Company registration number SC241155 (Scotland)
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
COMPANY INFORMATION
Directors
W S Henderson
M J Horner
Company number
SC241155
Registered office
Cornerstone
60 South Gyle Crescent
Edinburgh
EH12 9EB
Auditors
Geoghegans
Chartered Accountants
6 St Colme Street
Edinburgh
EH3 6AD
Bankers
Bank of Scotland
38 St Andrew Square
Edinburgh
EH2 2YR
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2022
- 1 -
The directors present the strategic report for the year ended 31 January 2022.
Fair review of the business
The directors report a profit before tax for the year of £356,761 which is considered satisfactory as the global economy emerges from the effects of the Covid 19 pandemic, along with the macro-economic effects arising from Brexit. Diversification into target industries and market sectors is a key component of the company's ongoing growth strategy and this is reflected in the increase in revenue of over 11% compared with the prior year.
Expansion throughout Scotland is a significant part of the company’s growth plan going forward. As part of this strategy, subsequent to the year end a business in Stirling has been acquired from an international consultancy group. This will allow the company to further consolidate and expand throughout central Scotland.
Given the nature of the business, the directors are of the opinion that analysis using key performance indicators is not necessary for an understanding of the development, performance and position of the business.
Principal risks and uncertainties
Having come through the Covid-19 pandemic in a strong position, and given the current global situation, the company is continuing with its strategy of diversification and targeted growth in order to maintain its resilience to trading volatilities.
The company’s systems and operations are continuously reviewed to ensure maximum efficiencies and service levels are maintained in order to meet client and compliance requirements.
Development and performance
The directors' main objective is to develop the business by offering services to a wide range of clients in existing and different market sectors.
The directors are confident that their strategy will deliver continuing profitability and generate the required cash flow
s
to finance its future operations.
M J Horner
Director
15 July 2022
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2022
- 2 -
The directors present their report and financial statements for the year ended 31 January 2022.
Principal activities
The principal activity of the company continued to be that of civil, structural, mechanical and electrical engineering consultancy and the provision of services to clients on all aspects and types of construction work.
Directors
The following directors have held office since 1 February 2021:
W S Henderson
M J Horner
Results and dividends
The results for the year are set out on page 7.
The directors do not recommend payment of a dividend
.
Auditor
In accordance with the company's articles, a resolution proposing that Geoghegans be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
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.
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 3 -
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
M J Horner
Director
15 July 2022
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
- 4 -
Opinion
We have audited the financial statements of Blyth & Blyth Consulting Engineers Limited
(the 'company')
for the year ended 31 January 2022 which comprise the Profit And Loss Account, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and
notes to the financial statements, including a summary of significant accounting policies
. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 January 2022 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the directors'
r
eport
. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have
no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and
then design and perform audit procedures to respond to those risks, including obtaining audit evidence
that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we consider the following:
-
The nature of the industry, control environment and business performance of the company.
-
The requests of our enquires with management and Directors about their own identification and assessment of the risks of irregularities.
-
The matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we consider the opportunities and incentives that may exist within the company for fraud. In common with all audits under ISAs (UK), we perform specific procedures to respond to the risk of management override.
We also obtain an understanding of the legal and regulatory environment in which the company operates, focusing on those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements and those which may be fundamental to the company’s ability to operate.
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
- 6 -
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
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.
