Company Registration No. 05957569 (England and Wales)
AKAAL GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
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 - 33
Independent auditor's report
34 - 37
AKAAL GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2021
- 1 -
The directors present the strategic report for the year ended 31 March 2021.
Fair review of the business
The group’s turnover has decreased in the year. In part this has been caused by Covid-19 restrictions.
The group has maintained a gross profit margin of 18% but operating profit has decreased due, principally to the reduction in turnover whilst maintaining staff retention.
The group continues to provide full external façade packages including cladding, windows, structural and architectural metalworks and internal plastering drylining works. 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 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 2021
- 2 -
Principal risks and uncertainties
As the country continues to return to more normal trading conditions after the restrictions of the last 18 months, the principal risks are those of further lockdowns being implemented to combat Covid-19 and the publicised scarcity in the supply of labour and materials giving rise to inflationary pressures.
If there was another ‘lockdown’ the group feels that it is in a strong position to take decisions quickly to protect itself, its workforce and its clients and has sufficient financial resources to allow it to continue through such restrictions.
The group has always taken care to build close relationships with both its clients and its supply chain and whilst it will not be able to avoid some of the inflationary aspects believes that, by having these relationships, it will be in a position to maintain the supply of materials and labour. The group will continue to improve efficiencies in its processes and in its buying decisions.
The group is of a size and has a sound financial base which together with its experience and knowledge enables it to deliver high quality work on contracts of all sizes. Having been trading for over 60 years it has weathered a number of recessions coming back stronger each time.
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 19 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 managers this risk by ensuring that there are sufficient ongoing cash reserves to meet obligations.
Development and performance
As the Government begins to relax lockdown measure 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.
Key performance indicators
AKAAL GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 3 -
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 wellbeing, encouraging participation in sport, investing in fuel-efficient vehicles and has recently 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.
Mr R S Manak
Director
6 December 2021
AKAAL GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2021
- 4 -
The directors present their annual report and financial statements for the year ended 31 March 2021.
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.
Results and dividends
The results for the year are set out on
page
7
.
Ordinary dividends were paid amounting to £292,000. The directors do not recommend payment of a further dividend.
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
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.
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.
Energy and carbon report
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
AKAAL GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 5 -
Strategic report
The
true
group
has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the
group
's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
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
6 December 2021
AKAAL GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2021
- 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
;
-
prepare the
on the going concern basis unless it is inappropriate to presume that the
group and
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 2021
- 7 -
2021
2020
Notes
£
£
Turnover
3
106,437,951
161,746,958
Cost of sales
(86,407,530)
(132,282,974)
Gross profit
20,030,421
29,463,984
Administrative expenses
(18,236,573)
(20,285,850)
Other operating income
2,563,571
800,956
Operating profit
4
4,357,419
9,979,090
Interest receivable and similar income
8
12,609
178,306
Interest payable and similar expenses
9
(99,465)
(106,170)
Amounts written off investments
10
-
(282,317)
Profit before taxation
4,270,563
9,768,909
Tax on profit
11
140,833
(3,107,033)
Profit for the financial year
4,411,396
6,661,876
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 2021
- 8 -
2021
2020
£
£
Profit for the year
4,411,396
6,661,876
Other comprehensive income
-
-
Total comprehensive income for the year
4,411,396
6,661,876
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 2021
31 March 2021
- 9 -
2021
2020
Notes
£
£
£
£
Fixed assets
Goodwill
13
377,834
425,063
Tangible assets
14
10,521,272
10,842,487
Investment properties
15
20,488,697
15,723,766
31,387,803
26,991,316
Current assets
Stocks
18
2,882,090
3,267,245
Debtors
19
47,488,819
58,891,014
Cash at bank and in hand
19,401,192
10,858,669
69,772,101
73,016,928
Creditors: amounts falling due within one year
20
(18,687,733)
(21,542,144)
Net current assets
51,084,368
51,474,784
Total assets less current liabilities
82,472,171
78,466,100
Creditors: amounts falling due after more than one year
21
(3,841,854)
(4,077,739)
Provisions for liabilities
Deferred tax liability
24
513,162
390,602
(513,162)
(390,602)
Net assets
78,117,155
73,997,759
Capital and reserves
Called up share capital
27
61,601
61,601
Other reserves
3,258,005
3,258,005
Profit and loss reserves
74,797,549
70,678,153
Total equity
78,117,155
73,997,759
The financial statements were approved by the board of directors and authorised for issue on 6 December 2021 and are signed on its behalf by:
06 December 2021
Mr R S Manak
Director
AKAAL GROUP LIMITED (REGISTERED NUMBER: 05957569)
COMPANY BALANCE SHEET
AS AT 31 MARCH 2021
31 March 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
14
6,757,496
6,877,232
Investment properties
15
20,488,697
15,723,766
Investments
16
3,555,476
3,555,476
30,801,669
26,156,474
Current assets
Debtors
19
28,242,085
34,630,364
Cash at bank and in hand
1,800,680
505,507
30,042,765
35,135,871
Creditors: amounts falling due within one year
20
(891,363)
(1,122,794)
Net current assets
29,151,402
34,013,077
Total assets less current liabilities
59,953,071
60,169,551
Creditors: amounts falling due after more than one year
21
(3,224,968)
(3,714,414)
Provisions for liabilities
Deferred tax liability
24
97,969
18,329
(97,969)
(18,329)
Net assets
56,630,134
56,436,808
Capital and reserves
Called up share capital
27
61,601
61,601
Profit and loss reserves
56,568,533
56,375,207
Total equity
56,630,134
56,436,808
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 profit for the year was £485,326 (2020 - £11,779,625 loss).
