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 2021 |
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G W ATKINS & SONS 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 2021 |
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FOR |
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G W ATKINS & SONS LIMITED |
G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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CONTENTS OF THE FINANCIAL STATEMENTS |
for the year ended 31 October 2021 |
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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 | 5 |
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Income Statement | 8 |
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Other Comprehensive Income | 9 |
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Balance Sheet | 10 |
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Statement of Changes in Equity | 11 |
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Notes to the Financial Statements | 12 |
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G W ATKINS & SONS LIMITED |
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COMPANY INFORMATION |
for the year ended 31 October 2021 |
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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 |
G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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STRATEGIC REPORT |
for the year ended 31 October 2021 |
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The directors present their strategic report for the year ended 31 October 2021. |
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The principal activity of the year under review was that of the production and sale of precision aluminium components. |
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REVIEW OF BUSINESS |
The business has had a very challenging year. It has been affected by a number of key macro-economic issues which has significantly affected its ability to operate at any reasonable level of profitability. The business has seen poor volumes from its customers who have been unable to recover from the Covid supply chain impacts. It has seen increasing raw material and energy costs, as well as significant inflation from its supply base. |
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Further to this recruitment challenges have been seen across all areas of the business driving waste and increasing costs. |
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Lastly the business completed on a significant transaction with Presbar however the transfer of the customer accounts had not been as understood by the board and so turnover and overhead contribution from this major investment in capital and transfer costs has been well off what was anticipated. |
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The board has made the decision to restructure the business, losing certain unprofitable customer accounts, and focussing on long term customers who the business can deliver real value to. This has been a difficult process for all and the workforce has been supportive of this transition. |
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Post year end the business position has stabilised and a closer integration with Bridge Aluminium has helped reduce production costs and waste in the business. |
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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. Post year end energy and material costs have been spiralling as a result of the Ukraine situation and the business has had to take measures to recover this from the customer base. The resolution of the Brexit position has removed one of the major risks to the business and it is hoped that this will prove positive long term. |
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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 37% decrease (2019: 22% increase) in the level of sales over the previous financial year. |
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Gross Margin |
Gross margin for the year has decreased from 23.5% to 19.3%. |
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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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G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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REPORT OF THE DIRECTORS |
for the year ended 31 October 2021 |
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The directors present their report with the financial statements of the company for the year ended 31 October 2021. |
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PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of the production and sale of precision aluminium components. |
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DIVIDENDS |
No dividends will be distributed for the year ended 31 October 2021. |
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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 |
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Other changes in directors holding office are as follows: |
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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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FUTURE DEVELOPMENTS |
Future developments have been detailed in the strategic report. |
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FINANCIAL INSTRUMENTS |
The company uses financial instruments, other than derivatives, comprising cash and other liquid resources and various other items such as trade debtors, hire purchase, trade creditors and inter-company loans that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company's operations. The main risks arising from the company's financial instruments are credit risk, liquidity risk and interest rate risk. The directors review and agree the policies for managing each of these risks and they are summarized below. The policies have remained unchanged from previous periods. |
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CREDIT RISK |
In order to limit credit risk the directors set limits for customers based on a combination of payment history and third party credit references. Debtor balances are reviewed on a regular basis in conjunction with debt ageing and collection history. |
