Company registration number 06775188 (England and Wales)
DEANE ROOFING AND CLADDING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2022
DEANE ROOFING AND CLADDING LIMITED
COMPANY INFORMATION
Directors
Mr P Deane
Mr R Deane
Mr N P Deane
Secretary
Mr P Deane
Company number
06775188
Registered office
Suites 3 and 4
63-67 Athenaeum Place
Muswell Hill
London
N10 3HL
Auditor
Beatty & Co
Suites 3 and 4
63-67 Athenaeum Place
Muswell Hill
London
N10 3HL
Business address
Waterside House
Waterside Way
Northampton
United Kingdom
NN4 7XD
Bankers
Barclays Bank Plc
Portman Square
Leicester
LE87 2BB
DEANE ROOFING AND CLADDING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
DEANE ROOFING AND CLADDING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 1 -
The directors present the strategic report for the year ended 28 February 2022.
Fair review of the business
During the year turnover decreased to £21,015,171 but retaining profitability before tax of £1,003,127. Turnover was down on the previous year mainly due to a major contract being completed in the previous year and ongoing issues with Covid-19 and the commencement of projects being delayed. Turnover is expected to increase in the 2023 financial year mainly due to the timing of contract commencements and the company winning more contracts.
Principal risks and uncertainties
As with any business, the company is not immune to risks and uncertainties; and whilst few risks can be eliminated in their entirety, the directors meet regularly to maintain and review a full set of management procedures aimed at minimising the probability and the severity of specific risks which could impact upon our operations. COVID-19 has affected the UK economy and the impact of this on the Company has been discussed below.
COVID-19
The outbreak of the Covid-19 virus was declared a global pandemic by the World Health Organisation in March 2020. To contain the virus the Government introduced social distancing and implemented a series of lockdowns which have continued through 2021. It also constrained the supply of products and materials, affected supply chain capacity, and required a complete overhaul of our processes and procedures on site to ensure building work could continue while adhering to social distancing measures.
The Government's clear message that infrastructure and construction projects should continue during lockdown was very welcome, but there remained many practical steps that needed to be taken before this could happen.
All construction projects had to quickly adapt to meet the Construction Leadership Council's Site Operating Procedures (SOP). This was a thorough process to ensure a Covid-compliant safe building environment.
This was essential as it meant that the company was able to continue building for our customers and maintained the momentum to ensure productivity levels remained reasonable during the crucial early days of the pandemic when any significant delay would have been uncertain to recover or justify. Thanks to the resolve and ingenuity of the company's staff, keeping sites going has been instrumental in limiting the worst financial impacts of Covid-19 on the company's day to day operations.
Supply risk
Currently material shortages and delivery issues are our main risks. We believe these have been caused by a mixture of Brexit and the Covid pandemic.
Foreign exchange risk
The company’s principal foreign currency exposures arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. Any hedging activity would involve the use of foreign exchange forward contracts.
Financial instruments risk
The company uses financial instruments, other than derivatives, comprising borrowings, cash and other liquid resources and various other items such as trade debtors and creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company's operations. The main risks arising from the company financial instruments are interest rate risk and liquidity risk. The directors review and agree policies for managing each of these risks and they are summarised below. The policies have remained unchanged from previous periods.
Liquidity risk
The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The company policy throughout the year has been to ensure continuity of funding and currently the company doesn't have any funding requirements.
DEANE ROOFING AND CLADDING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 2 -
Key performance indicators
Measurement of performance against strategy and the achievement of business objectives is by means of key performance indicators. Actual performance against the key performance indicators for the twelve months to February 2022 are shown below together with that for 2021 for comparative purposes.
2022 2021
Turnover Growth -34% 33%
Return on capital 21% 9%
Liquidity 2.35 1.55
Mr P Deane
Secretary
30 November 2022
DEANE ROOFING AND CLADDING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 3 -
The directors present their annual report and financial statements for the year ended 28 February 2022.
