REGISTERED NUMBER:
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STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
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AUDITED FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 OCTOBER 2020 |
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BURROWS & SMITH LIMITED |
REGISTERED NUMBER:
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STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
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AUDITED FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 OCTOBER 2020 |
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FOR |
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BURROWS & SMITH LIMITED |
BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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CONTENTS OF THE FINANCIAL STATEMENTS |
for the year ended 31 October 2020 |
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Company Information | 1 |
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Strategic Report | 2 |
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Report of the Directors | 3 |
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Report of the Independent Auditors | 4 |
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Statement of Comprehensive Income | 6 |
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Balance Sheet | 7 |
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Statement of Changes in Equity | 8 |
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Notes to the Financial Statements | 9 |
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BURROWS & SMITH LIMITED |
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COMPANY INFORMATION |
for the year ended 31 October 2020 |
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DIRECTORS: |
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SECRETARY: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Chartered Accountants |
Statutory Auditor |
Unit 2, Charnwood Edge Business Park |
Syston Road |
Leicestershire |
LE7 4UZ |
BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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STRATEGIC REPORT |
for the year ended 31 October 2020 |
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The directors present their strategic report for the year ended 31 October 2020. |
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The principal activity of the year under review was that of the production machining of ferrous castings. |
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REVIEW OF BUSINESS |
The business has performed well this year, despite some mixed volumes from its key customers as a result of the disruption associated with the global pandemic. Since February the volumes were heavily impacted by European and then UK lockdowns. The business reacted immediately to safeguard its staff as a priority and also protect its cash reserves. The management team have worked hard to adjust the facility and working practices to ensure the safety of the staff and we were pleased to pass a HSE review with no improvement points. |
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The business has continued production to support key customer lines whilst managing excess capacity with holidays and use of the Furlough support from the government. Despite these challenges a high level of operational performance combined with strict cost controls has allowed the company to achieve another positive year. |
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Forecasting is always difficult within our sector and this is especially true as the customers recover from the pandemic disruption but both short and medium term the volumes look reasonably strong. |
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At the time of writing the business levels are continuing to grow and the Board are pleased to see that the business is trading positively. |
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PRINCIPAL RISKS AND UNCERTAINTIES |
The key risks and uncertainties affecting the company annually are considered to relate to competition from overseas suppliers, global demand for our customer products and energy and raw material costs. The resolution of the Brexit position has removed one of the major risks to the business and it is hoped that this will prove position long term. The company is well positioned to meet these challenges with a capable supply chain, strong workforce and management team and growing reserves to meet these challenges allowing continual investment into the future |
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FINANCIAL KEY PERFORMANCE INDICATORS |
The Company's key performance indicators are as follows: |
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Sales |
The accounts report a 29.37% decrease (2019: 32% increase) in the level of sales over the previous financial year. |
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Gross Margin |
Gross margin for the year has increased from 20.61% to 21.82%. |
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OTHER KEY PERFORMANCE INDICATORS |
There are no significant non-financial key performance indicators which are relevant to understanding the position of the business. |
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ON BEHALF OF THE BOARD: |
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BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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REPORT OF THE DIRECTORS |
for the year ended 31 October 2020 |
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The directors present their report with the financial statements of the company for the year ended 31 October 2020. |
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PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of production machining of ferrous castings. |
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DIVIDENDS |
Interim dividends were paid amounting to Nil (2019: £60,000). The directors recommend that no final dividends will be paid. |
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EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
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DIRECTORS |
The directors shown below have held office during the whole of the period from 1 November 2019 to the date of this report. |
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STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
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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: |
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- | 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. |
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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. |
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STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
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AUDITORS |
The auditors, Magma Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
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ON BEHALF OF THE BOARD: |
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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
BURROWS & SMITH LIMITED |
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Opinion |
We have audited the financial statements of Burrows & Smith Limited (the 'company') for the year ended 31 October 2020 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
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In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 October 2020 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. |
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Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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. |
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Conclusions relating to going concern |
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: |
