Company Registration No. 02792107 (England and Wales)
SPECIALIST COATINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
SPECIALIST COATINGS LIMITED
COMPANY INFORMATION
Directors
Dr Allan Mitchell
Mrs Irene Mitchell
Mr Allan Mitchell
Secretary
Mrs Irene Mitchell
Company number
02792107
Registered office
c/o Almit Group
Faverdale
Faverdale Industrial Estate
Darlington
Co Durham
DL3 0PP
Auditor
Baldwins Audit Services Limited
Rowlands House
Portobello Road
Birtley
Chester le Street
Co Durham
DH3 2RY
Business address
c/o Almit Group
Faverdale
Faverdale Industrial Estate
Darlington
Co Durham
DL3 0PP
SPECIALIST COATINGS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 5
Profit and loss account
6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
Notes to the financial statements
10 - 22
SPECIALIST COATINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2017
- 1 -
The directors present the strategic report for the Year ended 31 March 2017.
Fair review of the business
The company has continued to invest heavily in its new property at Faverdale in Darlington, with continued renovation of the properties and the introduction of further plant and equipment. This investment has started to show through an increase in turnover, this is expected to continue in the following years.
Principal risks and uncertainties
These remain the general performance of the UK economy and to a certain extent the price of oil. The possible effects due to the probable exit of the UK from the European Union is as yet unclear, though it is hoped will be minimal.
Development and performance
Sales are up on the previous year, which is expected to in subsequent years due to increased capacity driven by continued investment. Gross profit margins have improved as a result of this increase in turnover.
Key performance indicators
The directors consider sales and cash flow to be key indicators when monitoring the company's progress. As mentioned above sales this year are up by 6% compared to the previous period. In addition available bank balances at the year end remain healthy given the amount of investment in the Faverdale site. An overall situation with which the directors are very satisfied.
Other information and explanations
Going forward the directors hope to continue to develop the Faverdale site and will look to consolidate operations as available capacity increases at this site. The goal being to achieve cost savings as a result of economies of scale.
Dr Allan Mitchell
Director
28 September 2017
SPECIALIST COATINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2017
- 2 -
The directors present their annual report and financial statements for the Year ended 31 March 2017.
Principal activities
The principal activity of the company continued to be that of wet and powder painting of metal structures together with shot blasting.
Directors
The directors who held office during the Year and up to the date of signature of the financial statements were as follows:
Dr Allan Mitchell
Mrs Irene Mitchell
Mr Allan Mitchell
Results and dividends
The results for the Year are set out on page 6.
Auditor
In accordance with the company's articles, a resolution proposing that Baldwins Audit Services Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (FRS102). 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 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 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.
SPECIALIST COATINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 3 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Dr Allan Mitchell
Director
28 September 2017
SPECIALIST COATINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPECIALIST COATINGS LIMITED
- 4 -
We have audited the financial statements of Specialist Coatings Limited for the Year ended 31 March 2017 set out on pages 6 to 22. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities Statement set out on pages 2 - 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:
-
• give a true and fair view of the state of the company's affairs as at 31 March 2017 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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion 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.
true
SPECIALIST COATINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPECIALIST COATINGS LIMITED
- 5 -
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where 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.
Colin Chater (Senior Statutory Auditor)
for and on behalf of Baldwins Audit Services Limited
28 September 2017
Chartered Accountants
Statutory Auditor
Rowlands House
Portobello Road
Birtley
Chester le Street
Co Durham
DH3 2RY
SPECIALIST COATINGS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2017
- 6 -
Year
Year
ended
ended
31 March
31 March
2017
2016
Notes
£
£
Turnover
3
6,145,431
5,801,525
Cost of sales
(3,228,102)
(2,806,255)
Gross profit
2,917,329
2,995,270
Administrative expenses
(2,311,858)
(1,832,738)
Other operating income
41,516
30,932
Operating profit
4
646,987
1,193,464
Interest receivable and similar income
8
4,539
3,591
Interest payable and similar expenses
9
(7,058)
(98,977)
Profit before taxation
644,468
1,098,078
Taxation
10
(56,850)
117,045
Profit for the financial Year
587,618
1,215,123
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SPECIALIST COATINGS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2017
- 7 -
Year
Year
ended
ended
31 March
31 March
2017
2016
£
£
Profit for the Year
587,618
1,215,123
Other comprehensive income
Revaluation of tangible fixed assets
-
2,014,812
Total comprehensive income for the Year
587,618
3,229,935
SPECIALIST COATINGS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2017
31 March 2017
- 8 -
2017
2016
Notes
£
£
£
£
Fixed assets
Tangible assets
12
7,813,533
7,425,571
Current assets
Stocks
13
48,583
61,579
Debtors
14
2,054,458
2,372,917
Cash at bank and in hand
74,364
524,133
2,177,405
2,958,629
Creditors: amounts falling due within one year
15
(5,236,163)
(5,599,206)
Net current liabilities
(3,058,758)
(2,640,577)
Total assets less current liabilities
4,754,775
4,784,994
Creditors: amounts falling due after more than one year
16
(421,124)
(459,761)
Provisions for liabilities
19
(185,109)
(128,259)
Net assets
4,148,542
4,196,974
Capital and reserves
Called up share capital
22
8
8
Revaluation reserve
1,949,416
1,987,727
Profit and loss reserves
2,199,118
2,209,239
Total equity
4,148,542
4,196,974
The financial statements were approved by the board of directors and authorised for issue on 28 September 2017 and are signed on its behalf by:
Dr Allan Mitchell
Director
Company Registration No. 02792107
SPECIALIST COATINGS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2017
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2015
8
-
1,551,331
1,551,339
Period ended 31 March 2016:
Profit for the period
-
-
1,215,123
1,215,123
Other comprehensive income:
Revaluation of tangible fixed assets
-
2,014,812
-
2,014,812
Total comprehensive income for the period
-
2,014,812
1,215,123
3,229,935
Dividends
11
-
-
(584,300)
(584,300)
Transfers
-
(27,085)
27,085
-
Balance at 31 March 2016
8
1,987,727
2,209,239
4,196,974
Period ended 31 March 2017:
Profit and total comprehensive income for the period
-
-
587,618
587,618
Dividends
11
-
-
(636,050)
(636,050)
Transfers
-
(38,311)
38,311
-
Balance at 31 March 2017
8
1,949,416
2,199,118
4,148,542
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
- 10 -
1
Accounting policies
Company information
Specialist Coatings Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
c/o Almit Group, Faverdale, Faverdale Industrial Estate, Darlington, Co Durham, DL3 0PP.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
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.
