The directors present the strategic report for the year ended 31 March 2022.
The principal activity of the company is that of a holding company and provider of management services to the group.
The principal activity of the group is that of design, install and connection of gas, water, electricity and street lighting infrastructure carried on through its subsidiary Aptus Utilities Limited.
The results have been impacted by a number of factors, both positive and negative, and each of these are considered below:
The market in which we operate has continued its bounce back from COVID. We have seen continued increases in activity in terms of new scheme awards in all of the regions in which we operate reflecting the confidence of housing developers in developing new sites during the financial year. In spite of the current economic and geopolitical headwinds all publicly quoted housing developers remain cautiously optimistic on the outlook for the sector. Our continued success, and resilience through the pandemic and beyond, can be attributed to our strong customer service ethos which runs throughout our business and people.
Price inflation has been prevalent across all our cost categories. We have seen increases ranging from 5%-50%. This has particularly been the case with polymer-based products and electric cable. We have sought to mitigate these material price increases through additional charges being levied against our customers and through management of suppliers. We have also sought to ensure that our quotes and new business are at the most current price at the time they are contracted. Our standard terms and conditions contain provisions to charge for RPI and for material input price changes.
Disruption in supply chains has continued, with certain key materials impacted as well as vehicles. In the main we have managed to deal with this through holding a higher level of stocks and through extending the life of our fleet, which in turn has increased the costs of running that fleet.
Labour shortages and wage inflation have been a feature, there has been competition for resources and this has tended to push up the price of that resource. We have sought to manage this by ensuring that we continue to offer a great place to work in addition to packages in line with market rates.
Whilst a significant proportion of our business remains in the North West we have continued with our previous success in growing our presence and business in the North East, Yorkshire and the Midlands. We operate depots in each of these locations and have continued to add colleagues through the period as activity levels have increased in these areas. We have continued to be successful in securing contracts from new customers in each of these areas.
The group has continued to invest in people, to ensure that it can continue to meet the demands of such a rapidly growing business. It is committed to both its trainee development and apprentice scheme and is proud of being able to attract young people into the industry at a time when the industry faces a skills shortage. This was recognised externally when we were shortlisted for two awards in the North West Young Professional Awards, winning the award for our training program. During this financial period, we continued our leadership development program for our senior managers (which will assist in future succession planning) and commenced a training program for the next level of managers.
The group faces a number of business risks and uncertainties due to the market conditions. The key risks are set out in the below.
Risk of a downturn in the market, either as a result of current economic or geopolitical issues. The continuing strategy of delivering market leading levels of customer service at competitive prices would be pursued in order to retain current customers. In addition, through enhanced business development activity, Aptus would expect to increase market share across its chosen geographical markets. Disciplined management of costs would ensure that margin percentages are protected as far as possible.
Risk of a shortage of skilled labour in a competitive environment. Aptus prides itself on its positive culture and the development opportunities it creates for its people. Further work will be done over the coming year to build on Aptus’ position as the employer of choice for people in the industry.
Risk of substantial input price increases or shortages of materials. The group enjoys very good relations with its supplier base, and its key suppliers in particular. This includes regular discussions to identify potential price increases, material shortages/ issues and assistance in mitigation strategies. In the case of a continued and extended period of higher prices the group’s terms and conditions allow for these to be passed on to our customers.
Risks from future legislation to achieve net zero on new housing. The government has issued a number of consultative documents, including a white paper entitled “Powering our Net Zero Future” (issued December 2020) which all relate to making new homes more energy efficient and the stated intent to phase out natural gas from all new builds after 2025. The changes envisaged represent both a challenge and an opportunity for the group. As yet the detailed legislation and impact has not been determined. The group ensures, and will continue to ensure, that it liaises with all key stakeholders to ensure the benefits to its business are maximized and the impacts mitigated of any future change in legislation.
A key tenet of the business continues to be health, safety, quality and the environment. In order to ensure that the group meets and even exceeds its obligations, we have a dedicated HSQE department who are responsible for implementing a class leading policy. This has been validated by our success in receiving our 3rd ROSPA Gold Awards for high health and safety standard in the workplace during the last financial year.
Our policy aims to provide and support a culture where health, safety, quality and the environment is at the top of everyone's agenda. This is achieved by ensuring that all our staff, operatives and sub-contractors receive adequate training, have the correct personal protective equipment and feel empowered to raise any concerns that they may have.
