Company Registration No. 02321487 (England and Wales)
EAST WEST CONNECT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
EAST WEST CONNECT LIMITED
COMPANY INFORMATION
Directors
Mrs K O'Hanlon
MM Allen
P O'Hanlon
Ms N O'Hanlon
RJ Carroll
MB Lapthorn
CJ Cooper
SP Allen
(Appointed 17 July 2023)
Secretary
NP Tanna
Company number
02321487
Registered office
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
Auditor
Rickard Luckin Limited
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
Business address
Unit 5
Silicone Business Centre
28 Wadsworth Road
Perivale
Middlesex
UB6 7JZ
Bankers
HSBC Bank Plc
Coventry DSC
Harry Weston Road
Coventry
West Midlands
CV3 2TQ
Solicitors
Backhouse Solicitors Limited
17 Duke Street
Chelmsford
Essex
CM1 1JU
EAST WEST CONNECT LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 25
EAST WEST CONNECT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report and financial statements for East West Connect Ltd for the year ended 31st March 2024.

Principal activities
The principal activities of the company continued to be that of electrical and mechanical engineers, construction and building services.
Review of the business

East West Connect Ltd is the main trading subsidiary of East West Group Ltd, it has continued to grow since it was established over 35 years ago by John O’Hanlon. Today the group remains majority owned by the O’Hanlon family and Kathleen O’Hanlon took on the role of Chairperson in 2014. The family will maintain its active leadership through the Chairperson and will further develop the role of family members at both operational and board level to maintain continuity and provide direction to the management team as the business grows. Over the last year Angus Duguid has come in as Non exec Director and Deputy Chair to support both the shareholders and the wider business as we develop, he brings a wealth of experience in commercial, governance and structuring business to support growth.

 

Running of the business is under the stewardship of Marcus Allen as Managing Director and the team of directors headed up by Ross Carroll. In recent years as part of a long-term incentive strategy, key management have been given the opportunity to become A and B shareholders and these long-term incentives plans continue to be rolled out to help ensure the management team is retained and built upon for the future.

 

The market has settled somewhat from the turmoil of the previous few years, although inflation has dropped the ongoing challenges with the financial strength of parts of the supply chain remain a risk, however we are confident that we have established strong commercial relationships with a range of key partners and developed processes which will allow for early risk identification and mitigation. We do not see the position changing in the short to medium term, as the market is required to absorb economic and political shocks.

 

The figures are for the 12 months to the end of March, which show a continued resilient position for the present time coupled with strong financials in what has been another troubled year and even harder times to predict, with a greater number of challenges and insolvencies affecting the stability of both market and supply chain. But East West Connect maintains a very strong position with the nature of our works and clients including a variety of negotiated projects and potential 2 stage tenders helping to alleviate these pressures.

 

East West Connect maintains a very strong position with completed major infrastructure and decarbonisation projects exceeding £50M with single clients and a backlog of £50M secured across several key clients and still to deliver over the next 2-3 years, and a number of other contracts being negotiated that will continue to bolster the order book.  We continue works with key long-term clients like Takenaka at Lombard Street following earlier phases and push ahead with works commencing on major plant and infrastructure replacement,  this should continue well into 2025-26 and several others opportunities being reviewed within the other building portfolios.

 

We continue to expand our works within a variety of niche markets many of these project would be considered high profile works within the Japanese business sector, and in live complex building environments including heritage Palace works and continued works within the CAT A market nearing completion at 41 Lothbury with Wates Construction and 84 Moorgate with Osborne, although with Osborne filing for voluntary administration at the time of writing, this project has been written back and East West Connect are in discussion with the owners of the building for completion of the works directly.

 

Having now converted further highly prestigious projects including another long-term degasification and plant replacement project within the City of London for a major financial institution, receiving orders for several phases of work direct for the client with an estimated budget of £25M over 3-4 years commencing construction later this year, this will allow us to redistribute resources from other major programmes coming to a close and maintaining high rates of labour utilisation.

