Company Registration No. 00446866 (England and Wales)
FRANCIS BROWN LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
PAGES FOR FILING WITH REGISTRAR
FRANCIS BROWN LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Notes to the financial statements
3 - 9
FRANCIS BROWN LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2017
31 December 2017
- 1 -
2017
2016
Notes
£
£
£
£
Fixed assets
Tangible assets
3
710,166
753,603
Current assets
Stocks
67,658
63,291
Debtors
4
2,198,789
1,550,313
Cash at bank and in hand
17,021
18,836
2,283,468
1,632,440
Creditors: amounts falling due within one year
5
(2,207,295)
(1,568,084)
Net current assets
76,173
64,356
Total assets less current liabilities
786,339
817,959
Creditors: amounts falling due after more than one year
6
(349,031)
(386,021)
Provisions for liabilities
(40,235)
(47,176)
Net assets
397,073
384,762
Capital and reserves
Called up share capital
7
10,000
10,000
Capital redemption reserve
4,800
4,800
Profit and loss reserves
382,273
369,962
Total equity
397,073
384,762
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
For the financial year ended 31 December 2017 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime.
FRANCIS BROWN LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2017
31 December 2017
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 3 July 2018 and are signed on its behalf by:
Mr S F Brown
Director
Company Registration No. 00446866
FRANCIS BROWN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
- 3 -
1
Accounting policies
Company information
Francis Brown Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Church Road, Stockton-on-Tees, TS18 2HL.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The company has committed bank financing arrangements including an overdraft facility that is subject to annual renewal and is used by the company to meet its day to day working capital requirements.
The directors have a reasonable expectation that
the bank facilities will continue to be available to the company
.
The directors are making operational changes in an effort to increase sales and improve efficiency.
Results to date and forecasts for the current year indicate improved profitability.
Having taken into consideration the above circumstances, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual 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
.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from construction contracts is recognised in line with the company's policy on construction contracts as detailed below.
1.4
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.
FRANCIS BROWN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 4 -
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 freehold
2.5% straight line basis
Plant and machinery
15% reducing balance basis
Office furniture and fittings
20% straight line basis
Motor vehicles
25% 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
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.6
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.
Cost is calculated using the first in first out (FIFO) basis.
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.
1.7
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs.
FRANCIS BROWN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 5 -
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.
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 and bank loans, 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
paymen
ts 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. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue 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.
FRANCIS BROWN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 6 -
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 the profit and loss account 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 income 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 lease asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
FRANCIS BROWN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 7 -
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred
. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 92 (2016 - 75).
3
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 January 2017
653,034
931,527
1,584,561
Additions
24,283
24,283
At 31 December 2017
653,034
955,810
1,608,844
Depreciation and impairment
At 1 January 2017
154,122
676,836
830,958
Depreciation charged in the year
16,332
51,388
67,720
At 31 December 2017
170,454
728,224
898,678
Carrying amount
At 31 December 2017
482,580
227,586
710,166
At 31 December 2016
498,912
254,691
753,603
4
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
1,753,597
977,048
Other debtors
445,192
573,265
2,198,789
1,550,313
Included within other debtors is £194,917 (2016 - £391,721) relating to gross amounts due from contract customers.
FRANCIS BROWN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 8 -
5
Creditors: amounts falling due within one year
2017
2016
£
£
Bank loans and overdrafts
669,490
220,226
Trade creditors
760,665
658,897
Other taxation and social security
393,483
166,314
Other creditors
383,657
522,647
2,207,295
1,568,084
Included within other creditors is £221,118 (2016 - £366,808) relating to gross amounts due from contract customers.
Hire purchase liabilities totalling £20,006 (2016 - £34,593) are secured over the assets to which they relate.
6
Creditors: amounts falling due after more than one year
2017
2016
Notes
£
£
Bank loans and overdrafts
315,394
339,497
Obligations under finance leases
16,777
23,341
Government grants
16,860
23,183
349,031
386,021
The bank loan and overdraft are secured by a fixed and floating charge over the assets of the company.
Hire purchase liabilities totalling £16,777 (2016 - £23,341) are secured over the assets to which they relate.
Amounts included above which fall due after five years are as follows:
Payable by instalments
208,567
233,234
7
Called up share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
10,000 Ordinary shares of £1 each
10,000
10,000
10,000
10,000
FRANCIS BROWN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 9 -
8
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2017
2016
£
£
Within one year
56,374
54,219
Between two and five years
182,981
175,394
In over five years
212,500
-
451,855
229,613
9
Directors' transactions
During the year the total dividends paid to directors amounted to £64,955 (2016: £105,303 ).
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Directors loan
-
41,226
5,196
-
46,422
Directors loan
-
59,765
21,178
(5,000)
75,943
Directors loan
-
4,429
20,800
-
25,229
-------
-------
-------
-------
105,420
47,174
(5,000)
147,594