Company Registration No. 05957569 (England and Wales)
AKAAL GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
AKAAL GROUP LIMITED
COMPANY INFORMATION
Directors
Mr R S Manak
Mrs H K Manak
Secretary
Ms T Barrett
Company number
05957569
Registered office
3 Roberts Mews
Orpington
Kent
BR6 0JP
Auditor
Perrys Accountants Limited
Chartered Accountants
3 Roberts Mews
Orpington
Kent
BR6 0JP
AKAAL GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Profit and loss account
7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Company statement of cash flows
14
Notes to the financial statements
15 - 34
Independent auditor's report
35 - 37
AKAAL GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 1 -
The directors present the strategic report for the year ended 31 March 2020.
Considerations under S172 Companies Act 2006
Whenever decisions are made, consideration is always given to the effect of these decisions in the long-term. Whilst the ongoing Covid-19 pandemic has necessitated important decisions being taken quickly and with more stress placed on short term outcomes, the directors consider the long-term consequences on the group and on its employees to be of paramount importance.
The group works closely across all its business relationships which it has always found to provide mutual benefit. Maintaining a reputation for high standards in all areas of the business and with all stakeholders is a core element of the group and shows in positive feedback received from clients, suppliers and staff.
The group employs its own inspectors to continually monitor health, safety and quality control procedures ensuring that high standards are maintained throughout.
By investing in training, staff are able to take on new opportunities and challenges, this in turn brings benefit to the group in terms of improved procedures, products, health, safety and customer services.
In the wider community the group looks to make decisions that improve the wellbeing, encouraging participation in sport, investing in fuel-efficient vehicles and having replaced all lighting with efficient LED systems.
The directors are aware of their requirement to act fairly between the members and take this requirement into account whenever major operational or financial decisions are made.
Fair review of the business
The group has had another successful year with a
continued
increase in turnover. Margins however have fallen
slightly
as material and labour costs have continued to rise.
The group continues to provide full external facade packages including cladding, windows, structural and architectural metalworks and internal plastering drylining work
s
. The group has in-house design and manufacturing facilities. It is a specialist business combining design, direct procurement of raw materials, fabrication and site installations on a wide variety of construction projects.
The group
's order book remains healthy and turnover is expected to continue to rise in the coming year.
The group will continue to invest in freehold land and buildings both to provide office, factory and warehouse space for its own operations and as investments.
The group continues to inspire development and leadership in its sector by providing innovative health and safety measures, internal management training programs and, continually, strives to improve its financial system to mitigate all wasted costs.
AKAAL GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 2 -
Principal risks and uncertainties
The ongoing Brexit negotiations could have an effect on the availability of labour as the country leaves the EU in December. We do not consider that this will be an issue for the group during this year however, we foresee that there may be upward pressure on labour rates after December 2020. The group has a unique reputation on paying its subcontractors weekly.
Likewise, there may be pressure on the cost of materials where there are limitations on cross border transport. To mitigate this, the group continues to place high importance on maintaining good relationships with suppliers in the UK and overseas.
Of course, the contraction of the UK economy is a risk but it is felt that with recent Government interventions and the promise of significant investment into infrastructure and housing, the group will not be negatively affected to any great extent.
Exposure to liquidity, credit, cash flow and interest rate risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for that other party by failing to discharge an obligation. Group policies are aimed at minimising such losses, and require that deferred terms are only granted to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures. Details of the group's debtors including retentions are shown in Note 18 to the financial statements. The group's clients are well recognised 'Blue Chip' companies and the debtors are well spread over these clients.
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The group aims to mitigate liquidity risk by managing cash generation by its operations, and by applying rigorous procedures for settling final accounts and collecting debtors as they fall due, including retentions.
Cash flow risk is the risk of exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability, such as future interest payments on a variable rate debt. The group manages this risk by ensuring that there are sufficient ongoing cash reserves to meet obligations.