EAST WEST CONNECT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

Our tender schedule continues to enjoy a good balance of direct to end users on infrastructure works giving greater margin and control, coupled with continuation of works for a very select number of tier 1 contractors or management agents including Takenaka, Wates, Walter Lilly and CBRE. Although we are continuing to tender works, they are focused on longer term works being our main target supplemented with a few smaller immediate works with known sources or client direct infrastructure works that are low in management and labour. This gives a further £40-£50M of real opportunity in the pipeline for the years 2024-26 turnover.

We have continued to develop a multi discipline-in-house delivery approach, complimented and cross selling all areas of the business maximising opportunities with clients where we have already established a positive relationship. This approach has been particularly successful in the maintenance division with high-profile long-term contract work driven out of the project delivery. We also continue to invest and grow our direct delivery capacity with a large pool of direct labour across all trades to facilitate the control and quality required in such live complex and prestige environments.

 

Social Housing contracts have been a significant part of the business since the 1990s and now with Peabody following a variety of mergers, coupled with renewal of our 10 years frameworks providing secured packages of M&E at £80M and Fire management works tenders of £20M with over 8 years to run. We continue to become more integral in the considerable challenge of delivering a full package of services to the newly expanded Peabody now with over 100,000 properties, this creates a stable and growing income stream upon which to further build our capability in this market.

 

Our maintenance team remains in a great place as they expand with new clients in the build to rent market with Quintain and seeing lots of new contracts continuing with Galliford Try, Walter Lilly and Japanese/ Swiss embassies Market.

Key performance indicators

We are pleased to report another year of growth and sustainable profit for the group with a good year maintaining organic growth and profits in line with previous years. Turnover is above that projected, as we catch up with several major projects that did see slippage in the previous year, across the group we have turned over £55.1M (against budget of £46M), this is complemented with a profit margin @ 13.5% (Budget – 14.1% this includes a reasonable level of write back against Geoffery Osborne) giving GP £7.4M and net profit before Tax £2.9M (again against projected £2.2M). These consolidated figures now include our sister company East West Compass (formerly Chas West) that services the reactive maintenance market for Peabody and has agreed a further extension of 5 years on the framework.

 

Our cash flow projections highlight our liquidity position, despite any administration affects already highlighted, our projections indicate a continued healthy cash flow, supported by our diverse client base and ongoing revenue streams. Our actual and projected cash flow closing cash position are in excess of £4.5 million and we continue to collect a substantial amount of cash as we head into the new financial year. We are predicting that this balance will continue to grow throughout the year.

Our current debt structure remains manageable. We do not have any bank loans outstanding nor any overdue HMRC debts, as we pay all our dues on a monthly basis as and when it falls due. Our current Creditors days (Efficiency - Based on Previous 12 months) is under 22 days which was 32 days this time last year. Hence, we have maintained a consistent track record of meeting our debt obligations promptly.

We have robust working capital facilities in place, which include a revolving daily credit line of £1.5m with HSBC Bank, providing us with additional liquidity flexibility. These facilities are part of our strategic financial management practices, ensuring we can navigate any short-term cash flow variances effectively.

Our financial strategy is designed to maintain stability and support growth, even in challenging circumstances. We are an owner managed business, which has maintained a policy of retaining a large proportion of its profits for many years to fund its growth for the long term and are not reliant on external debt. To further demonstrate this, the group operates from our offices in Perivale, which we own outright without a mortgage. We are confident in our ability to sustain our operations and continue to meet our financial commitments.

 

Our focus on margin remains but moderated to secure contracts with robust projects / clients giving longevity and payment certainty / improved cash flow, particularly during these less certain markets. These types of contracts are often government funded directly or indirectly.

EAST WEST CONNECT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
Financial instruments

We closely monitor and manage cash flow and have not needed to resort to our bank funding facility within the year, which however remains in place on an in case of need basis, but we have continued to grow a strong bank balance to fund the growing projects requirements, and this coupled with a growth of our assets leads to ever increasing security for the larger projects.

 

The company's policy is to pay suppliers to the agreed terms upon which business is conducted and continue to build an extremely strong and robust supply chain. The directors regularly review the financial requirements of the company, and the risks associated therewith. The company's operations are primarily financed from retained earnings and we have again increased our assets through investment within the business and property, and a board policy of profit retention, however a bank loan relating to trading premises and overdraft facility is available but presently unused.