Iain Binnie (Senior Statutory Auditor)
For and on behalf of Geoghegans
15 July 2022
Chartered Accountants
Statutory Auditor
6 St Colme Street
Edinburgh
EH3 6AD
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JANUARY 2022
- 7 -
2022
2021
Notes
£
£
Turnover
3
9,157,331
8,238,429
Cost of sales
(6,367,509)
(5,789,967)
Gross profit
2,789,822
2,448,462
Administrative expenses
(2,425,520)
(2,273,810)
Other operating income
4
6,323
144,528
Operating profit
4
370,625
319,180
Interest receivable and similar income
7
175
184
Interest payable and similar expenses
8
(14,039)
(4,684)
Profit before taxation
356,761
314,680
Taxation
9
(68,064)
(63,006)
Profit for the financial year
288,697
251,674
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
BALANCE SHEET
AS AT
31 JANUARY 2022
31 January 2022
- 8 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
303,736
381,136
Current assets
Debtors
11
5,234,551
5,100,161
Cash at bank and in hand
1,723,869
1,601,641
6,958,420
6,701,802
Creditors: amounts falling due within one year
12
(3,926,513)
(3,958,706)
Net current assets
3,031,907
2,743,096
Total assets less current liabilities
3,335,643
3,124,232
Creditors: amounts falling due after more than one year
13
(308,720)
(457,201)
Provisions for liabilities
16
(19,183)
(1,956)
Net assets
3,007,740
2,665,075
Capital and reserves
Called up share capital
20
114,446
117,568
Capital redemption reserve
85,554
82,432
Employee Benefit Trust reserve
21
(177,937)
(214,718)
Equity share option reserve
21
49,314
-
Profit and loss reserve
2,936,363
2,679,793
Total equity
3,007,740
2,665,075
The financial statements were approved by the board of directors and authorised for issue on 15 July 2022 and are signed on its behalf by:
M J Horner
Director
Company Registration No. SC241155
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022
- 9 -
Share capital
Equity share option reserve
Capital redemption reserve
Employee Benefit Trust reserve
Profit and loss reserve
Total
Notes
£
£
£
£
£
£
Balance at 1 February 2020
123,820
76,180
(214,718)
2,492,453
2,477,735
Year ended 31 January 2021:
Profit and total comprehensive income for the year
-
-
-
-
251,674
251,674
Purchase of own shares
20
(6,252)
-
6,252
-
(64,334)
(64,334)
Balance at 31 January 2021
117,568
82,432
(214,718)
2,679,793
2,665,075
Year ended 31 January 2022:
Profit and total comprehensive income for the year
-
-
-
-
288,697
288,697
Purchase of own shares
20
(3,122)
-
3,122
-
(32,127)
(32,127)
Employee Benefit Trust reserve movement
-
-
36,781
-
36,781
Equity share option reserve movement
-
49,314
-
-
-
49,314
Balance at 31 January 2022
114,446
49,314
85,554
(177,937)
2,936,363
3,007,740
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2022
- 10 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
364,159
785,816
Interest paid
(14,039)
(4,684)
Taxation paid
(73,942)
(63,651)
Net cash inflow from operating activities
276,178
717,481
Investing activities
Purchase of tangible fixed assets
(59,297)
(16,125)
Proceeds on disposal of tangible fixed assets
208
Interest received
175
184
Net cash used in investing activities
(59,122)
(15,733)
Financing activities
Redemption of shares
(32,127)
(64,334)
Decrease in Employee Benefit Trust loan
36,781
-
Repayment of other borrowings
(1,050)
(Repayment)/proceeds of bank loans
(23,333)
350,000
Repayment of finance lease obligations
(76,149)
(36,615)
Net cash (used in)/generated from financing activities
(94,828)
248,001
Net increase in cash and cash equivalents
122,228
949,749
Cash and cash equivalents at beginning of year
1,601,641
651,892
Cash and cash equivalents at end of year
1,723,869
1,601,641
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022
- 11 -
1
Accounting policies
Company information
Blyth & Blyth Consulting Engineers Limited is a
private
company
limited by shares
incorporated in
Scotland
.
The registered office is
Cornerstone, 60 South Gyle Crescent, Edinburgh, EH12 9EB.
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 on the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors a
re confident
that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
Term of the lease
Office equipment
25-100% per annum
Fixtures and fittings
20% per annum
Computer equipment
33% per annum
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.4
Impairment of fixed assets
The carrying value of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
1.5
Contract accounting
The profit on contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the period end, by recording turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Full provision is made for losses on all contracts in the period in which they are foreseen.
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
1
Accounting policies
(Continued)
- 12 -
1.6
Financial assets
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.
Debtors
Debtors with no stated interest rate or receivable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account.
1.7
Financial liabilities
Creditors with no stated interest rate and payable within one year are recorded at transaction price.
All interest bearing loans and borrowings which are basic financial instruments are initially recorded at the present value of cash payable. After initial recognition they are measured at amortised cost.
1.8
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.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future reversal of underlying timing differences can be deducted.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
1
Accounting policies
(Continued)
- 13 -
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense
.