Development and performance
As the Government begins to relax lockdown measures resulting from the current Covid-19 pandemic, the principal risk at this time would be a resurgence of the disease giving rise to a further period of more intense lockdown. The group and the clients for whom it works are taking all possible steps to prevent an outbreak on the development sites thereby attempting to mitigate any such risk.
If there were to be further lockdown measures introduced we consider that the group is in a strong position to deal with this and has the structure to take any necessary decisions quickly to protect itself, its work force and its clients.
Key performance indicators
AKAAL GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 3 -
Mr R S Manak
Director
16 December 2020
AKAAL GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 4 -
The directors present their annual report and financial statements for the year ended 31 March 2020.
Principal activities
The principal activity of the company and group continued to be that of providing full facade and drylining packages principally for the housing sector, together with property investment.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr R S Manak
Mrs H K Manak
Results and dividends
The results for the year are set out on
page
7
.
Ordinary dividends were paid amounting to £1,642,000. The directors do not recommend payment of a further dividend.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The group's policy is to consult and discuss with employees, through staff meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Post reporting date events
The parent company was reregistered as a Limited company after the balance sheet date.
Future developments
The group will continue to provide full external facade packages and internal plastering and drylining works as well as expanding its more recent offerings of unitised facades and building services. It is expected that turnover will increase significantly, with perhaps, a relatively minor fall in margins as material and labour prices rise.
The group will continue to invest in property when the right opportunities arise.
Auditor
In accordance with the company's articles, a resolution proposing that Perrys Accountants Limited be reappointed as auditor of the group will be put at a General Meeting.
AKAAL GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 5 -
Energy and carbon report
During the period under review, the group has consistently monitored their energy use in the UK and taken opportunities to reduce this usage where such opportunities have arisen. However, due to the trade and operations of the business, it is expected that each year energy usage will be significant.
Total energy usage for the period was 1,275,758 Kwh with greenhouse gas emissions of 254,271 kgCO2e.
Greenhouse gas emissions have been calculated using the 2020 natural gas conversion factor of 0.18387 and the 2020 electricity conversion factor of 0.23314 as recommended by HM Revenue & Customs.
As a measure, this could be seen to be 4,281 Kwh per employee. This has been calculated by dividing the total energy usage as noted above by the average number of employees in the group over the year.
Going forward, the group is continuing to prioritise investing in more eco-friendly technologies and wishes to continue reducing its carbon emissions gradually year on year. At the moment, significant resources are being used to invest in more fuel-efficient vehicles and recently all lighting has been replaced with more efficient LED systems.
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 auditor
of the
company 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 auditor
of the
company
is
aware of that information.
On behalf of the board
Mr R S Manak
Director
16 December 2020
AKAAL GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2020
- 6 -
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 group and company, and of the profit or loss of the group 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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
AKAAL GROUP LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2020
- 7 -
2020
2019
Notes
£
£
Turnover
3
161,746,958
136,045,083
Cost of sales
(132,282,974)
(107,311,125)
Gross profit
29,463,984
28,733,958
Administrative expenses
(20,285,850)
(19,371,759)
Other operating income
800,956
575,638
Operating profit
4
9,979,090
9,937,837
Interest receivable and similar income
8
178,306
120,128
Interest payable and similar expenses
9
(106,170)
(177,980)
Amounts written off investments
10
(282,317)
-
Profit before taxation
9,768,909
9,879,985
Tax on profit
11
(3,107,033)
(1,959,434)
Profit for the financial year
6,661,876
7,920,551
Profit for the financial year is all attributable to the owners of the parent company.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
AKAAL GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2020
- 8 -
2020
2019
£
£
Profit for the year
6,661,876
7,920,551
Other comprehensive income
-
-
Total comprehensive income for the year
6,661,876
7,920,551
Total comprehensive income for the year is all attributable to the owners of the parent company.