- | the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
- | the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
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Emphasis of matter |
We draw attention to Note 26 of the financial statements, which describes the effects of the loss of a key customer in the post-balance sheet period. Our opinion is not modified in respect of this matter. |
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Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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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. |
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In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
BURROWS & SMITH LIMITED |
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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 identified material misstatements in the Strategic Report or the Report of the Directors. |
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We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
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Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
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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. |
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Auditors' 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 a Report of the Auditors 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. |
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A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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. |
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for and on behalf of
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Chartered Accountants |
Statutory Auditor |
Unit 2, Charnwood Edge Business Park |
Syston Road |
Leicestershire |
LE7 4UZ |
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BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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STATEMENT OF COMPREHENSIVE |
INCOME |
for the year ended 31 October 2020 |
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2020 | 2019 |
Notes | £ | £ |
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TURNOVER | 4 |
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Cost of sales | ( |
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GROSS PROFIT |
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Administrative expenses | ( |
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(178,936 | ) | 825,369 |
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Other operating income | 5 |
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OPERATING PROFIT | 7 |
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Interest receivable and similar income |
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183,441 | 939,391 |
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Interest payable and similar expenses | 8 | ( |
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PROFIT BEFORE TAXATION |
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Tax on profit | 9 |
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PROFIT FOR THE FINANCIAL YEAR |
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OTHER COMPREHENSIVE INCOME |
Gain on revaluation |
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Income tax relating to other comprehensive
income |
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OTHER COMPREHENSIVE INCOME FOR
THE YEAR, NET OF INCOME TAX |
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TOTAL COMPREHENSIVE INCOME FOR
THE YEAR |
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BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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BALANCE SHEET |
31 October 2020 |
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2020 | 2019 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 11 |
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Investment property | 12 |
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CURRENT ASSETS |
Stocks | 13 |
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Debtors | 14 |
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Cash at bank and in hand |
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CREDITORS |
Amounts falling due within one year | 15 | ( |
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NET CURRENT ASSETS |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CREDITORS |
Amounts falling due after more than one
year |
16 |
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PROVISIONS FOR LIABILITIES | 19 |
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NET ASSETS |
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CAPITAL AND RESERVES |
Called up share capital | 20 |
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Fair value reserve | 21 |
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Retained earnings | 21 |
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SHAREHOLDERS' FUNDS |
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The financial statements were approved by the Board of Directors and authorised for issue on
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BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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STATEMENT OF CHANGES IN EQUITY |
for the year ended 31 October 2020 |
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Called up | Fair |
share | Retained | value | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
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Balance at 1 November 2018 |
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Changes in equity |
Dividends | - | ( |
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Total comprehensive income | - |
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Balance at 31 October 2019 |
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Changes in equity |
Total comprehensive income | - |
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Balance at 31 October 2020 |
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BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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NOTES TO THE FINANCIAL STATEMENTS |
for the year ended 31 October 2020 |
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1. | STATUTORY INFORMATION |
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Burrows & Smith Limited is a limited company, registered in England and Wales. Its registered office address is 365 Fosse Way, Syston, Leicestershire, LE7 1NL and the registered number is 00366790. |
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2. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
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The presentation currency of the financial statements is the Pound Sterling (£). |
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The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
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• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 33.7. |
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This information is included in the consolidated financial statements of Burrows and Smith Holdings Limited as at 31 October 2020. |
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Turnover |
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. |
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Revenue is recognised in the period in which the goods are despatched. |
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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. |
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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: |
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Improvements to property | 2.5% on a reducing balance basis |
Plant & machinery | 20% on a reducing balance basis or over 7 years on a straight line basis |
Motor vehicles | 25% on a reducing balance basis |
