Company Registration No. 04181309 (England and Wales)
ZENITH LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
ZENITH LIMITED
COMPANY INFORMATION
Directors
Mr P N Wynn
Mrs M A Wynn
Secretary
Mrs M A Wynn
Company number
04181309
Registered office
Suite 1
Troyte House
Sandys Road
Malvern
Worcestershire
WR14 1JJ
Auditor
Ormerod Rutter Limited
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
Bankers
National Westminster Bank Plc
1 The Cross
Worcester
Worcestershire
WR1 3PR
ZENITH LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 23
ZENITH LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2021
- 1 -
The directors present the strategic report for the year ended 31 March 2021.
Review of business
The turnover for the year consisted primarily from hotel refurbishment projects throughout the country. The balance sheet continues to strengthen showing a net asset position of £3,196,701 (2020: £3,180,343). The directors are satisfied with the company's performance to date.
Principal risks and uncertainties
We consider the principle risks and uncertainties to the business being related to t
he current economic climate
and the ongoing COVID-19 global pandemic. Due to the restrictions around the pandemic and social distancing measures, our construction and refurbishment operations were widely reduced at the early part of the trading year. As a result, our refurbishment
and development
decisions are
constantly being
reviewed
. However
,
we
believe
that the company
has remained
well positioned to adapt and respond to market
changes
and issues around the pandemic. The company has sufficient resources to continue to trade for the foreseeable future.
Future developments
The company continues
to quote for new construction contracts and we
have
further
development
opportunities
with existing clients. We have established strong
relationship
s
with
our
client base
over many years due to
the excellent reputation we have achieved from completing
projects on time and
being
within budget.
Key performance indicators
Key performance indicators include the monitoring of the management of profitability and working capital.
Profit before taxation - £494,070 (2020: £738,971)
Current ratio -
2.02
:1 (20
20:
2.44
:1)
Liquidity ratio -
2.01
:1 (20
20:
2.41
:1)
Financial risk management
Price risk
The company continually seeks competitive and reliable suppliers for the majority of supplies received for use in the
business.
Credit risk
All customers who wish to trade on credit terms are subject to credit verification procedures. Receivable balances are
monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Liquidity risk
The company manages its cash and borrowing requirements to maximise interest income and minimise interest expense,
whilst ensuring that the company has sufficient liquid resources to meet the operating needs of the business.
Mr P N Wynn
Director
2 December 2021
ZENITH LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2021
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2021.
Principal activity
The principal activity of the company continued to be that of
specialist building and refurbishment
contractors.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr P N Wynn
Mrs M A Wynn
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £379,000. The directors do not recommend payment of a further dividend.
Financial risk management
Information about financial risk management can be found within the strategic report.
Future developments
Information about future developments can be found within the strategic report.
Auditor
The auditors, Ormerod Rutter Limited, will be automatically re-appointed in accordance with Section 487(2) of the
Companies Act 2006.
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 (United Kingdom Accounting Standards and applicable law). 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.
ZENITH LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 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
Mr P N Wynn
Director
2 December 2021
ZENITH LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ZENITH LIMITED
- 4 -
Opinion
We have audited the financial statements of Zenith Limited (the 'company') for the year ended 31 March 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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 2021 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
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
ZENITH LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ZENITH 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
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
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
Based on our understanding of the company, we identified the principal risks of non-compliance with laws and regulations including those that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, and the extent to which non-compliance might have a material effect on the financial statements. Audit procedures performed included discussions with management, testing of journals, designing and performing audit procedures and challenging assumptions and judgements made by management in relation to accounting estimates.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
ZENITH LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ZENITH LIMITED
- 6 -
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.
