Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-312023-12-3165No description of principal activityfalsefalsefalse2023-01-0161false 7133601 2023-12-31 7133601 2023-01-01 2023-12-31 7133601 2022-01-01 2022-12-31 7133601 2022-12-31 7133601 2022-01-01 7133601 3 2023-01-01 2023-12-31 7133601 3 2022-01-01 2022-12-31 7133601 5 2023-01-01 2023-12-31 7133601 5 2022-01-01 2022-12-31 7133601 d:Director1 2023-01-01 2023-12-31 7133601 d:Director2 2023-01-01 2023-12-31 7133601 d:Director3 2023-01-01 2023-12-31 7133601 d:Director4 2023-01-01 2023-12-31 7133601 d:RegisteredOffice 2023-01-01 2023-12-31 7133601 e:Buildings e:ShortLeaseholdAssets 2023-01-01 2023-12-31 7133601 e:Buildings e:ShortLeaseholdAssets 2023-12-31 7133601 e:Buildings e:ShortLeaseholdAssets 2022-12-31 7133601 e:LandBuildings 2023-12-31 7133601 e:LandBuildings 2022-12-31 7133601 e:PlantMachinery 2023-01-01 2023-12-31 7133601 e:PlantMachinery 2023-12-31 7133601 e:PlantMachinery 2022-12-31 7133601 e:PlantMachinery e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 7133601 e:MotorVehicles 2023-01-01 2023-12-31 7133601 e:MotorVehicles 2023-12-31 7133601 e:MotorVehicles 2022-12-31 7133601 e:MotorVehicles e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 7133601 e:FurnitureFittings 2023-01-01 2023-12-31 7133601 e:FurnitureFittings 2023-12-31 7133601 e:FurnitureFittings 2022-12-31 7133601 e:FurnitureFittings e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 7133601 e:OfficeEquipment 2023-01-01 2023-12-31 7133601 e:OfficeEquipment 2023-12-31 7133601 e:OfficeEquipment 2022-12-31 7133601 e:OfficeEquipment e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 7133601 e:OtherPropertyPlantEquipment 2023-01-01 2023-12-31 7133601 e:OtherPropertyPlantEquipment 2023-12-31 7133601 e:OtherPropertyPlantEquipment 2022-12-31 7133601 e:OtherPropertyPlantEquipment e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 7133601 e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 7133601 e:Goodwill 2023-01-01 2023-12-31 7133601 e:Goodwill 2023-12-31 7133601 e:Goodwill 2022-12-31 7133601 e:ComputerSoftware 2023-01-01 2023-12-31 7133601 e:ComputerSoftware 2023-12-31 7133601 e:ComputerSoftware 2022-12-31 7133601 e:OtherResidualIntangibleAssets 2023-01-01 2023-12-31 7133601 e:CurrentFinancialInstruments 2023-12-31 7133601 e:CurrentFinancialInstruments 2022-12-31 7133601 e:CurrentFinancialInstruments e:WithinOneYear 2023-12-31 7133601 e:CurrentFinancialInstruments e:WithinOneYear 2022-12-31 7133601 e:UKTax 2023-01-01 2023-12-31 7133601 e:UKTax 2022-01-01 2022-12-31 7133601 e:ShareCapital 2023-12-31 7133601 e:ShareCapital 2022-12-31 7133601 e:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 7133601 e:RetainedEarningsAccumulatedLosses 2023-12-31 7133601 e:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 7133601 e:RetainedEarningsAccumulatedLosses 2022-12-31 7133601 e:RetainedEarningsAccumulatedLosses 2022-01-01 7133601 e:AcceleratedTaxDepreciationDeferredTax 2023-12-31 7133601 e:AcceleratedTaxDepreciationDeferredTax 2022-12-31 7133601 d:OrdinaryShareClass1 2023-01-01 2023-12-31 7133601 d:OrdinaryShareClass1 2023-12-31 7133601 d:OrdinaryShareClass1 2022-12-31 7133601 d:FRS102 2023-01-01 2023-12-31 7133601 d:Audited 2023-01-01 2023-12-31 7133601 d:FullAccounts 2023-01-01 2023-12-31 7133601 d:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 7133601 e:Subsidiary1 2023-01-01 2023-12-31 7133601 e:Subsidiary1 1 2023-01-01 2023-12-31 7133601 e:WithinOneYear 2023-12-31 7133601 e:WithinOneYear 2022-12-31 7133601 e:BetweenOneFiveYears 2023-12-31 7133601 e:BetweenOneFiveYears 2022-12-31 7133601 e:Goodwill e:ExternallyAcquiredIntangibleAssets 2023-01-01 2023-12-31 7133601 e:ComputerSoftware e:ExternallyAcquiredIntangibleAssets 2023-01-01 2023-12-31 7133601 2 2023-01-01 2023-12-31 7133601 6 2023-01-01 2023-12-31 7133601 e:ExternallyAcquiredIntangibleAssets 2023-01-01 2023-12-31 7133601 e:Goodwill e:OwnedIntangibleAssets 2023-01-01 2023-12-31 7133601 e:ComputerSoftware e:OwnedIntangibleAssets 2023-01-01 2023-12-31 7133601 f:PoundSterling 2023-01-01 2023-12-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 7133601










