REGISTERED NUMBER: 14083835 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTOR AND |
AUDITED CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 OCTOBER 2023 |
FOR |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED |
REGISTERED NUMBER: 14083835 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTOR AND |
AUDITED CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 OCTOBER 2023 |
FOR |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
for the year ended 31 October 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Director | 3 |
Report of the Independent Auditors | 5 |
Consolidated Statement of Comprehensive Income | 8 |
Consolidated Balance Sheet | 9 |
Company Balance Sheet | 10 |
Consolidated Statement of Changes in Equity | 11 |
Company Statement of Changes in Equity | 12 |
Consolidated Cash Flow Statement | 13 |
Notes to the Consolidated Cash Flow Statement | 14 |
Notes to the Consolidated Financial Statements | 15 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED |
COMPANY INFORMATION |
for the year ended 31 October 2023 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
Statutory Auditor |
Unit 2, Charnwood Edge Business Park |
Syston Road |
Leicestershire |
LE7 4UZ |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
GROUP STRATEGIC REPORT |
for the year ended 31 October 2023 |
The director presents his strategic report of the company and the group for the year ended 31 October 2023. |
REVIEW OF BUSINESS |
The group has performed satisfactorily in this period, despite some supply chain challenges, and 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 group has kept a tight control of costs throughout this period and the Directors are pleased to report good levels of operational performance. |
The group 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 group. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The key risks and uncertainties affecting the group are considered to relate to competition from overseas suppliers, global demand for our customer products and labour/energy/raw material costs. The group 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 |
Group turnover increased by 16.4% (2022 - decrease 1.3%). Profit before tax amounted to £1.39m (2022 - £2.43m). |
ON BEHALF OF THE BOARD: |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
REPORT OF THE DIRECTOR |
for the year ended 31 October 2023 |
The director presents his report with the financial statements of the company and the group for the year ended 31 October 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of production machining and assembly of ferrous and non ferrous castings. The group also held investment properties, traded in fixed assets held for resale and undertook farming activities during this period. |
DIVIDENDS |
In August 2022 the group acquired the entire share capital of Home Farm Beeby Limited and Shield Manufacturing Technologies Limited in return for shares. The shares were transferred up the group by way of a dividend in specie in August 2022 and disposed of by way of a share capital reduction. The transfer of trade through a distribution in specie totalled £5,105,909. There was no cash consideration as part of the demerger transaction. |
RESEARCH AND DEVELOPMENT |
The group has continued to invest in research and development activities which is considered integral to the success of the group. |
FUTURE DEVELOPMENTS |
Future developments have been detailed in the strategic report. |
DIRECTOR |
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES |
The group uses financial instruments, other than derivatives, comprising borrowings including bank loans, hire purchase, cash and various other items such as trade debtors and creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the group's operations. |
The main risks arising from the group's financial instruments are interest rate risk, liquidity and credit risk. The directors review and agree policies for managing each of these risks and they are summarised below. The policies have remained unchanged from previous periods. |
INTEREST RATE RISK |
The group finances its operations through a mixture of retained profits, bank and hire purchase borrowings and invoice discounting. The group's exposure to interest rate fluctuations is managed by the use of floating facilities. |
LIQUIDITY RISK |
The group seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and by investing cash assets safely and profitably. Primarily this is achieved through bank borrowings and similar facilities. |
