Company Registration No. 10333818 (England and Wales)
WIGHT SHIPYARD COMPANY LIMITED
ACCOUNTS
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
WIGHT SHIPYARD COMPANY LIMITED
COMPANY INFORMATION
Directors
Mr P Morton
Mrs J Daly
Company number
10333818
Registered office
Kintyre House
70 High Street
Fareham
Hampshire
United Kingdom
PO16 7BB
Auditor
Alliott Wingham Limited
Kintyre House
70 High Street
Fareham
Hants
PO16 7BB
WIGHT SHIPYARD COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 28
WIGHT SHIPYARD COMPANY LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 1 -
The directors present the strategic report for the Period ended 29 September 2020.
Fair review of the business
The company builds, refits and repairs aluminium vessels for the high speed passenger ferry, tourist boat, windfarm support and luxury yacht markets in the UK and overseas.
The financial statements for the period cover these core activities as well as the continuing research and development activity for new products. Performance for the year was materially affected by late delivery of design and significant changes by the client to the specification of those vessels built during the year.
The impact of the first lockdown in March 2020 drastically reduced the calendar build time, consequently resulting in additional cost associated with working extra night shifts in order to meet the delivery schedule after the lockdown, coupled with inefficiencies of having to complete four vessels at the same stage of construction. The company also experienced delays in deliveries from OEM suppliers in the second half of the year. More stringent timings of final specification and design, along with delivery of raw materials and OEM equipment, will now form the basis for future delivery dates.
The passenger travel market was clearly severely affected by COVID-19. However, operators are starting to place orders for new vessels and therefore the company expects to return to profitability in the 2021/22 financial year. The company has committed to a substantial investment with a new 260-ton travel hoist and infrastructure which will facilitate additional refit and repair business and reduce its reliance in the ultra-competitive new build market.
Another impact on the financial performance was the company’s decision to build a new ‘first in class’ wind farm support vessel. This vessel marks a breakthrough in that market and will provide transfers to and from windfarms at twice the speed for half the fuel burn for the operators. As with any new product, the company has had to absorb significant costs associated with the development. However the Directors are confident that this investment will result in many future orders for the product.”
WIGHT SHIPYARD COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 2 -
Principal risks and uncertainties
Company operations are UK based (but address a global market) and are subject to a number of risks, the principle area of risk and uncertainty relating to economic conditions prevailing in the UK and in key economies around the globe.
The company continues to take measures to ensure that it is not overly reliant on any one global region, sector or customer.
The company continues to assess the risks and opportunities arising from the UK’s exit from the European Union (‘BREXIT’) and evaluate the impact the trade deal has on its activity levels, supply chain and cost base. The company is aware that the UK is still in the early post-BREXIT phase, with trading relationships yet to settle, and that the marine industry could still see significant changes in the coming months and years that could affect the business. In order to mitigate this risk the company continues to review its supply chain arrangements as well as targeting adjacent sectors and new customers.
The company has put measures in place to facilitate the ongoing assessment of the impact of COVID-19 and continues to take action to mitigate any negative impact to trading activities, where possible, through changes to its operating procedures and accessing the support available from various government schemes.
Additional risks include changes to IR35 legislation and the possible impact this may have on gross margins. The company has taken the necessary steps to remain compliant with the legislation and will monitor however, the current assessment is that the impact will be minimal.
The company is exposed (to a greater or lesser extent) to a variety of financial risks from its operations including price risk, exchange rate risk, credit risk and liquidity risk.
Price risk
The company has some exposure to fluctuations in the cost of bought-in goods and services due to the long term contract nature of a substantial portion of its turnover. Where fixed pricing is agreed with customers for these larger contracts, the company seeks to secure pricing for bought-in goods and services at the outset of the project, enabling it to price appropriately.
Exchange rate risk
The company has some exposure to changes in foreign currency exchange rates as some customer contracts are non-Sterling and, whilst labour is UK based, certain bought-in goods and services are non-Sterling purchases. Where the company can achieve a natural hedge between income and costs it will do so and the remaining potential exposure is reviewed and hedged to the extent the senior management team deem appropriate.
Credit risk
The company’s credit risk relates primarily to its trade receivables. The company contracts directly with its customers who range from blue chip companies operating government contracts to small and medium sized entities in the commercial sector. The credit terms granted are proportional to risk profile and larger contracts are invoiced on a stage payment basis (before, during and on completion of the projects).