DRAINFAST LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
DRAINFAST LIMITED
 
 
COMPANY INFORMATION


Directors
Mr P James 
Mr T G James 
Mr T James 
Mr N James 




Registered number
7133601



Registered office
Wey Court West
Union Road

Farnham

Surrey

GU9 7PT




Independent auditor
Shaw Gibbs (Audit) Limited
Statutory Auditor

Wey Court West

Union Road

Farnham

Surrey

GU9 7PT





 
DRAINFAST LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditor's Report
 
5 - 8
Statement of Income and Retained Earnings
 
9
Statement of Financial Position
 
10
Statement of Cash Flows
 
11 - 12
Analysis of Net Debt
 
13
Notes to the Financial Statements
 
14 - 29


 
DRAINFAST LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Board of Directors have pleasure in presenting their strategic report for the year ended 31 December 2023.

Principal activities
 
Drainfast Limited is a wholesaler of drainage supplies to the construction industry.

Business review
 
The Company sales were down in the year by 7.4% to £20.7m, with Gross Profit also reducing from 38.3% in 2022 to 34.8%. Overheads increased by £0.2m or 4.1% and the resulting Operating Profit was £0.9m, down £1.6m on 2022. The EBITDA also reduced from 12.3% in 2022 to 6%.
The reduction in revenue was driven by the recession seen in the construction sector in 2023, which also affected the prices that could be charged, leading to the 3.5% reduction in Gross Profit. Overheads were tightly controlled in spite of the high level of general inflation, and the Company continued to provide its high level of service to customers, rather than trying to save money by reducing service levels. The Company continued to spend significant amounts on Research and Development, the benefit of which will be seen in future years with the introduction of innovative new products.
Net assets of the Company increased from £3.7m to £3.9m. A further £1.4m was invested in Fixed Assets over the year, mirroring the net cash outflow of £1.4m over the period. Year end trade debtors were up by £0.1m, reflecting cash flow problems encountered by our customers, while trade creditors were down by £0.1m, as the Company continued to prioritise the payment of suppliers on a consistent basis in accordance with agreed payment terms.
Company strategy and future outlook
The Company’s strategy is to continue to provide the highest level of service to our customers, ensuring high availability of products as they are required. The company is also looking to develop new, innovative products, some of which are already being brought to market. The Company also believes that these products will appeal to a range of customer, who have never previously bought from the Company, and that will enable us to offer them the full range of products, thereby further increasing future sales.
 

Principal risks and uncertainties

Matter of concern
Potential impact
Mitigating actions
Recession in Construction Sector
Recession could lead to reduced demand and customers being unable to pay their debts
The Company is looking to extend its customer base, and has taken out credit insurance to reduce risk of non-payment
Supply chain
Raw material price increases lead to suppliers increasing prices
The Company is identifying alternative sources of products with more advantageous pricing
Higher interest rates
Increased borrowing costs, and further impacts on the construction sector
The Company manages working capital and minimises the level of borrowings

Page 1

 
DRAINFAST LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Key performance indicators

2023
2022
Financial

Turnover

£20.7m

£22.3m
 
Gross profit margin

34.8%

38.3%
 
Operating profit

£0.9m

£2.5m
 
Earnings before interest, tax, depreciation and amortisation (EBITDA)

£1.2m

£2.7m
 
Non-financial

On-time, in-full supplies (OTIFS) to customers

97.1%

97.0%
 
Average number of employees

65

61
 


This report was approved by the board and signed on its behalf.







Mr P James
Director

Date: 18 November 2024

Page 2

 
DRAINFAST LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements 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 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The profit for the year, after taxation, amounted to £780,606 (2022 - £2,050,120).