CREDIT RISK |
In order to limit credit risk the directors set limits for customers based on a combination of payment history and third party credit references. Debtor balances are reviewed on a regular basis in conjunction with debt ageing and collection history. |
EMPLOYEE INVOLVEMENT |
Group employees are kept informed on matters of concern to them, including those factors affecting the performance and future of the business. Group employees are consulted about changes in work methods and systems, terms and conditions of employment, job security, and other matters affecting their working environment. |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
REPORT OF THE DIRECTOR |
for the year ended 31 October 2023 |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group 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 director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he 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 group'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 GROUP HOLDINGS |
LIMITED |
Opinion |
We have audited the financial statements of Shield Engineering Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2023 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 group's and of the parent company affairs as at 31 October 2023 and of the group's 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 group 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 director's 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 group's and the parent 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 director with respect to going concern are described in the relevant sections of this report. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, 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 Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Director. |
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is 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 director determines 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 director is responsible for assessing the group's and the parent 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 director either intends to liquidate the group or the parent company or to cease operations, or has 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED |
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 GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
CONSOLIDATED |
STATEMENT OF COMPREHENSIVE |
INCOME |
for the year ended 31 October 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 4 | 30,227,453 | 25,260,288 |
Cost of sales | (21,951,640 | ) | (17,936,388 | ) |
GROSS PROFIT | 8,275,813 | 7,323,900 |
Administrative expenses | (7,872,817 | ) | (5,478,323 | ) |
402,996 | 1,845,577 |
Other operating income | 5 | 1,352,334 | 853,852 |
OPERATING PROFIT | 8 | 1,755,330 | 2,699,429 |
Interest receivable and similar income | 13,488 | 5,907 |
1,768,818 | 2,705,336 |
Interest payable and similar expenses | 10 | (373,849 | ) | (278,483 | ) |
PROFIT BEFORE TAXATION | 1,394,969 | 2,426,853 |
Tax on profit | 11 | (311,070 | ) | 34,156 |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME |
Fair value reserve |
Deferred tax charge | - | 190,861 |
Income tax relating to other comprehensive income |
- |
- |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
- |
190,861 |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
1,083,899 |
2,651,870 |
Profit attributable to: |
Owners of the parent | 1,083,899 | 2,461,009 |
Total comprehensive income attributable to: |
Owners of the parent | 1,083,899 | 2,651,870 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
CONSOLIDATED BALANCE SHEET |
31 October 2023 |
2023 | 2022 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 13 | 4,076,498 | 5,096,133 |
Investments | 14 | 229,156 | 873,409 |
Investment property | 15 | 6,447,458 | 6,362,161 |
10,753,112 | 12,331,703 |
CURRENT ASSETS |
Stocks | 16 | 3,426,428 | 3,879,639 |
Debtors | 17 | 23,584,717 | 21,681,023 |
Cash at bank and in hand | 639,518 | 1,997,501 |
27,650,663 | 27,558,163 |
CREDITORS |
Amounts falling due within one year | 18 | (16,035,736 | ) | (19,095,319 | ) |
NET CURRENT ASSETS | 11,614,927 | 8,462,844 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
22,368,039 |
20,794,547 |
CREDITORS |
Amounts falling due after more than one year |
19 |
(3,908,492 |
) |
(3,472,723 |
) |
PROVISIONS FOR LIABILITIES | 23 | (654,100 | ) | (600,276 | ) |
