Company registration number 05968849 (England and Wales)
MICHAEL EVANS & ASSOCIATES LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
PAGES FOR FILING WITH REGISTRAR
MICHAEL EVANS & ASSOCIATES LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
MICHAEL EVANS & ASSOCIATES LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
4
11,285
12,845
Current assets
Debtors
5
205,188
260,269
Cash at bank and in hand
323,962
501,046
529,150
761,315
Creditors: amounts falling due within one year
6
(119,387)
(274,610)
Net current assets
409,763
486,705
Total assets less current liabilities
421,048
499,550
Provisions for liabilities
(1,448)
(1,477)
Net assets
419,600
498,073
Capital and reserves
Called up share capital
7
115
115
Share premium account
4,166
4,166
Profit and loss reserves
415,319
493,792
Total equity
419,600
498,073
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 31 October 2024 and are signed on its behalf by:
P Hobbs
J A Leafe
Director
Director
P Roberts
Director
Company registration number 05968849 (England and Wales)
MICHAEL EVANS & ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
1
Accounting policies
Company information
Michael Evans & Associates Limited is a private company limited by shares incorporated in England and Wales. The registered office is 34 Station Road, Draycott, Derby, DE72 3QB.
1.1
Reporting period
The comparatives in the financial statements cover a 18 month period from 1 May 2021 to 31 October 2022 and as such are not entirely comparable. The accounting reference date was changed in he prior year for commercial reasons.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 are set out below.
1.3
Going concern
During the accounting period and post year-end there has been a significant drop in activity due to both restructuring within the company and also a general downturn in the construction sector which the company operates in. At a group level there has been disruption to the rail industry caused by the change in control period by Network Rail which, whilst the changeover is in progress. It is of the belief of the directors that this downturn in activity will be in the short term and measures have been put in place to improve orders.
This downturn in trade has of course had an impact on cash flow management and projections for the group and the directors are having to closely monitor that the group stays within its agreed facilities. To help mitigate the cash flow shortfall the group has taken on some further bank borrowings to help ease the pressure. Further steps are also being taken and reviewed to reduce expenditure through periods of low orders.
At the time of approving the financial statements, the directors therefore have a reasonable expectation that the company and group 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
The validity of this assumption for the company is also dependent on the support, which has been received in writing, of its parent company and also other members of the group should the company require it in the next 12 months.
1.4
Turnover
Turnover represents the total invoice value, excluding value added tax, of sales made during the year. Income is recognised based on the level of completion of services.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
MICHAEL EVANS & ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 3 -
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:
Fixtures and fittings
20% 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
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.
MICHAEL EVANS & ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 4 -
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, 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.
1.8
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.
1.9
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.
MICHAEL EVANS & ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 5 -
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
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.
1.12
Government grants
Government grants are recognised in the profit and loss account as income when such grant does not impose specified future performance-related conditions, in accordance with the performance model.
1.13
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.
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.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
9
11
MICHAEL EVANS & ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 6 -
4
Tangible fixed assets
Fixtures and fittings
£
Cost
At 1 November 2022
50,834
Additions
400
At 31 October 2023
51,234
Depreciation and impairment
At 1 November 2022
37,989
Depreciation charged in the year
1,960
At 31 October 2023
39,949
Carrying amount
At 31 October 2023
11,285
At 31 October 2022
12,845
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
38,952
71,651
Amounts owed by group undertakings
148,113
174,653
Other debtors
18,123
13,965
205,188
260,269
6
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
12,788
Amounts owed to group undertakings
20,861
114,303
Taxation and social security
78,944
145,881
Other creditors
6,794
14,426
119,387
274,610
MICHAEL EVANS & ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 7 -
7
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
100
100
100
100
Ordinary B shares of £1 each
5
5
5
5
Ordinary C shares of £1 each
5
5
5
5
Ordinary D shares of £1 each
5
5
5
5
115
115
115
115
8
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Material uncertainty relating to going concern
We draw attention to Note 1.3 in the financial statements, which indicates that since the year end the company’s trading activity has been affected by internal restructuring and also a reduction in work within the construction sector which the company predominantly operates in. This has had a resulting impact on the cashflow position of the company and also the wider group. This has required increased borrowings in the group to assist in managing this and working capital requirements. As further stated in Note 1.3, it is the belief of the directors that this downturn will be short term and that measures have been put in place to improve orders. However, whilst these events and conditions are present it indicates that an uncertainty may exists and cast doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Senior Statutory Auditor:
Gavin Robert Booth
Statutory Auditor:
DJH Audit Limited
Date of audit report:
31 October 2024
9
Group companies
At the balance sheet date the amounts owed by such related parties is £148,113 (2022 - £174,653) and amounts owed to such related parties is £20,861 (2022 - £114,303).
10
Financial commitments, guarantees and contingent liabilities
The total amount of financial commitments relating to operating leases not included in the balance sheet is £7,500 (2022 - £25,500). The amounts due within 1 year are £7,500 (2022 - £18,000) and the amounts due between 2-5 years are £nil (2022 - £7,500).
MICHAEL EVANS & ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 8 -
11
Contingent liabilites
The company has entered into cross guarantees with its finance providers in respect of the liabilities of other group and related companies. This is supported by a debenture over the company's assets. The total amount of contingencies not included in the balance sheet is £2,657,846 (2022 - £3,140,855). The future outcome is dependant upon the performance of individual companies concerned however the director's do not expect any liability to crystallise.
After the balance sheet date a material legal claim has been made against the company by a former director and shareholder. The company dispute the claim in its entirety and have and continue to defend the claim in full. No liability is included in the financial statements relating to this claim. The potential claim is based on a number of assumptions and is therefore subject to uncertainty. Further details relating to the claim are not disclosed on the basis they may prejudice any defense of the claim which is ongoing. No court date has yet been set.
12
Directors' transactions
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Interest free loan
-
7,517
15,218
(22,735)
-
7,517
15,218
(22,735)
-
13
Parent company
The company's immediate parent is Signal House Group Limited, incorporated in England.
The ultimate controlling party is P Roberts.
The parent of the smallest and largest group in which these financial statements are consolidated is Signal House Group Limited, incorporated in England.
The address of Signal House Group Limited is:
Salcombe Road, Meadow Lane industrial estate, Alfreton , Derbyshire, DE55 7RG.
These financial statements are available on request from Companies house, Crown Way, Maindy, Cardiff, CF14 3UZ.