Rockstone Surfacing Limited
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Strategic Report |
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We are pleased to report another year of significant growth; with turnover increasing 19% year on year, an increase of 45% since 2013. Our surfacing operations remain evenly distributed between public, private, commercial and residential markets, within which our growth has been underpinned by a strong focus on customer retention. |
With demand often outstripping supply within the industry we have persevered to provide stability for our existing client base. Both operationally; creating a more agile business capable of satisfying surges in market demand, and commercially, fulfilling our duties at a competitive and stable price. |
As ever, the focus remains long-term with our clients, avoiding levying capacity-driven price increases so common across the industry. Elimination of sub-contract installation teams has rendered 100% of macadam work carried out in-house, contributing to the high level of workmanship which our clients seek to retain with our continued employ. |
A bi-product of the UK’s improving Construction Industry has been the allowance of a degree of selectivity towards new business, especially given Rockstone’s operational levels being at near capacity for the full financial year. We have been able to carefully consider clients whose core values reflect ours, and identify the potential for new long-term relationships when tendering. Conversely our prospective clients are developing more creative procurement methods to ensure that the required levels of quality are represented within bids received. We continue to re-invest resources towards quality management to reinforce the value always offered within our organisation, and have seen multiple public-sector contracts secured as a result of this. |
Our optimism extends to 2016 where continued organic and sustainable growth will be Rockstone’s core objective, to protect and build on another solid year’s trading performance. |
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This report was approved by the board on 24 December 2015 and signed on its behalf. |
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Mr S M Dziubinski |
Director |
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Rockstone Surfacing Limited
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Notes to the Accounts |
for the year ended 31 August 2015
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1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention and in accordance with applicable United Kingdom Accounting Standards.
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Turnover |
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Turnover represents the value, net of value added tax and discounts, of goods provided to customers and work carried out in respect of services provided to customers.
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Depreciation |
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Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Freehold buildings |
1% straight line
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Plant and machinery |
20% straight line
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Motor Vehicles |
20% straight line
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Office equipment |
20% straight line
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Stocks |
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Stock is valued at the lower of cost and net realisable value. |
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Deferred taxation |
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Full provision is made for deferred taxation resulting from timing differences between the recognition of gains and losses in the accounts and their recognition for tax purposes. Deferred tax is calculated at the tax rates which are expected to apply in the periods when the timing differences will reverse, and discounted to reflect the time value of money using rates based on the post-tax yields to maturity that could be obtained at the balance sheet date on government bonds with similar maturity dates. |
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Leasing and hire purchase commitments |
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Assets held under finance leases and hire purchase contracts, which are those where substantially all the risks and rewards of ownership of the asset have passed to the company, are capitalised in the balance sheet and depreciated over their useful lives. The corresponding lease or hire purchase obligation is treated in the balance sheet as a liability. The interest element of the rental obligations is charged to the profit and loss account over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding. Rentals paid under operating leases are charged to income on a straight line basis over the lease term. |
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Pensions |
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The company operates a defined contribution pension scheme. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme. |
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2 |
Analysis of turnover |
2015 |
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2014 |
£ |
£ |
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The turnover is attributable to the one principle activity of the company. |
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By geographical market: |
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UK |
10,680,509 |
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8,967,416 |
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3 |
Operating profit |
2015 |
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2014 |
£ |
£ |
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This is stated after charging: |
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Depreciation of owned fixed assets |
151,155 |
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108,952 |
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Depreciation of assets held under finance leases and hire purchase contracts |
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98,087 |
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58,667 |
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Amortisation of goodwill |
15,000 |
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6,250 |
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Operating lease rentals - plant and machinery |
461,938 |
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497,881 |
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Auditors' remuneration for audit services |
2,000 |
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2,000 |
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4 |
Directors' emoluments |
2015 |
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2014 |
£ |
£ |
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Emoluments |
22,092 |
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24,139 |
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Company contributions to money purchase pension schemes |
7,271 |
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11,336 |
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29,363 |
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35,475 |
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Number of directors in company pension schemes: |
2015 |
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2014 |
Number |
Number |
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Money purchase schemes |
2 |
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2 |
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5 |
Staff costs |
2015 |
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2014 |
£ |
£ |
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Wages and salaries |
1,709,439 |
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1,486,068 |
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Social security costs |
174,710 |
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156,449 |
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Other pension costs |
8,286 |
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11,336 |
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1,892,435 |
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1,653,853 |
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Average number of employees during the year |
Number |
Number |
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Site Staff |
28 |
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37 |
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Administration staff |
9 |
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6 |
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Management staff |
4 |
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7 |
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41 |
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50 |
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6 |
Interest payable |
2015 |
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2014 |
£ |
£ |
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Other loans |
- |
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4,184 |
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Finance charges payable under finance leases and hire purchase contracts |
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11,664 |
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6,361 |