Fixtures & fittings | 25% on a reducing balance basis |
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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. |
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Investment property |
Investment property is carried at fair value and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in the Profit and Loss Account. |
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Stocks |
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. |
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BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2020 |
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2. | ACCOUNTING POLICIES - continued |
Taxation |
The tax expense for the year comprises current and deferred tax. |
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Tax is recognised in profit or loss except that a change attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. |
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Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that: |
- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and |
- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. |
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Both current and deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
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Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
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Hire purchase contracts |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
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The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
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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. |
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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. |
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Pension costs and other post-retirement benefits |
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. |
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Finance costs |
Finance costs are charge to the Profit and Loss Account over the term of the debt using the effective interest method so that the amounts charged is at a consistent rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument. |
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Operating leases |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
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Cash and cash equivalents |
Cash at bank and in hand 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. |
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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 of accounting in preparing the financial statements. |
BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2020 |
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2. | ACCOUNTING POLICIES - continued |
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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. |
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Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. |
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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. |
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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. |
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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. |
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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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. |
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Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
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Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. |
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Equity instruments |
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. |
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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. |
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The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received. |
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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. |
BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2020 |
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3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
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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. |
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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. |
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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: |
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Depreciation of tangible assets |
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual lives of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 12 for the carrying amount of the assets and the tangible fixed assets accounting policy for the useful economic lives for each class of asset. |
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Stock provisioning |
Slow moving stock provisions are based on estimates of the likely recoverable amounts. |
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4. | TURNOVER |
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The turnover and profit before taxation are attributable to the one principal activity of the company. |
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An analysis of turnover by geographical market is given below: |
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2020 | 2019 |
£ | £ |
United Kingdom |
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Europe |
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Rest of the World | 61,367 | 407,557 |
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5. | OTHER OPERATING INCOME |
2020 | 2019 |
£ | £ |
Rents received |
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Government grants |
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362,267 | 113,983 |
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6. | EMPLOYEES AND DIRECTORS |
2020 | 2019 |
£ | £ |
Wages and salaries |
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Social security costs |
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Other pension costs |
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BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2020 |
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6. | EMPLOYEES AND DIRECTORS - continued |
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The average number of employees during the year was as follows: |
2020 | 2019 |
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Production and technical | 51 | 60 |
Management and administration | 10 | 14 |
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2020 | 2019 |
£ | £ |
Directors' remuneration |
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Directors' pension contributions to money purchase schemes |
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7. | OPERATING PROFIT |
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The operating profit is stated after charging/(crediting): |
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2020 | 2019 |
£ | £ |
Depreciation - owned assets |
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Depreciation - assets on hire purchase contracts |
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Profit on disposal of fixed assets | ( |
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Auditors' remuneration |
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8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2020 | 2019 |
£ | £ |
HMRC interest |
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Hire purchase interest |
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9. | TAXATION |