NET ASSETS | 17,805,447 | 16,721,548 |
CAPITAL AND RESERVES |
Called up share capital | 24 | 1,000 | 1,000 |
Fair value reserve | 25 | 1,752,311 | 1,752,311 |
Merger reserve | 25 | 33,779 | 33,779 |
Retained earnings | 25 | 16,018,357 | 14,934,458 |
SHAREHOLDERS' FUNDS | 17,805,447 | 16,721,548 |
The financial statements were approved by the director and authorised for issue on 30 July 2024 and were signed by: |
C R F Shield - Director |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
COMPANY BALANCE SHEET |
31 October 2023 |
2023 | 2022 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 13 |
Investments | 14 |
Investment property | 15 |
CURRENT ASSETS |
Debtors | 17 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 24 |
Retained earnings |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | - | 6,075,594 |
The financial statements were approved by the director and authorised for issue on |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
for the year ended 31 October 2023 |
Called up | Fair |
share | Retained | value | Merger | Total |
capital | earnings | reserve | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 November 2021 | 1 | 17,063,497 | 2,077,311 | 33,779 | 19,174,588 |
Changes in equity |
Reduction in share capital | (6,074,597 | ) | - | - | - | (6,074,597 | ) |
Allotment in ordinary shares A | 4,975,595 | - | - | - | 4,975,595 |
Allotment in ordinary shares B | 1,100,001 | - | - | - | 1,100,001 |
Total comprehensive income | - | 2,976,870 | (325,000 | ) | - | 2,651,870 |
Dividend in specie | - | (5,105,909 | ) | - | - | (5,105,909 | ) |
Balance at 31 October 2022 | 1,000 | 14,934,458 | 1,752,311 | 33,779 | 16,721,548 |
Changes in equity |
Total comprehensive income | - | 1,083,899 | - | - | 1,083,899 |
Balance at 31 October 2023 | 1,000 | 16,018,357 | 1,752,311 | 33,779 | 17,805,447 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
for the year ended 31 October 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 November 2021 |
Changes in equity |
Reduction in share capital | (6,074,597 | ) | - | (6,074,597 | ) |
Allotment in ordinary shares A | 4,975,595 | - | 4,975,595 |
Allotment in ordinary shares B | 1,100,001 | - | 1,100,001 |
Total comprehensive income | - |
Balance at 31 October 2022 |
Changes in equity |
Balance at 31 October 2023 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
CONSOLIDATED CASH FLOW STATEMENT |
for the year ended 31 October 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | (511,670 | ) | 4,372,545 |
Interest paid | (363,122 | ) | (222,838 | ) |
Interest element of hire purchase payments paid |
(10,727 |
) |
(55,645 |
) |
Tax refund | (24,719 | ) | 182,734 |
Net cash from operating activities | (910,238 | ) | 4,276,796 |
Cash flows from investing activities |
Purchase of tangible fixed assets | (245,903 | ) | (634,608 | ) |
Purchase of fixed asset investments | - | (229,156 | ) |
Investment property additions | (169,241 | ) | (111,197 | ) |
Sale of tangible fixed assets | 16,351 | 153,500 |
Sale of investment property | 83,944 | 660,000 |
Interest received | 13,488 | 5,907 |
Net cash from investing activities | (301,361 | ) | (155,554 | ) |
Cash flows from financing activities |
New loans in year | 1,500,000 | 3,145,000 |
Loan repayments in year | (1,009,720 | ) | (4,154,010 | ) |
Capital repayments in year | (683,209 | ) | (1,820,249 | ) |
Amount introduced by directors | 46,545 | 34,503 |
Amount withdrawn by directors | - | (3,617 | ) |
Net cash from financing activities | (146,384 | ) | (2,798,373 | ) |
(Decrease)/increase in cash and cash equivalents | (1,357,983 | ) | 1,322,869 |
Cash and cash equivalents at beginning of year |
2 |
1,997,501 |
674,632 |
Cash and cash equivalents at end of year | 2 | 639,518 | 1,997,501 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT |
for the year ended 31 October 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Profit before taxation | 1,394,969 | 2,426,853 |
Depreciation charges | 1,265,518 | 1,518,075 |
Profit on disposal of fixed assets | (16,331 | ) | (1,063,500 | ) |
Impairment of fixed asset investments | 644,253 | - |
Finance costs | 373,849 | 278,483 |
Finance income | (13,488 | ) | (5,907 | ) |
3,648,770 | 3,154,004 |
Decrease/(increase) in stocks | 453,211 | (830,855 | ) |
(Increase)/decrease in trade and other debtors | (46,480 | ) | 836,123 |
(Decrease)/increase in trade and other creditors | (4,567,171 | ) | 1,213,273 |