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11,664 |
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10,545 |
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7 |
Taxation |
2015 |
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2014 |
£ |
£ |
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Analysis of charge in period |
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Current tax: |
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UK corporation tax on profits of the period |
208,000 |
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86,057 |
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Deferred tax: |
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Origination and reversal of timing differences |
39,097 |
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63,730 |
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Tax on profit on ordinary activities |
247,097 |
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149,787 |
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Factors affecting tax charge for period |
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The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
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2015 |
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2014 |
£ |
£ |
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Profit on ordinary activities before tax |
1,183,118 |
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668,781 |
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The tax assessed on the profit on ordinary activities for the year is lower than the standard rate of corporation tax in the UK. |
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20.57% |
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20.73% |
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£ |
£ |
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Profit on ordinary activities multiplied by the standard rate of corporation tax |
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243,367 |
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138,638 |
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Effects of: |
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Expenses not deductible for tax purposes |
6,259 |
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2,717 |
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Capital allowances for period in excess of depreciation |
(41,626) |
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(56,102) |
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Sundry tax adjusting items |
- |
|
804 |
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Current tax charge for period |
208,000 |
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86,057 |
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8 |
Intangible fixed assets |
£ |
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Goodwill: |
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Cost |
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At 1 September 2014 |
300,000 |
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At 31 August 2015 |
300,000 |
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Amortisation |
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At 1 September 2014 |
6,250 |
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Provided during the year |
15,000 |
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At 31 August 2015 |
21,250 |
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Net book value |
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At 31 August 2015 |
278,750 |
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At 31 August 2014 |
293,750 |
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Goodwill is being written off in equal annual instalments over its estimated economic life of 20 years. |
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9 |
Tangible fixed assets |
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Land and buildings |
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Plant and Machinery |
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Motor vehicles |
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Office equipment |
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Total |
£ |
£ |
£ |
£ |
£ |
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Cost |
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At 1 September 2014 |
309,151 |
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1,446,889 |
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835,762 |
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142,346 |
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2,734,148 |
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Additions |
- |
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210,400 |
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209,808 |
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- |
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420,208 |
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Disposals |
- |
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(46,000) |
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(405,234) |
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- |
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(451,234) |
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At 31 August 2015 |
309,151 |
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1,611,289 |
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640,336 |
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142,346 |
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2,703,122 |
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Depreciation |
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At 1 September 2014 |
130,350 |
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1,055,852 |
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645,945 |
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138,882 |
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1,971,029 |
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Charge for the year |
3,092 |
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153,701 |
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91,222 |
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1,227 |
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249,242 |
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On disposals |
- |
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(46,000) |
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(355,234) |
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- |
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(401,234) |
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At 31 August 2015 |
133,442 |
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1,163,553 |
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381,933 |
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140,109 |
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1,819,037 |
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Net book value |
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At 31 August 2015 |
175,709 |
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447,736 |
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258,403 |
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2,237 |
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884,085 |
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At 31 August 2014 |
178,801 |
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391,037 |
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189,817 |
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3,464 |
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763,119 |
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2015 |
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2014 |
£ |
£ |
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Net book value of fixed assets included above held under finance leases and hire purchase contracts |
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325,064 |
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208,724 |
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10 |
Stocks |
2015 |
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2014 |
£ |
£ |
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Stock |
2,500 |
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3,700 |
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Work in progress |
- |
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68,472 |
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2,500 |
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72,172 |
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The difference between purchase price or production cost of stocks and their replacement cost is not material. |
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11 |
Debtors |
2015 |
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2014 |
£ |
£ |
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Trade debtors |
2,838,204 |
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3,330,542 |
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VAT recoverable |
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130,773 |
|
99,210 |
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Other debtors |
346,988 |
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330,431 |
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3,315,965 |
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3,760,183 |
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Other debtors includes Directors current accounts |