Cash flow and liquidity risk
The current cash position and short-to-medium-term cash flow forecasts are prepared and reviewed on a weekly basis to mitigate cash flow risk and predict any funding requirements. Liquidity risk is managed by matching payments from customers with the cash outflows on projects and support functions, along with the regular review of the overall working capital position.
WIGHT SHIPYARD COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 3 -
Key performance indicators
The ongoing financial performance and financial position of the company are managed through a series of key performance indicators which focus on project performance, turnover, gross profit and net cash balances. All of these are monitored and were reviewed by the senior management team during the year under review. On turnover of £15.0m (2019 - £18.9m) the gross profit margin net of grants was £0.3m, 1.8% (2019 - £0.3m, 1.3%) and at the year-end there was a cash balance of £1.6m (2019 £0.4m) and a loan balance of £6.9m (2019 £3.3m).
Mr P Morton
Director
30 September 2021
WIGHT SHIPYARD COMPANY LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 4 -
The directors present their annual report and financial statements for the Period ended 29 September 2020.
Principal activities
The principal activity of the company continued to be that of the building, refitting and repairing ships and floating structures.
Results and dividends
The results for the Period are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the Period and up to the date of signature of the financial statements were as follows:
Mr P Morton
Mrs J Daly
Auditor
The auditor, Alliott Wingham Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr P Morton
Director
30 September 2021
WIGHT SHIPYARD COMPANY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 5 -
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.
WIGHT SHIPYARD COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WIGHT SHIPYARD COMPANY LIMITED
- 6 -
Opinion
We have audited the financial statements of Wight Shipyard Company Limited (the 'company') for the Period ended 29 September 2020 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 a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 29 September 2020 and of its loss for the Period then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The 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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
WIGHT SHIPYARD COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WIGHT SHIPYARD COMPANY LIMITED
- 7 -
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 Period 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 company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
WIGHT SHIPYARD COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WIGHT SHIPYARD COMPANY LIMITED
- 8 -
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.
Mark Nolan FCA (Senior Statutory Auditor)
For and on behalf of Alliott Wingham Limited
30 September 2021
Chartered Accountants
Statutory Auditor
Kintyre House
70 High Street
Fareham
Hants
PO16 7BB
WIGHT SHIPYARD COMPANY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 9 -
Period
Year
ended
ended
29 September
30 September
2020
2019
Notes
£
£
Turnover
3
15,012,055
19,807,853
Cost of sales
(14,881,415)
(19,550,504)
Gross profit
130,640
257,349
Administrative expenses
(1,246,354)
(1,967,488)
Other operating income
144,490
Operating loss
4
(971,224)
(1,710,139)
Interest receivable and similar income
7
62,489
48,315
Interest payable and similar expenses
8
(209,985)
(28,094)
Loss before taxation
(1,118,720)
(1,689,918)
Tax on loss
9
109,823
363,481
Loss for the financial Period
(1,008,897)
(1,326,437)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WIGHT SHIPYARD COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 10 -
Period
Year
ended
ended
29 September
30 September
2020
2019
£
£
Loss for the Period
(1,008,897)
(1,326,437)
Other comprehensive income
-
-
Total comprehensive income for the Period
(1,008,897)
(1,326,437)
WIGHT SHIPYARD COMPANY LIMITED
BALANCE SHEET
AS AT
29 SEPTEMBER 2020
29 September 2020
- 11 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
10
665,197
647,608
Investments
11
502,500
502,500
1,167,697
1,150,108
Current assets
Stocks
14
111,416
455,298
Debtors
15
4,586,117
4,306,771
Cash at bank and in hand
1,581,394
402,463
6,278,927
5,164,532
Creditors: amounts falling due within one year
16
(1,918,405)
(6,729,527)
Net current assets/(liabilities)
4,360,522
(1,564,995)
Total assets less current liabilities
5,528,219
(414,887)
Creditors: amounts falling due after more than one year
17
(6,947,588)
Provisions for liabilities
Deferred tax liability
19
59,455
55,040
(59,455)
(55,040)
Net liabilities
(1,478,824)
(469,927)
Capital and reserves
Called up share capital
21
100
100
Profit and loss reserves
(1,478,924)
(470,027)
Total equity
(1,478,824)
(469,927)
The financial statements were approved by the board of directors and authorised for issue on 30 September 2021 and are signed on its behalf by:
Mr P Morton
Director
Company Registration No. 10333818
WIGHT SHIPYARD COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 October 2018
100
856,410
856,510
Year ended 30 September 2019:
Loss and total comprehensive income for the year
-
(1,326,437)
(1,326,437)
Balance at 30 September 2019
100
(470,027)
(469,927)
Period ended 29 September 2020:
Loss and total comprehensive income for the period
-
(1,008,897)
(1,008,897)
Balance at 29 September 2020
100
(1,478,924)
(1,478,824)
WIGHT SHIPYARD COMPANY LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 13 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
24
(2,245,036)
(3,076,776)
Interest paid
(209,985)
(28,094)
Income taxes refunded/(paid)
5,396
Net cash outflow from operating activities
(2,449,625)
(3,104,870)
Investing activities
Purchase of tangible fixed assets
(132,460)
(440,857)
Proceeds on disposal of tangible fixed assets
939
Interest received
89
715
Dividends received
62,400
47,600
Net cash used in investing activities
(69,032)
(392,542)
Financing activities
Proceeds of borrowings
3,697,588
3,250,000
Net cash generated from financing activities
3,697,588
3,250,000
Net increase/(decrease) in cash and cash equivalents
1,178,931
(247,412)
Cash and cash equivalents at beginning of Period
402,463
649,875
Cash and cash equivalents at end of Period
1,581,394
402,463
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 14 -
1
Accounting policies
Company information
Wight Shipyard Company Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Kintyre House, 70 High Street, Fareham, Hampshire, United Kingdom, PO16 7BB.
