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Registration number: 03151149

EA-RS Fire Engineering Ltd

Annual Report and Financial Statements

for the Year Ended 30 September 2023

 

EA-RS Fire Engineering Ltd

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4 to 6

Statement of Directors' Responsibilities

7

Independent Auditor's Report

8 to 10

Profit and Loss Account

11

Statement of Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15 to 30

 

EA-RS Fire Engineering Ltd

Company Information

Directors

A J Wheal

M G Horne

P J Silverlock

M L Wheeler

Registered office

4 Swanbridge Industrial Estate
Blackcroft Road
Witham
Essex
CM8 3YN

Auditors

Clement Rabjohns Limited
Chartered Accountants
111/113 High Street
Evesham
Worcestershire
WR11 4XP

 

EA-RS Fire Engineering Ltd

Strategic Report for the Year Ended 30 September 2023

The directors present their strategic report for the year ended 30 September 2023.

Principal activity

The principal activity of the company is fire and security services.

Fair review of the business

During the year, the company has grown organically delivering larger scale projects. This growth has seen Turnover increase by 47% to £27M. Despite challenging market conditions, the company has maintained strong Operating Profit and EBITDA, the key indicators by which the directors measure the business.
The company traded well throughout the year generating EBITDA of £967K and holding cash balances of £1.1M up from £539K in 2022. See reconciliation of EBITDA below:

Note

2023
 £

2022
 £

Operating Profit

 

536,224

791,289

Interest Payable

 

9,441

32,985

Depreciation & Amortisation

 

107,835

108,712

Other non-operating costs

 

32,056

71,361

Group management recharge

 

281,611

274,697

 

967,167

1,279,044

The company uses a range of performance measures to effectively monitor and manage its business. The Directors and senior management review these KPI’s and financial performance monthly and these are discussed at the monthly board meetings. The financial KPI’s used to manage the business are disclosed below:

Financial KPIs

Unit

2023

2022

Turnover

£

27,452,634

18,673,630

Turnover growth

%

47

9

Gross Profit

£

4,501,569

5,050,140

EBITDA before non-recurring costs

£

1,374,106

1,279,044

EBITDA growth

%

7

25

Non-recurring costs

£

406,939

-

EBITDA after non-recurring costs

£

967,167

1,279,044

-

-

No. of customers

No.

194

150

 

EA-RS Fire Engineering Ltd

Strategic Report for the Year Ended 30 September 2023

Principal risks and uncertainties

The principal risks to the business are;

- To mis-manage the installation of equipment at a client site resulting in a claim for contractual damages
- To provide defective design services to a client resulting in inadequate fire or security protection

The company has significant technical expertise and systems of management control and supervision borne out by its industry accreditations. These, combined with our unblemished track record over many years of trading provides comfort that the above risks are being properly mitigated.

Approved and authorised by the Board on 15 August 2024 and signed on its behalf by:
 

.........................................
M L Wheeler
Director

 

EA-RS Fire Engineering Ltd

Directors' Report for the Year Ended 30 September 2023

The directors present their report and the financial statements for the year ended 30 September 2023.

Directors of the company

The directors who held office during the year were as follows:

J Clitheroe (ceased 17 July 2023)

A J Wheal

M G Horne

P J Silverlock

D W Watson (ceased 29 March 2024)

D R Pugh (appointed 1 March 2023 and ceased 21 June 2024)

M L Wheeler

Financial instruments

Objectives and policies

The group's activities expose it to a variety of financial risks that include the effects of the change in price risk, liquidity risk, interest rate risk and operational risk.

 

EA-RS Fire Engineering Ltd

Directors' Report for the Year Ended 30 September 2023

Price risk, credit risk, liquidity risk and cash flow risk

The principal risks to the business are:

Price risk
The Group is exposed to price risk due to normal inflationary increase in the purchase price of supplies and services.

Liquidity risk
The Group regularly reviews its liquidity risk and has arranged appropriate facilities to be available.

Credit risk
The Group has a rigorous credit policy which it uses to manage credit risk. The cost of borrowing and general inflation increases have increased the risk of bad debt occurring, but the business has a wide customer base which spreads its risk and provision for potential bad debts.

Interest rate risk
The Group is exposed to interest rate risk on its borrowings, which are based on margin over SONIA. A rise in interest rates could increase the cost of borrowings. The Group continually monitors interest rate risks and reviews hedging as a way to mitigate interest rate rises though no hedging arrangements are currently in place.