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:
Freehold buildings
2% straight line
Plant and machinery
15% reducing balance
Fixtures, fittings & equipment
15% reducing balance
Motor vehicles
25% reducing balance
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
.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 11 -
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
including
cash in hand
and bank overdrafts
. Bank overdrafts are shown within borrowings in current liabilities.
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.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 12 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
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.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 13 -
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.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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.
1.13
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.
Government grants relating to property, plant and equipment are treated as deferred income and released to profit or loss over the expected useful lives of the assets concerned.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 14 -
3
Turnover and other revenue
All sales are derived from the company's principal activities of wet & powder painting of metal structures and shotblasting.
All the company's sales are to UK customers.
4
Operating profit
2017
2016
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
(40,654)
(30,932)
Depreciation of owned tangible fixed assets
479,504
312,471
Depreciation of tangible fixed assets held under finance leases
14,085
19,506
Loss on disposal of tangible fixed assets
25,949
-
Cost of stocks recognised as an expense
1,636,462
1,312,011
5
Auditor's remuneration
2017
2016
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
15,458
6,200
6
Employees
The average monthly number of persons (including directors) employed by the company during the Year was:
2017
2016
Number
Number
Production and Administration
107
84
Their aggregate remuneration comprised:
2017
2016
£
£
Wages and salaries
2,152,203
1,949,064
Social security costs
165,987
155,786
Pension costs
4,827
3,149
2,323,017
2,107,999
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 15 -
7
Directors' remuneration
2017
2016
£
£
Remuneration for qualifying services
77,750
71,250
8
Interest receivable and similar income
2017
2016
£
£
Interest income
Other interest income
4,539
3,591
9
Interest payable and similar expenses
2017
2016
£
£
Interest on financial liabilities measured at amortised cost:
Interest on finance leases and hire purchase contracts
7,045
19,274
Other interest on financial liabilities
-
79,696
7,045
98,970
Other finance costs:
Other interest
13
7
7,058
98,977
10
Taxation
2017
2016
£
£
Current tax
Adjustments in respect of prior periods
-
(115,237)
Deferred tax
Origination and reversal of timing differences
56,850
(1,808)
Total tax charge
56,850
(117,045)
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
10
Taxation
(Continued)
- 16 -
The actual charge/(credit) for the Year can be reconciled to the expected charge for the Year based on the profit or loss and the standard rate of tax as follows:
2017
2016
£
£
Profit before taxation
644,468
1,098,078
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2016: 20.00%)
128,894
219,616
Tax effect of expenses that are not deductible in determining taxable profit
96,570
62,131
Tax effect of income not taxable in determining taxable profit
-
(718)
Tax effect of utilisation of tax losses not previously recognised
(18,629)
-
Unutilised tax losses carried forward
-
48,012
Adjustments in respect of prior years
-
(115,237)
Group relief
(908)
-
Permanent capital allowances in excess of depreciation
(205,927)
(329,041)
Deferred tax adjustments
56,850
(1,808)
Tax expense for the period
56,850
(117,045)
No provision has been made in respect of Corporation Tax for the current year due to the availability of tax allowances applying to the company.