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
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.
Management have determined that with the measures being put into place following the financial loss in the year and to address the impact of COVID-19 (Coronavirus), no material uncertainties exist that would need to be disclosed within the financial statements. The company is in the process of realigning its cost base to improve processes and efficiencies (to meet the challenges of COVID-19 and other identified risks) and at the time of approving the financial statements there continues to be demand from the various business sectors in which it operates.
1.3
Turnover
Revenue from long term new build contracts
is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
of boat building, refit and maintenance, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from
long term new build
contracts
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
.
Investment income is recognised when it is probable that the economic benefits will flow to the company and the amount can be measured reliably.
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 15 -
1.4
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
.
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
15% reducing balance
Fixtures and fittings
15% reducing balance
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.7
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.
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 16 -
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.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
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.
1.10
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.
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 17 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 18 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.11
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.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 19 -
1.15
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.
1.16
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.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Work in progress
Calculation of ongoing project work at the year end relies upon judgement as to when the profit will be realised, based on the stage of completion of each project.
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
2
Judgements and key sources of estimation uncertainty
(Continued)
- 20 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Property, plant and equipment
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Provision for onerous contracts
Provisions for onerous contracts are calculated by estimating the costs of certain projects based on the works still to be carried out under obligation of the contract and offset against the benefits due to be derived from those contracts.
3
Turnover and other revenue
2020
2019
£
£
Turnover analysed by class of business
Building, repairs and refits of aluminium vessels
15,012,055
19,807,853
2020
2019
£
£
Other significant revenue
Interest income
89
715
Dividends received
62,400
47,600
Grants received
144,490
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
6,064,757
3,518,205
Europe
8,476,343
7,565,377
Rest of the World
470,955
8,724,271
15,012,055
19,807,853
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 21 -
4
Operating loss
2020
2019
Operating loss for the period is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
225,053
255,882
Research and development costs
30,246
447,884
Government grants
(144,490)
Fees payable to the company's auditor for the audit of the company's financial statements
6,250
6,250
Depreciation of owned tangible fixed assets
114,073
43,358
Profit on disposal of tangible fixed assets
(141)
Operating lease charges
190,505
313,195
5
Auditor's remuneration
2020
2019
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
6,250
6,250
6
Employees
The average monthly number of persons (including directors) employed by the company during the Period was:
2020
2019
Number
Number
Administration and manufacturing
39
34
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
1,445,683
1,111,521
Social security costs
90,733
100,127
Pension costs
65,846
54,055
1,602,262
1,265,703
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 22 -
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Interest on bank deposits
89
715
Income from fixed asset investments
Income from shares in group undertakings
62,400
47,600
Total income
62,489
48,315
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
89
715
8
Interest payable and similar expenses
2020
2019
£
£
Other finance costs:
Other interest
209,985
28,094
9
Taxation
2020
2019
£
£
Current tax
Adjustments in respect of prior periods
(35,885)
Deferred tax
Origination and reversal of timing differences
(224,413)
(327,596)
Adjustment in respect of prior periods
114,590
Total deferred tax
(109,823)
(327,596)
Total tax credit
(109,823)
(363,481)
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