275,914 |
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263,812 |
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12 |
Creditors: amounts falling due within one year |
2015 |
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2014 |
£ |
£ |
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Obligations under finance lease and hire purchase contracts |
155,429 |
|
81,892 |
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Trade creditors |
1,487,941 |
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1,732,880 |
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Corporation tax |
211,025 |
|
85,256 |
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Other taxes and social security costs |
53,175 |
|
62,423 |
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Other creditors |
3,837 |
|
680 |
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Accruals and deferred income |
40,057 |
|
63,539 |
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1,951,464 |
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2,026,670 |
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13 |
Creditors: amounts falling due after one year |
2015 |
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2014 |
£ |
£ |
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Obligations under finance lease and hire purchase contracts |
120,574 |
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110,539 |
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14 |
Obligations under finance leases and hire purchase |
2015 |
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2014 |
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contracts |
£ |
£ |
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Amounts disclosed under creditors secured by the company and payable: |
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Within one year |
155,429 |
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81,892 |
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Within two to five years |
120,574 |
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110,539 |
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|
276,003 |
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192,431 |
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15 |
Deferred taxation |
2015 |
|
2014 |
£ |
£ |
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Accelerated capital allowances |
118,408 |
|
79,311 |
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118,408 |
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79,311 |
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2015 |
|
2014 |
£ |
£ |
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At 1 September |
79,311 |
|
15,581 |
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Deferred tax charge in profit and loss account |
39,097 |
|
63,730 |
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At 31 August |
118,408 |
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79,311 |
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16 |
Share capital |
Nominal |
|
2015 |
|
2015 |
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2014 |
value |
Number |
£ |
£ |
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Allotted, called up and fully paid: |
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Ordinary shares
|
£1 each |
|
100 |
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100 |
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100 |
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17 |
Profit and loss account |
2015 |
£ |
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At 1 September 2014 |
3,318,668 |
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Profit for the financial year |
936,021 |
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Dividends |
(153,600) |
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At 31 August 2015 |
4,101,089 |
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18 |
Dividends |
2015 |
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2014 |
£ |
£ |
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Dividends for which the company became liable during the year: |
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Dividends paid |
153,600 |
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153,600 |
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19 |
Reconciliation of movement in shareholders' funds |
2015 |
|
2014 |
£ |
£ |
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At 1 September |
3,318,768 |
|
2,953,374 |
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Profit for the financial year |
936,021 |
|
518,994 |
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Dividends |
(153,600) |
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(153,600) |
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At 31 August |
4,101,189 |
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3,318,768 |
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20 |
Gross cash flows |
2015 |
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2014 |
£ |
£ |
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Returns on investments and servicing of finance |
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Interest received |
835 |
|
798 |
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Interest paid |
- |
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(6,361) |
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Interest element of finance lease rental payments |
(11,664) |
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(4,184) |
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(10,829) |
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(9,747) |
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Capital expenditure |
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Payments to acquire intangible fixed assets |
- |
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(300,000) |
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Payments to acquire tangible fixed assets |
(420,208) |
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(429,810) |
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Receipts from sales of tangible fixed assets |
50,000 |
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40,000 |
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(370,208) |
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(689,810) |
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Financing |
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Capital element of finance lease rental payments |
83,572 |
|
106,388 |
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21 |
Analysis of changes in net debt |
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At 1 Sep 2014 |
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Cash flows |
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Non-cash changes |
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At 31 Aug 2015 |
£ |
£ |
£ |
£ |
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Cash at bank and in hand |
646,064 |
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1,164,271 |
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|
1,810,335 |
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Finance leases |
(192,431) |
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(83,572) |
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|
|
(276,003) |
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|
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Total |
453,633 |
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1,080,699 |
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- |
|
1,534,332 |
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22 |
Loans to directors |
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Description and conditions |
B/fwd |
Paid |
Repaid |
C/fwd |
£ |
£ |
£ |
£ |
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Mr S M Dziubinkski
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During the year a joint loan account existed between the directors, Mr S M Dziubinkski and Mrs L J Dziubinski, and the company. Details are as follows (1/2 share):
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|
131,906 |
|
6,051 |
|
- |
|
137,957 |
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Mrs L J Dziubinski
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During the year a joint loan account existed between the directors, Mr S M Dziubinkski and Mrs L J Dziubinski, and the company. Details are as follows (1/2 share):
|
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|
131,906 |
|
6,051 |
|
- |
|
137,957 |
|
|
|
263,812 |
|
12,102 |
|
- |
|
275,914 |
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23 |
Related party transactions |
2015 |
|
2014 |
£ |
£ |
|
Mr S M Dziubinski
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Director
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During the year the director received dividends amounting to £76,800 (£76,800 in 2014).
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Mrs L J Dziubinski
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Director
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During the year the director received dividends amounting to £76,800 (£76,800 in 2014).
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24 |
Ultimate controlling party |
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In the opinion of the directors, the company is controlled by Mr S M Dziubinski and Mrs L J Dziubinski, who each own 50% of the issued shares in the company.
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