Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2022
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
CONTENTS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
COMPANY INFORMATION
Page 1
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors present their strategic report for the year ended 31 December 2022.
Pascall+Watson strengthened its pipeline of significant architectural projects throughout the year. New business was secured in the UK and at international branches. Revenues rose to £24.0m (2021: £10.6m) and pretax profits rose to a profit of £2.2m (2021: losses of £141k).
There was a rebound in income in 2022 following the negative impact of the pandemic in 2020 and 2021.
Performance was significantly improved due to:
∙Clients restarting projects that were placed on hold during the pandemic
∙New clients and increased workload in all locations
∙Significant bid wins for large projects
∙Improved resource utilisation and reduced overheads
The company also increased the diversity of its project portfolio during the year. The range of market sectors where the company has significant work now includes Aviation, Rail, Education, Workplace, Commercial, Leisure and Hospitality. Project locations included the UK, Ireland, Italy, Abu Dhabi, Saudi Arabia and Qatar. Services offered were Architecture, Design Management, Master planning, Interior Design, Wayfinding, and BIM Technology. Sustainability is a key consideration across all of our service offers. The company is exploring realistic opportunities for diversification both from a sector and geographic perspective.
The management structure of the company has been strengthened to support emerging market sectors and locations which will allow the business to respond to future growth opportunities whilst maintaining the strength of its core activities.
Pascall+Watson maintains a long-standing relationship with most of its clients and is present on a broad range of frameworks which account for a significant amount of income in most sectors. The diverse range of projects worked on by the firm in 2022 are grouped by project sector below.
Aviation
Pascall+Watson has an unrivalled track record in aviation with a large past and current portfolio of domestic and international aviation projects. It is currently completing design work for the UK major airports – Heathrow, Gatwick, Manchester, London City and Stansted. In addition, there is design activity internationally – Dublin Airport in Ireland, Red Sea Airport in KSA, Hamad International Airport in Qatar.
Rail
The company has sustained a robust portfolio of rail projects primarily in the UK and Ireland. Network Rail and TfL frameworks have been maintained. Currently, Pascall+Watson is focused on refining it’s offer and design expertise when it comes to station enhancements and passenger experience projects. The company maintains a strong relationship with Irish Rail, notably recently completing the National Train Control Centre and update works at Galway station.
Education, Workplace and Commercial
Pascall+Watson has a healthy reputation for design delivery in the Higher Education sector and continues to grow a portfolio of projects. It has maintained a consistent workload in recent years and the company is currently on several university frameworks.
Workplace design projects represent significant and exciting projects for Pascall+Watson. The company understands the challenges around rethinking traditional office, residential and retail spaces to provide vibrant, diverse and welcoming communities.
Page 2
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
STRATEGIC REPORT (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
Business review (continued)
Leisure, Cultural and Hospitality
The company continues to have current and forecasted workload on significant projects, thereby capitalising on sector investment and a reputation for providing services at delivery stage. Pascall+Watson has ongoing projects at hotel and villa projects, sport leisure schemes and at cultural building projects. The company currently supports onsite design delivery for museums in the UAE and UK.
Healthcare Pascall+Watson has specialist knowledge and expertise in small and medium sized Healthcare projects, especially in Ireland. The company has achieved a successful track record in providing creative design solutions for staff and patient focused facilities. In addition to increased project income and performances, improvements have been made in the following operational areas:
∙Sustainability Policy and Strategy
∙Achieving Carbon Neutral status and SBTi certification
∙Enhancement of BIM and digital technology knowledge, skillsets, workflows and awareness
∙Development of integrated marketing and communications
∙Continued focus on cost consciousness
∙Employee Benefits and engagement
Local and Global economic volatility and uncertainty
The specific risks of Covid-19, Brexit and the Ukraine conflict as giving way to the compound effects of inflation, economic uncertainty and climate shock. However, there is a shortage of capacity and desire to invest in the market sectors in which the firm operates. It is therefore reasonable to be confident about the short to medium term outlook for the company. Recruitment and retention of skilled staff is a major factor in the success of Pascall+Watson. Brexit was a negative factor; but the full effect was masked by the near simultaneous onset of the pandemic. The company continues to invest in UK students and the strength of its UK workforce. There is also evidence that revised visa arrangements between the UK and countries outside of the UK is filling short term demand for suitably qualified staff albeit that their ability to work long term in the UK is not certain. Financial risk The treasury function is managed centrally to support the company's operating activities. Its primary role is to ensure that adequate resources are available to meet the funding requirements on a day-to-day basis and that financial risk arising from underlying operations is effectively identified and managed. Credit risk The directors assess the company's exposure to credit risk by considering the credit rating of any new client and by monitoring the accumulated trading balances with existing clients. The credit risk associated with our trade debtors balance is considered to be moderate as our clients are mainly companies who we have been trading with for many years and with high credit ratings. Liquidity risk The directors monitor the company's ability to meet its liabilities as they fall due on at least a monthly basis by reviewing budgets and cash flow forecasts. Steps are taken as appropriate to accelerate asset recoveries and manage outstanding commitments where possible so that any risk is minimised.