Operational risk
- The mis-handling of a significant acquisition
- To mis-manage the installation of equipment at a client site resulting in a claim for contractual damages
- To provide defective design services to a client resulting in inadequate fire or security protection

The group has significant technical expertise and systems of management control, and supervision borne out by its industry accreditations. These, combined with our unblemished track record over many years of trading, provides comfort that the above risks are being properly mitigated.

Going concern

The directors, having assessed future profit forecasts and the level of financial support available, where necessary, have no reason to believe that a material uncertainty exists about the ability of the company to ensure that is can continue as a going concern for a period of at least a year from the date of approval of the financial statements. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Clement Rabjohns Limited as auditors of the company is to be proposed at the forthcoming Annual General Meeting.

Approved and authorised by the Board on 15 August 2024 and signed on its behalf by:
 

 

EA-RS Fire Engineering Ltd

Directors' Report for the Year Ended 30 September 2023

.........................................
M L Wheeler
Director

 

EA-RS Fire Engineering Ltd

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

EA-RS Fire Engineering Ltd

Independent Auditor's Report to the Members of EA-RS Fire Engineering Ltd

Opinion

We have audited the financial statements of EA-RS Fire Engineering Ltd (the 'company') for the year ended 30 September 2023, which comprise the Profit and Loss Account, 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 30 September 2023 and of its profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor 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 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 company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

EA-RS Fire Engineering Ltd

Independent Auditor's Report to the Members of EA-RS Fire Engineering Ltd

We have nothing to report in this regard.

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and 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 our 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 and 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 7], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities even though the audit has been properly planned and performed in accordance with the ISAs (UK). The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

EA-RS Fire Engineering Ltd

Independent Auditor's Report to the Members of EA-RS Fire Engineering Ltd

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company, and the industry in which it operates. These include but are not limited to compliance with the Companies Act 2006, UK Generally Accepted Accounting Principles and the relevant tax compliance regulations for the company.

We obtained an understanding of how the company is complying with these frameworks through discussions with management.

We enquired with management whether there were any instances of non-compliance with laws and regulations or whether they had knowledge of actual or suspected fraud. These enquiries are corroborated through follow-up audit procedures including but not limited to a review of legal and professional costs and correspondence.

We assessed the susceptibility of the company's financial statements to material misstatement, including the risk of fraud and management override of controls. We designed our audit procedures to respond to this assessment, including the identification and testing of any related party transactions and the testing of journal transactions that arise from management estimates, that are determined to be of significant value or unusual in their nature.

We assessed the appropriateness of the collective competence and capabilities of the engagement team, including consideration of the engagement team's knowledge and understanding of the industry in which the company operates in, and their practical experience through training and participation with audit engagements of a similar nature.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

......................................
Philip Parsons FCA (Senior Statutory Auditor)
For and on behalf of Clement Rabjohns Limited, Statutory Auditor

111/113 High Street
Evesham
Worcestershire
WR11 4XP

15 August 2024

 

EA-RS Fire Engineering Ltd

Profit and Loss Account for the Year Ended 30 September 2023

Note

2023
£

2022
£

Turnover

3

27,452,634

18,670,630

Cost of sales

 

(22,951,065)

(13,620,490)

Gross profit

 

4,501,569

5,050,140

Administrative expenses

 

(3,955,904)

(4,225,866)

Operating profit

5

545,665

824,274

Other interest receivable and similar income

6

888

-

Interest payable and similar expenses

7

(10,329)

(32,985)

   

(9,441)

(32,985)

Profit before tax

 

536,224

791,289

Tax on profit

11

251,577

89,274

Profit for the financial year

 

787,801

880,563

The above results were derived from continuing operations.

 

EA-RS Fire Engineering Ltd

Statement of Comprehensive Income for the Year Ended 30 September 2023

2023
£

2022
£

Profit for the year

787,801

880,563

Deficit on revaluation of other assets

-

(4,800)

Total comprehensive income for the year

787,801

875,763

 

EA-RS Fire Engineering Ltd

(Registration number: 03151149)
Balance Sheet as at 30 September 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

12

742,982

251,157

Tangible assets

13

238,578

251,382

Investments

14

2,273,184

2,273,184

 

3,254,744

2,775,723

Current assets

 

Stocks

15

267,734

74,718

Debtors

16

9,862,810

6,742,578

Cash at bank and in hand

 