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.
The company operates a defined contribution pension scheme. The pension costs charged to the financial statements represent the contributions payable by the company during the year in accordance with FRS 102 (section 28).
1.11
Share-based payments
The company grants equity-settled share based payments to certain employees and directors through the issuing of share options.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using
an appropriate pricing
model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. 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 the profit and loss account 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.
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
1
Accounting policies
(Continued)
- 14 -
1.13
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.14
Employee Share Ownership Plan
The company established on 10 November 2004 the Blyth & Blyth Consulting Engineers Limited Employee Benefits Trust (EBT) for the purpose of encouraging or facilitating the holding of shares or debentures in the company by or for the benefit of employees of the company.
The company sponsors and controls the Employee Benefit Trust (EBT). All the assets and liabilities of the EBT are accounted for in accordance with
FRS 102 (section 9)
.
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Recoverability of trade debtors
Recoverability of trade debtors are evaluated and provisions for doubtful debts are made where appropriate. Provisions are based on experience, the age of debt, customer relations and payment history. The actual level of debt collected may differ from the estimated level of recovery and can therefore impact future operating results.
Valuation of amounts due from contract customers
The directors assess the stage of completion of each contract to reflect the proportion of work carried out and turnover and profit on each contract is accounted for as contract activity progresses. Provision is made in full for any contracts which are estimated to result in a loss, as soon as the loss is forecast. Stage of completion and contract progress is measured based on experience. The actual stage of completion may differ from the estimated stage of completion.
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 15 -
3
Turnover analysed by geographical market
An analysis of the company's turnover is as follows:
2022
2021
£
£
United Kingdom
9,157,331
8,237,429
Overseas
-
1,000
9,157,331
8,238,429
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(6,323)
(144,528)
Fees payable to the company's auditor for the audit of the company's financial statements
15,000
14,470
Depreciation of owned tangible fixed assets
63,873
62,493
Depreciation of tangible fixed assets held under finance leases
71,994
50,477
Loss/(profit) on disposal of tangible fixed assets
830
(208)
Share-based payments
49,314
Operating lease charges
184,751
164,060
Government grant income includes £
nil
(202
1
: £
141,366
) of income in relation to the Coronavirus Job Retention Scheme and £
6,323
(202
1
: £
3,162
) of interest payments in relation to the Coronavirus Business Interruption Loan Scheme.
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Office and administration
10
10
Other
63
59
73
69
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
5
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
3,525,644
3,160,126
Social security costs
433,391
380,420
Pension costs
650,464
571,980
4,609,499
4,112,526
In addition, the company engaged the services of, on average, 1 (2021
-
8)
contract staff
under various forms of contract during the year
.
Remuneration of key management personnel
The remuneration of key management personnel, which also includes directors, is as follows.
2022
2021
£
£
Aggregate remuneration
2,184,585
1,994,535
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
195,315
191,645
Company pension contributions to defined contribution schemes
32,674
38,381
227,989
230,026
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021 - 1).
The number of directors who exercised share options during the financial year was 1 (2021: 0). The aggregate amount of gains by the directors on the exercise of share options during the year was £21,076 (2021: £nil).
The number of directors who were entitled to receive shares under long term incentive schemes during the year was 1 (2021 - 1).
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 17 -
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
175
184
8
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
13,679
3,162
Interest on finance leases and hire purchase contracts
101
Other interest
360
1,421
14,039
4,684
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
50,837
73,942
Adjustments in respect of prior periods
(8,349)
Total current tax
50,837
65,593
Deferred tax
Origination and reversal of timing differences
17,227
(2,587)
Total tax charge
68,064
63,006
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
9
Taxation
(Continued)
- 18 -
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:
2022
2021
£
£
Profit before taxation
356,761
314,680
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
67,785
59,789
Tax effect of expenses that are not deductible in determining taxable profit
11,066
1,086
Depreciation on assets not qualifying for tax allowances
12,136
1,533
Over provided in prior years
(8,349)
Other tax adjustments
2,094
8,947
Other deferred tax adjustments
(13,004)
Tax relief on share options exercised
(12,013)
Taxation charge for the year
68,064
63,006
10
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Office and computer equipment
Total
£
£
£
£
Cost
At 1 February 2021
285,286
114,748
776,005
1,176,039
Additions
54,902
4,395
59,297
Disposals
(210,172)
(210,172)
At 31 January 2022
340,188
119,143
565,833
1,025,164
Depreciation and impairment
At 1 February 2021
140,607
87,603
566,693
794,903
Depreciation charged in the year
43,503
9,737
82,627
135,867
Eliminated in respect of disposals
(209,342)
(209,342)
At 31 January 2022
184,110
97,340
439,978
721,428
Carrying amount
At 31 January 2022
156,078
21,803
125,855
303,736
At 31 January 2021
144,679
27,145
209,312
381,136
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
10
Tangible fixed assets
(Continued)
- 19 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases. The depreciation charge in respect of such assets amounted to £71,994 (2021 - £50,477) for the year.