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Analysis of the tax (credit)/charge |
The tax (credit)/charge on the profit for the year was as follows: |
2020 | 2019 |
£ | £ |
Current tax: |
UK corporation tax |
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Adjustment to prior years | (25,962 | ) | (14 | ) |
Total current tax |
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Deferred tax | ( |
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Tax on profit | ( |
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BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2020 |
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9. | TAXATION - continued |
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Reconciliation of total tax (credit)/charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
|
2020 | 2019 |
£ | £ |
Profit before tax |
|
|
Profit multiplied by the standard rate of corporation tax in the UK of
(2019 - |
|
|
|
Effects of: |
Capital allowances in excess of depreciation | ( |
) | - |
Depreciation in excess of capital allowances | - |
|
Utilisation of tax losses |
|
( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
Disallowable expenses | - | 9,126 |
R&D expenditure | - | (5,000 | ) |
Total tax (credit)/charge | (3,148 | ) | 30,935 |
|
Tax effects relating to effects of other comprehensive income |
|
2020 |
Gross | Tax | Net |
£ | £ | £ |
Gain on revaluation |
|
- | 425,943 |
|
10. | DIVIDENDS |
2020 | 2019 |
£ | £ |
Ordinary shares of £1 each |
Interim |
|
|
|
11. | TANGIBLE FIXED ASSETS |
Fixtures |
Plant and | and | Motor |
machinery | fittings | vehicles | Totals |
£ | £ | £ | £ |
COST |
At 1 November 2019 |
|
|
|
|
Additions |
|
|
|
|
Disposals | ( |
) |
|
( |
) | ( |
) |
At 31 October 2020 |
|
|
|
|
DEPRECIATION |
At 1 November 2019 |
|
|
|
|
Charge for year |
|
|
|
|
Eliminated on disposal | ( |
) |
|
( |
) | ( |
) |
At 31 October 2020 |
|
|
|
|
NET BOOK VALUE |
At 31 October 2020 |
|
|
|
|
At 31 October 2019 |
|
|
|
|
BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2020 |
|
|
11. | TANGIBLE FIXED ASSETS - continued |
|
The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows: |
|
2020 | 2019 |
£ | £ |
|
Plant and machinery | 275,595 | 331,310 |
|
|
|
The depreciation charge for the year on assets held under finance leases or hire purchase contracts, included above, are as follows: |
2020 | 2019 |
£ | £ |
|
Plant and machinery | 55,714 | 55,714 |
|
12. | INVESTMENT PROPERTY |
Total |
£ |
FAIR VALUE |
At 1 November 2019 |
|
Revaluations | 425,943 |
At 31 October 2020 |
|
NET BOOK VALUE |
At 31 October 2020 |
|
At 31 October 2019 |
|
|
Fair value at 31 October 2020 is represented by: |
£ |
Valuation in 2020 | 425,943 |
Valuation in 2013 | 131,529 |
Valuation in 2007 | 40,000 |
Valuation in 2006 | 657,491 |
Valuation in 2000 | 62,009 |
Cost | 683,028 |
2,000,000 |
|
13. | STOCKS |
2020 | 2019 |
£ | £ |
Raw materials |
|
|
Finished goods |
|
|
|
|
BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2020 |
|
|
14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2020 | 2019 |
£ | £ |
Trade debtors |
|
|
Amounts owed by group undertakings |
|
|
Other debtors |
|
|
Directors' current accounts | 59,827 | - |
Deferred tax asset |
|
|
Prepayments and accrued income |
|
|
|
|
|
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2020 | 2019 |
£ | £ |
Hire purchase contracts (see note 17) |
|
|
Trade creditors |
|
|
Tax |
|
|
Social security and other taxes |
|
|
Other creditors |
|
|
Amounts owed to related party undertakings | - | 133,415 |
Accruals and deferred income |
|
|
|
|
|
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2020 | 2019 |
£ | £ |
Hire purchase contracts (see note 17) |
|
|
|
17. | LEASING AGREEMENTS |
|
Minimum lease payments fall due as follows: |
|
Hire purchase contracts |
2020 | 2019 |
£ | £ |
Net obligations repayable: |
Within one year |
|
|
Between one and five years |
|
|
|
|
|
Non-cancellable | operating leases |
2020 | 2019 |
£ | £ |
Within one year |
|
|
Between one and five years |
|
|
|
|
|
Finance lease payments represent rentals payable by the company for certain tangible fixed assets. Leases include plant and machinery on which capital and interest is payable. 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. |
BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2020 |
|
|
18. | SECURED DEBTS |
|
The following secured debts are included within creditors: |
|
2020 | 2019 |
£ | £ |
Hire purchase contracts | 114,684 | 191,361 |
|
The hire purchase contracts are secured on the assets concerned. |
|
19. | PROVISIONS FOR LIABILITIES |
2019 |
£ |
Deferred tax | 47,600 |
|
Deferred |
tax |
£ |
Balance at 1 November 2019 |
|
Credit to Statement of Comprehensive Income during year | ( |
) |
Balance at 31 October 2020 | ( |
) |
|
20. | CALLED UP SHARE CAPITAL |
|
|
|
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2020 | 2019 |
value: | £ | £ |
|
Ordinary | £1 | 100,000 | 100,000 |
|
Non cumulative preference |
shares | £1 | 6,376 | 6,376 |
106,376 | 106,376 |
|
The company's ordinary shares carry full rights with respect to voting, dividends and distributions. |
|
21. | RESERVES |
|
Fair value reserve |
The fair value reserve reflects the surplus on the revaluation of investment property. |
|
Retained earnings |
Retained earnings includes all current and prior period retained profits and losses less dividends paid. |
|
22. | PENSION COMMITMENTS |
|
The company operates a defined contributions scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £37,536 (2019 - £37,904). Contributions totalling £Nil (2019 - £Nil) were payable to the fund at the balance sheet date and are included within creditors. |
|
23. | OTHER FINANCIAL COMMITMENTS |
|
The company had capital commitments of £138,450 (2019: £138,450) at the balance sheet date. |
BURROWS & SMITH LIMITED (REGISTERED NUMBER: 00366790) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2020 |
|
|
24. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
|
The following advances and credits to a director subsisted during the years ended 31 October 2020 and 31 October 2019: |
|
2020 | 2019 |
£ | £ |
|
Balance outstanding at start of year |
|
|
Amounts advanced |
|
|
Amounts repaid | ( |
) |
|
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year |
|
|
|
25. | RELATED PARTY DISCLOSURES |
|
During the year the company had transactions with the following related companies, all ultimately controlled by C R F Shield: |
|
|
2020 | 2019 |
£ | £ |
|
Purchases from Shield Engineering (Syston) Limited | (180,073 | ) | (50,202 | ) |
Sales to Shield Engineering (Syston) Limited | 5,514 | - |
Amounts due from/(to) Shield Engineering (Syston) Limited | 772,153 | 14,102 |
Sales to G W Atkins & Sons Limited | 2,568 | - |
Purchases from G W Atkins & Sons Limited | (9,613 | ) | - |
Amounts due from G W Atkins & Sons Limited | 1,758 | - |
Purchases from G W Atkins Holdings | - | (10,970 | ) |
Purchases from Woolley GMC Engineering Company Limited | - | (4,857 | ) |
Sales to Woolley GMC Engineering Company Limited | - | 2,915 |
Purchases from O.L.D Engineering Company Limited | - | (97,957 | ) |
Amounts due from/(to) Shield Properties Limited | 166,585 | (133,415 | ) |
Waiver of loan with Shield Engineering (Syston) Limited | - | 5,726,820 |
Purchases from Spaw Engineering Limited | (115 | ) | - |
Amounts due from/(to) Spaw Engineering Limited | (138 | ) | - |
|
26. | POST BALANCE SHEET EVENTS |
|
In August 2021 the company lost a key customer whose trade amounts to nearly half of the annual turnover in 2020, threatening the Company's ability to trade in to the future. To manage the issue, the directors have redistributed excess resources, such as labour, to companies under common control. This is likely to affect the profitability of the Company in the year to 31 October 2021 but is believed to be transitory as the Company scales back its operations in the year to 31 October 2022. |
|
27. | ULTIMATE CONTROLLING PARTY |
|
The company is controlled by its parent company, Burrows & Smith Holdings Limited which is controlled by C R F Shield. |