Continual development and improvement of all risk management and control systems within the business is key to the continued improvement in HSQE performance and striving to achieve best practice.
The group recognises that some of the by-products of the work undertaken, if not managed correctly, can have a detrimental effect on our people, our customers and the communities we work in. In order to mitigate these risks, the group has a management system that ensures compliance with all current legislation. Reduction of our carbon footprint and operational waste to landfill remain priorities for the business.
The group undertook an independent review of its Environmental, Social and Governance (ESG) position during the year. The review scored the group well but provided several areas where things could be improved still further to achieve best practice. These are currently being targeted by the management team.
|
|
202 2 |
202 1 |
|
|
£'000 |
£'000 |
|
|
|
|
Turnover |
|
61,431 |
44,074 |
Gross profit |
|
12,448 |
8,484 |
Gross profit % |
|
20 % |
19% |
Gross EBITDA |
|
5,536 |
2,983 |
Future orderbook |
|
118,000 |
108,000 |
We continued our success in recovering from the COVID impact of 2021 with turnover, gross profit and EBITDA all growing significantly from the previous years. Future orderbook benefited from the continued success of the business development activities and through the continued geographical expansion .
Strong customer relationships and a reputation for delivering great customer service provide a springboard for continued growth with existing and new customers in our chosen geographical regions of the North of England, Yorkshire and the Midlands. We aim to extend our reach through our existing network by pushing for new client opportunities in adjacent geographies.
The experienced team, along with the supportive shareholders and funders, will continue to drive the business through 2023 and beyond. A strong balance sheet and cash position means the business is in a strong position to continue to build on the success of recent years.
Business investment and improvement plans will continue to further enhance health and safety culture, improve the client experience, and develop our people and systems to provide greater efficiencies for the benefit of all stakeholders.
Management is aware of the potential changes in the domestic gas market from 2025 and the Government’s targets around emissions for new housing and construction. At present the proposals are yet to be specifically formulated however the group remain in dialogue with all stakeholders to ensure they are best placed to react to legislative and regulatory changes
The directors are very confident for the future of the business in light of the current strong position and future opportunities.
The group remains committed to both the quality and safety of the work environment and has retained all of its accreditations with Lloyds and ISO in the following areas:
MURS - Multi-Utility Registration Scheme
GIRS - Gas Industry Registration Scheme
WIRS - Water Industry Registration Scheme
NERS - National Electricity Registration Scheme
ISO – 9001, 14001, 45001
Financial instruments
The group has a normal level of exposure to price, credit, liquidity, and cash flow risks arising from trading activities which are conducted in the UK market place.
This statement by the board describes how the responsibilities under s172(1)(a) to (f) of the Companies Act 2006 have been approached in the financial period ending 31 st March 2022.
The directors consider that they have acted in good faith to promote the success of the group on behalf of the stakeholders, in relation to matters set out in s172 of the Act.
The stakeholders of the business include the employees, clients and suppliers of the business.
The directors monitor and review strategic objectives against long term growth plans and regular reviews at departmental and board level are held across the business in the key areas. These areas being HSQE, Financial performance, Operations, Human Resources and Risks and Opportunities.
HSQE is considered to be fundamental to the management of the business by the directors. Safe working practices that minimise environmental impact are key to the success of the business and vitally important for our stakeholders, the communities and the environments we work in.
The fundamental principle in the governance of Aptus Utilities is the clear, fair and trusting approach to all interactions with employees, clients and suppliers, This is reflected in the length of service of employees and management teams and the longevity of the relationships with our clients and suppliers.
The group's employees, clients and suppliers are critical to the success of the business and so it is recognised that engagement is an important aspect in those relationships.
The directors recognise and understand that it is important to keep employees informed of all matters concerning them and does this in a number of ways including newsletters, meetings, verbal and written communications. The views and interests of employees are considered in consultation with them through working groups or forums, which evolve over time to meet the needs of all parties. The policy of the group is to consult and discuss with employees any issues that arise in accordance with relevant procedures or legislation.
The group has an equal opportunities policy and is committed to the principles within the policy in respect of all stakeholders.
The group has built, and continues to grow, the business on a reputation for delivering excellent customer service. The company, through the senior management and employees, strives continuously to improve in every aspect of the products and services it provides, for the mutual benefit of all stakeholders.
