Company Registration No. 02792107 (England and Wales)
SPECIALIST COATINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
SPECIALIST COATINGS LIMITED
COMPANY INFORMATION
Directors
Dr A Mitchell
Mrs I Mitchell
Mr A D Mitchell
Secretary
Mrs I Mitchell
Company number
02792107
Registered office
c/o Almit Group
Faverdale
Faverdale Industrial Estate
Darlington
County Durham
DL3 0PP
Auditor
Baldwins Audit Services
Bede House
3 Belmont Business Park
Durham
DH1 1TW
SPECIALIST COATINGS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
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
Notes to the financial statements
10 - 22
SPECIALIST COATINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2019
- 1 -
The directors present the strategic report for the Year ended 31 March 2019.
Fair review of the business
The company has continued to invest in its property situated at its Faverdale, Darlington site. With continued renovation of the onsite properties and investment in plant and equipment, Specialist Coatings Limited has increased turnover as expected. The increased turnover is expected to continue into the following years.
Principal risks and uncertainties
The UK economy, in general, the continued uncertain Brexit outcome, along with the low price of oil have proven to be risks that the company has faced during the year. Planning for the effects of the UK leaving the European Union has remained a challenge as the effects of this remain unclear.
Development and performance
The company has utilised all of the property, plant and equipment investment from previous years to ensure that the turnover has increased on the previous year. The company is still expecting to expand in future years with plans in place to ensure that the performance of the company is not affected by the ongoing development. The company has utilised additional space of the site by consolidating its sister company at Faverdale.
Key performance indicators
Sales and cash flow still remain as the major key performance indicators for the company to monitor performance and position.
2019 2018
The sales of the company have increased on the previous year by 23.37% aided by the additional capacity that the Faverdale site has provided. There has also been a significant increase in the bank balances in the current year as a result of economies of scale provided by the consolidation of the sister company at the Faverdale site. The company continues to maintain a good working relationship with its banking provider.
Other information and explanations
Going forward the directors hope to continue to develop the Faverdale site and will look to increase operations as available capacity increases at this site. The goal being to continue to achieve cost savings as a result of economies of scale.
Dr A Mitchell
Director
17 December 2019
SPECIALIST COATINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2019
- 2 -
The directors present their annual report and financial statements for the Year ended 31 March 2019.
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 A Mitchell
Mrs I Mitchell
Mr A D Mitchell
Results and dividends
The results for the Year are set out on page 6.
Ordinary dividends were paid amounting to £125,000. The directors do not recommend payment of a final dividend.
Preference dividends were paid amounting to £522,000.
Auditor
In accordance with the company's articles, a resolution proposing that Baldwins Audit Services be reappointed as auditor of the company will be put at a General Meeting.
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 A Mitchell
Director
17 December 2019
SPECIALIST COATINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2019
- 3 -
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
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPECIALIST COATINGS LIMITED
- 4 -
Opinion
We have audited the financial statements of Specialist Coatings Limited (the 'company') for the Year ended 31 March 2019 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, 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 FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2019 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport 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.
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
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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.
Colin Chater (Senior Statutory Auditor)
for and on behalf of Baldwins Audit Services
19 December 2019
Statutory Auditor
Bede House
3 Belmont Business Park
Durham
DH1 1TW
SPECIALIST COATINGS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2019
- 6 -
Year
Year
ended
ended
31 March
31 March
2019
2018
Notes
£
£
Turnover
3
7,944,533
6,440,372
Cost of sales
(3,964,593)
(3,571,086)
Gross profit
3,979,940
2,869,286
Administrative expenses
(2,799,480)
(2,670,193)
Other operating income
265,139
734,334
Exceptional items
4
2,132
(111,239)
Operating profit
5
1,447,731
822,188
Interest receivable and similar income
9
8,900
7,404
Interest payable and similar expenses
10
(26,035)
(15,975)
Profit before taxation
1,430,596
813,617
Tax on profit
11
(93,007)
(61,325)
Profit for the financial Year
1,337,589
752,292
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 2019
- 7 -
Year
Year
ended
ended
31 March
31 March
2019
2018
£
£
Profit for the Year
1,337,589
752,292
Other comprehensive income
Revaluation of tangible fixed assets
(1,035,514)
-
Total comprehensive income for the Year
302,075
752,292
SPECIALIST COATINGS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2019
31 March 2019
- 8 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
13
6,791,756
8,085,422
Current assets
Stocks
14
47,235
43,743
Debtors
15
3,138,016
3,073,376
Cash at bank and in hand
43,518
4,693
3,228,769
3,121,812
Creditors: amounts falling due within one year
16
(5,138,520)
(5,768,692)
Net current liabilities
(1,909,751)
(2,646,880)
Total assets less current liabilities
4,882,005
5,438,542
Creditors: amounts falling due after more than one year
17
(769,577)
(958,485)
Provisions for liabilities
20
(194,519)
(217,223)
Net assets
3,917,909
4,262,834
Capital and reserves
Called up share capital
24
8
8
Revaluation reserve
846,133
1,911,105
Profit and loss reserves
3,071,768
2,351,721
Total equity
3,917,909