AKAAL GROUP LIMITED (REGISTERED NUMBER: 05957569)
GROUP BALANCE SHEET
AS AT
31 MARCH 2020
31 March 2020
- 9 -
2020
2019
Notes
£
£
£
£
Fixed assets
Goodwill
13
425,063
472,292
Tangible assets
14
10,842,487
10,599,986
Investment properties
15
15,723,766
13,267,820
26,991,316
24,340,098
Current assets
Stocks
18
3,267,245
3,235,324
Debtors
19
58,891,014
51,764,171
Cash at bank and in hand
10,858,669
16,340,652
73,016,928
71,340,147
Creditors: amounts falling due within one year
20
(21,542,144)
(22,115,561)
Net current assets
51,474,784
49,224,586
Total assets less current liabilities
78,466,100
73,564,684
Creditors: amounts falling due after more than one year
21
(4,077,739)
(4,314,898)
Provisions for liabilities
24
(390,602)
(271,903)
Net assets
73,997,759
68,977,883
Capital and reserves
Called up share capital
27
61,601
61,601
Other reserves
3,258,005
3,258,005
Profit and loss reserves
70,678,153
65,658,277
Total equity
73,997,759
68,977,883
The financial statements were approved by the board of directors and authorised for issue on 16 December 2020 and are signed on its behalf by:
16 December 2020
Mr R S Manak
Director
AKAAL GROUP LIMITED (REGISTERED NUMBER: 05957569)
COMPANY BALANCE SHEET
AS AT 31 MARCH 2020
31 March 2020
- 10 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
14
6,877,232
6,575,600
Investment properties
15
15,723,766
13,267,820
Investments
16
3,555,476
3,555,476
26,156,474
23,398,896
Current assets
Debtors
19
34,630,364
41,866,189
Cash at bank and in hand
505,507
10,315,100
35,135,871
52,181,289
Creditors: amounts falling due within one year
20
(1,122,794)
(1,414,496)
Net current assets
34,013,077
50,766,793
Total assets less current liabilities
60,169,551
74,165,689
Creditors: amounts falling due after more than one year
21
(3,714,414)
(4,307,256)
Provisions for liabilities
24
(18,329)
-
Net assets
56,436,808
69,858,433
Capital and reserves
Called up share capital
27
61,601
61,601
Profit and loss reserves
56,375,207
69,796,832
Total equity
56,436,808
69,858,433
As permitted by s408 Companies Act 2006, the
c
ompany has not presented its own profit and loss account and related notes. The
c
ompany’s loss for the year was £11,779,625 (2019 - £30,693,369 profit).
The financial statements were approved by the board of directors and authorised for issue on 16 December 2020 and are signed on its behalf by:
16 December 2020
Mr R S Manak
Director
AKAAL GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
- 11 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2018
61,601
3,258,005
63,322,321
66,641,927
Year ended 31 March 2019:
Profit and total comprehensive income for the year
-
-
7,920,551
7,920,551
Dividends
12
-
-
(5,584,595)
(5,584,595)
Balance at 31 March 2019
61,601
3,258,005
65,658,277
68,977,883
Year ended 31 March 2020:
Profit and total comprehensive income for the year
-
-
6,661,876
6,661,876
Dividends
12
-
-
(1,642,000)
(1,642,000)
Balance at 31 March 2020
61,601
3,258,005
70,678,153
73,997,759
AKAAL GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2018
61,601
44,688,058
44,749,659
Year ended 31 March 2019:
Profit and total comprehensive income for the year
-
30,693,369
30,693,369
Dividends
12
-
(5,584,595)
(5,584,595)
Balance at 31 March 2019
61,601
69,796,832
69,858,433
Year ended 31 March 2020:
Loss and total comprehensive income for the year
-
(11,779,625)
(11,779,625)
Dividends
12
-
(1,642,000)
(1,642,000)
Balance at 31 March 2020
61,601
56,375,207
56,436,808
AKAAL GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2020
- 13 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
31
2,978,469
3,449,918
Interest paid
(106,170)
(177,980)
Income taxes paid
(2,655,481)
(998,574)
Net cash inflow from operating activities
216,818
2,273,364
Investing activities
Purchase of intangible assets
-
(472,292)
Purchase of tangible fixed assets
(1,713,313)
(3,218,120)
Proceeds on disposal of tangible fixed assets
275,465
442,738
Purchase of investment property
(2,455,946)
(3,601,954)
Proceeds on disposal of fixed asset investments
(282,317)
-
Interest received
178,306
120,128
Net cash used in investing activities
(3,997,805)
(6,729,500)
Financing activities
Repayment of bank loans
(456,457)
(502,061)
Payment of finance leases obligations
368,968
(248,926)
Dividends paid to equity shareholders
(1,642,000)
(5,584,595)
Net cash used in financing activities
