Company registration number 07991017 (England and Wales)
TANFIELD ENGINEERING SYSTEMS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
TANFIELD ENGINEERING SYSTEMS LIMITED
COMPANY INFORMATION
Director
Mr K D Harris
Company number
07991017
Registered office
Tanfield Lea Industrial Estate
Stanley
Co Durham
DH9 9NX
Auditor
Davies Tracey
Swan House
Westpoint Road
Teesdale Business Park
Stockton on Tees
TS17 6BP
TANFIELD ENGINEERING SYSTEMS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
TANFIELD ENGINEERING SYSTEMS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The director presents the strategic report for the year ended 31 March 2024.
Principal activities
The Company's principal activity during the year was the manufacture of fabricated steel parts.
Review of the business
The director is pleased to report a profit for the financial year of £163,928, despite a reduced turnover from £17.2m to £14.8m due to a lower demand from a key customer and reducing steel prices reflected in selling prices.
Gross Profit percentage remained constant at 20%, even though the company spent circa £250k on improvements to facilities in the factory for the benefit of employees, property enhancements and repairs, and environmental upgrading. Also included in this spending was total replacement of lighting throughout the factory and offices with LED installation, which will reduce electricity consumption as well as improving the carbon footprint and significantly enhancing lighting quality.
Principal risks and uncertainties
The Company's exposure to the risks described below is assessed and controlled by the director and senior management team.
Supply chain risk
The supply chain risk is mitigated by a detailed knowledge of key suppliers and the risks that they are exposed to.
Price risk
Price risk, particularly rising material costs, is mitigated by the trading arrangements with customers and suppliers.
Liquidity risk
Trading cash flow and liquidity risks are managed with funding facilities available to the Company. The cash flow position is closely monitored and controlled, with regular forecasting.
Competitive risk
The market for supply of fabricated steel parts is highly competitive. However, this risk is mitigated by the Company’s strong working relationships with key customers.
Key performance indicators
The director and senior management team assess the Company’s financial performance with reference to regularly prepared management information, including the monitoring of actual results with forecasts, enabling corrective action to be taken where appropriate.
TANFIELD ENGINEERING SYSTEMS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Mr K D Harris
Director
27 June 2024
TANFIELD ENGINEERING SYSTEMS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The director presents his 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 8.
Ordinary dividends were paid amounting to £74,000. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr K D Harris
Future developments
Customer demand remains strong and the director is confident that the Company will continue to trade profitably and increase its market share.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s 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. He is 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.
Disclosure in the 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.
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.
TANFIELD ENGINEERING SYSTEMS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
On behalf of the board
Mr K D Harris
Director
27 June 2024
TANFIELD ENGINEERING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TANFIELD ENGINEERING SYSTEMS LIMITED
- 5 -
Opinion
We have audited the financial statements of Tanfield Engineering Systems 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, the statement of cash flows 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:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
TANFIELD ENGINEERING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TANFIELD ENGINEERING SYSTEMS LIMITED (CONTINUED)
- 6 -
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 director's 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
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 the extent to which an audit conducted under ISAs (UK) is capable of detecting irregularity, including fraud. Our procedures include:
obtaining an understanding of the legal and regulatory frameworks applicable to the company, such as the Companies Act 2006;
obtaining an understanding of how the company complies with the applicable legal and regulatory frameworks;
assessing the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, with audit procedures including reviewing internal controls, testing supporting documentation, enquiring of company management and obtaining written confirmation.
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.
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.
TANFIELD ENGINEERING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TANFIELD ENGINEERING SYSTEMS LIMITED (CONTINUED)
- 7 -
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.
Craig McBride (Senior Statutory Auditor)
For and on behalf of Davies Tracey
Chartered Accountants and Statutory Auditors
Swan House
Westpoint Road
Teesdale Business Park
Stockton on Tees
TS17 6BP
27 June 2024
TANFIELD ENGINEERING SYSTEMS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
14,835,931
17,164,940
Cost of sales
(11,889,664)
(13,757,551)
Gross profit
2,946,267
3,407,389
Administrative expenses
(2,510,966)
(2,101,935)
Operating profit
3
435,301
1,305,454
Interest payable and similar expenses
6
(272,590)
(347,860)
Profit before taxation
162,711
957,594
Tax on profit
7
1,217
(223,370)
Profit for the financial year
163,928
734,224
The profit and loss account has been prepared on the basis that all operations are continuing operations.