The group enjoys good relationships with suppliers in relation to credit arrangements and takes a firm approach to debtor management. Payment terms reduce the risk to the business whilst the process for debt collection minimises the risk of non payments.
The directors have overall responsibility for delivering the group’s strategy and values and for ensuring high standards of governance. The primary aim of the directors is to promote the long term sustainable success of the group to generate benefit for the stakeholders. Throughout the next financial year, the directors will continue to review, improve and challenge the engagement with all stakeholders.
The g roup has an equal opportunities policy and is committed to the principles within the policy in respect of all stakeholders.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2022.
The results for the year are set out on page 13.
No ordinary dividends were paid.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
In accordance with the Companies (Directors’ Report) Regulations 2018, Neptune 123 Limited has prepared the following energy and carbon declaration. The data has been reported for all entities which operate under Neptune 123 Limited and its subsidiaries without exclusion. This declaration only covers energy usage within the UK.
The following standards are used in the calculation the above disclosures:
2019 HM Government Environmental Reporting Guidelines
GHG Reporting Protocol – Corporate Standard
2020 UK Government's Conversion Factors for Company Reporting
In the current period the group has undertaken a range of actions, which have included the following steps, to seek to reduce its emissions:
Replacing plastic bottles with glass ones for our milk supplies;
Using energy efficient lighting at our offices and depots; and
Increasingly going paperless thanks to the use of technology.
Looking forward we have set ourselves targets on reducing the amount of waste we send to landfill (by 10%), increasing level of recycling (25%) and reducing our energy consumption (by 25%). We also aim to plant trees under an accredited scheme to offset our consumption of greenhouse gases, based on the size of our vehicle fleet.
We have audited the financial statements of Neptune 123 Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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).
Basis for opinion
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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard , and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
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.
In the light of the knowledge and understanding of the group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' r esponsibilities s tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements , the directors are responsible for assessing the parent company ' s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements .
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below:
Enquiries with management, about any known or suspected instances of non-compliance with laws and regulations and fraud ;
Challenging assumptions and judgements made by management in their significant accounting estimates ; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness ; and
Reviewing board minutes and resolutions.
Because of the field in which the client operates we identified that employment law, health and safety legislation and compliance with the UK Companies Act are the area s most likely to have a material impact on the financial statements.
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.
Use of our report
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.
As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £99,775 (2021 - £14,257 profit).
Neptune 123 Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales . The registered office is Aptus House, Barrs fold Road, Westhoughton, Bolton, England, BL5 3XP.
The group consists of Neptune 123 Limited and all of its subsidiaries.
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.
The consolidated financial statements incorporate those of Neptune 123 Limited and all of its subsidiaries (ie entities that the g roup controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All financial statements are made up to 31 March 2022 . Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Neptune 456 Limited , Neptune 789 Limited, Aptus Group Limited, Aptus Limited and Aptus Utilities Limited "the Group" have all been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows f or the 12 month period from to 31 March 2022 .
The directors have considered the following factors in assessing going concern:
Current year performance to date;
Current and future cash resources and structure of the balance sheet;
Covenant compliance;
Future prospects for the business;
Future financial commitments;
Existing and newly entered into bank facilities; and
The group’s ability to deal with any future reduction in work caused by a slow down in the development of new build residential market for sale and social housing.
Post year end the directors have obtained additional banking facilities from its lenders together with amended covenants. The directors have produced future cash flow forecasts based on different scenarios which indicate sufficient funds are in place to meet all liabilities as they are projected to fall due for payment over the next twelve months.
Taken together the directors have concluded that there are no material uncertainties over adopting the going concern basis at the time of signing the financial statements.
A t the time of approving the financial statements , t he directors have a reasonable expectation that the company and group 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.
Turnover represents the net invoiced value of work completed, excluding value added tax. In respect of long term contracts and contracts for ongoing services, turnover represents the value of work done in the year, including estimates of amounts not invoiced. Turnover in respect of long term contracts and contracts for ongoing services is recognised by reference to the stage of completion with amounts due included within Amounts Recoverable on Contracts. Any amounts received in advance are included within Payments Received on Account and included within creditors.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account .