(1,729,489)
(6,335,582)
Net decrease in cash and cash equivalents
(5,510,476)
(10,791,718)
Cash and cash equivalents at beginning of year
16,309,578
27,101,296
Cash and cash equivalents at end of year
10,799,102
16,309,578
Relating to:
Cash at bank and in hand
10,858,669
16,340,652
Bank overdrafts included in creditors payable within one year
(59,567)
(31,074)
AKAAL GROUP LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2020
- 14 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
(4,565,707)
(32,251,455)
Interest paid
(131,144)
(136,976)
Income taxes paid
(135,411)
(88,901)
Net cash outflow from operating activities
(4,832,262)
(32,477,332)
Investing activities
Purchase of tangible fixed assets
(416,056)
(950,298)
Purchase of investment property
(2,455,946)
(3,601,954)
Purchase of subsidiaries
-
(1,054,927)
Proceeds on disposal of fixed asset investments
(282,317)
-
Interest received
175,445
118,457
Dividends received
100,000
30,400,000
Net cash (used in)/generated from investing activities
(2,878,874)
24,911,278
Financing activities
Repayment of bank loans
(456,457)
(502,061)
Dividends paid to equity shareholders
(1,642,000)
(5,584,595)
Net cash used in financing activities
(2,098,457)
(6,086,656)
Net decrease in cash and cash equivalents
(9,809,593)
(13,652,710)
Cash and cash equivalents at beginning of year
10,315,100
23,967,810
Cash and cash equivalents at end of year
505,507
10,315,100
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
- 15 -
1
Accounting policies
Company information
Akaal Group Limited (“the company”)
is a
private
limited company domiciled and incorporated in England and Wales.
The registered office is
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE.
The group consists of Akaal Group Limited and all of its subsidiaries.
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
Basis of consolidation
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
I
nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
The consolidated financial statements incorporate those of AKAAL GROUP LIMITED and all of its subsidiaries (ie entities that the
g
roup controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All financial statements are made up to 31 March 2020
.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the
g
roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 16 -
1.3
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.
1.4
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
and
settlement discounts
.
1.5
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
1.6
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of
a
business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life
.
Goodwill, being the amount paid in connection with
the
acquisition of a business in 2
019,
is being
amortised
evenly over its estimated useful life of ten years
.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.7
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% on cost
Plant and equipment
25% on reducing balance
Fixtures and fittings
25% on reducing balance
Computers
33% on reducing balance
Motor vehicles
25% on reducing balance
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 17 -
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 recognised in the profit and loss account.
Freehold land is not depreciated. The freehold land is included in the accounts at cost.
1.8
Investment properties
Investment property, which is property held to earn rentals and for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the
reporting end date. The surplus or deficit on revaluation is recognised in the profit and loss account.
1.9
Fixed asset investments
Equity in
vest
ments are measured at fair value through profit or loss
,
except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably
,
which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I
n the parent company financial statements, investments in subsidiaries
are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the
group. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.10
Impairment of fixed assets
At each reporting
period
end date, the
group
reviews the carrying amounts of its tangible and intangible
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.
1.11
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.
1.12
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.