Peter Ormerod FCA (Senior Statutory Auditor)
For and on behalf of Ormerod Rutter Limited
3 December 2021
Chartered Accountants
Statutory Auditor
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
ZENITH LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
- 7 -
Year
Year
ended
ended
31 March
31 March
2021
2020
Notes
£
£
Turnover
3
6,257,731
8,844,617
Cost of sales
(4,927,612)
(6,713,534)
Gross profit
1,330,119
2,131,083
Administrative expenses
(1,044,628)
(1,403,638)
Other operating income
207,594
Exceptional item
4
6,582
Operating profit
5
493,085
734,027
Interest receivable and similar income
7
1,311
5,489
Interest payable and similar expenses
8
(326)
(545)
Profit before taxation
494,070
738,971
Tax on profit
9
(98,712)
(148,745)
Profit for the financial year
395,358
590,226
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ZENITH LIMITED
BALANCE SHEET
AS AT
31 MARCH 2021
31 March 2021
- 8 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
11
201,668
105,710
Current assets
Stocks
12
50,628
60,466
Debtors
14
4,209,875
2,718,959
Cash at bank and in hand
1,696,468
2,433,111
5,956,971
5,212,536
Creditors: amounts falling due within one year
15
(2,944,454)
(2,137,903)
Net current assets
3,012,517
3,074,633
Total assets less current liabilities
3,214,185
3,180,343
Provisions for liabilities
Deferred tax liability
17
17,484
(17,484)
-
Net assets
3,196,701
3,180,343
Capital and reserves
Called up share capital
19
2,222
2,222
Profit and loss reserves
20
3,194,479
3,178,121
Total equity
3,196,701
3,180,343
The financial statements were approved by the board of directors and authorised for issue on 2 December 2021 and are signed on its behalf by:
Mr P N Wynn
Director
Company Registration No. 04181309
ZENITH LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2019
2,222
3,009,895
3,012,117
Year ended 31 March 2020:
Profit and total comprehensive income for the year
-
590,226
590,226
Dividends
10
-
(422,000)
(422,000)
Balance at 31 March 2020
2,222
3,178,121
3,180,343
Period ended 31 March 2021:
Profit and total comprehensive income for the period
-
395,358
395,358
Dividends
10
-
(379,000)
(379,000)
Balance at 31 March 2021
2,222
3,194,479
3,196,701
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
- 10 -
1
Accounting policies
Company information
Zenith Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Suite 1, Troyte House, Sandys Road, Malvern, Worcestershire, WR14 1JJ.
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. 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
Zenith Holdings (Malvern) Limited
. These consolidated financial statements are available from its registered office,
The Oakley, Kidderminster Road, Droitwich, Worcestershire, WR9 9AY.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT
.
The directors consider that the projects undertaken by the company meet the definition of long-term contracts. As such, the value of work that has been completed over and above the value of work invoiced is recognised as turnover and classified as 'amounts recoverable on contracts' within debtors as appropriate.
Profit on long-term contracts is recognised on a percent of completion basis. Provision is made for all losses incurred together with any foreseeable future losses.
I
nterest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 11 -
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:
Plant and equipment
25% on cost
Office and computer equipment
25% 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.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Work in progress is valued at the lower of cost and net realisable value. Cost includes all direct costs.
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.
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 12 -
1.7
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.8
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 13 -
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.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
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.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 15 -
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Depreciation
The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful lives and residual values are reassess annually. They are amended when necessary to reflect current estimates.
Deferred tax assets
Deferred tax assets are only recognised to the extent to which it can be regarded as more likely than not that the company will generate sufficient future taxable profits from which the reversal of the underlying timing differences can be deducted.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Building and refurbishment
6,257,731
8,844,617
2021
2020
£
£
Other significant revenue
Interest income
1,311
5,489
Grants received
207,594
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 16 -
4
Exceptional item
2021
2020
£
£
Expenditure
Irrecoverable loan written off
-
(6,582)
During the previous year a connected company, Zenith (Ellenborough Park) Limited, was dissolved. The related creditor balance is not going to be recovered and has been written off.