Principal activities
The principal activity of the company continued to be that of roofing and cladding of buildings.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final 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 P Deane
Mr R Deane
Mr N P Deane
Auditor
In accordance with the company's articles, a resolution proposing that Beatty & Co be reappointed as auditor of the company will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
By order of the board
Mr P Deane
Secretary
30 November 2022
DEANE ROOFING AND CLADDING LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
DEANE ROOFING AND CLADDING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DEANE ROOFING AND CLADDING LIMITED
- 5 -
Opinion
We have audited the financial statements of Deane Roofing and Cladding Limited (the 'company') for the year ended 28 February 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 28 February 2022 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
DEANE ROOFING AND CLADDING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DEANE ROOFING AND CLADDING LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have
no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We identified areas of
law and regulations
that could reasonably be expected to have a material effect on the financial statements from our experience through discussions with the directors and management as required by auditing standards.
We had regard to laws and regulations in areas that directly affected the financial statements including financial reporting, related company and taxation legislation. We considered that extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.
With the exception of any known or possible non-compliance, and as required by auditing standards, our work included agreeing the financial statement disclosures to underlying supporting documentation, review of board minutes, enquiries with management, enquiries of external advisers, and review of correspondence with external legal advisors.
We communicated any identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
We addressed the risk of fraud through management override of controls, by testing the appropriateness of journal entries and unusual account combinations or where posted by senior management. We evaluated whether there was evidence of bias by the directors in accounting estimates that represented a risk of material misstatement due to fraud and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
DEANE ROOFING AND CLADDING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DEANE ROOFING AND CLADDING LIMITED
- 7 -
Our audit procedures were designed to respond to risk of material misstatement in the financial statements, 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, collusion or misrepresentation, or forgery. There are inherent limitations in the audit procedures performed and the further removed noncompliance with laws and regulations is from transactions and events reflected in the financial statements, the less likely we are to become aware of it.
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.
Peter Edwards
Senior Statutory Auditor
For and on behalf of Beatty & Co
30 November 2022
Chartered Certified Accountants
Statutory Auditor
Suites 3 and 4
63-67 Athenaeum Place
Muswell Hill
London
N10 3HL
DEANE ROOFING AND CLADDING LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
21,015,171
31,897,494
Cost of sales
(17,430,580)
(24,663,613)
Gross profit
3,584,591
7,233,881
Administrative expenses
(2,605,824)
(3,090,239)
Other operating income
24,033
Operating profit
4
1,002,800
4,143,642
Interest receivable and similar income
7
327
633
Amounts written off investments
8
(2,806,766)
Profit before taxation
1,003,127
1,337,509
Tax on profit
9
791,430
(784,849)
Profit for the financial year
1,794,557
552,660
The profit and loss account has been prepared on the basis that all operations are continuing operations.
DEANE ROOFING AND CLADDING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 9 -
2022
2021
£
£
Profit for the year
1,794,557
552,660
Other comprehensive income
-
-
Total comprehensive income for the year
1,794,557
552,660
DEANE ROOFING AND CLADDING LIMITED
BALANCE SHEET
AS AT
28 FEBRUARY 2022
28 February 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
419,693
337,997
Current assets
Debtors
11
6,587,576
4,797,580
Cash at bank and in hand
6,110,088
10,992,818
12,697,664
15,790,398
Creditors: amounts falling due within one year
12
(5,354,354)
(10,179,458)
Net current assets
7,343,310
5,610,940
Total assets less current liabilities
7,763,003
5,948,937
Provisions for liabilities
Deferred tax liability
13
56,954
37,445
(56,954)
(37,445)
Net assets
7,706,049
5,911,492
Capital and reserves
Called up share capital
15
10
10
Profit and loss reserves
7,706,039
5,911,482
Total equity
7,706,049
5,911,492
The financial statements were approved by the board of directors and authorised for issue on 30 November 2022 and are signed on its behalf by:
Mr P Deane
Mr N P Deane
Director
Director
Company Registration No. 06775188
DEANE ROOFING AND CLADDING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 March 2020
10
5,358,822
5,358,832
Year ended 28 February 2021:
Profit and total comprehensive income for the year
-
552,660
552,660
Balance at 28 February 2021
10
5,911,482
5,911,492
Year ended 28 February 2022:
Profit and total comprehensive income for the year
-
1,794,557
1,794,557
Balance at 28 February 2022
10
7,706,039
7,706,049
DEANE ROOFING AND CLADDING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 12 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
20
(3,919,397)
10,295,900
Income taxes paid
(799,380)
(258,688)
Net cash (outflow)/inflow from operating activities
(4,718,777)
10,037,212
Investing activities
Purchase of tangible fixed assets
(186,280)
(8,500)
Proceeds on disposal of tangible fixed assets
22,000
Interest received
327
633
Net cash used in investing activities
(163,953)
(7,867)
Net (decrease)/increase in cash and cash equivalents
(4,882,730)
7,222,579
Cash and cash equivalents at beginning of year
10,992,818
3,770,239
Cash and cash equivalents at end of year
6,110,088
10,992,818
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 13 -
1
Accounting policies
Company information
Deane Roofing and Cladding Limited is a
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Suites 3 and 4, 63-67 Athenaeum Place, Muswell Hill, London, N10 3HL.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
As at 28 February 2022, the company had substantial cash balances, no debt, access to secured bank facilities and a strong forward secured order book.
