Company Registration No. SC127071 (Scotland)
CAPITO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
CAPITO LIMITED
COMPANY INFORMATION
Directors
Mrs A Burnside
Mr A Quinn
Mr C Lennox
Mr E Campbell
Mr M Gibson
Secretary
Mrs A Burnside
Company number
SC127071
Registered office
Caputhall Road
Livingston
West Lothian
United Kingdom
EH54 8AS
Auditor
Azets Audit Services
Titanium 1
Kings Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
CAPITO LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
CAPITO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
The results for the year show an operating profit before tax of £
529,697
(20
20
: £
400,322
) on turnover of £
8.62m
(20
20
: £
5.37m
). The company has a net balance sheet value of £
2.92
m at 31 December 20
21
(20
20
: £
2.48
m)
Principal risks and uncertainties
The management of the business and the execution of the Company's strategy are subject to a number of risks.
The key business risks and uncertainties affecting the Company are considered to be:
-
Staff retention – Capito is an Accredited Living Wage Employer and Silver Level Accredited Investors in People, accredited as “We Invest in People”. Capito’s people are at the heart of what they do and they are constantly exploring ways to ensure the experienced and dedicated workforce are retained.
Company Values
Capito continues to work closely with its customers to define and deliver IT solutions that meet their business needs. Living the company values is key to everything Capito achieves:
-
Attentive – Listening to the customers and understanding the challenges faced helps Capito offer the right solution
.
-
R
eliable – Capito ensures a clearly defined scope of requirements is agreed with its customers to allow a timely and cost-effective solution to be delivered.
-
Positive – Capito’s can-do attitude gives its customers confidence in delivery capability.
-
Flexible – Understanding the current market conditions and the challenges some businesses are facing with flexible working allows Capito to offer a flexible delivery approach to ensure customers are supported and receive their desired solution.
KPI Measures
Capito’s senior management team are responsible for reporting on departmental KPI on a weekly basis as the company challenges itself in creating efficiencies and identifying areas where improvements are required.
The company business objectives are shared company wide and progress against these are discussed at the Bi-monthly company board meetings.
Outlook
Despite the exceptional circumstances and uncertainty created by the Global Pandemic Covid 19 and the new Brexit trading regulations, Capito’s results for the year to December 2021 showed year on year growth of 32%.
As we move in to 2022, the company objectives are focused on continuing to grow its profitability through increasing our customer base and geographic delivery capability. The company increased its headcount by 18% in 2021 and will use this increased sales and delivery capability to increase services sales and margin % by delivering from our fixed cost basis.
CAPITO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Financial risk management objectives and policies
The Company's principal financial instruments are cash, debt discounting and general banking facilities, all of which are used to facilitate normal trading operations. The main risks from the company's financial instruments are credit, liquidity and cash flow risk.
The Company mitigates credit risk by thorough credit vetting of clients prior to commencement of trade and periodically thereafter, systematic enforcement of credit limits and agreed payment terms and insuring of trade debt.
The Company mitigates liquidity risk through financing from a mix of shareholders' funds and bank borrowings. This mix of funding offers flexibility and cost effectiveness to match the needs of the Company.
The Company mitigates cash flow risk by discounting debt with a third party to ensure sufficient funding to satisfy creditors as they fall due, enforcement of customer credit limits and agreed payment terms.
Mrs A Burnside
Director
10 March 2022
CAPITO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company in the year under review was that of the provision of Information and Communication Technologies (ICT) services to Public and Private Sector Organisations. The Company continues to develop its strategic partnerships and to expand its business throughout the UK. There have not been any significant changes in the Company's principal activity in the year under review. At the date of this report, the directors are not aware of any major changes in the Company's activity in the next year.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs A Burnside
Mr A Quinn
Mr C Lennox
Mr E Campbell
Mr M Gibson
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the 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
Mrs A Burnside
Director
10 March 2022
CAPITO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
CAPITO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CAPITO LIMITED
- 5 -
Opinion
We have audited the financial statements of Capito Limited (the 'company') for the year ended 31 December 2021 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CAPITO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPITO LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report 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
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 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.