4,262,834
The financial statements were approved by the board of directors and authorised for issue on 17 December 2019 and are signed on its behalf by:
Dr A Mitchell
Mr A D Mitchell
Director
Director
Company Registration No. 02792107
SPECIALIST COATINGS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2019
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2017
8
1,949,416
2,199,118
4,148,542
Period ended 31 March 2018:
Profit and total comprehensive income for the period
-
-
752,292
752,292
Dividends
12
-
-
(638,000)
(638,000)
Transfers
-
(38,311)
38,311
-
Balance at 31 March 2018
8
1,911,105
2,351,721
4,262,834
Period ended 31 March 2019:
Profit for the period
-
-
1,337,589
1,337,589
Other comprehensive income:
Revaluation of tangible fixed assets
-
(1,035,514)
-
(1,035,514)
Total comprehensive income for the period
-
(1,035,514)
1,337,589
302,075
Dividends
12
-
-
(647,000)
(647,000)
Transfers
-
(29,458)
29,458
-
Balance at 31 March 2019
8
846,133
3,071,768
3,917,909
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
- 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, County 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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of
Almit Group Limited
. These consolidated financial statements are available from its registered office,
Faverdale, Faverdale Industrial Estate, Darlington, Co Durham, DL3 0PP
.
1.2
Going concern
A
true
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.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 11 -
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
.
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 at bank and in hand
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.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 12 -
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.
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.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 13 -
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.
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 profit or loss 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.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 14 -
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2019
2018
£
£
Turnover analysed by class of business
Wet and powder painting of metal structures
7,944,533
6,440,372
2019
2018
£
£
Other significant revenue
Interest income
8,900
7,404
Grants received
22,602
56,234
All Turnover was generated in the UK
4
Exceptional costs/(income)
2019
2018
£
£
Exceptional - loan written off
(2,132)
111,239
In 2016, Timla Limited (fellow subsidiary) transferred its trade and assets to Almit Metal Finishing Limited (fellow subsidiary) and in 2017 transferred all employees as well. As a result of this and Timla Limited no longer trading, it was decided by the group that all inter-company loans between Timla Limited and the rest of the group were irrecoverable and have therefore been written off.
5
Operating profit
2019
2018
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
(22,602)
(56,234)
Depreciation of owned tangible fixed assets
245,014
331,113
Depreciation of tangible fixed assets held under finance leases
146,580
100,050
(Profit)/loss on disposal of tangible fixed assets
-
9,679
Cost of stocks recognised as an expense
1,905,194
1,766,097
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 15 -
6
Auditor's remuneration
2019
2018
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of this company and all other group companies
15,000
15,000
7
Employees
The average monthly number of persons (including directors) employed by the company during the Year was:
2019
2018
Number
Number
Production and administration
100
105
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
2,694,557
2,385,097
Social security costs
219,203
200,755
Pension costs
22,964
8,903
2,936,724
2,594,755
8
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
34,050
33,250
9
Interest receivable and similar income
2019
2018
£
£
Interest income
Other interest income
8,900
7,404
10
Interest payable and similar expenses
2019
2018
£
£
Interest on finance leases and hire purchase contracts
26,035
15,975
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 16 -
11
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
115,711
29,210
Deferred tax
Origination and reversal of timing differences
(22,704)
32,115
Total tax charge
93,007
61,325
The actual charge 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:
2019
2018
£
£
Profit before taxation
1,430,596
813,617
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
271,813
154,587
Tax effect of expenses that are not deductible in determining taxable profit
382
2,741
Tax effect of income not taxable in determining taxable profit
(4,699)
(10,684)
Tax effect of utilisation of tax losses during the year
-
(20,443)
Group relief
(21,267)
(131,434)
Tax effect of capital allowances in excess of depreciation
45,919
17,900
Adjustments in respect of financial assets
-
21,135
Research and development tax credit
(176,437)
(9,691)
Under/(over) provided in the year
-
5,100
Deferred tax adjustments
(22,704)
32,114
Tax expense for the period
93,007
61,325
12
Dividends
2019
2018
£
£
Interim paid
647,000
638,000
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 17 -
13
Tangible fixed assets
Freehold buildings
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 April 2018
6,635,923
3,410,868
115,761
8,421
10,170,973
Additions
95,826
37,616
-
-
133,442
Revaluation
(1,431,749)
-
-
-
(1,431,749)
At 31 March 2019
5,300,000
3,448,484
115,761
8,421
8,872,666
Depreciation and impairment
At 1 April 2018
317,668
1,685,132
79,014
3,737
2,085,551
Depreciation charged in the Year
122,735
262,176
5,512
1,171
391,594
Revaluation
(396,235)
-
-
-
(396,235)
At 31 March 2019
44,168
1,947,308
84,526
4,908
2,080,910
Carrying amount
At 31 March 2019
5,255,832
1,501,176
31,235
3,513
6,791,756
At 31 March 2018
6,318,255
1,725,737
36,746
4,684
8,085,422
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2019
2018
£
£
Plant and machinery
830,625
1,025,273
Fixtures, fittings & equipment
-
11,820
830,625
1,037,093
Land and buildings with a carrying amount of £6,335,514 were revalued
to £5,300,000
at
23rd October 2018
by
Knight Frank LLP
, 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.