1,124,600

538,949

 

11,255,144

7,356,245

Creditors: Amounts falling due within one year

18

(10,399,742)

(6,802,889)

Net current assets

 

855,402

553,356

Total assets less current liabilities

 

4,110,146

3,329,079

Creditors: Amounts falling due after more than one year

18

-

(17,153)

Provisions for liabilities

19

(36,879)

(26,460)

Net assets

 

4,073,267

3,285,466

Capital and reserves

 

Called up share capital

600

600

Capital redemption reserve

400

400

Revaluation reserve

60,000

60,000

Retained earnings

4,012,267

3,224,466

Shareholders' funds

 

4,073,267

3,285,466

Approved and authorised by the Board on 15 August 2024 and signed on its behalf by:
 

.........................................
M L Wheeler
Director

 

EA-RS Fire Engineering Ltd

Statement of Changes in Equity for the Year Ended 30 September 2023

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Retained earnings
£

Total
£

At 1 October 2022

600

400

60,000

3,224,466

3,285,466

Profit for the year

-

-

-

787,801

787,801

At 30 September 2023

600

400

60,000

4,012,267

4,073,267

Share capital
£

Capital redemption reserve
£

Revaluation reserve
£

Retained earnings
£

Total
£

At 1 October 2021

600

400

64,800

2,343,903

2,409,703

Profit for the year

-

-

-

880,563

880,563

Other comprehensive income

-

-

(4,800)

-

(4,800)

Total comprehensive income

-

-

(4,800)

880,563

875,763

At 30 September 2022

600

400

60,000

3,224,466

3,285,466

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales, United Kingdom.

The address of its registered office is:
4 Swanbridge Industrial Estate
Blackcroft Road
Witham
Essex
CM8 3YN
United Kingdom

These financial statements were authorised for issue by the Board on 15 August 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

These financial statements are presented in Pound Sterling (£).

Summary of disclosure exemptions

EA-RS Fire Engineering Limited meets the definition of a qualifying entity under FRS 102 and is therefore exempt from certain disclosure requirements in respect of its financial statements. Exemptions have been taken in relation to the preparation of a statement of cash flows, financial instruments and key management compensation.

Name of parent of group

These financial statements are consolidated in the financial statements of EA-RS Fire Engineering Group Limited.

The financial statements of EA-RS Fire Engineering Group Limited may be obtained from 4 Swanbridge Industrial Park, Black Croft Road, Witham, Essex, CM8 3YN.

Going concern

The financial statements have been prepared on a going concern basis.

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

Exemption from preparing group accounts

The financial statements contain information about EA-RS Fire Engineering Ltd as an individual company and do not contain consolidated financial information as the parent of a group.
The company is exempt under section 400 of the Companies Act 2006 from the requirement to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its parent, EA-RS Group Limited.

Judgements

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 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

Revenue recognition and accrued contract costs:
The turnover policy and financial instrument policies below set out the company's policies with regards to revenue recognition and recognition of accrued contract costs which affects turnover, cost of sales, gross profit, debtors and creditors. This is necessarily based on assumptions and estimates in relation to the degree of contract completion and the expected profitability of each contract. The main estimates this year are the sum of £2,561,203 (2022: £2,583,110) included in debtors in respect of gross amounts due from contract customers and the sum of £2,312,221 (2022: £2,157,033) included in creditors in respect of gross amounts due to contract suppliers.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Contract revenue recognition

Turnover is derived from ordinary activities and is stated after trade discounts and net of VAT

Revenue from long term contracts is recognised by the reference to the stage of completion of the contract. The stage of completion is determined by the amount of progress made on the work relating to the next stage payment, which is determined in the contract wording. A prudent level of profit attributable to the contract activity is recognised if the final outcome of such contracts can be reliably assessed. An expected loss on a contract progress are shown in creditors, and the amount by which the turnover is in excess of payments on account is included within debtors.

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold property

Held at valuation amount prior to reclassification

Short leasehold

20% straight line & held at valuation amount

Plant and machinery

15% straight line

Fixtures and fittings

15% straight line

Motor vehicles

25% reducing balance

Computer equipment

33% straight line

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Intangible assets

Separately acquired trademarks and licences are shown at historical cost.

Trademarks, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.

Trademarks, licences and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.


Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made 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 lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

Financial instruments

Classification
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.


 Recognition and measurement
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Basic financial assets, which include trade and other receivables 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 financial transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Basic financial liabilities, which include trade and other payables, are initially measured at transaction price and subsequently measured at amortised cost, 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.