TANFIELD ENGINEERING SYSTEMS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
9
75,000
135,000
Tangible assets
10
1,648,524
1,657,002
1,723,524
1,792,002
Current assets
Stocks
11
1,325,222
1,113,424
Debtors
12
3,164,641
4,268,579
Cash at bank and in hand
191,420
1,075,465
4,681,283
6,457,468
Creditors: amounts falling due within one year
13
(4,678,980)
(6,431,107)
Net current assets
2,303
26,361
Total assets less current liabilities
1,725,827
1,818,363
Creditors: amounts falling due after more than one year
15
(100,660)
(276,705)
Provisions for liabilities
Deferred tax liability
18
356,444
362,863
(356,444)
(362,863)
Net assets
1,268,723
1,178,795
Capital and reserves
Called up share capital
20
5
5
Revaluation reserve
271,800
305,250
Profit and loss reserves
996,918
873,540
Total equity
1,268,723
1,178,795
The financial statements were approved and signed by the director and authorised for issue on 27 June 2024
Mr K D Harris
Director
Company registration number 07991017 (England and Wales)
TANFIELD ENGINEERING SYSTEMS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
5
331,900
199,666
531,571
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
734,224
734,224
Dividends
8
-
-
(87,000)
(87,000)
Transfers
-
(26,650)
26,650
-
Balance at 31 March 2023
5
305,250
873,540
1,178,795
Year ended 31 March 2024:
Profit and total comprehensive income
-
-
163,928
163,928
Dividends
8
-
-
(74,000)
(74,000)
Transfers
-
33,450
33,450
Other movements
-
(33,450)
-
(33,450)
Balance at 31 March 2024
5
271,800
996,918
1,268,723
TANFIELD ENGINEERING SYSTEMS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
60,144
1,875,812
Interest paid
(272,590)
(347,860)
Income taxes paid
(140,304)
(61,751)
Net cash (outflow)/inflow from operating activities
(352,750)
1,466,201
Investing activities
Purchase of tangible fixed assets
(257,816)
(240,636)
Proceeds from disposal of tangible fixed assets
10,231
Net cash used in investing activities
(257,816)
(230,405)
Financing activities
Repayment of borrowings
(184,479)
(323,577)
Payment of finance leases obligations
(15,000)
(85,819)
Dividends paid
(74,000)
(87,000)
Net cash used in financing activities
(273,479)
(496,396)
Net (decrease)/increase in cash and cash equivalents
(884,045)
739,400
Cash and cash equivalents at beginning of year
1,075,465
336,065
Cash and cash equivalents at end of year
191,420
1,075,465
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
1
Accounting policies
Company information
Tanfield Engineering Systems Limited is a private company limited by shares incorporated in England and Wales. The registered office is Tanfield Lea Industrial Estate, Stanley, Co Durham, DH9 9NX.
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, modified to include the revaluation of certain tangible fixed assets. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
1.4
Research and development expenditure
Research and development expenditure is written off in the year it is incurred or, if appropriate, development expenditure is capitalised and written off over its estimate useful life.
1.5
Intangible fixed assets other than goodwill
Intangible assets are initially recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation 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:
Development costs
10% and 20% per annum on a straight line basis
During the year the useful economic life of the intangible assets was reassessed as 7 years rather than 10 years.
1.6
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.
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
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:
Land and buildings
2% per annum on a straight line basis
Plant and machinery
10% per annum on a straight line basis
Fixtures and fittings
10% per annum on a straight line basis
Computer equipment
10% per annum on a straight line basis
Motor vehicles
10% per annum on a straight line basis
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.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
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.
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.
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
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.
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.
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.
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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.
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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
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
8,500
8,000
Depreciation of owned tangible fixed assets
261,640
212,399
Loss on disposal of tangible fixed assets
4,654
5,557
Amortisation of intangible assets
60,000
41,610
Operating lease charges
175,000
175,003
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production
102
101
Administration
8
8
Directors
1
1
Total
111
110
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
4
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,403,964
3,170,800
Social security costs
309,704
301,148
Pension costs
64,399
61,828
3,778,067
3,533,776
5
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
12,593
12,840
6
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
26,864
61,814
Other interest on financial liabilities
243,995
277,909
270,859
339,723
Other finance costs:
Interest on finance leases and hire purchase contracts
110
6,296
Other interest
1,621
1,841
272,590
347,860
7
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
5,202
164,043
Deferred tax
Origination and reversal of timing differences
(6,419)
59,327
Total tax (credit)/charge
(1,217)
223,370
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
7
Taxation
(Continued)
- 18 -
The UK tax on profits for the current period of £5,202 represents the current year tax charge of £47,202 and a credit in relation to the prior year of £42,000.