Cash generated from operations | (511,670 | ) | 4,372,545 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 October 2023 |
31/10/23 | 1/11/22 |
£ | £ |
Cash and cash equivalents | 639,518 | 1,997,501 |
Year ended 31 October 2022 |
31/10/22 | 1/11/21 |
£ | £ |
Cash and cash equivalents | 1,997,501 | 674,632 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1/11/22 | Cash flow | At 31/10/23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 1,997,501 | (1,357,983 | ) | 639,518 |
1,997,501 | (1,357,983 | ) | 639,518 |
Debt |
Finance leases | (835,856 | ) | 683,209 | (152,647 | ) |
Debts falling due within 1 year | (2,470,205 | ) | 1,609,602 | (860,603 | ) |
Debts falling due after 1 year | (3,311,930 | ) | (596,562 | ) | (3,908,492 | ) |
(6,617,991 | ) | 1,696,249 | (4,921,742 | ) |
Total | (4,620,490 | ) | 338,266 | (4,282,224 | ) |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
for the year ended 31 October 2023 |
1. | STATUTORY INFORMATION |
Shield Engineering Group Holdings Limited is a private group, limited by shares, registered in England and Wales. Its registered office address is First Floor, One Colton Square, Leicester, United Kingdom, LE1 1QH and the registered number is 14083835. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements are prepared in sterling, which is the functional currency of the group, 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 |
The directors believe that it is appropriate to adopt the going concern basis in the preparation of the financial statements. At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. |
Basis of consolidation |
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. |
The consolidated financial statements have therefore been prepared under the merger accounting rules as if C R Shield Holdings Limited and its subsidiaries had been owned by the company from inception and therefore the result and position have been reflected in the comparatives. |
Turnover |
Turnover is derived primarily from the group's principal activities which are that of sub-contract precision engineers. The group is also involved in farming activities, commercial property mainly from group activities, trading in fixed assets held for resale and held investment properties. |
Turnover from sub contract precision engineering and fixed assets held for resale is recognised on delivery. Rental income is recognised within other operating income over the period of the rental. Turnover is recognised exclusive of Value Added Tax and trade discounts. |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Tangible fixed assets under the cost model, other than investment properties, 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 | 2-5% on a straight line basis |
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 | 15-25% 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 group. The costs relating to the development of the projects are capitalised however no depreciation is charged until the asset is available for use. |
Valuation of investments |
Investments in subsidiaries are measured at cost less accumulated impairment. Where merger relief is applicable, the cost of the investment in a subsidiary undertaking is measured at the nominal value of the shares issued together with the fair value of any additional consideration paid. |
Unlisted investments |
Associates and joint ventures are held at cost less impairment. |
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. |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The group 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 group's balance sheet when the group 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. |
(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 group 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 group. |
Cash and cash equivalents |
Cash and cash equivalents are represented by cash in hand, deposits held at call with financial institutions, and other short-term highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
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. |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
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. |
Operating leases |
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases. |
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability. |
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 group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group 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 group in independently administered funds. |