11
Dividends
2017
2016
£
£
Interim paid
636,050
584,300
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 17 -
12
Tangible fixed assets
Freehold buildings
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 April 2016
5,468,997
2,997,910
112,890
101,866
8,681,663
Additions
694,588
148,120
2,078
115,716
960,502
Disposals
-
-
-
(112,490)
(112,490)
At 31 March 2017
6,163,585
3,146,030
114,968
105,092
9,529,675
Depreciation and impairment
At 1 April 2016
71,075
1,060,017
64,406
60,596
1,256,094
Depreciation charged in the Year
117,854
336,649
8,171
30,915
493,589
Eliminated in respect of disposals
-
-
-
(33,541)
(33,541)
At 31 March 2017
188,929
1,396,666
72,577
57,970
1,716,142
Carrying amount
At 31 March 2017
5,974,656
1,749,364
42,391
47,122
7,813,533
At 31 March 2016
5,397,922
1,937,894
48,485
41,270
7,425,571
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2017
2016
£
£
Plant and machinery
53,936
65,492
Fixtures, fittings & equipment
13,906
16,434
Motor vehicles
-
22,584
67,842
104,510
Depreciation charge for the Year in respect of leased assets
14,085
19,506
Land and buildings with a carrying amount of £5,974,656 were revalued at
16th July 2015
by
Frank Knight Property Advisers
, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
12
Tangible fixed assets
(Continued)
- 18 -
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
2017
2016
£
£
Cost
4,248,048
3,553,460
Accumulated depreciation
(288,204)
(170,350)
Carrying value
3,959,844
3,383,110
Freehold land and buildings with a carrying amount of £5,974,656 (2016 - £5,397,922) have been pledged to secure borrowings of the company
and the group via cross guarantees
. The company is not
able
to pledge these assets as security for other borrowings or to sell them to another entity
without prior agreement of the lenders
.
13
Stocks
2017
2016
£
£
Finished goods and goods for resale
48,583
61,579
14
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
1,566,712
1,574,400
Amounts due from group undertakings
375,565
358,703
Other debtors
93,770
126,583
Prepayments and accrued income
18,411
313,231
2,054,458
2,372,917
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 19 -
15
Creditors: amounts falling due within one year
2017
2016
Notes
£
£
Bank loans and overdrafts
17
92,916
104,668
Obligations under finance leases
18
47,982
89,414
Trade creditors
432,920
876,262
Amounts due to group undertakings
4,127,244
3,839,478
Other taxation and social security
231,118
243,805
Other creditors
169,143
317,565
Accruals and deferred income
134,840
128,014
5,236,163
5,599,206
The
obligations
due under
finance leases
are secured on the assets to which they relate.
16
Creditors: amounts falling due after more than one year
2017
2016
Notes
£
£
Obligations under finance leases
18
4,832
52,814
Government grants
416,292
406,947
421,124
459,761
17
Loans and overdrafts
2017
2016
£
£
Bank loans
-
103,167
Bank overdrafts
92,916
1,501
92,916
104,668
Payable within one year
92,916
104,668
Included in bank loans and overdrafts due within one year is £92,916 (2016 - £1,501) relating to money advanced in respect of an invoice finance agreement, which is secured on the debts factored. At the balance sheet date the outstanding factored debts were £1,472,298 (2016 - £1,410,059) and are included in trade debtors.
The bank borrowings and invoice finance facilities are secured by a cross guarantee and debenture over the assets of all the Almit group companies.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 20 -
18
Finance lease obligations
2017
2016
Future minimum lease payments due under finance leases:
£
£
Within one year
47,982
89,414
In two to five years
4,832
52,814
52,814
142,228
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Provisions for liabilities
2017
2016
Notes
£
£
Deferred tax liabilities
20
185,109
128,259
185,109
128,259
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2017
2016
Balances:
£
£
Accelerated capital allowances
212,340
235,526
Tax losses
(27,231)
(107,267)
185,109
128,259
2017
Movements in the Year:
£
Liability at 1 April 2016
128,259
Charge to profit or loss
56,850
Liability at 31 March 2017
185,109
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 21 -
21
Retirement benefit schemes
2017
2016
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
4,827
3,149
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
22
Share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
2 Ordinary shares of £1 each
2
2
Preference share capital
Issued and fully paid
6 Ordinary preference shares of £1 each
6
6
23
Financial commitments, guarantees and contingent liabilities
There are unlimited inter-company bank guarantees in place between fellow subsidiaries, Almit Metal Finishing Limited, Timla Limited and Almit Properties Limited. The bank has a right of set-off against all group bank accounts.
24
Related party transactions
The following amounts were outstanding at the reporting end date:
2017
2016
Amounts owed to related parties
£
£
A S M Surface Technologies Limited
33,542
186,026
25
Directors' transactions
Dividends totalling £87,000 (2016 - £78,400) were paid in the Year in respect of shares held by the company's directors.
During the year a vehicle was sold by the company to one of the directors incurring proceeds of £50,000. A loss on disposal of £25,949 has been recognised in the accounts.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 22 -
26
Controlling party
The company's immediate and ultimate parent company is Almit Group Limited, a company registered in England & Wales. The smallest and largest group accounts that the company's results are incorporated into are those produced by Almit Group Limited, copies of which can be obtained from the registered office Almit Group Limited at Faverdale, Faverdale Industrial Estate, Darlington, County Durham, DL3 0PP.
The company's ultimate controlling party is Dr A & Mrs I Mitchell due to their controlling interest in the ultimate parent company Almit Group Limited.
2017-03-31
2016-04-01
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