Company registration number 00968729 (England and Wales)
CAUNTON ENGINEERING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
CAUNTON ENGINEERING LIMITED
COMPANY INFORMATION
Directors
D F Bingham
S D Bingham
S J Cundy
S T R Klein (Non-executive)
I C Oliver
M J Shimwell
G Skelton
S Waterhouse
R S Weeden
M A White
R M Wollerton
Secretary
H C Bingham
Company number
00968729
Registered office
Caunton House
2 Coombe Road
Moorgreen Industrial Park
Nottingham
United Kingdom
NG16 3SU
Auditor
Azets Audit Services
Ship Canal House
98 King Street
Manchester
M2 4WU
Bankers
Lloyds Bank plc
Butt Dyke House
33 Park Row
Nottingham
Nottinghamshire
United Kingdom
NG1 6GY
CAUNTON ENGINEERING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 24
CAUNTON ENGINEERING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -

The directors present the strategic report for the year ended 31 January 2024.

 

Section 172 of Companies Act 2006

Section 172 of the Companies Act 2006 sets out a number of general duties that directors owe to a company. These includes a general duty requiring directors to act in a way in which they consider, in good faith, will promote the success of the company for the benefit of shareholders as a whole.

In doing so a director of a company must have regard (amongst other matters) to:

a. The likely consequences of any decision in the long term;

b. The interests of the company’s employees;

c. The need to foster the company’s business relationships with suppliers, customers and others;

d. The impact of the company’s operations on the community and the environment;

e. The desirability of the company maintaining a reputation for high standards of business conduct; and

f. The need to act fairly as between members of the company.

Further detail on the performance of the business during the year and the longer-term activity is provided in this strategic report.

Principal activities

The principal activity of the company throughout the year continued to be that of structural engineering.

Business review

This year we saw a strong Q1 and Q2 evaporate into a weak Q3 and Q4 resulting in a reduction in revenues for the period to £94.8m (2023 £120.5m) and net profit decreasing to £3.0m (2023 £7.4m). Our cash position remains strong though and we will continue with our strategic investment plans into 2024/5.

 

Principal risks and uncertainties

The principal risks facing the business stem from contracting, its demands, the terms and conditions and associated issues therein. To mitigate these risks significant time and resource is dedicated to contract negotiations at the outset.

 

There has also been a rise in the broader financial challenges that the business faces as the credit insurance and Bond market has tightened significantly during the year. We continue to manage this through regular dialogue with our financial partners and by working closely both upstream and downstream with customers and suppliers alike.

 

 

While any inflationary pressures across many of our input costs, especially raw materials, have been, and continue to be, managed as a pass-through cost, any uncertainty around price volatility and availability of raw materials are closely monitored and managed at bid stage. These challenges have eased in recent times. Our operational efficiency gains, ability to be flexible in both design and manufacture coupled with support from our supply chain enables us to mitigate these threats.

 

 

The development and publication of our Carbon Reduction Road Map illustrates our commitment at all levels of the business to reduce our impact on the environment.

 

Occupational Health and Safety standards are set very high within the construction industry. Failure to adhere to the standards can result in accidents and/or injuries that can prove fatal. This is therefore of great importance to the Board as any negative impact in this area not only affects the lives of those involved but the reputation of the business and potential future work.

CAUNTON ENGINEERING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
Financial key performance indicators

Cash remains key to all businesses and we track our balances daily and constantly monitor our debtor and creditor days.

 

Net Profit on Sales is one of our primary indicators of performance as it takes into account the true running costs of the business in totality.

 

Our Forward Order Book of contracted sales gives us a clear look ahead of what resources both operationally and financially we need to plan to have in place.

 

Enquiries are measured in number, quality and value. Our conversion rates from tenders to contracts won by market sector and client along with the cost of servicing those markets and clients are monitored to ensure best returns.

 

With Health and Safety being such a critical factor we measure our AFR (accident frequency rate) and report this back to the Board throughout the year. We are pleased to report that our AFR remains lower than the industry average and we continue to work hard to drive this lower.

Quality, Environment and Safety

Caunton proudly retains its accredited standards for Quality, the Environment and Occupational Health and Safety (BS EN ISO 9001:2015; BS EN ISO 14001:2015; BS EN 45001:2018).

 

EWF Welding Standard ISO 3834 Part 2: 2005 underpins Caunton's ability to CE mark structural steelwork.