 

As can be seen from our strong account operation and working capital position, we continue to be mindful of cash flow with a keen eye on building a reserve and accruals of all future payments including VAT, hence maintaining flexibility whilst maximising our available capital. Our banking accounts have been restructured to maximise our position with our increasing reserves and interest rates to ensure whilst remaining agile with our reserves. At this stage we are likely to continue with our dividend policy of retaining 50% of the profit within the business to ensure

our stability and growth, this leads to our strong balance in these times. To further our development of our staff we continue to review employment packages and provide above market employment packages to build a team for the future.

 

During this financial year we have heavily invested in a new finance package 4PS finance system to replace the exchequer systems that is now fully implemented for the start of the new financial year 2024-2025, this gives greater control, understanding and transparency of the company finance from cradle to grave and will use this opportunity to overhaul and invest across the business in new procurement process to enhance transparency and accountability.

Risks and uncertainties

Against many unstable and unpredictable market factors , including inflation, the election and government uncertainty and supply chain challenges our business has continued to grow across the board and we presently see more many opportunities, secured works and tender pipeline than ever in our history.

 

So therefore, although we acknowledge and continue to plan for financial challenges, slippage, changing market, client mergers and supply and cost challenges we see ourselves in a strong position driven through hard work, diversity, good reputation and a constantly growing management and delivery team that is the best in the industry.

 

Maintaining margin growth against this background will be challenging but we continue to plan effectively, adapting our processes and systems to create high levels of transparency and improve financial planning and analysis and early identification and mitigation of issues.

 

We go into 2024/25 in a strong position with 85% of our income budget secured and supported by signed contracts with highly credit rated clients. A considerable level of our projects provide secured works extending well into 2025-26 underwriting a large element of the following year’s activities and allowing continued investment in staff and systems. The business has strong relationships with a growing list of key and highly rated clients, coupled with a reputation that is opening the door to more and more great opportunities  introducing some new key clients.

 

Recently secured negotiated works again strengthen the position along with the renewed contracts with our social housing client and our reactive business taking this further to 2029. East West Connect have continued the growth following full accreditation in specialist fire protection and works to complement our already extensive fire alarm and fire doors works; now building our in-house capability and direct delivery to ensure our development in our ever-changing market.

 

We have continued with considerable growth, investment and development across the company has led to expansion of the Quality, Health and Safety department into a Compliance department to take the relevant standards, health and safety and quality (ISO 9001 & 14001 and transition from OHSAS 18001 to 45001) into the next era.

EAST WEST CONNECT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -

On behalf of the board

Mrs K O'Hanlon
Director
30 September 2024
EAST WEST CONNECT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -

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

Results and dividends

The results for the year are set out on page 11.

Interim dividends were paid amounting to £1,000,000.

Directors

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

Mrs K O'Hanlon
MM Allen
P O'Hanlon
Ms N O'Hanlon
RJ Carroll
MB Lapthorn
CJ Cooper
SP Allen
(Appointed 17 July 2023)
Auditor

In accordance with the company's articles, a resolution proposing that Rickard Luckin Limited be reappointed as auditor of the company will be put at a General Meeting.

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.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of principal activities of the business.

EAST WEST CONNECT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 6 -
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
Mrs K O'Hanlon
Director
30 September 2024
EAST WEST CONNECT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EAST WEST CONNECT LIMITED
- 7 -
Opinion

We have audited the financial statements of East West Connect Limited (the 'company') for the year ended 31 March 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:

EAST WEST CONNECT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EAST WEST CONNECT 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.

Capability of the audit in detecting irregularity, including fraud

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

 

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management and via inspection of the company’s regulatory and legal correspondence.

We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

EAST WEST CONNECT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EAST WEST CONNECT LIMITED
- 9 -

Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: employment legislation; health and safety legislation; trade legislation; data protection legislation; anti-bribery and anti-corruption legislation.

ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations to the procedures, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance which laws and regulations that could have a material impact on the financial statements.

In relation to fraud, we performed the following specific procedures in addition to those already noted:

These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.

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.

EAST WEST CONNECT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EAST WEST CONNECT LIMITED
- 10 -

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.