During the year dividends of £524,518 (2022: £937,900) were paid.

Directors

The directors who served during the year were:

Mr P James 
Mr T G James 
Mr T James 
Mr N James 

Matters covered in the Strategic Report

The company has chosen in accordance with s414C (11) Companies Act 2006 to set out in the company's
strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of
future developments.

Page 3

 
DRAINFAST LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditor

The auditor, Shaw Gibbs (Audit) Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 






Mr P James
Director

Date: 18 November 2024

Page 4

 
DRAINFAST LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DRAINFAST LIMITED
 

Opinion


We have audited the financial statements of Drainfast Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position, the Statement of Cash Flows and the related notes, including a summary of significant accounting policiesThe 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 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor'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 United Kingdom, including the Financial Reporting Council'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.


Page 5

 
DRAINFAST LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DRAINFAST LIMITED (CONTINUED)


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 ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of 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:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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.


Page 6

 
DRAINFAST LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DRAINFAST LIMITED (CONTINUED)


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 detailed below:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.


Page 7

 
DRAINFAST LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DRAINFAST LIMITED (CONTINUED)


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 2006Our 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.







Stephen South FCA (Senior Statutory Auditor)
for and on behalf of
Shaw Gibbs (Audit) Limited
Statutory Auditor
Wey Court West
Union Road
Farnham
Surrey
GU9 7PT

22 November 2024
Page 8

 
DRAINFAST LIMITED
 
 
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£


Turnover
20,656,650
22,310,568

Cost of sales
(13,470,591)
(13,771,957)

Gross profit
7,186,059
8,538,611

Administrative expenses
(6,262,902)
(6,018,919)

Operating profit
923,157
2,519,692

Interest receivable and similar income
116
195

Interest payable and similar expenses
(8,818)
(1,542)

Profit before tax
914,455
2,518,345

Tax on profit
(133,849)
(468,225)

Profit after tax
780,606
2,050,120



Retained earnings at the beginning of the year
3,656,937
2,544,717

Profit for the year
780,606
2,050,120

Dividends declared and paid
(524,518)
(937,900)

Retained earnings at the end of the year
3,913,025
3,656,937

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of income and retained earnings.

The notes on pages 14 to 29 form part of these financial statements.

Page 9

 
DRAINFAST LIMITED
REGISTERED NUMBER: 7133601

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
448,526
370,627

Tangible assets
 13 
2,297,113
1,051,907

Investments
 14 
100
100

  
2,745,739
1,422,634

Current assets
  

Stocks
 15 
2,231,224
2,295,525

Debtors: amounts falling due within one year
 16 
3,384,877
3,667,204

Cash at bank and in hand
 17 
2,075
201,464

  
5,618,176
6,164,193

Creditors: amounts falling due within one year
 18 
(3,941,309)
(3,553,320)

Net current assets
  
 
 
1,676,867
 
 
2,610,873

Total assets less current liabilities
  
4,422,606
4,033,507

Provisions for liabilities
  

Deferred tax
 19 
(509,481)
(376,470)

  
 
 
(509,481)
 
 
(376,470)

Net assets
  
3,913,125
3,657,037


Capital and reserves
  

Called up share capital 
 20 
100
100

Profit and loss account
 21 
3,913,025
3,656,937

  
3,913,125
3,657,037


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Mr P James
Director

Date: 18 November 2024

The notes on pages 14 to 29 form part of these financial statements.

Page 10

 
DRAINFAST LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
780,606
2,050,120

Adjustments for:

Amortisation of intangible assets
71,302
82,966

Depreciation of tangible assets
166,324
142,496

Interest paid
8,818
1,542

Interest received
(116)
(195)

Taxation charge
133,849
468,225

Decrease/(increase) in stocks
64,301
(437,844)

Decrease in debtors
282,327
215,105

Increase/(decrease) in creditors
57,341
(973,520)

Corporation tax (paid)
(340,830)
(185,498)

Net cash generated from operating activities

1,223,922
1,363,397


Cash flows from investing activities

Purchase of intangible fixed assets
(149,200)
(5,528)

Purchase of tangible fixed assets
(1,411,528)
(851,337)

Interest received
116
195

HP interest paid
(333)
(325)

Net cash from investing activities

(1,560,945)
(856,995)

Cash flows from financing activities

Other new loans
670,636
-

Repayment of/new finance leases
-
(18,230)

Dividends paid
(524,518)
(937,900)

Interest paid
(8,484)
(1,217)

Net cash used in financing activities
137,634
(957,347)

Net (decrease) in cash and cash equivalents
(199,389)
(450,945)
Page 11

 
DRAINFAST LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022

£
£



Cash and cash equivalents at beginning of year
201,464
652,409

Cash and cash equivalents at the end of year
2,075
201,464


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,075
201,464

2,075
201,464


The notes on pages 14 to 29 form part of these financial statements.