With construction operations having remained open throughout the year, including through national lockdowns, the Directors do not anticipate the Covid-19 pandemic to have an impact on the going concern status of the company.
The company is currently monitoring the continuing rising energy costs and the impact this is likely to have on materials costs.
The directors regularly review the working capital requirements of the company in the normal course of business and, in doing so, consider a range of hypothetical sensitivities concerning workload and cash generation decline. Those sensitivities include stress testing scenarios including the potential impact of workload and cash flow from operating activities being reduced significantly.
After making enquiries and considering the factors and sensitivities outlined above for a range of scenarios, the Directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
1.3
Turnover
Turnover represents amounts receivable for goods and services provided to customers net of VAT and trade discounts. The company's turnover is derived from construction contracts and fabrication sales.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
1
Accounting policies
(Continued)
- 14 -
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
20% Straight line
Fixtures, fittings & equipment
15% Straight Line
Motor vehicles
20% Reducing Balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
1
Accounting policies
(Continued)
- 15 -
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
1
Accounting policies
(Continued)
- 17 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The
company's holiday year runs from 01 March to 28/29 February the following year and staff are not allowed to carry forward any holidays to the next period.
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
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
s
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.
1.14
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
1.15
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
.
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Impact of Covid-19
Management has exercised judgment in evaluating the impact of Covid-19 on the financial statements. Management assessed areas relevant for the company which had the potential to be impacted such as; expected credit losses; impairment of stocks, tangible asset impairment; and deferred tax asset recognition. In light of the company's strong and resilient performance during the period, management concluded there was no material impact in these areas and no new sources of estimation uncertainty.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Useful economic lives of tangible assets
The annual depreciations charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments and the physical condition of the assets. See note 10 for the carrying amount of the property plant and equipment,
Amounts recoverable on long term contracts
The company provides roofing and cladding services to the construction sector. These contracts can run anywhere from a month to over a year in some cases. It is therefore necessary to consider the value of these contracts on a regular basis. When calculating the value of work in progress management considers the stage of completion of each contract along with the expected recoverability on each. See note 11 for the net carrying amounts due from contract customers.
Impairment of debtors
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 11 for the net carrying amount of the debtors and associated impairment provision.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Sales of goods
21,015,171
31,897,494
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
3
Turnover and other revenue
(Continued)
- 19 -
2022
2021
£
£
Turnover analysed by geographical market
UK and Ireland
21,015,171
31,897,494
2022
2021
£
£
Other revenue
Interest income
327
633
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
56,129
(10,931)
Fees payable to the company's auditor for the audit of the company's financial statements
19,000
20,000
Depreciation of owned tangible fixed assets
75,563
83,615
Loss on disposal of tangible fixed assets
7,021
Operating lease charges
192,186
575,564
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Directors
3
3
Employees
44
39
Total
47
42
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
2,033,581
2,024,974
Social security costs
234,225
239,215
Pension costs
45,832
41,951
2,313,638
2,306,140
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 20 -
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
269,056
487,801
Company pension contributions to defined contribution schemes
3,959
3,940
273,015
491,741
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2021 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
85,000
229,032
Company pension contributions to defined contribution schemes
1,320
1,313
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
327
633
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
327
633
8
Amounts written off investments
2022
2021
£
£
Amounts written back to/(written off) current loans
-
(2,806,766)