The actual (credit)/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
162,711
957,594
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
40,678
181,943
Tax effect of expenses that are not deductible in determining taxable profit
12,256
9,316
Effect of change in corporation tax rate
87,087
Permanent capital allowances in excess of depreciation
(12,606)
Under/(over) provided in prior years
(42,144)
Deferred tax adjustments in respect of prior years
(42,370)
Tax at marginal rate
(857)
Deferred tax adjustments in respect of current year
(11,150)
Taxation (credit)/charge for the year
(1,217)
223,370
8
Dividends
2024
2023
£
£
Interim paid
74,000
87,000
9
Intangible fixed assets
Development costs
£
Cost
At 1 April 2023 and 31 March 2024
294,350
Amortisation and impairment
At 1 April 2023
159,350
Amortisation charged for the year
60,000
At 31 March 2024
219,350
Carrying amount
At 31 March 2024
75,000
At 31 March 2023
135,000
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
10
Tangible fixed assets
Land and buildings
Plant and machinery
Fixtures and fittings
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 April 2023
396,125
2,226,038
115,543
64,877
26,000
2,828,583
Additions
21,241
161,111
27,797
15,667
32,000
257,816
Disposals
(6,500)
(6,500)
At 31 March 2024
417,366
2,387,149
143,340
80,544
51,500
3,079,899
Depreciation and impairment
At 1 April 2023
52,681
1,034,764
45,315
36,270
2,551
1,171,581
Depreciation charged in the year
9,231
227,777
12,671
7,503
4,458
261,640
Eliminated in respect of disposals
(1,846)
(1,846)
At 31 March 2024
61,912
1,262,541
57,986
43,773
5,163
1,431,375
Carrying amount
At 31 March 2024
355,454
1,124,608
85,354
36,771
46,337
1,648,524
At 31 March 2023
343,444
1,191,274
70,228
28,607
23,449
1,657,002
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
130,000
160,000
Tangible fixed assets were valued on an open market basis on 30 March 2018 by Tanfield Engineering Systems Limited.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
2024
2023
£
£
Cost
1,071,070
1,071,070
Accumulated depreciation
(654,142)
(576,217)
Carrying value
416,928
494,853
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
11
Stocks
2024
2023
£
£
Raw materials and consumables
588,656
652,661
Work in progress
631,706
383,819
Finished goods and goods for resale
104,860
76,944
1,325,222
1,113,424
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,092,485
4,144,664
Other debtors
13,303
29,736
Prepayments and accrued income
58,853
94,179
3,164,641
4,268,579
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
16
15,000
Other loans
14
96,687
105,121
Trade creditors
2,212,383
2,787,216
Corporation tax
28,941
164,043
Other taxation and social security
210,997
261,307
Other creditors
1,939,089
2,849,945
Accruals and deferred income
190,883
248,475
4,678,980
6,431,107
14
Loans and overdrafts
2024
2023
£
£
Other loans
197,347
381,826
Payable within one year
96,687
105,121
Payable after one year
100,660
276,705
Loans totalling £96,687 (2023 - £203,066) are secured by fixed and floating charges over the company's assets.
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Other loans
14
100,660
276,705
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
19,245
Less: future finance charges
(4,245)
15,000
Obligations under finance leases are secured against the assets to which they relate.
17
Secured debt
The following other secured debt is included within creditors:
Other creditors £1,912,448 (2023 - £2,821,453)
Other creditors are secured by way of a fixed and floating charge over the company's assets.
18
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
265,844
261,113
Revaluations
90,600
101,750
356,444
362,863
2024
Movements in the year:
£
Liability at 1 April 2023
362,863
Charge to profit or loss
4,731
Credit to other comprehensive income
(11,150)
Liability at 31 March 2024
356,444
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
64,399
61,828
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.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
1
1
1
1
Ordinary B shares of £1 each
1
1
1
1
Ordinary C shares of £1 each
1
1
1
1
Ordinary D shares of £1 each
1
1
1
1
Ordinary E shares of £1 each
1
1
1
1
5
5
5
5
The Ordinary A, B, C and D shares all have full voting, dividend and capital distribution rights. The Ordinary E shares have no voting rights and no rights to capital.
21
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
175,000
175,000
Between two and five years
175,000
175,000
350,000
22
Related party transactions
At the year end the company had amounts due to the director of £100,660 (2023 - £178,760).