2022
2021
£
£
Office and computer equipment
117,815
189,809
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
1,999,627
2,524,462
Gross amounts due from contract customers
1,827,310
1,696,475
Other debtors
1,005,887
574,313
Prepayments and accrued income
401,727
304,911
5,234,551
5,100,161
12
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans and overdrafts
14
70,000
23,333
Obligations under finance leases
15
72,721
70,389
Payments received on account
956,786
973,247
Trade creditors
746,064
610,774
Corporation tax
50,837
73,942
Other taxation and social security
380,639
827,509
Accruals and deferred income
1,649,466
1,379,512
3,926,513
3,958,706
13
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
14
256,667
326,667
Obligations under finance leases
15
52,053
130,534
308,720
457,201
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 20 -
14
Loans and overdrafts
2022
2021
£
£
Bank loans
326,667
350,000
Payable within one year
70,000
23,333
Payable after one year
256,667
326,667
Bank loans above represent an unsecured bank loan from Bank of Scotland plc obtained through the Coronavirus Business Interruption Loan Scheme and was drawn down on 28 September 2020. The loan is repayable over six years with no repayments required in the first year, and carries interest at base rate plus 2.1% per annum. The first year of interest payments are covered by a government grant.
Bank of Scotland plc hold a bond and floating charge over the whole assets of the company together with a cross corporate guarantee with the company and a third party.
15
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
72,721
70,389
In two to five years
52,053
130,534
124,774
200,923
Finance lease obligations are secured against the tangible fixed assets to which they relate.
16
Provisions for liabilities
2022
2021
Notes
£
£
Deferred tax liabilities
17
19,183
1,956
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
32,601
25,153
Other timing differences
(13,418)
(23,197)
19,183
1,956
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
17
Deferred taxation
(Continued)
- 21 -
2022
Movements in the year:
£
Liability at 1 February 2021
1,956
Charge to profit or loss
16,161
Liability at 31 January 2022
18,117
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so.
18
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
650,464
571,980
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. The unpaid contributions outstanding at the period end, and included i
n
creditors, amounted to £53,644 (2021 - £122,088).
19
Share-based payment transactions
Number of share options
Weighted average exercise price
2022
2021
2022
2021
Number
Number
£
£
Outstanding at 1 February 2021
35,556
35,556
8.17
8.17
Exercised
(5,556)
6.62
Outstanding at 31 January 2022
30,000
35,556
8.46
8.17
Exercisable at 31 January 2022
-
-
-
The weighted average share price at the date of exercise for share options exercised during the year was £6.62 (2021 - £0).
The options outstanding at 31 January 2022 had an exercise price ranging from
£6.62
to
£10.29
, and a remaining contractual life of 2 to
8
years.
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
19
Share-based payment transactions
(Continued)
- 22 -
The weighted average fair value of options granted in the year was determined using the Black-Scholes option pricing model. The Black-Scholes model is considered to apply the most appropriate valuation method due to the relatively short contractual lives of the options and the requirement to exercise within a short period after the employee becomes entitled to the shares (the “vesting date”).
The expected life used in the model has been adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.
Non-vesting conditions and market conditions are taken into account when estimating the fair value of the option at grant date. Service conditions and non-market performance conditions are taken into account by adjusting the number of options expected to vest at each reporting date.
Liabilities and expenses
During the year, the company recognised total share-based payment expenses of £49,314 (2021 - £nil) which related to equity settled share based payment transactions.