People

We continue to invest in our people at all levels. Our in-house Ofsted accredited Apprentice Training Academy celebrates its 20th anniversary this year, and has, to date, delivered 48 apprentices into the business since its inception. Our Degree Apprentices, Graduates and Apprentices now comprise 24% of our workforce. Wider people development and on-going CPD work ensures that we keep investing and promoting a culture of non-stop progression.

 

Outlook

As the various macroeconomic headwinds of, inflation, pricing volatility and energy costs begin to settle we remain mindful of the political challenges that elections at home and in the USA as well as the conflicts in Ukraine and the Middle East may present us with new challenges. At present though our outlook for 2024-2025 remains, on balance, a positive one. Our core markets remain relatively robust and we have secured a good forward order book and are seeing some excellent longer term prospects in the pipeline.

 

 

On behalf of the Board I would like to thank all our work colleagues who have shown great resilience, dedication and determination throughout the year.

On behalf of the board

S D Bingham
Director
8 July 2024
CAUNTON ENGINEERING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 January 2024.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid (2023: No ordinary dividends were paid).

 

The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

D F Bingham
S D Bingham
S J Cundy
S T R Klein (Non-executive)
I C Oliver
(Appointed 4 May 2023)
M J Shimwell
G Skelton
(Appointed 4 May 2023)
S Waterhouse
(Appointed 4 May 2023)
R S Weeden
(Appointed 4 May 2023)
M A White
(Appointed 4 May 2023)
R M Wollerton
(Appointed 4 May 2023)
Financial instruments

The company holds or issues financial instruments in order to achieve three main objectives, being:


(a) to finance its operations;


(b) to manage its exposure to interest and currency risks arising from its operations and from its sources of finance; and


(c) for trading purposes.


In addition, various financial instruments (e.g. trade debtors, trade creditors, accruals and prepayments) arise directly from the company's operations.


Transactions in financial instruments result in the company assuming or transferring to another party one or more of the financial risks described below.

Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

Interest rate risk

The company is exposed to fair value interest rate risk on its fixed rate borrowings. The directors monitor institutional interest rates closely so as to reduce its exposure to changes in rates.

CAUNTON ENGINEERING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 4 -
Credit risk

The company monitors credit risk closely and considers that its current policies of credit checks meet its objectives of managing exposure to credit risk.


The company has no significant concentrations of credit risk. Amounts shown in the balance sheet best represent the maximum credit risk exposure in the event other parties fail to perform their obligations under financial instruments.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees, through staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

Auditor

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

CAUNTON ENGINEERING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 5 -
Energy and carbon report

The company has committed to reducing its impact on the environment including climate change. The commitment has been shown by the company’s ongoing Environmental Management System ISO 14001 accreditation, BCSA Steel Sustainability Charter ‘Gold’ standard and the publication of its carbon roadmap with the aim to deliver Net Zero by 2050.

The company has over recent years implemented a number of energy efficiency measures and continues to monitor and review sustainability strategies and polices, to cater for industry wide innovation, technological and regulatory changes.

Implemented energy measures and initiatives include:

We continue to explore initiatives in conjunction with our Clients, Steel Association, Supply Chain Partners with the aim to reduce and minimise environmental impacts and carbon C02e emissions on an annual basis.

Our methodology is based upon the following documents:

 

GHG emission data for the period 1st February 2023 to 31st January 2024

Tonnes of C02e

Scope 1 (Energy consumption excluding electricity)

986

Scope 2

555

Scope 3

27

Total gross emissions

1,568

 

The intensity ratio of C02e per £1 turnover = 16.5 Grams per £1

GHG emission data for the period 1st February 2022 to 31st January 2023

Tonnes of C02e

Scope 1 (Energy consumption excluding electricity)

2,183

Scope 2

431

Total gross emissions

2,614

 

The intensity ratio of C02e per £1 turnover = 21.7 Grams per £1

 

CAUNTON ENGINEERING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 6 -
Statement of directors' responsibilities

The directors are responsible 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:

 

 

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

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
S D Bingham
Director
8 July 2024
CAUNTON ENGINEERING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CAUNTON ENGINEERING LIMITED
- 7 -
Opinion

We have audited the financial statements of Caunton Engineering Limited (the 'company') for the year ended 31 January 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:

CAUNTON ENGINEERING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CAUNTON ENGINEERING LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

CAUNTON ENGINEERING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CAUNTON ENGINEERING LIMITED
- 9 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

This report is made solely to the company’s member, 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 member 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 member, for our audit work, for this report, or for the opinions we have formed.