TANFIELD ENGINEERING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
23
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
163,928
734,224
Adjustments for:
Taxation (credited)/charged
(1,217)
223,370
Finance costs
272,590
347,860
Loss on disposal of tangible fixed assets
4,654
5,557
Amortisation and impairment of intangible assets
60,000
41,610
Depreciation and impairment of tangible fixed assets
261,640
212,399
Movements in working capital:
(Increase)/decrease in stocks
(211,798)
164,368
Decrease/(increase) in debtors
1,103,938
(457,813)
(Decrease)/increase in creditors
(1,593,591)
604,237
Cash generated from operations
60,144
1,875,812
24
Analysis of changes in net funds/(debt)
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
1,075,465
(884,045)
191,420
Borrowings excluding overdrafts
(381,826)
184,479
(197,347)
Obligations under finance leases
(15,000)
15,000
-
678,639
(684,566)
(5,927)
2024-03-312023-04-01falseCCH SoftwareCCH Accounts Production 2024.200Mr K D Harrisfalsefalse079910172023-04-012024-03-3107991017bus:Director12023-04-012024-03-3107991017bus:RegisteredOffice2023-04-012024-03-31079910172024-03-31079910172022-04-012023-03-3107991017core:RetainedEarningsAccumulatedLosses2022-04-012023-03-3107991017core:RetainedEarningsAccumulatedLosses2023-04-012024-03-3107991017core:OtherResidualIntangibleAssets2024-03-3107991017core:OtherResidualIntangibleAssets2023-03-3107991017core:DevelopmentCostsCapitalisedDevelopmentExpenditure2024-03-3107991017core:DevelopmentCostsCapitalisedDevelopmentExpenditure2023-03-31079910172023-03-3107991017core:LandBuildingscore:LeasedAssetsHeldAsLessee2024-03-3107991017core:PlantMachinery2024-03-3107991017core:FurnitureFittings2024-03-3107991017core:ComputerEquipment2024-03-3107991017core:MotorVehicles2024-03-3107991017core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-03-3107991017core:PlantMachinery2023-03-3107991017core:FurnitureFittings2023-03-3107991017core:ComputerEquipment2023-03-3107991017core:MotorVehicles2023-03-3107991017core:CurrentFinancialInstrumentscore:WithinOneYear2024-03-3107991017core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3107991017core:Non-currentFinancialInstrumentscore:AfterOneYear2024-03-3107991017core:Non-currentFinancialInstrumentscore:AfterOneYear2023-03-3107991017core:CurrentFinancialInstruments2024-03-3107991017core:CurrentFinancialInstruments2023-03-3107991017core:ShareCapital2024-03-3107991017core:ShareCapital2023-03-3107991017core:RevaluationReserve2024-03-3107991017core:RevaluationReserve2023-03-3107991017core:RetainedEarningsAccumulatedLosses2024-03-3107991017core:RetainedEarningsAccumulatedLosses2023-03-3107991017core:ShareCapital2022-03-3107991017core:RevaluationReserve2022-03-3107991017core:RetainedEarningsAccumulatedLosses2022-03-3107991017core:ShareCapitalOrdinaryShares2024-03-3107991017core:ShareCapitalOrdinaryShares2023-03-3107991017core:RevaluationReserve2022-04-012023-03-3107991017core:RevaluationReserve2023-04-012024-03-31079910172023-03-31079910172022-03-3107991017core:IntangibleAssetsOtherThanGoodwill2023-04-012024-03-3107991017core:DevelopmentCostsCapitalisedDevelopmentExpenditure2023-04-012024-03-3107991017core:LandBuildingscore:LongLeaseholdAssets2023-04-012024-03-3107991017core:PlantMachinery2023-04-012024-03-3107991017core:FurnitureFittings2023-04-012024-03-3107991017core:ComputerEquipment2023-04-012024-03-3107991017core:MotorVehicles2023-04-012024-03-310799101712023-04-012024-03-310799101712022-04-012023-03-3107991017core:UKTax2023-04-012024-03-3107991017core:UKTax2022-04-012023-03-310799101722023-04-012024-03-310799101722022-04-012023-03-310799101732023-04-012024-03-310799101732022-04-012023-03-3107991017core:DevelopmentCostsCapitalisedDevelopmentExpenditure2023-03-3107991017core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-03-3107991017core:PlantMachinery2023-03-3107991017core:FurnitureFittings2023-03-3107991017core:ComputerEquipment2023-03-3107991017core:MotorVehicles2023-03-3107991017core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-04-012024-03-3107991017core:Non-currentFinancialInstruments2024-03-3107991017core:Non-currentFinancialInstruments2023-03-3107991017core:WithinOneYear2024-03-3107991017core:WithinOneYear2023-03-3107991017core:BetweenTwoFiveYears2024-03-3107991017core:BetweenTwoFiveYears2023-03-3107991017bus:PrivateLimitedCompanyLtd2023-04-012024-03-3107991017bus:FRS1022023-04-012024-03-3107991017bus:Audited2023-04-012024-03-3107991017bus:FullAccounts2023-04-012024-03-31xbrli:purexbrli:sharesiso4217:GBP