20
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
114,446
117,568
114,446
117,568
During the year the company bought back 3,122 (20
2
1 - 6,252) ordinary shares of £1 each for a total consideration of £32,127 (2021 - £64,334). On completion of the share buy back the shares purchased were cancelled.
The company has previously granted options to certain employees to subscribe for A ordinary shares
and ordinary shares
.
O
ptions
in place are as follows:
Options to allow
certain
employees to purchase 10,000 A ordinary shares at an exercise price of £6.62
.
The
se options have a 10 year
exercise period
and expire on 16 January 2024. The exercise of these options is conditional
upon
the
employee
s
achieving satisfactory performance
within the company.
The options must be exercised within a prescribed period of meeting these conditions.
Options to allow
certain
employees to purchase 5,000 A ordinary shares at an exercise price of £6.62
.
The
se options have a 10 year
exercise period
and expire on 24 March 2025. The exercise of these options is conditional
upon
the
employee
s
achieving satisfactory performance
within the company.
The options must be exercised within a prescribed period of meeting these conditions.
Options to allow certain employees to purchase 15,000 A ordinary shares at an exercise price of £10.29. These options have a 10 year exercise period and expire on 4 March 2030.
The exercise of these options is conditional
upon
the
employee
s
achieving satisfactory performance
within the company.
The options must be exercised within a prescribed period of meeting these conditions
.
O
ptions
to allow certain employees to
purchase
5,556
ordinary shares at a
n exercise
price of £6.62.
These options were exercised on
29 October 2021
by transferring 5,556
ordinary
shares to the
option holders
from the Employee Benefit Trust for a contribution value of £
36,781
.
As at the balance sheet date, options were outstanding in relation to 30
,000
A ordinary shares (202
1
:
30
,000 A ordinary shares). There are no outstanding options in place in relation to ordinary shares (2021: 5,556 ordinary shares).
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 23 -
21
Other reserves
Employee Benefit Trust Reserve
The company established on 10 November 2004 the Blyth & Blyth Consulting Engineers Limited Employee Benefits Trust (EBT) for the purpose of encouraging or facilitating the holding of shares or debentures in the company by or for the benefit of employees of the company
.
Equity share option reserve
Share options are accounted for in accordance with FRS 102 Section 26 “Share based payments”. Equity-settled share based payment transactions include share options and long-term equity incentive plans where the overall outcome is that the employee receives shares. Fair value of issued share options are measured annually at each accounting reference date after the date of grant and any increase in price is charged to the profit and loss account over the vesting period and a corresponding entry is made to the equity share option reserve.
22
Financial commitments
At the balance sheet date the company had outstanding commitments for future minimum lease payments under operating leases, which fall due as follows:
Land and buildings
2022
2021
£
£
Within one year
237,733
163,950
Between two and five years
661,669
728,117
In over five years
183,813
183,813
1,083,215
1,075,880
23
Related party transactions
The directors are of the opinion that there are no related party transactions.
BLYTH & BLYTH CONSULTING ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022
- 24 -
24
Cash generated from operations
2022
2021
£
£
Profit for the year
288,697
251,674
Adjustments for:
Taxation
68,064
63,006
Finance costs
14,039
4,684
Investment income
(175)
(184)
Loss/(profit) on disposal of tangible fixed assets
830
(208)
Depreciation and impairment of tangible fixed assets
135,867
112,970
Equity settled share based payment expense
49,314
-
Decrease in provisions
(60,000)
Movements in working capital:
Decrease/(increase) in debtors
(134,390)
964,829
(Decrease) in creditors
(58,087)
(550,955)
Cash generated from operations
364,159
785,816
25
Analysis of changes in net funds/(debt)
2022
£
Opening net funds/(debt)
Cash and cash equivalents
1,601,641
Loans
(350,000)
Obligations under finance leases
(200,923)
1,050,718
Changes in net funds/(debt) arising from:
Cash flows of the entity
221,710
Closing net funds/(debt) as analysed below
1,272,428
Closing net funds/(debt)
Cash and cash equivalents
1,723,869
Loans
(326,667)
Obligations under finance leases
(124,774)
1,272,428
2022-01-31
2021-02-01
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