Equity in vest ments are measured at fair value through profit or loss , except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably , which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I n the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest m ethod unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors , bank loans , vendor loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently 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 though 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account , except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease d asset are consumed.
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.
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.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Profit on construction contracts is taken as the work is carried out, if the final outcome can be assessed with reasonable certainty, The profit is calculated on a prudent basis to reflect the proportion of work carried out by the year end by recording turnover and related costs as contract activity progresses.
Turnover is calculated as that proportion of total contract revenue which costs incurred to date bear to total expected costs for that contract. Revenue derived from the variations on contracts is only recognised when they have been accepted by the customers.
Full provision is made for losses on all contracts in the year in which they are foreseen.
Amounts recoverable on contracts are amounts not yet invoiced for which work has been completed but not yet certified.
Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2021 - 7).
The total remuneration for the key management personnel of the group was £894,954 (2021: £821,899).
Investment income includes the following:
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 31 March 2022 are as follows:
All other loans are secured by a fixed and floating charge over the assets of Neptune 123 Limited, Neptune 456 Limited, Neptune 789 Limited, Aptus Group Limited and Aptus Utilities Limited.
The bank loan is secured by a fixed and floating charge over the assets of Neptune 123 Limited, Neptune 456 Limited, Neptune 789 Limited, Aptus Group Limited and Aptus Utilities Limited.
The bank loan is repayable at £250,000 per quarter, commencing the quarter ending 30 September 2020. Interest on the loan is being charged in arrears at 5.2% over base rate.
Other loans of £15,610,894 (2021: £15,087,756) have capital and unpaid interest repayable in 6 equal bi-annual instalments with the first instalment due 31 March 2025. Interest is being charged quarterly in arrears at 10% with the first payment due 30 June 2021, and paid quarterly thereon subject to the approval of the holder of the bank loan. The other loans also includes a 3% yield per annum on the principal amount which is payable on redemption.
Other loans of £9,147,003 (2021: £8,840,565) have capital and unpaid interest repayable in 6 equal bi-annual instalments with the first instalment due 31 March 2025. Interest is being charged quarterly in arrears at 10% with the first payment made on 30 June 2021, and paid quarterly thereon subject to the approval of the holder of the bank loan. The other loans also includes a 3% yield per annum which is payable on redemption.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above is not expected to materially reverse over the upcoming 12 months and relates to accelerated capital allowances and the opposite effect of short term timing differences that are not expected to reverse within the same period .
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Ordinary A shares
Right to vote and attend meetings, right to dividends, right to receive capital (including on wind up), and rank in priority in the event of an exit.
Ordinary B shares
Right to vote and attend meetings, right to dividends, right to receive capital (including on wind up), and rank in priority in the event of an exit.
Ordinary C shares
Right to vote and attend meetings, right to dividends, right to receive capital (including on wind up), and rank behind the A Ordinary shares and B Ordinary shares in the event of an exit.
Ordinary D shares
Right to vote and attend meetings, right to dividends, right to receive capital (including on wind up), and rank behind the A Ordinary shares and B Ordinary shares in the event of an exit.
Ordinary E shares
Do not have the right to vote and to attend meetings, do not have the right to dividends, in the event of an exit or return of capital (on a liquidation or otherwise), the holder of the E Ordinary shares shall only have the right to receive the issue price in respect of the E Ordinary shares.
Ordinary F shares
Do not have the right to vote and to attend meetings, do not have the right to dividends. Right to receive capital on a liquidation, exit or otherwise is in accordance with articles 10.2 and 10.3.
On 7 May 2021 22,500 C Ordinary shares and 22,500 E Ordinary shares were purchased in Treasury for £45,000.
On 9 November 2021 15,000 C Ordinary shares and 15,000 E Ordinary shares were sold from Treasury for £30,000.
On 31 March 2022 7,500 issued and 12,500 unissued C Ordinary shares were designated to Ordinary F shares.
On 31 March 2022 12,495 Ordinary F 1p shares were issued with a premium of £1.99 per share.
On 31 March 2022 7,500 F Ordinary F 1p shares were sold out of Treasury for £15,000, being £2 per share.
As at 31 March 2022 the company holds 7,500 E Ordinary in Treasury.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The company has taken advantage of the exemption permitted under Section 33 'Related Party Disclosures' paragraph 33.1A from disclosing transactions with the parent company.