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:
2019
2018
£
£
Cost
4,816,212
4,799,520
Accumulated depreciation
(409,746)
(417,151)
Carrying value
4,406,466
4,382,369
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
13
Tangible fixed assets
(Continued)
- 18 -
Freehold land and buildings with a carrying amount of £5,255,833 (2018 - £6,318,255) 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
.
14
Stocks
2019
2018
£
£
Raw materials
47,235
43,743
15
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
2,346,954
1,713,566
Amounts owed by group undertakings
614,617
758,804
Other debtors
155,517
587,405
Prepayments and accrued income
20,928
13,601
3,138,016
3,073,376
16
Creditors: amounts falling due within one year
2019
2018
Notes
£
£
Bank loans and overdrafts
18
399
424,014
Obligations under finance leases
19
169,399
174,231
Trade creditors
500,730
594,338
Amounts owed to group undertakings
3,594,832
3,938,317
Corporation tax
115,711
29,210
Other taxation and social security
354,244
258,622
Government grants
22
19,509
22,602
Other creditors
189,275
168,524
Accruals and deferred income
194,421
158,834
5,138,520
5,768,692
The
obligations
due under
finance leases
are secured on the assets to which they relate.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 19 -
17
Creditors: amounts falling due after more than one year
2019
2018
Notes
£
£
Obligations under finance leases
19
451,630
621,029
Government grants
22
317,947
337,456
769,577
958,485
18
Loans and overdrafts
2019
2018
£
£
Bank overdrafts
399
424,014
Payable within one year
399
424,014
Included in bank loans and overdrafts due within one year is £399 (2018 - £424,014) 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 £2,251,139 (2018 - £1,570,070) and are included in trade debtors.
The bank borrowings and invoice finance facilities are secured against the former Amedga Building, Faverdale Industrial Estate, a charge over the debtor book and by a cross guarantee and debenture over the assets of all the Almit group companies.
19
Finance lease obligations
2019
2018
Future minimum lease payments due under finance leases:
£
£
Within one year
169,399
174,231
In two to five years
451,630
621,029
621,029
795,260
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 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
20
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
21
194,519
217,223
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 20 -
21
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
2019
2018
Balances:
£
£
Accelerated capital allowances
194,519
217,223
2019
Movements in the Year:
£
Liability at 1 April 2018
217,223
Credit to profit or loss
(22,704)
Liability at 31 March 2019
194,519
22
Government grants
Deferred income is included in the financial statements as follows:
Included in creditors due after one year are deferred grants relating to amounts received in respect of fixed assets purchased by the company with the assistance of those grants. These grants are released to the profit and loss account at the same rate as the depreciation applied to those assets.
2019
2018
£
£
Current liabilities
19,509
22,602
Non-current liabilities
317,947
337,456
337,456
360,058
Deferred income is included in the financial statements as follows:
Included in creditors due after one year are deferred grants relating to amounts received in respect of fixed assets purchased by the company with the assistance of those grants. These grants are released to the profit and loss account at the same rate as the depreciation applied to those assets.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 21 -
23
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
22,964
8,903
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.
24
Share capital
2019
2018
£
£
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
Preference shares classified as equity
6
6
Total equity share capital
8
8
25
Financial commitments, guarantees and contingent liabilities
There are unlimited inter-company bank guarantees in place between fellow subsidiaries, Almit Metal Finishing Limited, Timla Developments Limited, Timla Limited and Almit Properties Limited. The bank has a right of set-off against all group bank accounts.
26
Related party transactions
The following amounts were outstanding at the reporting end date:
2019
2018
Amounts due to related parties
£
£
A S M Surface Technologies Limited
32,317
32,922
27
Directors' transactions
Dividends totalling £87,000 (2018 - £87,000) were paid in the Year in respect of shares held by the company's directors.
SPECIALIST COATINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
27
Directors' transactions
(Continued)
- 22 -
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Dr A & Mrs I Mitchell
2.50
87,859
82,633
3,139
(88,734)
84,897
87,859
82,633
3,139
(88,734)
84,897
28
Ultimate 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.
2019-03-31
2018-04-01
false
CCH Software
CCH Accounts Production 2019.301
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