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 18 -
1.13
Financial instruments
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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
m
ethod unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group 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. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.14
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
group’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 19 -
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
if, and only if, there is
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.
1.15
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.
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.
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.17
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.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
d
asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 20 -
1.18
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.
2
Judgements and key sources of estimation uncertainty
In the application of the group’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.
The basis of measurement of the company's investment properties is fair value which contains judgements, estimates and assumptions on the fair value of the investment properties. As at 31 March 2020, the investment properties were tenanted and the director's valuation takes into consideration that these properties can be let to both tenants or operational businesses. The director has assessed the open market value of the properties by reference to the purchase price of the properties, and by reference to conducting estimates of comparable properties in the same areas and has assessed the open market value to be £15,723,766.
Included within freehold buildings in tangible fixed assets is freehold land which is not depreciated. The value of freehold land is estimated by the director as a proportion of the total cost of the property at acquisition.
3
Turnover and other revenue
An analysis of the group's turnover is as follows:
2020
2019
£
£
Turnover analysed by class of business
Property development and maintenance
161,746,958
136,045,083
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
3
Turnover and other revenue
(Continued)
- 21 -
2020
2019
£
£
Other significant revenue
Interest income
178,306
120,128
Grants received
11,126
-
4
Operating profit
2020
2019
£
£
Operating profit for the year is stated after charging/(crediting):
Research and development costs
2,500
-
Government grants
(11,126)
-
Depreciation of owned tangible fixed assets
1,134,792
1,098,510
Depreciation of tangible fixed assets held under finance leases
43,477
90,136
Loss on disposal of tangible fixed assets
17,078
38,225
Amortisation of intangible assets
47,229
-
Operating lease charges
235,467
131,237
5
Auditor's remuneration
2020
2019
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,745
5,575
Audit of the financial statements of the company's subsidiaries
73,101
48,682
78,846
54,257
For other services
All other non-audit services
20,235
88,348
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 22 -
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2020
2019
2020
2019
Number
Number
Number
Number
Management and administration
208
199
2
1
Production
90
95
-
-
Total
298
294
2
1
Their aggregate remuneration comprised:
Group
Company
2020
2019
2020
2019
£
£
£
£
Wages and salaries
14,684,148
13,168,925
188,990
189,989
Social security costs
1,740,105
1,429,304
25,704
25,733
Pension costs
933,251
593,357
-
-
17,357,504
15,191,586
214,694
215,722
7
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
188,990
189,989
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2019 - 1).
8
Interest receivable and similar income
2020
2019
£
£
Interest income
Interest on bank deposits
23,614
43,564
Other interest income
154,692
76,564
Total income
178,306
120,128
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
8
Interest receivable and similar income
(Continued)
- 23 -
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
178,306
119,100
9
Interest payable and similar expenses
2020
2019
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
131,144
136,980
Other finance costs:
Interest on finance leases and hire purchase contracts
-
435
Other interest
(24,974)
40,565
Total finance costs
106,170
177,980
10
Amounts written off investments
2020
2019
£
£
Amounts written off non-current loans
(282,317)
-
11
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
2,856,366
1,863,425
Adjustments in respect of prior periods
129,020
17,977
Total current tax
2,985,386
1,881,402
Deferred tax
Origination and reversal of timing differences
121,647
78,032
Total tax charge
3,107,033
1,959,434
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
11
Taxation
(Continued)
- 24 -
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:
2020
2019
£
£
Profit before taxation
9,768,909
9,879,985
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
1,856,093
1,877,197
Tax effect of expenses that are not deductible in determining taxable profit
2,401,900
120,603
Permanent capital allowances in excess of depreciation
1,069
-
Under/(over) provided in prior years
129,019
17,977
Deferred tax adjustments in respect of prior years
122,716
78,032
Dividend income
(19,000)
-
Depreciation in excess of capital allowances
(31,392)
(141,637)
Loss on disposal of assets
6,030
7,262
Loan written off
(2,280,000)
-
Losses group relived
920,598
-
Taxation charge
3,107,033
1,959,434
12
Dividends
2020
2019
£
£
Interim paid
1,642,000
5,584,595
13
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 April 2019 and 31 March 2020
472,292
Amortisation and impairment
At 1 April 2019
-
Amortisation charged for the year
47,229
At 31 March 2020
47,229
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
13
Intangible fixed assets
(Continued)
- 25 -
Carrying amount
At 31 March 2020
425,063
At 31 March 2019
472,292
The company had no intangible fixed assets at 31 March 2020 or 31 March 2019.