Page 3
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
STRATEGIC REPORT (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
Principal risks and uncertainties (continued)
Future developments Securing new opportunities and delivering high quality services Pascall+Watson has a strong workload and is committed to delivering a high quality service for clients. It intends to continue its pursuit of new opportunities across all sectors, offices and geographies and explore realistic diversification opportunities. Prioritising design and sustainability Operational sustainability and pathway to sustainable design are major priorities for the business. Pascall+Watson’s operations and sustainability goals are now accredited using the Science Based Targets organisation. Evolving workplace Pascall+Watson maintains an enjoyable, vibrant, environmentally sound workplace. Office utilisation is carefully monitored so that updates and adjustment can be made for the benefit of all staff and project teams Staff motivation, education and improvement Staff improvement and fulfilment is key to delivering successful projects now and in the future. Staff satisfaction is measured on an ongoing basis and the company provides a comprehensive training and education programme. Consistent and effective improvement The Company will continue to review potential enhancements in its operational and organisational functions and implement new policies where it is believed that these will add value to the staff and the business.
The company measures the business in a number of different ways using key performance indicators (KPI's) at various levels across the organisation. The highest level financial KPI's are:
∙Turnover
∙Current asset position
∙Gross profit margin
In 2022 the performance against these KPI's was as follows:
Turnover Turnover for the year was £24,010,092 (2021: £10,601,089). Turnover for the year rose significantly as the post-Covid recovery was quicker than anticipated in our core sectors. Current asset position The company's net current assets have increased to £11,702,687 (2021: £9,730,695) resulting from the improved performance of the company during the year and the company's management of working capital. Gross profit margin Gross profit margin has increased in the year to 24% (2021: 20%). Gross profit margin is reliant on the projects recognised in the period; the increase in 2022 is due to the change in the mix, volume, and value of projects undertaken.
Page 4
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
STRATEGIC REPORT (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
This report was approved by the board and signed on its behalf.
Page 5
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors present their report and the financial statements for the year ended 31 December 2022.
The profit for the year, after taxation, amounted to £1,790,024 (2021: loss £167,727).
The directors did not propose a dividend in the year (2021: £618,020).
The directors who served during the year were:
On 15 August 2023 S P S Bancil, T W Burton, N D Naidoo, M A Neilan, L S Patel, J H Rogers and A H Yomi-Adeleke were appointed as directors.
As permitted by Section 414c(11) of the Companies Act 2006, the directors have elected to disclose information required to be in the director's report by Schedule 7 of the "Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008", in the strategic report.
This report was approved by the board on
Page 6
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to 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.
Page 7
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PASCALL + WATSON LIMITED
FOR THE YEAR ENDED 31 DECEMBER 2022
We have audited the financial statements of Pascall + Watson (the 'company') for the year ended 31 December 2022, which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and the related notes, 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Page 8
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PASCALL + WATSON LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
The other information comprises the information included in the Annual Report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
Page 9
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PASCALL + WATSON LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the architectural design sector.
∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, environmental and health and safety legislation;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙reviewed the nominal ledger including testing journal entries to identify unusual transactions;
∙assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias; and
∙investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙reading the minutes of meetings of those charged with governance;
∙enquiring of management as to actual and potential litigation and claims; and
∙reviewing correspondence with HMRC and relevant regulators.
Page 10
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PASCALL + WATSON LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Auditor's responsibilities for the audit of the financial statements (continued)
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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 auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
16 Great Queen Street
Covent Garden
WC2B 5AH
Date:
Page 11
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
Page 12
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
Page 13
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 32 form part of these financial statements.
Page 14
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Page 15
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
The company's principal activity is that of architectural design.
The company is a private company limited by shares incorporated in England and Wales. Its principal place of business is The Warehouses, 10 Black Friars Lane, London, EC4V 6EJ. Its registered office is 16 Great Queen Street, Covent Garden, London, WC2B 5AH. The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102:
∙Section 3 Financial Statement Presentation paragraph 3.17(d) (inclusion of statement of cash flows);
∙Section 7 Statement of Cash Flows (inclusion of statement of cash flows);
∙Section 11 Financial Instruments paragraphs 11.41, 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c) (disclosures relating to financial instruments);
∙Section 26 Share based payments (disclosure of share based payments);
∙Section 33 Related Party Disclosures paragraph 33.7 (disclosures of key management personnel compensation).