The financial statements were approved by the board of directors and authorised for issue on 6 December 2021 and are signed on its behalf by:
06 December 2021
Mr R S Manak
Director
AKAAL GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
- 11 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 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
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
-
4,411,396
4,411,396
Dividends
12
-
-
(292,000)
(292,000)
Balance at 31 March 2021
61,601
3,258,005
74,797,549
78,117,155
AKAAL GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 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
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
485,326
485,326
Dividends
12
-
(292,000)
(292,000)
Balance at 31 March 2021
61,601
56,568,533
56,630,134
AKAAL GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2021
- 13 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
32
18,523,540
2,978,469
Interest paid
(99,465)
(106,170)
Income taxes paid
(3,599,589)
(2,655,481)
Net cash inflow from operating activities
14,824,486
216,818
Investing activities
Purchase of tangible fixed assets
(1,239,938)
(1,713,313)
Proceeds on disposal of tangible fixed assets
352,529
275,465
Purchase of investment property
(5,055,101)
(2,455,946)
Proceeds on disposal of investment property
500,000
-
Proceeds on disposal of subsidiaries
(198,435)
-
Proceeds on disposal of investments
-
(282,317)
Receipts arising from loans made
(427,010)
-
Interest received
12,609
178,306
Net cash used in investing activities
(6,055,346)
(3,997,805)
Financing activities
Repayment of bank loans
(501,227)
(456,457)
Payment of finance leases obligations
579,057
368,968
Dividends paid to equity shareholders
(292,000)
(1,642,000)
Net cash used in financing activities
(214,170)
(1,729,489)
Net increase/(decrease) in cash and cash equivalents
8,554,970
(5,510,476)
Cash and cash equivalents at beginning of year
10,799,102
16,309,578
Cash and cash equivalents at end of year
19,354,072
10,799,102
Relating to:
Cash at bank and in hand
19,401,192
10,858,669
Bank overdrafts included in creditors payable within one year
(47,120)
(59,567)
AKAAL GROUP LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2021
- 14 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
7,278,765
(4,565,707)
Interest paid
(84,543)
(131,144)
Income taxes paid
(227,895)
(135,411)
Net cash inflow/(outflow) from operating activities
6,966,327
(4,832,262)
Investing activities
Purchase of tangible fixed assets
(416,056)
Proceeds on disposal of tangible fixed assets
1,200
Purchase of investment property
(5,055,101)
(2,455,946)
Proceeds on disposal of investment property
500,000
Proceeds on disposal of investments
(282,317)
Receipts arising from loans made
(427,010)
-
Interest received
2,984
175,445
Dividends received
100,000
100,000
Net cash used in investing activities
(4,877,927)
(2,878,874)
Financing activities
Repayment of bank loans
(501,227)
(456,457)
Dividends paid to equity shareholders
(292,000)
(1,642,000)
Net cash used in financing activities
(793,227)
(2,098,457)
Net increase/(decrease) in cash and cash equivalents
1,295,173
(9,809,593)
Cash and cash equivalents at beginning of year
505,507
10,315,100
Cash and cash equivalents at end of year
1,800,680
505,507
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
- 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
Business combinations
In the parent company
financial statements, t
he 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.