14
Tangible fixed assets
Group
Freehold buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2019
6,994,190
550,284
593,674
1,083,116
4,987,555
14,208,819
Additions
416,056
169,693
24,855
305,127
797,582
1,713,313
Disposals
-
-
(385)
-
(589,445)
(589,830)
At 31 March 2020
7,410,246
719,977
618,144
1,388,243
5,195,692
15,332,302
Depreciation and impairment
At 1 April 2019
446,530
199,195
368,527
804,612
1,789,969
3,608,833
Depreciation charged in the year
107,439
74,211
34,404
143,892
818,323
1,178,269
Eliminated in respect of disposals
-
-
(118)
-
(297,169)
(297,287)
At 31 March 2020
553,969
273,406
402,813
948,504
2,311,123
4,489,815
Carrying amount
At 31 March 2020
6,856,277
446,571
215,331
439,739
2,884,569
10,842,487
At 31 March 2019
6,547,660
351,089
225,147
278,504
3,197,586
10,599,986
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
14
Tangible fixed assets
(Continued)
- 26 -
Company
Freehold buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2019
6,994,190
100,000
27,030
7,121,220
Additions
416,056
-
-
416,056
At 31 March 2020
7,410,246
100,000
27,030
7,537,276
Depreciation and impairment
At 1 April 2019
446,530
78,643
20,447
545,620
Depreciation charged in the year
107,439
5,339
1,646
114,424
At 31 March 2020
553,969
83,982
22,093
660,044
Carrying amount
At 31 March 2020
6,856,277
16,018
4,937
6,877,232
At 31 March 2019
6,547,660
21,357
6,583
6,575,600
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2020
2019
2020
2019
£
£
£
£
Motor vehicles
502,670
226,575
-
-
15
Investment property
Group
Company
2020
2020
£
£
Fair value
At 1 April 2019
13,267,820
13,267,820
Additions through external acquisition
2,455,946
2,455,946
At 31 March 2020
15,723,766
15,723,766
The investment properties above are stated at fair value in the opinion of the directors. External acquisitions in the year were purchased at fair value and, in the opinion of the directors, this represents the fair value at the year end. Other investment properties held have been included at fair value by the directors on the basis of the open market value by reference to market evidence of transaction prices for similar properties.