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LIQUIDITY RISK |
The company seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and by investing cash assets safely and profitably. |
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G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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REPORT OF THE DIRECTORS |
for the year ended 31 October 2021 |
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STATEMENT OF DIRECTORS' RESPONSIBILITIES - continued |
INTEREST RATE RISK |
The company finances its operations through a mixture of retained profits, hire purchase and related company loans. The company's exposure to interest rate fluctuations on its borrowings is managed by the use of both fixed and floating facilities. |
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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 |
G W ATKINS & SONS LIMITED |
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Opinion |
We have audited the financial statements of G W Atkins & Sons Limited (the 'company') for the year ended 31 October 2021 which comprise the Income Statement, Other 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 2021 and of its loss 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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Material uncertainty 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. |
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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. |
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Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
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In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the accounting policy in the financial statements concerning the Company’s ability to continue as a going concern. The Company had net liabilities of £555,490 at 31 October 2021 which continued to be depleted in the post-balance sheet period and became a net liability of £895,724 in January 2022. As explained in note 25, the Company relies on the continued support of its funders, principally companies controlled by C R Shield. This requirement indicates the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern if the support is not provided. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern. |
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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 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. |
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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 |
G W ATKINS & SONS 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 pages three and four, 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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The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
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Based on our understanding of the company and industry, we identified the principal risks of non-compliance with laws and regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates. Audit procedures performed included: |
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discussions with management including consideration of known or suspected instances of non-compliance with
laws and regulation and fraud; |
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challenging assumptions made by management in their significant accounting estimates, in particular in relation
to the stock valuation and judgements formed; |
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identifying and testing journal entries, in particular any journal entries posted with unusual account combinations,
journal entries crediting cash and journal entries with specific defined descriptions. |
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There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion |
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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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
G W ATKINS & SONS LIMITED |
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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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G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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INCOME STATEMENT |
for the year ended 31 October 2021 |
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2021 | 2020 |
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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(2,454,791 | ) | (804,295 | ) |
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Other operating income | 5 |
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OPERATING (LOSS)/PROFIT | 7 | ( |
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Interest payable and similar expenses | 9 | ( |
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(LOSS)/PROFIT BEFORE TAXATION | ( |
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Tax on (loss)/profit | 10 | ( |
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LOSS FOR THE FINANCIAL YEAR | ( |
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G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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OTHER COMPREHENSIVE INCOME |
for the year ended 31 October 2021 |
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2021 | 2020 |
Notes | £ | £ |
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LOSS FOR THE YEAR | ( |
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OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR |
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( |
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G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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BALANCE SHEET |
31 October 2021 |
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2021 | 2020 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 11 |
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Investments | 12 |
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CURRENT ASSETS |
Stocks | 13 |
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Debtors | 14 |