5
Operating profit
2021
2020
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
(207,594)
Fees payable to the company's auditor for the audit of the company's financial statements
7,090
6,750
Depreciation of owned tangible fixed assets
33,859
35,802
Profit on disposal of tangible fixed assets
(5,230)
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Sales and administration
12
16
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
454,336
624,658
Social security costs
38,524
64,563
Pension costs
7,701
12,617
500,561
701,838
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 17 -
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
1,311
5,214
Other interest income
275
Total income
1,311
5,489
8
Interest payable and similar expenses
2021
2020
£
£
Other interest
326
545
9
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
69,139
153,773
Adjustments in respect of prior periods
9,925
(89)
Total current tax
79,064
153,684
Deferred tax
Origination and reversal of timing differences
19,648
(4,939)
Total tax charge
98,712
148,745
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
9
Taxation
(Continued)
- 18 -
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:
2021
2020
£
£
Profit before taxation
494,070
738,971
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
93,873
140,404
Tax effect of expenses that are not deductible in determining taxable profit
4,806
12,302
Tax effect of utilisation of tax losses not previously recognised
(3,867)
Adjustments in respect of prior years
(9,982)
Under/(over) provided in prior years
9,925
(89)
Depreciation in excess of capital allowances
(18,564)
4,934
(Profit)/Loss on disposal of assets
(994)
Deferred tax adjustment
19,648
(4,939)
Taxation charge for the period
98,712
148,745
10
Dividends
2021
2020
£
£
Final paid
379,000
422,000
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 19 -
11
Tangible fixed assets
Plant and equipment
Office and computer equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2020
16,397
55,854
307,280
379,531
Additions
5,248
10,185
120,154
135,587
Disposals
(29,974)
(29,974)
At 31 March 2021
21,645
66,039
397,460
485,144
Depreciation and impairment
At 1 April 2020
16,397
43,470
213,954
273,821
Depreciation charged in the year
1,312
5,652
26,895
33,859
Eliminated in respect of disposals
(24,204)
(24,204)
At 31 March 2021
17,709
49,122
216,645
283,476
Carrying amount
At 31 March 2021
3,936
16,917
180,815
201,668
At 31 March 2020
12,384
93,326
105,710
12
Stocks
2021
2020
£
£
Work in progress
50,628
60,466
13
Construction contracts
2021
2020
£
£
Contracts in progress at the reporting date
Gross amounts owed by contract customers included in debtors
1,287,907
592,974
Contract revenues recognised
Contract costs incurred plus recognised profits less recognised losses to date
5,699,076
1,995,262
Less: progress billing
(4,411,169)
(1,402,288)
1,287,907
592,974
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 20 -
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
1,542,719
1,297,032
Gross amounts owed by contract customers
1,287,907
592,974
Amounts owed by group undertakings
1,284,736
812,293
Other debtors
222
222
Prepayments and accrued income
94,291
14,274
4,209,875
2,716,795
Deferred tax asset (note 17)
2,164
4,209,875
2,718,959
15
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
2,423,908
1,499,663
Corporation tax
69,139
60,764
Other taxation and social security
288,853
153,926
Other creditors
28,250
16,999
Accruals and deferred income
134,304
406,551
2,944,454
2,137,903
16
Securities
There is a mortgage debenture dated 31/08/2001 outstanding against the company. The security is charged against all assets of the company.
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 21 -
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2021
2020
2021
2020
Balances:
£
£
£
£
Accelerated capital allowances
17,484
-
-
2,164
2021
Movements in the year:
£
Asset at 1 April 2020
(2,164)
Charge to profit or loss
19,648
Liability at 31 March 2021
17,484
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
18
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
7,701
12,617
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.
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 22 -
19
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
1,000 Ordinary A of £1 each
1,000
1,000
1,000 Ordinary B of £1 each
1,000
1,000
111 Ordinary C of £1 each
111
111
111 Ordinary D of £1 each
111
111
2,222
2,222
Ordinary A shares have voting rights in respect of dividends. In winding up the assets of the company, first payable will be the holders of B shares. The remainder will be distributed to the A shareholders in proportion to their holdings.
Ordinary B shares have no voting rights in respect of dividends. B shareholders will be first payable in the event of winding up the company assets. A shareholders will be distributed the remainder as a proportion of their holdings.
Ordinary C shares have full voting rights but are not entitled to a dividend unless first approved in writing by the holder of not less than 75% of the issued ordinary A shares.
Ordinary D shares have voting rights but are not entitled to a dividend unless first approved in writing by the holder of not less than 75% of the issued ordinary A shares.
20
Profit and loss reserves
2021
2020
£
£
At the beginning of the year
3,178,121
3,009,895
Profit for the year
395,358
590,226
Dividends declared and paid in the year
(379,000)
(422,000)
At the end of the year
3,194,479
3,178,121
This represents the accumulated realised earnings from the prior and current periods as reduced by losses and dividends from time to time.
ZENITH LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 23 -
21
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
2021
2020
£
£
Other related parties
268,919
222,894
Management charges
Rental income
2021
2020
2021
2020
£
£
£
£
Entities with control, joint control or significant influence over the company
300,000
615,000
11,760
11,760
The following amounts were outstanding at the reporting end date:
2021
2020
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
1,284,736
812,293
22
Ultimate controlling party
The ultimate parent company is Zenith Holdings (Malvern) Limited, a company incorporated in England and Wales, which is the parent undertaking of the smallest and largest group to consolidate these financial statements.
The registered office is
Suite 1, Troyte House, Sandys Road, Malvern, Worcestershire, WR14 1JJ.
The ultimate controlling party is considered to be Mr P Wynn and Mrs M A Wynn by virtue of their joint majority shareholding in the ultimate parent company.
2021-03-31
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