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. |
Dividends |
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. |
Provisions for liabilities |
Provisions are made where an event has taken place that gives the group 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 group 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. |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED 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 group’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 below notes for the carrying amount of the assets and above notes for the useful economic lives for each class of asset. |
Stock provisioning |
The Group 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 Group 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 Group 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 one principal activity of the group. |
An analysis of turnover by class of business is given below: |
2023 | 2022 |
£ | £ |
Engineering | 30,062,219 | 25,078,758 |
Farming | 105,817 | 119,212 |
Rental income | 59,417 | 62,318 |
30,227,453 | 25,260,288 |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom | 25,646,811 | 22,169,928 |
Europe | 4,466,748 | 2,890,846 |
Rest of the World | 113,894 | 199,514 |
30,227,453 | 25,260,288 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
5. | OTHER OPERATING INCOME |
2023 | 2022 |
£ | £ |
Rents received | 559,578 | 528,636 |
Sundry receipts | 792,756 | 325,216 |
1,352,334 | 853,852 |
6. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries | 4,176,460 | 4,013,556 |
Social security costs | 362,957 | 382,454 |
Other pension costs | 89,667 | 90,973 |
4,629,084 | 4,486,983 |
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 | 403,032 | 371,771 |
Directors' pension contributions to monetary purchase schemes | 14,152 | 4,050 |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc | 230,484 | 220,020 |
No Directors' remuneration was charged through the Company. |
8. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery | 25,149 | 19,156 |
Depreciation - owned assets | 1,101,499 | 1,061,340 |
Depreciation - assets on hire purchase contracts | 164,019 | 456,737 |
Profit on disposal of fixed assets | (16,331 | ) | (1,063,500 | ) |
Foreign exchange differences | 44,592 | (35,368 | ) |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
9. | AUDITORS' REMUNERATION |
2023 | 2022 |
£ | £ |
Fees payable to the groups auditors for the audit of the company's financial statements |
31,745 |
43,550 |
10. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank loan interest | 363,122 | 222,838 |
Hire purchase interest | 10,727 | 55,645 |
373,849 | 278,483 |
11. | 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 | 257,246 | (209,927 | ) |
Adjustment to prior years | 24,719 | (361,626 | ) |
Total current tax | 281,965 | (571,553 | ) |
Deferred tax | 29,105 | 537,397 |
Tax on profit | 311,070 | (34,156 | ) |
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 | 1,394,969 | 2,426,853 |
Profit multiplied by the standard rate of corporation tax in the UK of 22.500 % (2022 - 19 %) |
313,868 |
461,102 |
Effects of: |
Expenses not deductible for tax purposes | 227,276 | 17,087 |
Income not taxable for tax purposes | (3,035 | ) | - |
Capital allowances in excess of depreciation | - | (110,770 | ) |
Depreciation in excess of capital allowances | 97,200 | - |
Utilisation of tax losses | (265,593 | ) | (544,393 | ) |
Adjustments to tax charge in respect of previous periods | - | (361,626 | ) |
Transfer pricing adjustment | - | 127,733 |
R&D tax credit | (112,470 | ) | (160,685 | ) |
Deferred tax movement | 53,824 | 408,158 |
Deferred tax change in rates | - | 129,238 |
Total tax charge/(credit) | 311,070 | (34,156 | ) |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
11. | TAXATION - continued |
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 |
£ | £ | £ |
Fair value reserve |
Deferred tax charge | 190,861 | - | 190,861 |
190,861 | - | 190,861 |
12. | INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME |
As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements. |
13. | TANGIBLE FIXED ASSETS |
Group |
Freehold | Improvements |
land & | to | Plant and |
buildings | property | machinery |
£ | £ | £ |
COST |
At 1 November 2022 | 306,769 | 1,061,480 | 20,401,773 |
Additions | - | 8,804 | 190,124 |
Disposals | - | - | (16,050 | ) |
Reclassification/transfer | - | - | - |
At 31 October 2023 | 306,769 | 1,070,284 | 20,575,847 |