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 27 -
16
Fixed asset investments
Group
Company
2020
2019
2020
2019
Notes
£
£
£
£
Investments in subsidiaries
17
-
-
3,555,476
3,555,476
Movements in fixed asset investments
Company
Shares in group undertakings
£
Cost or valuation
At 1 April 2019 and 31 March 2020
3,555,476
Carrying amount
At 31 March 2020
3,555,476
At 31 March 2019
3,555,476
17
Subsidiaries
Details of the company's subsidiaries at 31 March 2020 are as follows:
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
17
Subsidiaries
(Continued)
- 28 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Manak Homes Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
100.00
-
Stanmore Contractors Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary A
100.00
-
Stanmore Drylining Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
0
100.00
Stanmore Facades Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
0
100.00
Stanmore Glazing Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
0
100.00
Stanmore Holdings Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
100.00
-
Stanmore Homes Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
0
100.00
Stanmore Modular Limited
3 Roberts Mews, Orpington, Kent, BR6 0JP
Ordinary
0
100.00
Stanmore Steel Limited
3 Roberts Mews, Orpington, Kent, BR6 0JP
Ordinary
100.00
-
Stanmore Unitised Facades Limited
3 Roberts Mews, Orpington, Kent, BR6 0JP
Ordinary
100.00
-
Kent Powder Coating Limited
3 Roberts Mews, Orpington, Kent, BR6 0JP
Ordinary and Ordinary A
100.00
-
Stanmore Fire Proofing Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
0
100.00
Stanmore Brickwork Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
0
100.00
Stanmore Carpentry Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
0
100.00
Stanmore Decorating Limited
Stanmore House, Gyproc Business Park, Church Manorway, Erith, Kent, DA8 1DE
Ordinary
0
100.00
18
Stocks
Group
Company
2020
2019
2020
2019
£
£
£
£
Raw materials and consumables
3,267,245
3,235,324
-
-
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 29 -
19
Debtors
Group
Company
2020
2019
2020
2019
Amounts falling due within one year:
£
£
£
£
Trade debtors
50,577,199
44,259,635
224,538
159,925
Corporation tax recoverable
29,000
-
-
-
Amounts owed by group undertakings
-
-
31,120,085
37,570,820
Other debtors
7,258,978
7,097,988
3,285,741
4,132,494
Prepayments and accrued income
1,025,837
403,598
-
-
58,891,014
51,761,221
34,630,364
41,863,239
Amounts falling due after more than one year:
Deferred tax asset (note 24)
-
2,950
-
2,950
Total debtors
58,891,014
51,764,171
34,630,364
41,866,189
20
Creditors: amounts falling due within one year
Group
Company
2020
2019
2020
2019
Notes
£
£
£
£
Bank loans and overdrafts
22
648,281
483,403
588,714
452,329
Obligations under finance leases
23
181,663
168,378
-
-
Trade creditors
13,811,496
16,665,070
9,094
2,794
Amounts owed to group undertakings
-
6,785
83,949
61,429
Corporation tax payable
2,079,042
1,720,138
9,760
69,348
Other taxation and social security
1,599,939
1,460,504
20,521
9,084
Deferred income
25
186,333
-
-
-
Other creditors
521,250
818,755
315,833
695,378
Accruals and deferred income
2,514,140
792,528
94,923
124,134
21,542,144
22,115,561
1,122,794
1,414,496
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 30 -
21
Creditors: amounts falling due after more than one year
Group
Company
2020
2019
2020
2019
Notes
£
£
£
£
Bank loans and overdrafts
22
3,714,414
4,307,256
3,714,414
4,307,256
Obligations under finance leases
23
363,325
7,642
-
-
4,077,739
4,314,898
3,714,414
4,307,256
22
Loans and overdrafts
Group
Company
2020
2019
2020
2019
£
£
£
£
Bank loans
4,303,128
4,759,585
4,303,128
4,759,585
Bank overdrafts
59,567
31,074
-
-
4,362,695
4,790,659
4,303,128
4,759,585
Payable within one year
648,281
483,403
588,714
452,329
Payable after one year
3,714,414
4,307,256
3,714,414
4,307,256
The group's overdraft facility is secured by fixed and floating charges over the group's assets present and future. The groups overdraft position at 31 March 2020 totalled £59,567
(201
9
- £
31,704
)
.
The group has entered into a cross guarantee arrangement with its bankers in relation to Stanmore Contractors Limited, Akaal Group PLC and Stanmore Steel Limited.
At 31 March 2020, loans in all group companies, subject to guarantee by the group, amounted to £
4
,303,128
(
2019 - £4,759,585). These loans are also secured by way of legal mortgages over the group's freehold and investment properties.
Hire purchase liabilities totalling £544,988 (2019 - £176,020) are secured on the assets purchased under the hire purchase agreements.
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
22
Loans and overdrafts
(Continued)
- 31 -
Interest rates on these loans is variable based on the risk profile of the borrowing at the time and any other factors as appropriate.