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Cash at bank |
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CREDITORS |
Amounts falling due within one year | 15 | ( |
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NET CURRENT LIABILITIES | ( |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CREDITORS |
Amounts falling due after more than one
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16 |
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PROVISIONS FOR LIABILITIES | 19 | ( |
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NET (LIABILITIES)/ASSETS | ( |
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CAPITAL AND RESERVES |
Called up share capital | 20 |
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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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G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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STATEMENT OF CHANGES IN EQUITY |
for the year ended 31 October 2021 |
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Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
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Balance at 1 November 2019 |
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Changes in equity |
Total comprehensive income | - | ( |
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Balance at 31 October 2020 |
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Changes in equity |
Total comprehensive income | - | ( |
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Balance at 31 October 2021 |
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( |
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G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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NOTES TO THE FINANCIAL STATEMENTS |
for the year ended 31 October 2021 |
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1. | STATUTORY INFORMATION |
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G W Atkins & Sons Limited is a limited company, registered in England and Wales. Its registered office address is 365 Fosse Way, Syston, Leicester, Leicestershire the registered number is 00944323. |
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2. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
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The financial statements are prepared in sterling, which is the functional currency of the company, and rounded to the nearest £. |
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Going concern |
The company had net current liabilities at the year end. Notwithstanding this, the directors believe that it is appropriate to adopt the going concern basis in the preparation of the financial statements. 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 despite the global pandemic which occurred in prior years. The directors have prepared financial forecasts which incorporate the impact of COVID-19 as far as possible, including cashflow forecasts and an assessment of available associated company support. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements. |
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Financial reporting standard 102 - reduced disclosure exemptions |
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 3.17(d); |
• | the requirement of paragraph 33.7. |
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The information is included in the consolidated financial statements of G W Atkins Holdings Limited as at 31 October 2021 and these financial statements may be obtained from G W Atkins Holdings Limited, Third Floor Two Colton Square, Leicester, Leicestershire, LE7 1QH. |
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Turnover |
Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised: |
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Revenue is recognised on the date that 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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Short leasehold land & buildings | Over the term of the lease |
Plant & machinery | 7 years on a straight line basis |
Motor vehicles | 3 years on a straight line basis |
Fixtures & fittings | 3 years on a straight line 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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Government grants |
The company has received funding in the form of grants relating to the Coronavirus Job Retention Scheme (CJRS). The grant funding is released to the profit and loss account in full in the period the conditions of the grant funding have been met. |
G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2021 |
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2. | ACCOUNTING POLICIES - continued |
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Investments in subsidiaries |
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit and loss. |
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A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. |
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Stocks |
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads. |
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At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss. |
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Financial instruments |
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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Debtors |
Basic financial assets, including trade and other debtors, are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment. |
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Cash and cash equivalents |
Cash and cash equivalents are represented by cash in hand, deposits held at call with financial institutions, and other short-term highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
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Creditors |
Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related parties, 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. Such instruments are subsequently carried at amortised cost using the effective interest method, less any impairment. |
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Equity instruments |
Equity instruments issued by the group 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 group. |