The company is included in the consolidated financial statements of Roots Group UK Limited for the year ended 31 December 2022 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
The following principal accounting policies have been applied:
The directors continue to prepare and frequently revise their forecasts for the company. The directors are satisfied, based on all forecasted scenarios and on the sensitivity analysis which has been performed, that the company has adequate resources to forge ahead within its core business sectors and to continue its operations, in order to meet its liabilities, obligations and duties as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements have been approved. This will be supported by the strong cash position at the end of 2022. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements
Page 16
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
The results of overseas operations in their functional currencies are translated into Sterling at rates approximating to those ruling when the transactions took place (the average rate). All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at average rate are recognised in other comprehensive income.
Page 17
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the profit and loss account in the same period as the related expenditure.
The company makes contributions into personal pension schemes of certain employees. Contributions are charged to the profit and loss account as they become payable.
The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet.
Page 18
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument. 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. The component parts of compound instruments issued by the company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. On initial recognition the financial liability component is recorded at its fair value. The fair value of the liability component is estimated using the prevailing market interest rate for a similar instrument without equity features. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised in equity and not subsequently remeasured.
Page 19
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
The company’s policies for its major classes of financial assets and financial liabilities are set out below.
Financial assets Basic financial assets, including trade and other debtors, cash and bank balances 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate. Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment. Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price, which excludes transaction costs for those financial assets that are subsequently measured at fair value through profit and loss. Such financial assets are subsequently measured at fair value through profit or loss, where they are publicly traded, or fair value can be measured reliably, for example by using a valuation technique. Where fair value cannot be measured reliably, the financial asset is measured at cost less impairment. Financial liabilities Basic financial liabilities, including trade and other creditors, other loans and intercompany working capital balances 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Derivative contracts Derivatives contracts, including interest rate swaps and foreign exchange forward contracts, are not basic financial instruments. Derivatives contracts are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in interest payable and similar expenses or interest receivable and similar income as appropriate. Impairment of financial assets Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.
Page 20
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss. Derecognition of financial assets and financial liabilities Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. If a transfer does not result in derecognition because the company has retained significant risks and rewards of ownership of the transferred asset, the company continues to recognise the transferred asset in its entirety and recognises a financial liability for the consideration received. The asset and liability are not offset. In subsequent periods, the company recognises any income on the transferred asset and any expense incurred on the financial liability. Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. Offsetting of financial assets and financial liabilities Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.
Page 21
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss 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. When payments are eventually made, they are charged to the provision carried in the balance sheet.
Ordinary shares are classified as equity.
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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The following are the critical judgmental and estimations that the directors have made in the process of applying the group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements: Revenue recognition The company enters into long term contracts with its customers for the provision of its services. Long-term contracts are accounted for under FRS 102. The ensuing accounting requires management judgement to determine the appropriateness of calculating the revenue and profit to be recognised. This includes estimating the total expected costs to complete each contract, the profitability of the contract and also the percentage of completion at the balance sheet date. The percentage of completion is calculated as the costs incurred in proportion to the estimated costs of the entire project. These judgements directly influence revenue and profit that can be recognised in relation to such contracts. Material changes in these estimates could affect the overall amounts recognised on individual contracts. Carrying amount of relevant assets: £1,144,406 (2021: £623,868). Carrying amount of relevant liabilities: £33,854 (2021: £23,779).
Page 22
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3.Judgments in applying accounting policies (continued)
Management review trade debtor balances on a periodic basis. In determining whether there is a need for a provision, management is required to determine their best estimate of future expected cash flows. In arriving at this estimate, management consider historical experience and current trends. The provision included within trade debtors at the year-end is £292,162 (2020: £190,299). Actual outcomes could be different to the assumptions used in determining the estimate.
The whole of the turnover is attributable to the principal activity of the company.
Analysis of turnover by country of destination:
Page 23
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Page 24
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Page 25
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25% for companies with profits of over £250,000. A small profits rate will also be introduced for companies with profits of £50,000 or less so that they will continue to pay corporation tax at
19%. From this date companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective corporation tax rate. This new law was substantively enacted on 24 May 2021. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.
Page 26
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Page 27
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Page 28
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Page 29
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Page 30
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Share premium account
Capital redemption reserve
Profit and loss account
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in independently administered funds. The pension cost charge represents contributions payable by the company to the fund and amounted to £492,951 (2021: £278,395). Contributions totalling £438,882 (2021: £12,938) were payable by the company, to the funds at the balance sheet date and are included in creditors.
The company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.
Transactions with (other) related parties are as follows:
Amounts owed to related parties are unsecured, interest free and due for repayment within one year.
Page 31
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PASCALL + WATSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
The immediate controlling party is
The parent undertaking of the smallest group of undertakings for which group financial statements are drawn up and which the company is a member is The ultimate parent company is Roots Group UK Limited, a company incorporated in England. In the opinion of the directors there is no ultimate controlling party.
Page 32
|