CAPITO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPITO LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
-
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
-
Reviewing minutes of meetings of those charged with governance;
-
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
-
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Greig McKnight (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
10 March 2022
Chartered Accountants
Statutory Auditor
Titanium 1
Kings Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
CAPITO LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
8,615,210
5,368,040
Cost of sales
(6,480,311)
(3,662,315)
Gross profit
2,134,899
1,705,725
Administrative expenses
(1,605,202)
(1,467,859)
Other operating income
162,456
Operating profit
4
529,697
400,322
Interest payable and similar expenses
7
(36,310)
(32,031)
Profit before taxation
493,387
368,291
Tax on profit
8
(56,221)
(62,629)
Profit for the financial year
437,166
305,662
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CAPITO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
2021
2020
£
£
Profit for the year
437,166
305,662
Other comprehensive income
-
-
Total comprehensive income for the year
437,166
305,662
CAPITO LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
9
76,904
65,078
Current assets
Stocks
10
49,454
123,241
Debtors
11
3,613,259
3,271,379
Cash at bank and in hand
262,167
420,071
3,924,880
3,814,691
Creditors: amounts falling due within one year
12
(1,084,803)
(1,198,890)
Net current assets
2,840,077
2,615,801
Total assets less current liabilities
2,916,981
2,680,879
Creditors: amounts falling due after more than one year
13
(201,064)
Net assets
2,916,981
2,479,815
Capital and reserves
Called up share capital
18
68,378
68,378
Share premium account
19
195,977
195,977
Capital redemption reserve
19
208,045
208,045
Profit and loss reserves
19
2,444,581
2,007,415
Total equity
2,916,981
2,479,815
The financial statements were approved by the board of directors and authorised for issue on 10 March 2022 and are signed on its behalf by:
Mrs A Burnside
Director
Company Registration No. SC127071
CAPITO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2020
68,378
195,977
208,045
1,701,753
2,174,153
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
-
305,662
305,662
Balance at 31 December 2020
68,378
195,977
208,045
2,007,415
2,479,815
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
-
437,166
437,166
Balance at 31 December 2021
68,378
195,977
208,045
2,444,581
2,916,981
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
1
Accounting policies
Company information
Capito Limited is a
private
company
limited by shares
incorporated in
Scotland
.
The registered office is
Caputhall Road, Livingston, West Lothian, United Kingdom, EH54 8AS.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’
:
Interest
income/expense and net gains/losses for each category of financial instrument;
basis
of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 26 ‘Share based Payment’
:
Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Murray Capital Group Limited.
These consolidated financial statements are available from its registered office,
26 Charlotte Square, Edinburgh, EH2 4ET.
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis in preparing the financial statements.
true
In their consideration of going concern the directors have paid special attention to the ongoing Brexit regulations and impact on supply chain on the business.
The current and future financial position of the company, its cash flows and liquidity position have been reviewed by the directors. Cashflow projections including sensitivities have been prepared that extend beyond one year from the date of approval of these financial statements.
The directors have obtained assurances that the ultimate parent company Murray Capital Limited ("the group") will continue to provide support as necessary.
The directors have reviewed the latest projections of the group and are satisfied as to the validity of these assurances and that the group has the means and authority to provide such funding if it is required.
After reviewing the measures taken against the business risk, the cashflow projections and the Group's support, the directors consider that it is appropriate to prepare the financial statements on the going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, 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 a contract to provide services is recognised in the period in which the services are provided when 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.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
20% on reducing balance
Fixtures and fittings
25% on cost, 25% on reducing balance and 20% on 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
.
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell
, after making due allowance for obsolete and slow moving items.
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.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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.
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
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.
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The 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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
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.
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 18 -
1.15
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.