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G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2021 |
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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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Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
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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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Operating leases |
Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
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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 charged to the statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant 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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Provisions for liabilities |
Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation. |
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Provisions are charged as an expense to the statement of comprehensive income in the year that the company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. |
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When payments are eventually made, they are charged to the provision carried in the balance sheet. |
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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. |
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G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2021 |
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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; |
|
Useful economic lives 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 9 for the carrying amount of the assets and Tangible fixed assets note above for the useful economic lives for each class of asset. |
|
Inventory impairments and provisions |
Inventories are valued at lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete inventories. Calculation of these estimates require judgements to be made, which include forecasting consumer demand, competitive and economic environment and inventory loss trends. |
|
The management reviews this on a regular basis. The provision for inventory loss is made to ensure the accounts reflect the lower of net realisable value and cost. The provision comprises of the loss due to ageing of inventory. Historic costs are used to calculate the provision. |
|
Impairment of fixed asset investments |
Investments are held at cost less any accumulated impairment losses. An impairment assessment is completed annually and where the carrying value exceeds the recoverable amount an impairment loss will be recognised. Impairment losses are recognised immediately in the profit and loss account. |
|
4. | TURNOVER |
|
The turnover and loss (2020 - profit) before taxation are attributable to the one principal activity of the company. |
|
An analysis of turnover by class of business is given below: |
|
2021 | 2020 |
£ | £ |
|
|
|
|
|
|
An analysis of turnover by geographical market is given below: |
|
2021 | 2020 |
£ | £ |
United Kingdom |
|
|
|
|
G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2021 |
|
|
5. | OTHER OPERATING INCOME |
2021 | 2020 |
£ | £ |
Rents received |
|
|
Government grants |
|
|
529,008 | 874,270 |
|
6. | EMPLOYEES AND DIRECTORS |
2021 | 2020 |
£ | £ |
Wages and salaries |
|
|
Social security costs |
|
|
Other pension costs |
|
|
|
|
|
The average number of employees during the year was as follows: |
2021 | 2020 |
|
Directors | 2 | 2 |
Production and administration | 134 | 169 |
|
|
|
2021 | 2020 |
£ | £ |
Directors' remuneration |
|
|
Directors' pension contributions to money purchase schemes |
|
|
|
The number of directors to whom retirement benefits were accruing was as follows: |
|
Money purchase schemes |
|
|
|
7. | OPERATING (LOSS)/PROFIT |
|
The operating loss (2020 - operating profit) is stated after charging/(crediting): |
|
2021 | 2020 |
£ | £ |
Other operating leases |
|
|
Depreciation - owned assets |
|
|
Profit on disposal of fixed assets | ( |
) | ( |
) |
Foreign exchange differences |
|
( |
) |
|
8. | AUDITORS' REMUNERATION |
2021 | 2020 |
£ | £ |
Fees payable to the company's auditors for the audit of the company's
financial statements |
8,750 |
8,000 |
|
9. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2021 | 2020 |
£ | £ |
Hire purchase interest |
|
|
G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2021 |
|
|
10. | TAXATION |
|
Analysis of the tax charge |
The tax charge on the loss for the year was as follows: |
2021 | 2020 |
£ | £ |
Deferred tax |
|
|
Tax on (loss)/profit |
|
|
|
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
|
2021 | 2020 |
£ | £ |
(Loss)/profit before tax | ( |
) |
|
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of
|
( |
) |
|
|
Effects of: |
Expenses not deductible for tax purposes |
|
|
Income not taxable for tax purposes | ( |
) |
|
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Fixed asset (profit)/loss on disposal | (9,721 | ) | (3,306 | ) |
Chargeable gain | 2,755 | - |
Group relief | 34,232 | - |
Non-trade related loss relief | (10,133 | ) | (6,851 | ) |
Tax losses brought forward | (18,319 | ) | - |
Tax losses carried forward | 372,512 | 18,319 |
Deferred tax movement | 36,500 | 64,000 |
Total tax charge | 36,500 | 64,000 |
|
11. | TANGIBLE FIXED ASSETS |
Short |
leasehold | Fixtures |
land & | Plant and | and | Motor |
buildings | machinery | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 November 2020 |
|
|
|
|
|
Additions |
|
|
|
|
|
Disposals |
|
( |
) |
|
|
( |
) |
At 31 October 2021 |
|
|
|
|
|
DEPRECIATION |
At 1 November 2020 |
|
|
|
|
|
Charge for year |
|
|
|
|
|
Eliminated on disposal |
|
( |
) |
|
|
( |
) |
At 31 October 2021 |
|
|
|
|
|
NET BOOK VALUE |
At 31 October 2021 |
|
|
|
|
|
At 31 October 2020 |
|
|
|
|
|
G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2021 |
|
|
11. | TANGIBLE FIXED ASSETS - continued |
|
The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows: |
|
2021 | 2020 |
£ | £ |
Plant and machinery | 2,499,330 | 3,177,952 |
|
The depreciation charge for the year on assets held under finance leases or hire purchase contracts, included above, are as follows: |
|
2021 | 2020 |
£ | £ |
Plant and machinery | 537,840 | 467,056 |
|
12. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