 

3

Turnover

The analysis of the company's turnover for the year from continuing operations is as follows:

2023
£

2022
£

Sale of goods

27,452,634

18,670,630

The analysis of the company's turnover for the year by class of business is as follows:

2023
£

2022
£

Fire engineering services

27,452,634

18,670,630

The analysis of the company's turnover for the year by market is as follows:

2023
£

2022
£

UK

27,452,634

18,670,630

4

Other gains and losses

The analysis of the company's other gains and losses for the year is as follows:

2023
£

2022
£

Gain on disposal of tangible assets

-

1,287

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

5

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

57,615

58,492

Amortisation expense

50,220

50,220

Foreign exchange losses

2,085

4,910

Operating lease expense - plant and machinery

262,737

-

Profit on disposal of property, plant and equipment

-

(1,287)

6

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

888

-

7

Interest payable and similar expenses

2023
£

2022
£

Interest expense on other finance liabilities

10,329

32,985

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

4,667,662

3,962,868

Social security costs

178,545

240,561

Pension costs, defined contribution scheme

82,410

72,290

Other employee expense

28,127

42,515

4,956,744

4,318,234

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Staff

80

68

Directors

5

5

85

73

9

Directors' remuneration

The directors' remuneration for the year was as follows:

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

2023
£

2022
£

Remuneration

314,329

288,884

During the year the number of directors who were receiving benefits and share incentives was as follows:

2023
No.

2022
No.

Accruing benefits under defined benefit pension scheme

3

3

In respect of the highest paid director:

2023
£

2022
£

Remuneration

115,701

101,571

Company contributions to money purchase pension schemes

1,101

1,321

10

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

17,000

21,100


 

11

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

-

157,356

UK corporation tax adjustment to prior periods

(261,996)

(254,007)

(261,996)

(96,651)

Deferred taxation

Arising from origination and reversal of timing differences

10,419

7,377

Tax receipt in the income statement

(251,577)

(89,274)

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of 22.01% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

536,224

791,289

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

2023
£

2022
£

Corporation tax at standard rate

118,013

150,345

Decrease in UK and foreign current tax from adjustment for prior periods

(147,932)

-

Tax (decrease)/increase from effect of capital allowances and depreciation

(253)

4,510

Increase from effect of different UK tax rates on some earnings

119

-

Effect of expense not deductible in determining taxable profit (tax loss)

13,344

2,500

Tax (decrease)/increase arising from group relief

(130,229)

102,295

Deferred tax expense from unrecognised temporary difference from a prior period

-

7,378

Tax decrease from effect of adjustment in research and development tax credit

(104,639)

(356,302)

Total tax credit

(251,577)

(89,274)

The standard rate of corporation tax increased to 25% from 19% with effect from 1 April 2023. Deferred tax has been measured at the rate it is expected to reverse, being 25%.

Deferred tax

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Fixed asset timing differences

-

36,879

-

36,879

2022

Asset
£

Liability
£

Fixed asset timing differences

-

26,460

-

26,460

Tax relating to items recognised in other comprehensive income or equity

2023
£

2022
£

Current tax related to items recognised as items of other comprehensive income

-

4,800

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

12

Intangible assets

Goodwill
 £

Contractual customer relationships
 £

Total
£

Cost or valuation

At 1 October 2022

502,268

-

502,268

Additions acquired separately

-

542,045

542,045

At 30 September 2023

502,268

542,045

1,044,313

Amortisation

At 1 October 2022

251,111

-

251,111

Amortisation charge

50,220

-

50,220

At 30 September 2023

301,331

-

301,331

Carrying amount

At 30 September 2023

200,937

542,045

742,982

At 30 September 2022

251,157

-

251,157

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

13

Tangible assets

Short leasehold land and buildings
£

Fixtures and fittings
£

Plant and machinery
£

Office equipment
£

Motor vehicles
 £

Total
£

Cost or valuation

At 1 October 2022

130,000

11,109

16,377

120,807

80,240

358,533

Additions

-

1,501

1,670

41,641

-

44,812

Disposals

-

-

-

(38,632)

-

(38,632)

At 30 September 2023

130,000

12,610

18,047

123,816

80,240

364,713

Depreciation

At 1 October 2022

-

5,869

4,521

64,482

32,279

107,151

Charge for the year

-

1,777

2,665

39,039

14,135

57,616

Eliminated on disposal

-

-

-

(38,632)

-

(38,632)

At 30 September 2023

-

7,646

7,186

64,889

46,414

126,135

Carrying amount

At 30 September 2023

130,000

4,964

10,861

58,927

33,826

238,578

At 30 September 2022

130,000

5,240

11,856

56,325

47,961

251,382

Included within the net book value of land and buildings above is £Nil (2022 - £Nil) in respect of freehold land and buildings and £130,000 (2022 - £130,000) in respect of short leasehold land and buildings.
 