DEPRECIATION |
At 1 November 2022 | 54,080 | 1,431,928 | 15,347,387 |
Charge for year | 6,119 | 37,001 | 1,179,287 |
Eliminated on disposal | - | - | (16,050 | ) |
At 31 October 2023 | 60,199 | 1,468,929 | 16,510,624 |
NET BOOK VALUE |
At 31 October 2023 | 246,570 | (398,645 | ) | 4,065,223 |
At 31 October 2022 | 252,689 | (370,448 | ) | 5,054,386 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
13. | TANGIBLE FIXED ASSETS - continued |
Group |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 November 2022 | 137,439 | 117,458 | 57,639 | 22,082,558 |
Additions | 24,836 | 15,600 | 6,539 | 245,903 |
Disposals | - | (7,157 | ) | - | (23,207 | ) |
Reclassification/transfer | 64,178 | - | (64,178 | ) | - |
At 31 October 2023 | 226,453 | 125,901 | - | 22,305,254 |
DEPRECIATION |
At 1 November 2022 | 75,252 | 77,778 | - | 16,986,425 |
Charge for year | 31,892 | 11,219 | - | 1,265,518 |
Eliminated on disposal | - | (7,137 | ) | - | (23,187 | ) |
At 31 October 2023 | 107,144 | 81,860 | - | 18,228,756 |
NET BOOK VALUE |
At 31 October 2023 | 119,309 | 44,041 | - | 4,076,498 |
At 31 October 2022 | 62,187 | 39,680 | 57,639 | 5,096,133 |
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 |
14. | FIXED ASSET INVESTMENTS |
Group |
Unlisted |
investments |
£ |
COST |
At 1 November 2022 | 873,409 |
Impairments | (644,253 | ) |
At 31 October 2023 | 229,156 |
NET BOOK VALUE |
At 31 October 2023 | 229,156 |
At 31 October 2022 | 873,409 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
14. | FIXED ASSET INVESTMENTS - continued |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 November 2022 |
and 31 October 2023 |
NET BOOK VALUE |
At 31 October 2023 |
At 31 October 2022 |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiaries |
Registered office: England and Wales |
Nature of business: |
% |
Class of shares: | holding |
Registered office: England and Wales |
Nature of business: |
% |
Class of shares: | holding |
Registered office: England and Wales |
Nature of business: |
% |
Class of shares: | holding |
Registered office: England and Wales |
Nature of business: |
% |
Class of shares: | holding |
Registered office: England and Wales |
Nature of business: |
% |
Class of shares: | holding |
Registered office: England and Wales |
Nature of business: |
% |
Class of shares: | holding |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
14. | FIXED ASSET INVESTMENTS - continued |
Registered office: England and Wales |
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. At the date of signing the accounts the director cannot yet quantify the effect that this will have on the investment. |
15. | INVESTMENT PROPERTY |
Group |
Total |
£ |
FAIR VALUE |
At 1 November 2022 | 6,362,161 |
Additions | 169,241 |
Disposals | (83,944 | ) |
At 31 October 2023 | 6,447,458 |
NET BOOK VALUE |
At 31 October 2023 | 6,447,458 |
At 31 October 2022 | 6,362,161 |
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 | 1,360,094 |
Cost | 4,180,098 |
6,447,458 |
16. | STOCKS |
Group |
2023 | 2022 |
£ | £ |
Raw materials | 3,202,699 | 3,761,978 |
Finished goods | 223,729 | 117,661 |
3,426,428 | 3,879,639 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
17. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade debtors | 1,921,381 | 4,198,655 |
Amounts owed by group undertakings | 1,010,487 | - |
Amounts owed by related parties | 6,578,692 | 5,717,765 | - | - |
Other debtors | 3,584,507 | 1,289,661 |
Fixed assets held for sale | 9,856,083 | 9,856,083 | - | - |
Directors' current accounts | 8,897 | 55,442 | - | - |
Corporation tax | 459,617 | 459,617 |
VAT | 2,475 | 11,774 |
Called up share capital not paid | 100 | 100 |
Prepayments and accrued income | 162,478 | 91,926 |
23,584,717 | 21,681,023 |
18. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group |
2023 | 2022 |
£ | £ |
Bank loans and overdrafts (see note 20) | 860,603 | 2,470,205 |
Hire purchase contracts (see note 21) | 152,647 | 675,063 |
Trade creditors | 3,345,901 | 4,621,698 |
Amounts owed to group undertakings | 1,035,687 | - |
Amounts owed to related parties | 9,151,675 | 9,953,594 |
Tax | 257,246 | - |
Social security and other taxes | 230,611 | 398,699 |
Other creditors | 924,113 | 893,740 |
Accruals and deferred income | 77,253 | 82,320 |
16,035,736 | 19,095,319 |
19. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
2023 | 2022 |
£ | £ |
Bank loans (see note 20) | 3,908,492 | 3,311,930 |
Hire purchase contracts (see note 21) | - | 160,793 |