Graham Rigby
Senior Statutory Auditor
For and on behalf of Azets Audit Services
8 July 2024
Chartered Accountants
Statutory Auditor
Ship Canal House
98 King Street
Manchester
M2 4WU
CAUNTON ENGINEERING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
94,761,963
120,452,885
Change in stocks of finished goods and in work in progress
(1,334,651)
936,328
Other operating income
92,696
106,568
Other external expenses
(47,202,465)
(69,427,219)
Staff costs
5
(13,326,382)
(14,395,546)
Depreciation
4
(780,297)
(863,912)
Other operating expenses
(28,423,817)
(28,745,781)
Operating profit
4
3,787,047
8,063,323
Interest receivable and similar income
7
836,407
7,519
Interest payable and similar expenses
8
(94)
(844)
Profit before taxation
4,623,360
8,069,998
Tax on profit
9
(1,603,373)
(680,452)
Profit for the financial year
3,019,987
7,389,546
CAUNTON ENGINEERING LIMITED
BALANCE SHEET
AS AT
31 JANUARY 2024
31 January 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
3,857,738
3,981,012
Current assets
Stocks
11
3,821,436
5,156,087
Debtors
12
9,458,093
14,003,621
Cash at bank and in hand
26,908,765
23,169,733
40,188,294
42,329,441
Creditors: amounts falling due within one year
13
(20,193,294)
(25,507,358)
Net current assets
19,995,000
16,822,083
Total assets less current liabilities
23,852,738
20,803,095
Creditors: amounts falling due after more than one year
14
(1,000)
(1,000)
Provisions for liabilities
Deferred tax liability
15
526,923
497,267
(526,923)
(497,267)
Net assets
23,324,815
20,304,828
Capital and reserves
Called up share capital
17
1,000
1,000
Capital redemption reserve
18
2,025,000
2,025,000
Other reserves
9,638
9,638
Profit and loss reserves
19
21,289,177
18,269,190
Total equity
23,324,815
20,304,828
The financial statements were approved by the board of directors and authorised for issue on 8 July 2024 and are signed on its behalf by:
S J Cundy
Director
Company Registration No. 00968729
CAUNTON ENGINEERING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
- 12 -
Share capital
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 February 2022
1,000
2,025,000
9,638
10,879,644
12,915,282
Year ended 31 January 2023:
Profit and total comprehensive income for the year
-
-
-
7,389,546
7,389,546
Balance at 31 January 2023
1,000
2,025,000
9,638
18,269,190
20,304,828
Year ended 31 January 2024:
Profit and total comprehensive income for the year
-
-
-
3,019,987
3,019,987
Balance at 31 January 2024
1,000
2,025,000
9,638
21,289,177
23,324,815
CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 13 -
1
Accounting policies
Company information

Caunton Engineering Limited is a private company limited by shares incorporated in England and Wales. The registered office is Caunton House, 2 Coombe Road, Moorgreen Industrial Park, Nottingham, United Kingdom, NG16 3SU.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted have been set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Caunton Holdings Limited. These consolidated financial statements are available from its registered office, Caunton House, 2 Coombe Road, Moorgreen Industrial Park, Nottingham, Nottinghamshire, England, NG16 3SU.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Attributable turnover is calculated by reference to applications made including retentions, less provisions for turnover attributable to future periods. Turnover is stated net of value added tax.

1.4
Research and development expenditure

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.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 14 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
10 years straight line
Plant and machinery
15% on written down value or straight line over 15 years
Furniture, fittings and equipment
15% on written down value or straight line over 5 years
Motor vehicles
25% on written down value

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 credited or charged to profit or loss.

1.6
Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

1.7
Construction contracts

Work in progress is valued at net cost, less foreseeable losses. Profit on short term contracts is recognised as the work is carried out if the final outcome can be assessed with reasonable certainty. Profit is ascertained in a manner appropriate to the stage of completion of the contract, by reference to attributable turnover less costs incurred to date. Costs include subcontracting which is recognised on the basis of applications received. No provision is made for retention-related expenditure unless the cost of rectification work is known. Full provision is made for losses on all contracts in the year they are first foreseen.

1.8
Cash at bank and in hand

Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs, less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. The impairment loss is recognised in profit or loss.

CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 16 -
1.12
Retirement benefits

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

 

The contributions are recognised as an expense in the statement of comprehensive income when they fall due. Amounts not paid are shown in other creditors as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

1.13
Leases

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance leases are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation in each period.

Operating lease rentals are charged as an expense in the profit and loss account on a straight line basis.

1.14
Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the statement of comprehensive income at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.

1.15
Foreign exchange

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 in the period are included in profit or loss.

1.16

Interest income

Interest income is recognised in the statement of comprehensive income using the effective interest method.

1.17

Finance costs

Finance costs are charged to the statement of comprehensive income 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.

CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 17 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Provisions for loss making contracts

Where losses on contracts are expected, the entire forecasted loss is recognised immediately within the profit and loss account.

Stage of contract completion

Profit is recognised in the profit and loss account subject to the stage of completion and an assessment of the value of work done on each contract, taking into consideration contract variations, estimated costs to complete and forecast profitability.

Bad debt provision

The directors have reviewed the trading balances owing to the company from its customers and made adequate provision for any debts where it is considered probable that the amount will not be recovered.

The amounts would have otherwise been recognised in trade debtors.

3
Turnover and other revenue

The whole of the turnover is attributable to the one principal activity of the company.

All turnover arose within the United Kingdom.

2024
2023
£
£
Other revenue
Interest income
836,407
7,519
Grants received
92,696
106,568
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
11,776
32,686
Auditor's remuneration
28,800
26,100
Auditor's remuneration - non audit
8,400
6,700
Depreciation of owned tangible fixed assets
788,108
810,195
(Profit)/loss on disposal of tangible fixed assets
(7,811)
53,717
Operating lease charges
1,217,428
1,177,604
CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 18 -
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Number of production staff
155
151
Number of technical and administrative staff
93
93
Total
248
244

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
11,078,478
12,174,287
Social security costs
1,051,318
1,177,695
Pension costs
1,196,586
1,043,564
13,326,382
14,395,546
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
925,902
197,510
Company pension contributions to defined contribution schemes
207,946
13,599
1,133,848
211,109

Remuneration for qualifying services represents payments made in the year to a total of 8 (2023: 3) directors. The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 7 (2023: 1).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
235,407
n/a
Company pension contributions to defined contribution schemes
23,208
n/a
CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 19 -
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
778,364
-
0
Other interest income
58,043
7,519
Total income
836,407
7,519
8
Interest payable and similar expenses
2024
2023
£
£
Interest on finance leases and hire purchase contracts
94
844
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,142,030
100,377
Adjustments in respect of prior periods
431,687
-
0
Total current tax
1,573,717
100,377
Deferred tax
Origination and reversal of timing differences
29,656
1,151,238
Adjustment in respect of prior periods
-
0
(571,163)
Total deferred tax
29,656
580,075
Total tax charge
1,603,373
680,452
CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
9
Taxation
(Continued)
- 20 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
4,623,360
8,069,998
Expected tax charge based on the standard rate of corporation tax in the UK of 24.03% (2023: 19.00%)
1,110,993
1,533,300
Tax effect of expenses that are not deductible in determining taxable profit
26,693
12,743
Tax effect of income not taxable in determining taxable profit
(2,311)
(2,164)
Adjustments in respect of prior years
431,687
-
0
Effect of change in corporation tax rate
1,151
276,297
Depreciation on assets not qualifying for tax allowances
35,160
33,366
Research and development tax credit
-
0
(582,255)
Deferred tax adjustments in respect of prior years
-
0
(571,163)
Super deduction allowance
-
0
(19,672)
Taxation charge for the year
1,603,373
680,452
10
Tangible fixed assets
Leasehold improvements
Plant and machinery
Furniture, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 February 2023
1,533,939
9,639,972
2,435,919
742,730
14,352,560
Additions
-
0
464,708
32,169
198,645
695,522
Disposals
-
0
-
0
(31,566)
(102,472)
(134,038)
At 31 January 2024
1,533,939
10,104,680
2,436,522
838,903
14,914,044
Depreciation and impairment
At 1 February 2023
1,027,773
7,079,168
1,837,507
427,100
10,371,548
Depreciation charged in the year
153,393
409,438
121,172
104,105
788,108
Eliminated in respect of disposals
-
0
-
0
(27,402)
(75,948)
(103,350)
At 31 January 2024
1,181,166
7,488,606
1,931,277
455,257
11,056,306
Carrying amount
At 31 January 2024
352,773
2,616,074
505,245
383,646
3,857,738
At 31 January 2023
506,166
2,560,804
598,412
315,630
3,981,012
CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
10
Tangible fixed assets
(Continued)
- 21 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2024
2023
£
£
Plant and machinery
638,614
752,512
11
Stocks
2024
2023
£
£
Raw materials and consumables
1,219,152
1,577,150
Work in progress
2,602,284
3,578,937
3,821,436
5,156,087
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
5,962,216
10,878,834
Amounts owed by related parties
792,650
14,430
Other debtors
2,703,227
3,110,357
9,458,093
14,003,621
13
Creditors: amounts falling due within one year
2024
2023
£
£
Obligations under finance leases
-
0
6,789
Trade creditors
10,643,662
16,853,477
Amounts owed to group undertakings
2,000,000
2,000,000
Amounts owed to related parties
3,964,078
4,015,406
Corporation tax
288,436
100,377
Other taxation and social security
312,279
300,743
Grant income deferred
43,579
53,197
Other creditors
2,941,260
2,177,369
20,193,294
25,507,358

