchase contracts | 152,647 | 835,856 |
The bank loan is secured by first legal charges on 6 Wenlock Way, Leicester, Fosse Way, Syston and 140-156 Barkby Road, Leicester. These properties are owned by Shield Properties Limited a related company. A guarantee of £4.6 million has been provided by Shield Properties Limited. |
The company has provided an unlimited guarantee to Lloyds Bank Commercial Finance Limited in relation to the Debt Purchase Agreement between Woolley GMC Engineering Co Limited (a related company) and Lloyds Bank Commercial Finance Limited. |
The company has provided a guarantee to National Westminster Bank plc for a loan of £1.5 million advanced to Shield Properties Limited. |
The hire purchase contracts are secured on the assets concerned. |
22. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax | 595,100 | 570,381 |
Deferred |
tax |
£ |
Balance at 1 November 2022 |
Charge to Statement of Comprehensive Income during year |
Balance at 31 October 2023 |
23. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1.00 | 1,101 | 1,101 |
The company's ordinary shares carry full rights with respect to voting, dividends and distributions. |
24. | RESERVES |
Capital redemption reserve |
The capital redemption reserve arises in relation to redemption or purchase and cancellation of a company's own shares. For purposes of a capital reduction under CA 2006, this reserve is treated as part of 'capital'. |
Retained earnings |
This includes all current and prior period retained profits and losses. |
Fair value reserve |
The fair value reserve arose on the revaluation of the investment property. |
SHIELD ENGINEERING (SYSTON) LIMITED (REGISTERED NUMBER: 00495735) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
25. | PENSION COMMITMENTS |
The company operates a defined contributions scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £89,667 (2022 - £90,973). |
26. | CAPITAL COMMITMENTS |
2023 | 2022 |
£ | £ |
Contracted but not provided for in the |
financial statements |
27. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
The following advances and credits to a director subsisted during the years ended 31 October 2023 and 31 October 2022: |
2023 | 2022 |
£ | £ |
Balance outstanding at start of year |
Amounts advanced |
Amounts repaid | ( |
) | ( |
) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year |
28. | RELATED PARTY DISCLOSURES |
During the year the company had transactions with the following related companies, all ultimately |
controlled by C R F Shield. |
2023 | 2022 |
£ | £ |
Amounts due to Spaw Engineering Limited | (580,000 | ) | (578,388 | ) |
Sales to Spaw Engineering Limited | - | 1,320 |
Sales to Woolley GMC Engineering Limited | 126,015 | 719,642 |
Purchases from Woolley GMC Engineering Limited | (3,038 | ) | (603,456 | ) |
Amounts due to Woolley GMC Engineering Limited | (3,193,284 | ) | (3,219,851 | ) |
Sales to Burrows & Smith Limited | 126,958 | 6,759 |
Purchases from Burrows & Smith Limited | (55,649 | ) | (134,771 | ) |
Amounts due to Burrows & Smith Limited | (3,859,649 | ) | (3,768,468 | ) |
Purchases from Shield Properties Limited | (182,600 | ) | - |
Amounts due to Shield Properties Limited | (1,484,482 | ) | (1,048,705 | ) |
Sales to G W Atkins & Sons Limited | - | 466,027 |
Purchases from G W Atkins & Sons Limited | - | (805,722 | ) |
Amounts due from/(to) G W Atkins and Sons Holdings Limited | - | 666,000 |
Sales to Bridge Aluminium Limited | 275,858 | 12,600 |
Purchases from Bridge Aluminium Limited | (2,592,348 | ) | (1,379,856 | ) |
Amounts due from Bridge Aluminium Limited | 2,767,232 | 1,718,171 |
Purchases from OLD Engineering Limited | (276,403 | ) | (158,864 | ) |
Amounts due to OLD Engineering Limited | (34,260 | ) | (10,876 | ) |
Sales to PFS Manufacturing Limited | 151,846 | 141,475 |
Amounts due from PFS Manufacturing Limited | 87,251 | 119,896 |
Sales to Shield Manufacturing Technologies Limited | 21,677 | - |
Amounts due from/(to) Shield Manufacturing Technologies Limited | 3,074,097 | (203,771 | ) |
29. | ULTIMATE CONTROLLING PARTY |
The company is a subsidiary of R A Shield Limited, and the ultimate parent company is Shield Engineering Group Holdings Limited, a company controlled by C R F Shield. |