3,908,492 | 3,472,723 |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
20. | LOANS |
An analysis of the maturity of loans is given below: |
Group |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on | demand: |
Bank loans | 860,603 | 2,470,205 |
Amounts falling due between one and two | years: |
Bank loans - 1-2 years | 3,908,492 | 3,311,930 |
21. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year | 152,647 | 675,063 |
Between one and five years | - | 160,793 |
152,647 | 835,856 |
Obligations under finance leases and hire purchase contracts are secured upon the asset concerned. Finance lease payments represent rentals payable by the group 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. |
Group |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year | 35,260 | 35,260 |
Between one and five years | 50,372 | 85,632 |
85,632 | 120,892 |
Operating leases relate to rent payable for the building in which the group operates. |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
22. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group |
2023 | 2022 |
£ | £ |
Bank loans | 4,769,095 | 5,782,135 |
Hire purchase contracts | 152,647 | 835,856 |
4,921,742 | 6,617,991 |
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 group. A guarantee of £4.6 million has been provided by Shield Properties Limited. |
The group 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 group 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. |
23. | PROVISIONS FOR LIABILITIES |
Group |
2023 | 2022 |
£ | £ |
Deferred tax | 654,100 | 600,276 |
Group |
Deferred |
tax |
£ |
Balance at 1 November 2022 | 600,276 |
Charge to Statement of Comprehensive Income during year | 53,824 |
Balance at 31 October 2023 | 654,100 |
24. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary A | £1.00 | 1,000 | 1,000 |
The company was incorporated with 1 £1 ordinary share. On 1 August 2022 4,975,595 £1 ordinary A shares and 1,100,001 £1 ordinary B shares were allotted, on the same day there was a share capital reduction to leave 1,000 £1 ordinary A shares. |
The company's ordinary shares carry full rights with respect to voting, dividends and distributions. |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
25. | RESERVES |
Merger Reserve |
The merger reserve represents the difference between the parent company's cost of investment and the subsidiary's share capital and share premium. |
Profit and Loss Account |
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. |
26. | PENSION COMMITMENTS |
The group operates several defined contribution pension schemes. The assets of the schemes are held separately from those of the group in independently administered funds. The pension cost charge represents contributions payable by the group to the fund and amounted to £89,667 (2022 - £90,973). |
27. | DIRECTOR'S 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 |
£ | £ |
C R F Shield |
Balance outstanding at start of year | 55,442 | 86,329 |
Amounts advanced | 7,625 | 3,616 |
Amounts repaid | (56,210 | ) | (34,503 | ) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | 6,857 | 55,442 |
28. | RELATED PARTY DISCLOSURES |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
There are no key management personnel other than the directors. |
SHIELD ENGINEERING GROUP HOLDINGS |
LIMITED (REGISTERED NUMBER: 14083835) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
28. | RELATED PARTY DISCLOSURES - continued |
Other related party transactions |
During the year the group 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 | ) |
Purchases from OLD Engineering Limited | (276,403 | ) | (158,864 | ) |
Amounts due to OLD Engineering Limited | (34,260 | ) | (10,876 | ) |
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 from Shield Properties Limited | 1,764,332 | 1,048,705 |
Sales to G W Atkins & Sons Limited | - | 466,027 |
Purchases from G W Atkins & Sons Limited | - | (805,722 | ) |
Amounts due from G W Atkins and Sons Holdings Limited | 666,000 | 666,000 |
Sales to Bridge Aluminium Limited | 275,858 | 12,600 |
Purchases from Bridge Aluminium | (2,767,232 | ) | (1,379,856 | ) |
Amounts due from Bridge Aluminium Limited | 2,101,232 | 1,718,171 |
Amounts due to Twingear Limited | - | (578,388 | ) |
Amounts due from PFS Manufacturing Limited | 87,251 | 119,896 |
Amounts due from/(to) Shield Manufacturing Technologies Limited | 3,074,097 | (203,771 | ) |
29. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party is C R F Shield. |