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company
Akaal Group Limited
together with
all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates
.
All
financial statements
are made up to 31 March 2021
.
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 GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 16 -
1.4
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the
group
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.
1.5
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
.
1.6
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
.
1.7
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.
1.8
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 GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
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.
1.9
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.
1.10
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.
1.11
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.
1.12
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.
1.13
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 GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 18 -
1.14
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.
1.15
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 GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
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.
1.16
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.
1.17
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.18
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 GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 20 -
1.19
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 2021, 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 £20,488,697.
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:
2021
2020
£
£
Turnover analysed by class of business
Property development and maintenance
106,437,951
161,746,958
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
3
Turnover and other revenue
(Continued)
- 21 -
2021
2020
£
£
Other significant revenue
Interest income
12,609
178,306
Grants received
1,790,370
11,126
973,704
990,333
4
Operating profit
2021
2020
£
£
Operating profit for the year is stated after charging/(crediting):
Research and development costs
-
2,500
Government grants
(1,790,370)
(11,126)
Depreciation of owned tangible fixed assets
946,499
1,134,792
Depreciation of tangible fixed assets held under finance leases
245,098
43,477
Loss on disposal of tangible fixed assets
17,027
17,078
Profit on disposal of investment property
(209,830)
-
Amortisation of intangible assets
47,229
47,229
Loss on disposal of intangible assets
198,435
-
Operating lease charges
221,046
235,467
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,915
5,745
Audit of the financial statements of the company's subsidiaries
69,205
73,101
75,120
78,846
For other services
All other non-audit services
22,858
20,235
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 22 -
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2021
2020
2021
2020
Number
Number
Number
Number
Management and administration
196
222
2
2
Production
105
90
-
-
Total
301
312
2
2
Their aggregate remuneration comprised:
Group
Company
2021
2020
2021
2020
£
£
£
£
Wages and salaries
13,311,262
14,684,148
164,003
188,990
Social security costs
1,576,644
1,740,105
21,326
25,704
Pension costs
882,540
933,251
34,000
15,770,446
17,357,504
219,329
214,694
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
164,003
188,990
Company pension contributions to defined contribution schemes
34,000
-
198,003
188,990
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2020 - 1).
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
221
23,614
Other interest income
12,388
154,692
Total income
12,609
178,306
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
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
221
178,306
9
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
84,543
131,144
Other interest on financial liabilities
2
-
84,545
131,144
Other finance costs:
Other interest
14,920
(24,974)
Total finance costs
99,465
106,170
10
Amounts written off investments
2021
2020
£
£
Amounts written back to/(written off) non-current loans
-
(282,317)
11
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
846,091
2,856,366
Adjustments in respect of prior periods
(1,109,484)
129,020
Total current tax
(263,393)
2,985,386
Deferred tax
Origination and reversal of timing differences
82,625
121,647
Previously unrecognised tax loss, tax credit or timing difference
39,935
-
Total deferred tax
122,560
121,647
Total tax (credit)/charge
(140,833)
3,107,033
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
11
Taxation
(Continued)
- 24 -
The actual (credit)/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
4,270,563
9,768,909
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
811,407
1,856,093
Tax effect of expenses that are not deductible in determining taxable profit
9,438
2,401,900
Tax effect of utilisation of tax losses not previously recognised
(7,109)
-
Permanent capital allowances in excess of depreciation
314
1,069
Amortisation on assets not qualifying for tax allowances
8,974
-
Under/(over) provided in prior years
(1,109,484)
129,019
Deferred tax adjustments in respect of prior years
122,560
122,716
Dividend income
-
(19,000)
Depreciation in excess of capital allowances
(12,190)
(31,392)
Loss on disposal of assets
(36,632)
6,030
Chargeable gains
34,186
-
Loan written off
-
(2,280,000)
Losses group relived
-
920,598
Profit/loss on disposal of subsidiary
37,703
-
Taxation (credit)/charge
(140,833)
3,107,033
12
Dividends
2021
2020
Recognised as distributions to equity holders:
£
£
Interim paid
292,000
1,642,000
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 25 -
13
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 April 2020 and 31 March 2021
472,292
Amortisation and impairment
At 1 April 2020
47,229
Amortisation charged for the year
47,229
At 31 March 2021
94,458
Carrying amount
At 31 March 2021
377,834
At 31 March 2020
425,063
The company had no intangible fixed assets at 31 March 2021 or 31 March 2020.
