Company Registration Number:
31 AUGUST 2024
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EWART ENGINEERING LIMITED
COMPANY INFORMATION
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EWART ENGINEERING LIMITED
CONTENTS
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EWART ENGINEERING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
The directors present their Strategic Report for Ewart Engineering Limited for the year ended 31 August 2024.
Development and financial performance during the year
As reported in the company's profit and loss account, revenue has shown a decrease from £9.9m to £7.8m in the current year. Profit before tax has fallen from £0.4m to £0.07m primarily due to additional costs incurred combined with the decrease in revenue. Financial position at the reporting date The balance sheet shows that the company's net assets at the year end have stayed fairly constant, increasing slightly from £5.27m to £5.27m. The company continues to hold cash and manage working capital without external finance.
The directors continually monitor the key risks facing the company, together with assessing the controls used for managing these risks.
The principal risks and uncertainties facing the company are as follows: Economic downturn - the company acknowledges the importance of maintaining close relationships with its key customers in order to be able to identify the early stages of potential difficulties. Sales trends in its major markets are constantly reviewed to enable early action to be taken in the event of sales declining. Rising inflation and interest rates will undoubtedly cause some businesses to encounter financial difficulties and customer credit terms are being carefully monitored. Competitor pressure - the market in which the company operates is considered to be highly competitive and, therefore, competitor pressure could result in losing sales to key competitors. The company manages this risk by providing quality products and maintaining strong relationships with its key customers. Loss of key personnel - the directors seek to ensure that key personnel are appropriately remunerated to ensure that good performance is recognised.
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EWART ENGINEERING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
The directors use a range of financial performance measures to monitor and manage the business. The key performance indicators for the past three years ending 31 August are set out below and are rounded to the nearest thousandth pound.
2024 2023 2022 Turnover 7,828 9,950 11,309 Gross profit 1,767 2,567 2,851 Profit before tax 7 400 712 Shareholder's Funds 5,267 5,262 5,245
This report was approved by the board and signed on its behalf.
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EWART ENGINEERING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
The directors present their report and the financial statements for the year ended 31 August 2024.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
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 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £4,522 (2023 - £306,214).
No dividends (2023 - £288,382) were declared during the year.
The directors who served during the year were:
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EWART ENGINEERING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
The company's principal financial instruments include bank balances, trade receivables and trade payables. The
principal risks in respect of these instruments are set out below. Liquidity risk The company manages its cash requirements to maximise interest income whilst ensuring that the company has sufficient liquid resources to meet the operating needs of its business. Credit risk Investment of cash surpluses are made through banks and companies which must fulfil credit rating criteria approved by the board. All customers who wish to trade on credit terms are subject to credit verification procedures. Receivable balances are monitored on an on-going basis and provision is made for doubtful debts where necessary. Foreign currency risk The company's principal foreign currency exposures arise from trading operations with overseas companies. The directors ensure exposure to foreign currency risk is minimised by imposing strict payment terms on non-sterling invoices.
The auditors, Armstrong Watson Audit Limited, will 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.
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EWART ENGINEERING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EWART ENGINEERING LIMITED
We have audited the financial statements of Ewart Engineering Limited (the 'Company') for the year ended 31 August 2024, 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 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).
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 Auditors' 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.
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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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EWART ENGINEERING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EWART ENGINEERING LIMITED (CONTINUED)
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.
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.
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EWART ENGINEERING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EWART ENGINEERING LIMITED (CONTINUED)
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 Auditors' 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:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities,
including fraud and non-compliance with laws and regulations, was as follows: • the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations, such as the Health & Safety at Work Act, Factories Act 1961, Fire Precaution Act 1971, Office, Shops and Railway Premises Act 1963 and Companies Act 2006. ; • we identified the laws and regulations applicable to the company through discussions with directors and other management and from our commercial knowledge; • we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; • we identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: • making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; • considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations To address the risk of fraud through management bias and override of controls, we: • performed analytical procedures to identify any unusual or unexpected relationships; • tested journal entries to identify unusual transactions; • reviewed the application of accounting policies including stock overhead absorption In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: • agreeing financial statement disclosures to underlying supporting documentation; and • enquiring of management as to actual and potential litigation and claims;
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 Auditors' report.
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EWART ENGINEERING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EWART ENGINEERING LIMITED (CONTINUED)
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 Auditors' 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.
for and on behalf of
Chartered Accountants & Statutory Auditors
Carlisle
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EWART ENGINEERING LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 AUGUST 2024
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EWART ENGINEERING LIMITED
REGISTERED NUMBER: SC049122
STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 24 form part of these financial statements.
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EWART ENGINEERING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2024
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EWART ENGINEERING LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 AUGUST 2024
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Ewart Engineering Limited is a private company limited by shares incorporated in Scotland. The address of its registered office and principal place of business is Glasgow Road, Gretna, Dumfriesshire, DG16 5JN.
The functional and presentational currency is Pounds Sterling.
2.Accounting policies
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 judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
At the end of the year the company had net current assets of £3.02m and net assets of £5.27m, following a profit of £6.8k in the year.
The directors have considered the position of the company, its cash reserves and forecasts of future performance and cash flows, and have concluded that the going concern basis of accounting is appropriate. The company has significant cash reserves and forecasts that future cash generation will remain positive. The performance of the business after the year end has been such that the directors do not believe that there is a material uncertainty in relation to the ability of the company to continue as a going concern.
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
2.Accounting policies (continued)
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
2.Accounting policies (continued)
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the reducing balances and straight-line methods.
Depreciation is provided on the following basis:
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.
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors.
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Judgements and estimates are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (a) Establishing useful economic lives for depreciation purposes of property, plant and equipment Long-lived assets, consisting primarily of property, plant and equipment, comprise a significant proportion of total fixed assets. The annual depreciation charge depends primarily on the estimated useful economic lives and is changed as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on depreciation charges for the period. Details of the depreciation policies based on estimated useful economic lives are included in the relevant accounting policy note in these financial statements. (b) Providing for doubtful debts The company establishes a provision for receivables that are not estimated to be recoverable. When assessing recoverability the directors consider factors such as the ageing of receivables, past experience of recoverability, and the credit profile of individual groups of customers. (c) Overhead absorption The company absorbs costs into stock at the year end based on the total relevant costs incurred in the year divided by the number of labour hours undertaken in the year. This rate is then applied to labour hours spent on WIP in stock at the year end.
Analysis of turnover by country of destination:
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
10.Taxation (continued)
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
10.Taxation (continued)
There are no factors that may affect future tax charges.
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Capital redemption reserve
Profit and loss account
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EWART ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
The company operates a defined contribution scheme in respect of the directors and a Group Personal Pension Scheme in respect of other employees. The pension cost charge represents contributions payable by the company to these funds amounted to £85,438 (2023 - £91,668). Accrued contributions of £12,180 (2023 – £16,657).
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