Paul Forster
Senior Statutory Auditor
For and on behalf of Rickard Luckin Limited
30 September 2024
Chartered Accountants
Statutory Auditor
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
EAST WEST CONNECT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Year
Period
ended
ended
31 March
31 March
2024
2023
Notes
£
£
Turnover
3
50,379,497
28,633,164
Cost of sales
(44,262,769)
(24,175,716)
Gross profit
6,116,728
4,457,448
Administrative expenses
(3,704,598)
(2,375,412)
Operating profit
4
2,412,130
2,082,036
Interest receivable and similar income
7
71,442
-
0
Interest payable and similar expenses
8
(1,047)
(63)
Profit before taxation
2,482,525
2,081,973
Tax on profit
9
(688,322)
(461,488)
Profit for the financial year
1,794,203
1,620,485

The profit and loss account has been prepared on the basis that all operations are continuing operations.

EAST WEST CONNECT LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 12 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
139,375
177,222
Current assets
Debtors
12
9,694,314
7,064,648
Cash at bank and in hand
3,387,554
4,578,638
13,081,868
11,643,286
Creditors: amounts falling due within one year
13
(7,331,844)
(6,716,357)
Net current assets
5,750,024
4,926,929
Total assets less current liabilities
5,889,399
5,104,151
Provisions for liabilities
Deferred tax liability
14
18,361
27,316
(18,361)
(27,316)
Net assets
5,871,038
5,076,835
Capital and reserves
Called up share capital
16
5,000
5,000
Profit and loss reserves
17
5,866,038
5,071,835
Total equity
5,871,038
5,076,835

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 30 September 2024 and are signed on its behalf by:
Mrs K O'Hanlon
MM Allen
Director
Director
Company registration number 02321487 (England and Wales)
EAST WEST CONNECT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 July 2022
5,000
4,051,350
4,056,350
Period ended 31 March 2023:
Profit and total comprehensive income
-
1,620,485
1,620,485
Dividends
10
-
(600,000)
(600,000)
Balance at 31 March 2023
5,000
5,071,835
5,076,835
Year ended 31 March 2024:
Profit and total comprehensive income
-
1,794,203
1,794,203
Dividends
10
-
(1,000,000)
(1,000,000)
Balance at 31 March 2024
5,000
5,866,038
5,871,038
EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
1
Accounting policies
Company information

East West Connect Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1st Floor, County House, 100 New London Road, Chelmsford, Essex, CM2 0RG.

1.1
Reporting period

The previous reporting period was reduced to a 9 month period to remain in line with the period of the parent company which was also reduced to 9 months. The comparative amounts presented in the financial statements are therefore not entirely comparable as they relate to a 9 month period.

1.2
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, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

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

 

 

The financial statements of the company are consolidated in the financial statements of East West Group Limited. These consolidated financial statements are available from its registered office, 1st Floor, County House, 100 New London Road, Chelmsford, Essex, CM2 0RG.

1.3
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 at least the next 12 months. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -

Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

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.

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
Over the 10 year lease term
Fixtures, fittings & equipment
25% reducing balance
Motor vehicles
25% reducing balance

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
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
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 and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, 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. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

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, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities

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

1.9
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.

1.10
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 expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, 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.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the earnings basis model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.15

Dividends

Dividends are recognised when the shareholders right to receive payment is established.

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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Contract accounting

Revenue from amounts recoverable on contracts is valued by reference to the stage of contract completion, which is judged by reviewing the costs to date incurred as a percentage of the final expected contract costs. Using this percentage of completion, an adjustment is made for to recognise the appropriate revenue.

Share based payments

An expense in relation to share based payments is recognised in profit or loss at the point when the shares issued to individuals meet their vesting conditions. The expense is recognised in the company where the individuals who have been granted the share options and employed. Shares are valued at their deemed market value on the day of them being granted.

EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Services
50,379,497
28,633,164
2024
2023
£
£
Other revenue
Interest income
71,442
-
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
29,000
27,250
Depreciation of owned tangible fixed assets
45,565
48,639
Loss on disposal of tangible fixed assets
69,335
-
Share-based payments
81,509
-
Operating lease charges
48,000
36,000
5
Employees

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

2024
2023
Number
Number
Administration
11
13
Cost of Sales
90
79
Directors
8
7
Total
109
99

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
6,181,087
4,098,080
Social security costs
709,900
467,940
Pension costs
123,976
85,325
7,014,963
4,651,345
EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
995,906
600,968
Company pension contributions to defined contribution schemes
23,528
-
Amounts receivable under share options scheme
67,169
-
1,086,603
600,968

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 7 (2023 - 7).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
223,396
136,731
Company pension contributions to defined contribution schemes
1,321
-
Amounts receivable under share options scheme
14,340

Key Management Personnel consist only of directors.

 

During the year, the parent company East West Group Limited, granted share options which vested in full. The individuals for who share options vested are all employee of East West Connect and therefore this company has recognised the share based payment expense of £81,509 (2023: £nil) which relates to equity based payment transactions. The share based payment expense in relation to directors of East West Connect Limited is £67,169 (2023: £nil).

7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
71,442
-
0
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
-
63
Other interest
1,047
-
0
1,047
63
EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
699,624
434,172
Adjustments in respect of prior periods
(2,347)
-
0
Total current tax
697,277
434,172
Deferred tax
Origination and reversal of timing differences
(8,955)
27,316
Total tax charge
688,322
461,488

The change in the effective tax rate is as a result of an amendment to Corporation Tax rates by HM Revenue & Customs for businesses.

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
2,482,525
2,081,973
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
620,631
395,575
Tax effect of expenses that are not deductible in determining taxable profit
69,528
45,436
Tax effect of income not taxable in determining taxable profit
-
0
(3,703)
Change in unrecognised deferred tax assets
-
0
(3,524)
Adjustments in respect of prior years
(2,347)
-
0
Depreciation on assets not qualifying for tax allowances
510
388
Deferred taxation charge
-
0
27,316
Taxation charge for the year
688,322
461,488
10
Dividends
2024
2023
£
£
Interim paid
1,000,000
600,000
EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
11
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2023
53,708
332,760
34,020
420,488
Additions
-
0
76,545
508
77,053
Disposals
-
0
(150,818)
(34,020)
(184,838)
At 31 March 2024
53,708
258,487
508
312,703
Depreciation and impairment
At 1 April 2023
36,253
180,305
26,708
243,266
Depreciation charged in the year
5,371
40,120
74
45,565
Eliminated in respect of disposals
-
0
(88,795)
(26,708)
(115,503)
At 31 March 2024
41,624
131,630
74
173,328
Carrying amount
At 31 March 2024
12,084
126,857
434
139,375
At 31 March 2023
17,455
152,455
7,312
177,222
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
5,402,586
2,266,898
Gross amounts owed by contract customers
3,328,130
2,913,321
Amounts owed by group undertakings
748,942
1,489,075
Other debtors
6,746
5,540
Prepayments and accrued income
207,910
389,814
9,694,314
7,064,648
13
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
2,939,550
3,067,265
Corporation tax
208,648
319,880
Other taxation and social security
950,766
676,047
Other creditors
216,574
363,887
Accruals and deferred income
3,016,306
2,289,278
7,331,844
6,716,357
EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
14
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
18,361
27,316
2024
Movements in the year:
£
Liability at 1 April 2023
27,316
Credit to profit or loss
(8,955)
Liability at 31 March 2024
18,361
15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
123,976
85,325

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.

16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Authorised
Ordinary of £1 each
100,000
100,000
100,000
100,000
Issued and fully paid
Ordinary of £1 each
5,000
5,000
5,000
5,000

The company has one class of ordinary shares which carry no right to fixed income. Each ordinary share carries one voting right.

17
Profit and loss reserves

All profit and loss reserves are deemed distributable.

EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
18
Financial commitments, guarantees and contingent liabilities

At 31 March 2024 the company's banker held a multilateral guarantee in respect of East West Connect Limited and East West Group Limited. This is in respect of security over group assets for the bank loans and overdrafts. At 31 March 2024 the total borrowings against this guarantee were £Nil (2023: £Nil) of which £Nil (2023: £Nil) is included within the creditors of this company's financial statements.