Page 12

 
DRAINFAST LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

201,464

(199,389)

2,075

Debt due within 1 year

(63)

(670,626)

(670,689)


201,401
(870,015)
(668,614)

The notes on pages 14 to 29 form part of these financial statements.

Page 13

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Drainfast Limited (registered number 07133601) is a private company, limited by shares, and incorporated in England and Wales. The company's registered office is Wey Court West, Union Road, Farnham, Surrey, GU9 7PT. The company's principal place of business is Vision Park, Selbourne Road, Alton, Hampshire, GU34 3HL.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies.

The following principal accounting policies have been applied:

 
2.2

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Page 14

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Income and Retained Earnings over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Goodwill
-
10
years
Computer software
-
5
years

 
2.4

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

S/Term Leasehold Property
-
10 years straight-line method
Plant & machinery
-
5 - 10 years straight-line method
Motor vehicles
-
5 years straight-line method
Fixtures & fittings
-
3 - 10 years straight-line method
Office equipment
-
3 - 5 years straight-line method

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.5

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 15

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.6

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.7

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.8

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.9

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.10

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

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

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The
Page 16

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.10
Financial instruments (continued)

impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

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

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

 
2.11

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.12

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 17

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

 
2.14

Pensions

Defined contribution pension plan

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

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.15

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.16

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 18

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.17

Current and deferred taxation

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

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

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.18

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.19

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Page 19

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.20

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.


3.


Turnover

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

All turnover arose within the United Kingdom.


4.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Research & development charged as an expense
103,341
133,381

Exchange differences
2,645
14,351

Depreciation on tangible fixed assets
166,323
142,495

Amortisation on intangible assets
71,301
82,966


5.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor:


2023
2022
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements
18,000
15,000

Page 20

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
2,690,169
2,657,536

Social security costs
290,891
291,264

Cost of defined contribution scheme
99,262
58,627

3,080,322
3,007,427


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







All Staffing
65
61


7.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
50,304
70,388



8.


Interest receivable

2023
2022
£
£


Other interest receivable
116
195


9.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
8,484
1,217

Finance leases and hire purchase contracts
334
325

8,818
1,542

Page 21

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
-
332,444

Adjustments in respect of previous periods
838
-


Total current tax
838
332,444

Deferred tax


Origination and reversal of timing differences
133,011
135,781

Total deferred tax
133,011
135,781


Taxation on profit on ordinary activities
133,849
468,225

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
914,455
2,518,346


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
231,562
478,486

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
42,251
4,431

Capital allowances for year in excess of depreciation
(273,813)
(151,504)

Adjustments to tax charge in respect of prior periods
838
-

Changes in provisions leading to an increase (decrease) in the tax charge
-
(94)

Deferred tax
133,011
135,781

Other differences leading to an increase (decrease) in the tax charge
-
1,125

Total tax charge for the year
133,849
468,225


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 22

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Dividends

2023
2022
£
£


Dividends paid
524,518
937,900


12.


Intangible assets




Computer software
Goodwill
Total

£
£
£



Cost


At 1 January 2023
92,932
974,522
1,067,454


Additions
149,200
-
149,200


Disposals
(26,609)
-
(26,609)



At 31 December 2023

215,523
974,522
1,190,045



Amortisation


At 1 January 2023
62,330
634,497
696,827


Charge for the year on owned assets
23,849
47,452
71,301


On disposals
(26,609)
-
(26,609)



At 31 December 2023

59,570
681,949
741,519



Net book value



At 31 December 2023
155,953
292,573
448,526



At 31 December 2022
30,602
340,025
370,627



Page 23

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Tangible fixed assets





S/Term Leasehold Property Improvements
Plant & machinery
Motor vehicles
Fixtures & fittings

£
£
£
£



Cost or valuation


At 1 January 2023
-
494,322
348,431
629,595


Additions
114,385
240,146
-
1,758


Disposals
-
(26,844)
-
(138,258)



At 31 December 2023

114,385
707,624
348,431
493,095



Depreciation


At 1 January 2023
-
63,099
260,170
179,513


Charge for the year on owned assets
5,917
40,913
34,745
49,751


Disposals
-
(26,844)
-
(138,258)