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 21 -
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(229,691)
428,181
Adjustments in respect of prior periods
(689,015)
Total UK current tax
(918,706)
428,181
Foreign current tax on profits for the current period
107,767
371,199
Total current tax
(810,939)
799,380
Deferred tax
Origination and reversal of timing differences
19,509
(14,531)
Total tax (credit)/charge
(791,430)
784,849
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:
2022
2021
£
£
Profit before taxation
1,003,127
1,337,509
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
190,594
254,127
Tax effect of expenses that are not deductible in determining taxable profit
17,068
533,839
Adjustments in respect of prior years
(689,015)
Effect of change in corporation tax rate
13,669
Double tax relief
(107,767)
Research and development tax credit
(229,691)
Other timing differences
13,712
(3,117)
Taxation (credit)/charge for the year
(791,430)
784,849
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 22 -
10
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 March 2021
600,496
14,557
173,096
788,149
Additions
102,285
83,995
186,280
Disposals
(12,690)
(4,697)
(41,500)
(58,887)
At 28 February 2022
690,091
9,860
215,591
915,542
Depreciation and impairment
At 1 March 2021
363,466
9,913
76,773
450,152
Depreciation charged in the year
51,291
1,479
22,793
75,563
Eliminated in respect of disposals
(5,881)
(4,697)
(19,288)
(29,866)
At 28 February 2022
408,876
6,695
80,278
495,849
Carrying amount
At 28 February 2022
281,215
3,165
135,313
419,693
At 28 February 2021
237,030
4,644
96,323
337,997
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
1,315,318
850,696
Gross amounts owed by contract customers
3,751,994
3,174,463
Corporation tax recoverable
918,707
Other debtors
592,557
763,421
Prepayments and accrued income
9,000
9,000
6,587,576
4,797,580
12
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
2,860,542
4,325,483
Corporation tax
107,767
799,380
Other taxation and social security
169,810
188,523
Other creditors
119,413
18,666
Accruals and deferred income
2,096,822
4,847,406
5,354,354
10,179,458
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 23 -
13
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2022
2021
Balances:
£
£
ACAs
56,954
37,445
2022
Movements in the year:
£
Liability at 1 March 2021
37,445
Charge to profit or loss
19,509
Liability at 28 February 2022
56,954
£12,761 of the deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
14
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
45,832
41,951
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
15
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
10
10
10
10
All shares carry equal voting rights, rights to dividends and rights to a share of the company's assets on a winding up of the business.
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 24 -
16
Operating lease commitments
Lessee
The operating lease represent
s a
lease of
buildings
from
third parties. The lease
is a 5 year lease which expires in July 2022
and rentals are fixed for
the entire lease period
. There are
currently
no options in place for either party to extend the lease term.
The lease incentive given at the start of the lease has been recognised on a straight line basis since inception and therefore has had no impact on the transition to FRS102.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
35,345
140,715
Between two and five years
35,345
35,345
176,060
17
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Purchases
2022
2021
2022
2021
£
£
£
£
Entities over which the entity has control, joint control or significant influence
2,926,994
5,893,534
Other related parties
57,273
104,895
4,950,121
4,879,880
2022
2021
Amounts due to related parties
£
£
Entities over which the entity has control, joint control or significant influence
546,026
1,647,988
Other related parties
324,585
468,374
The following amounts were outstanding at the reporting end date:
2022
2021
Amounts due from related parties
£
£
Other related parties
-
104,895
18
Directors' transactions
Dividends totalling £0 (2021 - £0) were paid in the year in respect of shares held by the company's directors.
DEANE ROOFING AND CLADDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2022
- 25 -
19
Ultimate controlling party
There is no Parent company.
There is no one ultimate controlling party. The company is controlled by it's shareholders by virtue of their shareholdings.
20
Cash (absorbed by)/generated from operations
2022
2021
£
£
Profit for the year after tax
1,794,557
552,660
Adjustments for:
Taxation (credited)/charged
(791,430)
784,849
Investment income
(327)
(633)
Loss on disposal of tangible fixed assets
7,021
Depreciation and impairment of tangible fixed assets
75,563
83,615
Movements in working capital:
(Increase)/decrease in debtors
(871,289)
11,655,131
Decrease in creditors
(4,133,491)
(2,779,721)
Cash (absorbed by)/generated from operations
(3,919,396)
10,295,901
21
Analysis of changes in net funds
1 March 2021
Cash flows
28 February 2022
£
£
£
Cash at bank and in hand
10,992,818
(4,882,730)
6,110,088
2022-02-28
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