14
Tangible fixed assets
Group
Freehold buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2020
7,410,246
719,977
618,144
1,388,243
5,195,692
15,332,302
Additions
-
5,742
12,439
196,347
1,025,410
1,239,938
Disposals
-
-
-
-
(1,045,860)
(1,045,860)
At 31 March 2021
7,410,246
725,719
630,583
1,584,590
5,175,242
15,526,380
Depreciation and impairment
At 1 April 2020
553,969
273,406
402,813
948,504
2,311,123
4,489,815
Depreciation charged in the year
113,414
73,648
32,779
188,553
783,203
1,191,597
Eliminated in respect of disposals
-
-
-
-
(676,304)
(676,304)
At 31 March 2021
667,383
347,054
435,592
1,137,057
2,418,022
5,005,108
Carrying amount
At 31 March 2021
6,742,863
378,665
194,991
447,533
2,757,220
10,521,272
At 31 March 2020
6,856,277
446,571
215,331
439,739
2,884,569
10,842,487
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
14
Tangible fixed assets
(Continued)
- 26 -
Company
Freehold buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2020
7,410,246
100,000
27,030
7,537,276
Disposals
(9,189)
(9,189)
At 31 March 2021
7,410,246
100,000
17,841
7,528,087
Depreciation and impairment
At 1 April 2020
553,969
83,982
22,093
660,044
Depreciation charged in the year
113,414
4,005
933
118,352
Eliminated in respect of disposals
(7,805)
(7,805)
At 31 March 2021
667,383
87,987
15,221
770,591
Carrying amount
At 31 March 2021
6,742,863
12,013
2,620
6,757,496
At 31 March 2020
6,856,277
16,018
4,937
6,877,232
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
2021
2020
2021
2020
£
£
£
£
Motor vehicles
1,044,490
502,670
15
Investment property
Group
Company
2021
2021
£
£
Fair value
At 1 April 2020
15,723,766
15,723,766
Additions through external acquisition
5,055,101
5,055,101
Disposals
(290,170)
(290,170)
At 31 March 2021
20,488,697
20,488,697
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
15
Investment property
(Continued)
- 27 -
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.
16
Fixed asset investments
Group
Company
2021
2020
2021
2020
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 2020 and 31 March 2021
3,555,476
Carrying amount
At 31 March 2021
3,555,476
At 31 March 2020
3,555,476
17
Subsidiaries
Details of the company's subsidiaries at 31 March 2021 are as follows:
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
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
Manak Homes Limited (company number 05282843) is exempt from the requirements of the Companies Act relating to the audit of individual accounts by virtue of s479A of the Companies Act.
18
Stocks
Group
Company
2021
2020
2021
2020
£
£
£
£
Raw materials and consumables
2,416,542
3,267,245
Work in progress
465,548
-
-
-
2,882,090
3,267,245
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 29 -
19
Debtors
Group
Company
2021
2020
2021
2020
Amounts falling due within one year:
£
£
£
£
Trade debtors
36,226,748
50,577,199
197,480
224,538
Corporation tax recoverable
1,812,940
29,000
231,461
Amounts owed by group undertakings
-
-
25,867,777
31,120,085
Other debtors
8,272,484
7,258,978
1,945,315
3,285,741
Prepayments and accrued income
1,176,647
1,025,837
52
47,488,819
58,891,014
28,242,085
34,630,364
20
Creditors: amounts falling due within one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bank loans and overdrafts
22
624,053
648,281
576,933
588,714
Obligations under finance leases
23
507,159
181,663
Trade creditors
14,957,399
13,811,496
21,208
9,094
Amounts owed to group undertakings
-
-
82,749
83,949
Corporation tax payable
-
2,079,042
9,760
Other taxation and social security
1,397,047
1,599,939
11,790
20,521
Deferred income
25
-
186,333
Other creditors
257,146
521,250
100,581
315,833
Accruals and deferred income
944,929
2,514,140
98,102
94,923
18,687,733
21,542,144
891,363
1,122,794
21
Creditors: amounts falling due after more than one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bank loans and overdrafts
22
3,224,968
3,714,414
3,224,968
3,714,414
Obligations under finance leases
23
616,886
363,325
3,841,854
4,077,739
3,224,968
3,714,414
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 30 -
22
Loans and overdrafts
Group
Company
2021
2020
2021
2020
£
£
£
£
Bank loans
3,801,901
4,303,128
3,801,901
4,303,128
Bank overdrafts
47,120
59,567
3,849,021
4,362,695
3,801,901
4,303,128
Payable within one year
624,053
648,281
576,933
588,714
Payable after one year
3,224,968
3,714,414
3,224,968
3,714,414
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 2021 totalled £47,120
(20
20
- £
59,567
)
.