£ |
COST |
At 1 November 2020 |
and 31 October 2021 |
|
NET BOOK VALUE |
At 31 October 2021 |
|
At 31 October 2020 |
|
|
13. | STOCKS |
2021 | 2020 |
£ | £ |
Raw materials |
|
|
Work-in-progress |
|
|
Finished goods |
|
|
|
|
|
14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Trade debtors |
|
|
Amounts owed by group undertakings |
|
|
Other debtors |
|
|
Prepayments and accrued income |
|
|
|
|
G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2021 |
|
|
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Hire purchase contracts (see note 17) |
|
|
Trade creditors |
|
|
Amounts owed to group undertakings |
|
|
Social security and other taxes |
|
|
VAT | 89,048 | 143,016 |
Other creditors |
|
|
Accruals and deferred income |
|
|
|
|
|
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2021 | 2020 |
£ | £ |
Hire purchase contracts (see note 17) |
|
|
|
17. | LEASING AGREEMENTS |
|
Minimum lease payments fall due as follows: |
|
Hire purchase contracts |
2021 | 2020 |
£ | £ |
Net obligations repayable: |
Within one year |
|
|
Between one and five years |
|
|
|
|
|
Non-cancellable | operating leases |
2021 | 2020 |
£ | £ |
Within one year |
|
|
Between one and five years |
|
|
In more than five years |
|
|
|
|
|
Operating lease payments represent rentals payable by the company for property. The lease payments recognised as an expense in the year in relation to the property were £644,075. |
|
G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2021 |
|
|
17. | LEASING AGREEMENTS - continued |
Lessor |
The company sub-leases property. Rental income earned on the specific property under non-cancellable agreements during the year was £409,949. The total period of the lease is 5 years. |
|
At the reporting end date the company had contracted with customers for the following minimum lease payments: |
|
|
Non-cancellable
operating leases |
|
|
2021 | 2020 |
£ | £ |
Within one year | 390,058 | 392,225 |
Between one and five years | 647,083 | 1,035,332 |
1,037,140 | 1,427,557 |
|
18. | SECURED DEBTS |
|
The following secured debts are included within creditors: |
|
2021 | 2020 |
£ | £ |
Hire purchase contracts | 1,645,162 | 2,425,137 |
Invoice discounting | 1,390,106 | 798,255 |
|
|
|
The invoice discounting facility, included within other creditors, represents amounts due to RBS Invoice Finance Ltd which are secured by fixed and floating charges over the assets of the company. |
|
Hire purchase contracts are secured on the assets concerned. |
|
19. | PROVISIONS FOR LIABILITIES |
2021 | 2020 |
£ | £ |
Deferred tax |
Accelerated capital allowances |
|
|
Deferred tax | - | 64,000 |
100,500 | 64,000 |
|
Deferred |
tax |
£ |
Balance at 1 November 2020 |
|
Unused amounts reversed during year |
|
Movement due to change in rate |
Balance at 31 October 2021 |
|
|
20. | CALLED UP SHARE CAPITAL |
|
|
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2021 | 2020 |
value: | £ | £ |
|
Ordinary | £1 | 60,000 | 60,000 |
G W ATKINS & SONS LIMITED (REGISTERED NUMBER: 00944323) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2021 |
|
|
21. | RESERVES |
|
Profit & loss account |
The profit and loss account includes all current and prior period retained profits and losses. |
|
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 £99,419 (2020 - £107,374). |
|
23. | CONTINGENT LIABILITIES |
|
On 19 August 2020, G W Atkins & Sons Limited entered in to an agreement to purchase the assets of a competitor. Included in these assets were £1,480,000 of Plant and Machinery and the competitor's order book at £795,500. As part of the agreement, there is £1,175,500 of deferred consideration payable within 24 months of the completion date. |
|
At the point of approving these financial statements, the agreement is in legal dispute and the Company has not made any payments towards the deferred consideration. The directors of G W Atkins & Sons Limited are doubtful that the deferred consideration attributable to the order book of £795,500 will be payable once the case is settled. The exact amount is currently being negotiated. |
|
24. | RELATED PARTY DISCLOSURES |
|
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
|
During the year the company had transactions with the following related companies, all ultimately |
controlled by C R F Shield. |
2021 | 2020 |
£ | £ |
|
Purchases from Burrows & Smith Limited | (16,800 | ) | (2,568 | ) |
Sales to Burrows & Smith Limited | 9,964 | 11,661 |
Amounts due from/(to) Burrows and Smith Limited | (16,968 | ) | (968 | ) |
Sales to Spaw Limited | 578 | 577 |
Amounts due from/(to) Spaw Engineering Limited | (130,000 | ) | (130,000 | ) |
Sales to Woolley GMC Company Limited | 14,654 | 14,400 |
Sales ledger balance Woolley GMC Engineering Limited | 2,447 | 2,400 |
Amounts due from/(to) Woolley GMC Engineering Limited | 325,755 | 325,755 |
Purchases from Shield Engineering (Syston) Limited | (119,415 | ) | (187,791 | ) |
Sales to Shield Engineering (Syston) Limited | 941,974 | 1,213,939 |
Amounts due from/(to) Shield Engineering (Syston) Limited | (2,793,017 | ) | (2,998,728 | ) |
Sales to PFS Manufacturing Limited | 2,880 | - |
Amounts due from/(to) PFS Manufacturing Limited | 2,880 | - |
|
25. | POST BALANCE SHEET EVENTS |
|
The business, along with the manufacturing industry as a whole, has seen a shortage of labour available for use in its production facilities because of the pandemic. However, this is amplified by increased competition for local labour with newly established distribution centres. This has affected the Company's supply chain at multiple stages and has resulted in the Company having to scale down its operations. |
|
In addition to the labour shortage, the industry has also seen a rise in raw material prices. The Company has managed to pass these increases on to the customer where possible but in some circumstances resulted in loss of custom. This has added constraints to cash flow and resulted in the company falling in to a net liabilities position on the post-year end balance sheet. The company has received a letter of support from C R Shield stating that the companies under their control will continue to support the company through this period of uncertainty. |
|
26. | ULTIMATE CONTROLLING PARTY |
|
The parent company is G W Atkins & Sons Holdings Limited which is controlled by Mr C R F Shield. |