An analysis of the maturity of loans is given below:
|
|
|
|
|
|
|
|
Due within one year or on demand
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
Finance lease obligations
Group
Company
2020
2019
2020
2019
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
181,663
168,378
-
-
In two to five years
363,325
7,642
-
-
544,988
176,020
-
-
Finance lease payments represent rentals payable by the company or group 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.
24
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
Assets
Assets
2020
2019
2020
2019
Group
£
£
£
£
Accelerated capital allowances
390,602
271,903
-
2,950
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
24
Deferred taxation
(Continued)
- 32 -
Liabilities
Liabilities
Assets
Assets
2020
2019
2020
2019
Company
£
£
£
£
Accelerated capital allowances
18,329
-
-
2,950
Group
Company
2020
2020
Movements in the year:
£
£
Liability/(Asset) at 1 April 2019
268,953
(2,950)
Charge to profit or loss
121,649
21,279
Liability at 31 March 2020
390,602
18,329
25
Deferred income
Group
Company
2020
2019
2020
2019
£
£
£
£
Other deferred income
186,333
-
-
-
26
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
933,251
593,357
A
defined contribution pension scheme
is operated
for all qualifying employees.
The assets of the scheme are held separately from those of the group in an independently administered fund.
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 33 -
27
Share capital
Group and company
2020
2019
Ordinary share capital
£
£
Issued and fully paid
1 Ordinary Shares of £1 each
1
1
61,100 Ordinary A Shares of £1 each
61,100
61,100
500 Ordinary B Shares of £1 each
500
500
61,601
61,601
28
Related party transactions
As at the balance sheet date, the group had loaned £1,752,437 (2019 - £2,078,451) to a project which a close family member has an interest, this balance is included within other debtors. During the year, interest was charged on this loan totalling £154,692 (2019 - £75,536).
As at the balance sheet date the
group
was owed £743,770
(201
9
- £743,770)
from a company controlled by a close family member of the directors
, this balance is included within other debtors.
During the year under review, the
group
subcontracted services from a company incorporated in Croatia in which a close family member of the director is an officer and shareholder, totalling
£423,043 (2019 - £342,500.
29
Directors' transactions
Dividends totalling £1,642,000 (2019 - £5,584,595) were paid in the year in respect of shares help by the company's directors.
At the 31 March 2020, the director R S Manak was owed £224,391 (2019 - £599,653) by the group. These amounts are disclosed in other creditors.
30
Controlling party
R S Manak, a director, controls the company by virtue of his shareholding.
AKAAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 34 -
31
Cash generated from group operations
2020
2019
£
£
Profit for the year after tax
6,661,876
7,920,551
Adjustments for:
Taxation charged
3,107,033
1,959,434
Finance costs
106,170
177,980
Investment income
(178,306)
(120,128)
Loss on disposal of tangible fixed assets
17,078
38,225
Amortisation and impairment of intangible assets
47,229
-
Depreciation and impairment of tangible fixed assets
1,178,269
1,188,646
Amounts written off investments
282,317
-
Movements in working capital:
Increase in stocks
(31,920)
(994,145)
Increase in debtors
(7,100,793)
(13,015,990)
(Decrease)/increase in creditors
(1,296,817)
6,295,345
Increase in deferred income
186,333
-
Cash generated from operations
2,978,469
3,449,918
AKAAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AKAAL GROUP LIMITED
- 35 -
Opinion
We have audited the
financial statements of AKAAL GROUP LIMITED (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2020 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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 group's and the parent company's affairs as at 31 March 2020 and of the group's 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
group's or the parent
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.
AKAAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AKAAL GROUP LIMITED
- 36 -
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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the
group and the parent
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-
the parent company 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
group's and the parent
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
group or the parent
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.
AKAAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AKAAL GROUP LIMITED
- 37 -
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.
Declan McCusker (Senior Statutory Auditor)
for and on behalf of Perrys Accountants Limited
Chartered Accountants
Statutory Auditor
3 Roberts Mews
Orpington
Kent
BR6 0JP
Date
18 December 2020
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