The group has entered into a cross guarantee arrangement with its bankers in relation to Stanmore Contractors Limited, Akaal Group Limited and Stanmore Steel Limited.
At 31 March 2021, loans in all group companies, subject to guarantee by the group, amounted to £3,801,901
(
2020 - £4,303,128). These loans are also secured by way of legal mortgages over the group's freehold and investment properties.
Hire purchase liabilities totalling £1,090,089 (2020 - £544,988) are secured on the assets purchased under the hire purchase agreements.
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 31 -
23
Finance lease obligations
Group
Company
2021
2020
2021
2020
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
507,159
181,663
In two to five years
616,886
363,325
1,124,045
544,988
-
-
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
2021
2020
Group
£
£
Accelerated capital allowances
513,162
390,602
Liabilities
Liabilities
2021
2020
Company
£
£
Accelerated capital allowances
97,969
18,329
Group
Company
2021
2021
Movements in the year:
£
£
Liability at 1 April 2020
390,602
18,329
Charge to profit or loss
122,560
79,640
Liability at 31 March 2021
513,162
97,969
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 32 -
25
Deferred income
Group
Company
2021
2020
2021
2020
£
£
£
£
Other deferred income
-
186,333
-
-
26
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
882,540
933,251
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.
27
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
1
1
1
1
Ordinary A Shares of £1 each
61,100
61,100
61,100
61,100
Ordinary B Shares of £1 each
500
500
500
500
61,601
61,601
61,601
61,601
28
Events after the reporting date
After the balance sheet date, the group purchased two investment properties at a purchase price of £4.4m.
29
Related party transactions
As at the balance sheet date, the group had loaned £202,843 (2020 - £1,752,437) 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 £74,881 (2020 - £154,692).
As at the balance sheet date the
group
was owed £743,770
(20
20
- £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
£246,624 (2020 - £423,043).
AKAAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 33 -
30
Directors' transactions
Dividends totalling £292,000 (2020 - £1,642,000) were paid in the year in respect of shares help by the company's directors.
At the 31 March 2021, the director R S Manak was owed £nil (2020 - £224,391) by the group. These amounts are disclosed in other creditors.
At the balance sheet date, there was an overdrawn director's loan account of £427,010 (repaid within 9 months), this is included within other debtors.
31
Controlling party
R S Manak, a director, controls the company by virtue of his shareholding.
32
Cash generated from group operations
2021
2020
£
£
Profit for the year after tax
4,411,396
6,661,876
Adjustments for:
Taxation (credited)/charged
(140,833)
3,107,033
Finance costs
99,465
106,170
Investment income
(12,609)
(178,306)
Loss on disposal of tangible fixed assets
17,027
17,078
Gain on disposal of investment property
(209,830)
-
Loss on disposal of intangible assets
198,435
-
Amortisation and impairment of intangible assets
47,229
47,229
Depreciation and impairment of tangible fixed assets
1,191,597
1,178,269
Amounts written off investments
-
282,317
Movements in working capital:
Decrease/(increase) in stocks
385,155
(31,920)
Decrease/(increase) in debtors
13,613,145
(7,100,793)
Decrease in creditors
(890,304)
(1,296,817)
(Decrease)/increase in deferred income
(186,333)
186,333
Cash generated from operations
18,523,540
2,978,469
AKAAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AKAAL GROUP LIMITED
- 34 -
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 2021 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
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 2021 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
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
group's and
parent
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.
AKAAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AKAAL GROUP LIMITED
- 35 -
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.
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
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
company or to cease operations, or have no realistic alternative but to do so.
AKAAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AKAAL GROUP LIMITED
- 36 -
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
.
We gained an understanding of the legal and regulatory framework applicable to the group and the industry in which it operates, and considered the risk of acts by the group that were contrary to applicable laws and regulations, including fraud.
We designed audit procedures to respond to the risk, recognising that 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.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management.
We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
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.
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
14 December 2021
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