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

2023
£

2022
£

Motor vehicles

23,896

32,040

   

14

Investments

2023
£

2022
£

Investments in subsidiaries

2,273,184

2,273,184

Subsidiaries

£

Cost or valuation

At 1 October 2022

2,273,184

Provision

Carrying amount

At 30 September 2023

2,273,184

At 30 September 2022

2,273,184

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Circum Fire Engineering Limited

Unit 4 Swanbridge Industrial Estate, Black Croft Road, Witham, Essex, CM8 3YN

United Kingdom

Ordinary

100%

100%

Subsidiary undertakings

Circum Fire Engineering Limited

The principal activity of Circum Fire Engineering Limited is fire engineering services.

15

Stocks

2023
£

2022
£

Other inventories

267,734

74,718

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

16

Debtors

Current

Note

2023
£

2022
£

Trade debtors

 

7,281,451

5,946,583

Amounts owed by related parties

25

-

253,335

Other debtors

 

1,446,430

107,486

Prepayments

 

458,357

194,709

Gross amount due from customers for contract work

 

676,572

240,465

   

9,862,810

6,742,578

17

Cash and cash equivalents

2023
£

2022
£

Cash on hand

609

-

Cash at bank

1,123,991

538,949

1,124,600

538,949

18

Creditors

Note

2023
£

2022
£

Due within one year

 

Loans and borrowings

22

16,566

10,459

Trade creditors

 

2,611,135

3,045,797

Amounts due to related parties

 

3,877,149

865,560

Social security and other taxes

 

180,808

130,252

Other payables

 

456,183

290,830

Accruals

 

3,100,545

2,302,635

Income tax liability

11

157,356

157,356

 

10,399,742

6,802,889

Due after one year

 

Loans and borrowings

22

-

17,153

19

Provisions for liabilities

Deferred tax
£

Total
£

At 1 October 2022

26,460

26,460

Increase (decrease) in existing provisions

10,419

10,419

At 30 September 2023

36,879

36,879

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

20

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £82,410 (2022 - £72,290).

21

Share capital

Allotted, called up and fully paid shares

2023

2022

No.

£

No.

£

Ordinary shares of £1 each

600

600

600

600

       

22

Loans and borrowings

Non-current loans and borrowings

2023
£

2022
£

Hire purchase contracts

-

17,153

Current loans and borrowings

2023
£

2022
£

Hire purchase contracts

16,566

10,459

23

Obligations under leases and hire purchase contracts

Finance leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

16,565

10,459

Later than one year and not later than five years

-

17,153

16,565

27,612

Operating leases

The total of future minimum lease payments is as follows:

 

EA-RS Fire Engineering Ltd

Notes to the Financial Statements for the Year Ended 30 September 2023

2023
£

2022
£

Not later than one year

108,205

185,909

Later than one year and not later than five years

215,455

221,817

Later than five years

23,867

58,354

347,527

466,080

24

Financial guarantee contracts

The company's assets have been pledged as security for a debenture given by Rockpool (Security Trustee) Limited to an intermediate parent company in the Group.

The company's assets have been secondly pledged as security for a debenture given by Ares Management Limited to an intermediate parent company in the Group.

25

Related party transactions

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 with directors

2022

At 1 October 2021
£

Repayments by director
£

At 30 September 2022
£

A J Wheal

Advance

10,470

(10,470)

-

D W Watson

Advance

75

(75)

-

26

Parent and ultimate parent undertaking

The company's immediate parent is EA-RS Group Limited, incorporated in the United Kingdom.

 The ultimate parent is EA-RS Fire Engineering Group Limited, incorporated in the United Kingdom.

 The most senior parent entity producing publicly available financial statements is EA-RS Fire Engineering Group Limited. These financial statements are available upon request from Unit 4 Swanbridge Industrial Park, Black Croft Road, Witham, Essex, CM8 3YN.