9
Taxation
(Continued)
- 23 -
The actual credit for the Period can be reconciled to the expected credit for the Period based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Loss before taxation
(1,118,720)
(1,689,918)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
(212,557)
(321,084)
Tax effect of expenses that are not deductible in determining taxable profit
2,532
Under/(over) provided in prior years
114,590
(35,885)
Dividend income
(11,856)
(9,044)
Taxation credit for the period
(109,823)
(363,481)
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 October 2019
685,998
10,519
50,075
746,592
Additions
132,460
132,460
Disposals
(939)
(939)
At 29 September 2020
818,458
9,580
50,075
878,113
Depreciation and impairment
At 1 October 2019
87,014
1,951
10,019
98,984
Depreciation charged in the Period
102,774
1,285
10,014
114,073
Eliminated in respect of disposals
(141)
(141)
At 29 September 2020
189,788
3,095
20,033
212,916
Carrying amount
At 29 September 2020
628,670
6,485
30,042
665,197
At 30 September 2019
598,984
8,568
40,056
647,608
11
Fixed asset investments
2020
2019
Notes
£
£
Investments in joint ventures
12
502,500
502,500
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 24 -
12
Joint ventures
Details of the company's joint ventures at 29 September 2020 are as follows:
Name of undertaking
Registered office
Interest
% Held
held
Direct
Aluminium Marine Consultants Limited
United Kingdom
Ordinary shares
50.00
13
Financial instruments
2020
2019
£
£
14
Stocks
2020
2019
£
£
Work in progress
111,416
455,298
15
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
989,710
1,012,619
Corporation tax recoverable
5,396
Other debtors
414,783
1,485,901
Prepayments and accrued income
2,725,990
1,461,459
4,130,483
3,965,375
2020
2019
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 19)
455,634
341,396
Total debtors
4,586,117
4,306,771
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 25 -
16
Creditors: amounts falling due within one year
2020
2019
Notes
£
£
Other borrowings
18
3,250,000
Trade creditors
955,329
2,760,246
Taxation and social security
163,799
30,874
Deferred income
534,146
30,455
Other creditors
5,793
58,928
Accruals and deferred income
259,338
599,024
1,918,405
6,729,527
17
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Other borrowings
18
6,947,588
18
Loans and overdrafts
2020
2019
£
£
Other loans
6,947,588
3,250,000
Payable within one year
3,250,000
Payable after one year
6,947,588
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2020
2019
2020
2019
Balances:
£
£
£
£
Accelerated capital allowances
59,455
55,040
-
-
Tax losses
-
-
455,634
341,396
59,455
55,040
455,634
341,396
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
19
Deferred taxation
(Continued)
- 26 -
2020
Movements in the Period:
£
Asset at 1 October 2019
(286,356)
Credit to profit or loss
(109,823)
Asset at 29 September 2020
(396,179)
The deferred tax asset set out above is only expected to partially reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period. Likewise the deferred tax liability set out above is only expected to partially reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
20
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
65,846
54,055
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.
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 27 -
21
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
100 Oridnary £1 shares of £1 each
100
100
22
Control
There is no ultimate controlling party.
23
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2020
2019
£
£
Aggregate compensation
97,511
128,124
Key management personnel are deemed to be the directors of the company as they have authority and responsibility for planning, directing and controlling the activities of the entity
Transactions with related parties
During the Period the company entered into the following transactions with related parties:
Purchases
2020
2019
£
£
Entities over which the entity has control, joint control or significant influence
319,310
601,901
WIGHT SHIPYARD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 SEPTEMBER 2020
- 28 -
24
Cash absorbed by operations
2020
2019
£
£
Loss for the Period after tax
(1,008,897)
(1,326,437)
Adjustments for:
Taxation credited
(109,823)
(363,481)
Finance costs
209,985
28,094
Investment income
(62,489)
(48,315)
Gain on disposal of tangible fixed assets
(141)
Depreciation and impairment of tangible fixed assets
114,073
43,358
Movements in working capital:
Decrease/(increase) in stocks
343,882
(336,806)
(Increase)/decrease in debtors
(170,504)
362,425
Decrease in creditors
(2,064,813)
(30,320)
Increase/(decrease) in deferred income
503,691
(1,405,294)
Cash absorbed by operations
(2,245,036)
(3,076,776)
25
Analysis of changes in net debt
1 October 2019
Cash flows
29 September 2020
£
£
£
Cash at bank and in hand
402,463
1,178,931
1,581,394
Borrowings excluding overdrafts
(3,250,000)
(3,697,588)
(6,947,588)
(2,847,537)
(2,518,657)
(5,366,194)
2020-09-29
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