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Sale of goods
4,118,800
3,748,740
Rendering of services
4,496,410
1,619,300
8,615,210
5,368,040
2021
2020
£
£
Other significant revenue
Grants received
148,192
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(148,192)
Fees payable to the company's auditor for the audit of the company's financial statements
18,000
16,750
Depreciation of owned tangible fixed assets
28,291
17,554
Depreciation of tangible fixed assets held under finance leases
1,383
6,760
Operating lease charges
111,487
97,494
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Administration
21
14
Sales/technical
35
34
Total
56
48
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
1,976,760
1,670,076
Social security costs
213,338
175,995
Pension costs
53,855
61,607
2,243,953
1,907,678
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
278,172
287,727
Company pension contributions to defined contribution schemes
5,205
5,513
283,377
293,240
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2020: 3)
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
154,821
148,029
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
7
Interest payable and similar expenses
2021
2020
£
£
Interest on bank overdrafts and loans
11,303
11,715
Other interest on financial liabilities
22,612
19,047
Interest on finance leases and hire purchase contracts
734
Other interest
1,661
1,269
36,310
32,031
8
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
82,544
61,122
Adjustments in respect of prior periods
(31,003)
686
Total current tax
51,541
61,808
Deferred tax
Origination and reversal of timing differences
7,950
821
Changes in tax rates
(3,270)
Total deferred tax
4,680
821
Total tax charge
56,221
62,629
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
493,387
368,291
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
93,744
69,975
Tax effect of expenses that are not deductible in determining taxable profit
2,726
1,596
Adjustments in respect of prior years
(31,003)
686
Group relief
(6,300)
(8,277)
Deferred tax adjustments in respect of prior years
(33)
Rate differences
(1,362)
(1,318)
Fixed asset differences
(1,584)
Taxation charge for the year
56,221
62,629
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
9
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2021
40,398
1,052,293
1,092,691
Additions
41,500
41,500
At 31 December 2021
40,398
1,093,793
1,134,191
Depreciation and impairment
At 1 January 2021
32,488
995,125
1,027,613
Depreciation charged in the year
1,582
28,092
29,674
At 31 December 2021
34,070
1,023,217
1,057,287
Carrying amount
At 31 December 2021
6,328
70,576
76,904
At 31 December 2020
7,910
57,168
65,078
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2021
2020
£
£
Fixtures and fittings
4,148
5,531
10
Stocks
2021
2020
£
£
Finished goods and goods for resale
49,454
123,241
11
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
975,282
1,292,389
Amounts owed by group undertakings
2,421,920
1,838,816
Other debtors
19,122
5,901
Prepayments and accrued income
191,260
123,918
3,607,584
3,261,024
Deferred tax asset (note 16)
5,675
10,355
3,613,259
3,271,379
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
11
Debtors
(Continued)
- 22 -
Interest is not charged on inter-company balances and there is no fixed repayment date.
12
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Obligations under finance leases
15
1,064
5,781
Trade creditors
294,042
360,230
Corporation tax
51,541
61,122
Other taxation and social security
221,230
248,875
Other creditors
8,629
24,714
Accruals and deferred income
508,297
498,168
1,084,803
1,198,890
13
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
14
200,000
Obligations under finance leases
15
1,064
201,064
14
Loans and overdrafts
2021
2020
£
£
Bank loans
200,000
Payable after one year
200,000
Bank loans are represented by the lending facility obtained under the Coronavirus Business Interruption Loan Scheme (CBILS) during 2020. The loan is guaranteed by the UK Government under the Enterprise Finance Guarantee programme, is subject to interest at 2.95% over Bank of England Base Rate and falls due for repayment on the second anniversary of the date of drawdown. This was fully repaid during the current year.
Trade debtors are subject to an invoice financing agreement, which is secured by a first charge over trade debtors. The company has granted to its bankers a bond and floating charge over all of the assets of the company and of its parent.
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
15
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
1,064
5,781
In two to five years
1,064
1,064
6,845
Finance lease payments represent rentals payable by the company 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.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2021
2020
Balances:
£
£
Fixed asset timing differences
5,177
9,977
Losses and other deductions
498
378
5,675
10,355
2021
Movements in the year:
£
Asset at 1 January 2021
(10,355)
Charge to profit or loss
4,680
Asset at 31 December 2021
(5,675)
17
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
53,855
61,607
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.
CAPITO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
18
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 10p each
683,778
683,778
68,378
68,378
Ordinary shares carry one vote per share. There are no restrictions on the distribution of dividends and the repayment of capital.
19
Reserves
Share premium
This reserve records the amount above the nominal value received for shares sold, less transaction costs.
Capital redemption reserve
This reserve records the nominal value of shares repurchased by the Company.
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
90,790
88,869
Between two and five years
11,477
10,434
102,267
99,303
21
Related party transactions
During the year Capito Limited entered into sales transactions in the ordinary course of business with related parties as follows; Chardon Wines Ltd amounting to £97 (2020: £0), Murray Capital Limited £13,889 (2020: £19,541), Murray Estates Ltd £97 (2019: £734) and New Brannock Ltd £3887 (2020: £813).
There were no balances outstanding at the year end.
22
Ultimate controlling party
The immediate parent undertaking is Capito Holdings Limited. The ultimate parent undertaking and controlling party of the company is Murray Capital Group Limited. The smallest and largest group in which the results of Capito Limited are consolidated is that headed by Murray Capital Group Limited.
Copies of Murray Capital Group Limited consolidated financial statements can be obtained from the company secretary at 26 Charlotte Square, Edinburgh, EH2 4ET.
2021-12-31
2021-01-01
false
CCH Software
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