At 31 December 2023

5,917
77,168
294,915
91,006



Net book value



At 31 December 2023
108,468
630,456
53,516
402,089



At 31 December 2022
-
431,223
88,261
450,081
Page 24

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

           13.Tangible fixed assets (continued)


Office equipment
Assets under construction
Total

£
£
£



Cost or valuation


At 1 January 2023
182,627
-
1,654,975


Additions
15,990
1,039,250
1,411,529


Disposals
(99,158)
-
(264,260)



At 31 December 2023

99,459
1,039,250
2,802,244



Depreciation


At 1 January 2023
100,286
-
603,068


Charge for the year on owned assets
34,997
-
166,323


Disposals
(99,158)
-
(264,260)



At 31 December 2023

36,125
-
505,131



Net book value



At 31 December 2023
63,334
1,039,250
2,297,113



At 31 December 2022
82,342
-
1,051,907




The net book value of land and buildings may be further analysed as follows:


2023
2022
£
£

Short leasehold
108,468
-

108,468
-


Page 25

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
100



At 31 December 2023
100





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

Sitestak Limited
Vision Park, Selborne Road, Alton, Hampshire, United Kingdom, GU34 3HL
Dormant
Ordinary
100%

The group is exempt from preparing consolidated accounts under section 405 of the Companies Act 2006, as the subsidiary is dormant.

The aggregate of the share capital and reserves as at 31 December 2023 and the profit or loss for the year ended on that date for the subsidiary undertaking were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)

Sitestak Limited
100
-


15.


Stocks

2023
2022
£
£

Raw materials and consumables
2,231,224
2,295,525


Page 26

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Debtors

2023
2022
£
£


Trade debtors
2,833,006
2,728,897

Other debtors
14,594
525,704

Prepayments and accrued income
537,277
412,603

3,384,877
3,667,204


The company has an ongoing debt purchase facility with HSBC Invoice Finance (UK) Limited.. The company has the option to sell Trade balances to HSBC for a finance charge. The company has retained a recourse interest in the Trade balances, meaning that it is liable to HSBC for any amounts that are not collected from the debtors. The liability to HSBC Invoice Finance (UK) Limited at the year end was £670,636 (2022 £Nil).
HSBC Invoice Finance (UK) Limited holds a fixed and floating charge over the company against any debts that may be outstanding. 


17.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
2,075
201,464



18.


Creditors: Amounts falling due within one year

2023
2022
£
£

Other loans
670,636
-

Trade creditors
2,318,629
2,433,749

Corporation tax
4,276
344,265

Other taxation and social security
352,217
286,909

Other creditors
27,792
26,033

Accruals and deferred income
567,759
462,364

3,941,309
3,553,320


Other loans are secured by a fixed charge over all discounted debtors and other debts, and all rights under any supply contract giving rise to a discounted debt or other debt, and the benefit of all guarantees, indemnities and insurances in relation thereto, and a floating charge over the floating assets.

Page 27

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.


Deferred taxation




2023


£






At beginning of year
(376,470)


Charged to profit or loss
(133,011)



At end of year
(509,481)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(509,481)
(376,470)


20.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



100 (2022 - 100) Ordinary shares of £1 each
100
100



21.


Reserves

Profit & loss account

This reserve represents the accumulative distributable reserves of the company.


22.


Capital commitments


At 31 December 2023 the Company had capital commitments as follows:

2023
2022
£
£


Contracted for but not provided in these financial statements
22,800
591,750

Page 28

 
DRAINFAST LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

23.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company  in an independently administered fund. The pension cost charge represents contributions payable by the Company  to the fund and amounted to £99,262 (2022 - £58,627). Contributions totalling £5,557 (2022 - £5,085) were payable to the fund at the reporting date and are included in creditors.


24.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
307,492
183,571

Later than 1 year and not later than 5 years
711,102
147,456

1,018,594
331,027


25.


Related party transactions

The company made payments of £48,800 rent and £5,133 electricity to J G Farms (2022 - £48,846), a business owned by one of the directors' relatives, for the use of land and buildings in Coventry.
The company uses land and buildings in Alton which are owned by the directors, no rent was paid in 2023.
At the reporting date the company owed the directors £53 (2022 - £63). This is repayable on demand and is included in creditors falling due within 1 year.


26.


Controlling party

There is no ultimate controlling party.

 
Page 29