19
Operating lease commitments
Lessee

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
1,500
-
0
Between two and five years
13,200
-
0
14,700
-
0
20
Related party transactions

At the year end the company owed the directors a total of £110,078 (2023: £206,232).

 

At the year end the company was owed a total of £15,000 (2023: £566,124) by a fellow group company.

 

At the year end the company was owed a total of £733,942 (2023: £922,951) by its parent company.

 

At the year end the company owed £4,296 (2023:£nil) to a company with common directorships. During the year, the company made purchases from this related party totalling £13,890 (2023: £14,320).

 

The company has taken advantage of the exemption available in FRS102 whereby it has not disclosed transactions with any wholly owned group members.

EAST WEST CONNECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
21
Ultimate controlling party

In this year and the preceding financial period, the immediate and ultimate parent undertaking is East West Group Limited, a company incorporated in England and Wales. Consolidated financial statements are available from Companies House.

 

The controlling party is Mrs K O'Hanlon by virtue of her shareholding in the parent company, in both the current year and preceding period.

EAST WEST CONNECT LIMITED
MANAGEMENT INFORMATION
FOR THE YEAR ENDED 31 MARCH 2024
2024-03-312023-04-01falseCCH SoftwareCCH Accounts Production 2024.200Mrs K O'HanlonMM AllenP O'HanlonMs N O'HanlonRJ CarrollMB LapthornCJ CooperSP AllenNP Tannafalsefalse023214872023-04-012024-03-3102321487bus:Director12023-04-012024-03-3102321487bus:Director22023-04-012024-03-3102321487bus:Director32023-04-012024-03-3102321487bus:Director42023-04-012024-03-3102321487bus:Director52023-04-012024-03-3102321487bus:Director62023-04-012024-03-3102321487bus:Director72023-04-012024-03-3102321487bus:Director82023-04-012024-03-3102321487bus:CompanySecretary12023-04-012024-03-3102321487bus:RegisteredOffice2023-04-012024-03-3102321487bus:Agent12023-04-012024-03-31023214872024-03-31023214872022-07-012023-03-3102321487core:RetainedEarningsAccumulatedLosses2022-07-012023-03-3102321487core:RetainedEarningsAccumulatedLosses2023-04-012024-03-31023214872023-03-3102321487core:LeaseholdImprovements2024-03-3102321487core:FurnitureFittings2024-03-3102321487core:MotorVehicles2024-03-3102321487core:LeaseholdImprovements2023-03-3102321487core:FurnitureFittings2023-03-3102321487core:MotorVehicles2023-03-3102321487core:CurrentFinancialInstrumentscore:WithinOneYear2024-03-3102321487core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3102321487core:CurrentFinancialInstruments2024-03-3102321487core:CurrentFinancialInstruments2023-03-3102321487core:ShareCapital2024-03-3102321487core:ShareCapital2023-03-3102321487core:RetainedEarningsAccumulatedLosses2024-03-3102321487core:RetainedEarningsAccumulatedLosses2023-03-3102321487core:ShareCapital2022-06-3002321487core:RetainedEarningsAccumulatedLosses2022-06-3002321487core:LeaseholdImprovements2023-04-012024-03-3102321487core:FurnitureFittings2023-04-012024-03-3102321487core:MotorVehicles2023-04-012024-03-310232148712023-04-012024-03-310232148712022-07-012023-03-3102321487core:UKTax2023-04-012024-03-3102321487core:UKTax2022-07-012023-03-310232148722023-04-012024-03-310232148722022-07-012023-03-3102321487core:LeaseholdImprovements2023-03-3102321487core:FurnitureFittings2023-03-3102321487core:MotorVehicles2023-03-31023214872023-03-3102321487core:WithinOneYear2024-03-3102321487core:WithinOneYear2023-03-3102321487core:BetweenTwoFiveYears2024-03-3102321487core:BetweenTwoFiveYears2023-03-3102321487bus:PrivateLimitedCompanyLtd2023-04-012024-03-3102321487bus:FRS1022023-04-012024-03-3102321487bus:Audited2023-04-012024-03-3102321487bus:FullAccounts2023-04-012024-03-31xbrli:purexbrli:sharesiso4217:GBP