Obligations under finance leases and hire purchase contracts are secured against the assets to which they relate.

CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 22 -
14
Creditors: amounts falling due after more than one year
2024
2023
£
£
Amounts owed to related parties
1,000
1,000

 

15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
548,269
516,695
Short term timing differences
(21,346)
(19,428)
526,923
497,267
2024
Movements in the year:
£
Liability at 1 February 2023
497,267
Charge to profit or loss
29,656
Liability at 31 January 2024
526,923
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,196,586
1,043,564

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

At the year end, contributions outstanding were £96,096 (2023: £89,184), held in other creditors.

17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 23 -
18
Capital redemption reserve

The capital redemption reserve is a non-distributable reserve and represents paid up share capital that the company has bought back.

 

19
Profit and loss reserves

The profit and loss account represents accumulated trading profit, less equity dividends paid and less cumulative amounts transferred to the capital redemption reserve.

20
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
1,192,518
1,212,041
Between two and five years
1,582,300
2,580,897
In over five years
35,504
-
0
2,810,322
3,792,938
21
Contingent assets

During the year, the company has claimed through insurance in respect of costs incurred to date on a contract for which the customer has gone into administration. The total value of the claim, before the deduction of policy excesses and retentions, is in the region of £1.4m. No asset or income has been recognised in the financial year as the success of the claim had not been confirmed at the date of approval of these financial statements.

 

The full anticipated loss on the contract, excluding the potential insurance claim, has been recognised in full in the current financial year in accordance with FRS 102.

22
Capital commitments

Amounts contracted for but not provided in the financial statements:

2024
2023
£
£
Acquisition of tangible fixed assets
2,206,536
-

Capital commitments at the balance sheet date relate to deposits paid on machinery not yet received.

CAUNTON ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 24 -
23
Related party transactions

The company has taken full advantage of the exemption under section 33 of FRS 102 from disclosing transactions with other members of the group headed by Caunton Holdings Limited provided that consolidated financial statements in which the company is included are publicly available.

 

Maplebeck Holdings Limited, Caunton Investments Limited and Tiger Buildings Limited are related parties by virtue of common control.

During the year goods and services were charged on a normal commercial basis to the company from Maplebeck Holdings Limited and Caunton Investments Limited amounting to £549,351 (2023: £549,219) and £6,034,991 (2023: £7,086,637) respectively.

 

At the balance sheet date the company owed £3,964,078 (2023: £4,015,406) to Caunton Investments Limited and £1,000 (2023: £1,000) to Tiger Buildings Limited.

 

At the balance sheet date the company was owed £792,650 (2023: £nil) from Maplebeck Holdings Limited.


Modular Walling Systems Holdings Limited is a related party by virtue of common directorship and beneficial interest. During the year the company paid expenses on behalf on Modular Walling Systems Holdings Limited amounting to £292 (2023: £116,853). A balance of £nil (2023: £14,487) was due to the company from Modular Walling Systems Holdings Limited at the balance sheet date.

24
Ultimate controlling party

The company is a wholly owned subsidiary of Caunton Holdings Limited, a company registered in England and Wales. The company's ultimate controlling party was the Bingham family throughout the current and preceding year.

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