Company Registration No. 03908728 (England and Wales)
TSG BUILDING SERVICES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2017
TSG BUILDING SERVICES PLC
COMPANY INFORMATION
Directors
S J Gwynn
J P Holloway
B L Rees
A J Thrussell
B P Thrussell
C A Thrussell
R J Glendinning
Secretary
R J Glendinning
Company number
03908728
Registered office
TSG House
Cranbourne Industrial Estate
Carnborne Road
Potters Bar
Herts
EN6 3JN
Auditor
Newton & Garner Limited
Chartered Accountants
Building 2
30 Friern Park
North Finchley
London
N12 9DA
TSG BUILDING SERVICES PLC
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 5
Statement of comprehensive income
6
Balance sheet
7
Statement of changes in equity
8
Statement of cash flows
9
Notes to the financial statements
10 - 22
TSG BUILDING SERVICES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2017
- 1 -
The directors present the strategic report for the year ended 30 April 2017.
Fair review of the business
TSG Building Services PLC (TSG), continued to secure contracts in the year and although turnover reduced to £32,615,704 (2016 - £36,238,050) TSG has improved its gross margin to 18.8% (2016 – 17.0%) and operating profit has also improved on last year to £2,081,039 (2016 – £1,891,990). The reduced turnover was due to a later start on new contracts and these will come through in the next financial year.
The performance of TSG over the past few years has been as a direct result of the hard work and focus of the company’s directors and employees. The business has continued to implement process improvements and operational efficiencies in the year, resulting in stronger management of our direct costs and overheads. Our investment in the resources we employ has continued in the year and will continue into the future.
The company continues to focus on sustainable growth and providing the services and customer care our clients expect from us. The divisions of the company can provide adaptable solutions for the many different types of services and products our clients demand. The company successfully obtained new client contracts in the year and the directors continue to seek new opportunities with improved margins. The market is still very competitive and the directors expect this to continue in the coming year.
Principal risks and uncertainties
The UK market place remains highly competitive and losing sales to key competitors is a continued risk to the company. The company manages this risk by ensuring the high quality levels of its products and services is sustained and that it continues to build and hold strong relationships with its customers, supply chain and employees.
Development and performance
UK market conditions remain challenging and it is likely that economic uncertainty will bring more challenges in the year ahead. This has remained constant over the past twelve months, however the number of new opportunities for the company have continued to grow over the year and TSG has a strong sustainable order book in the medium term. The company continues to develop its operations and is seeking further cost reductions by building stronger and more robust internal practices through the development of its technologies and its staff. We expect to see further expansion of the companies work streams in the area of commercial gas installations and maintenance and new build. The company has continued to invest in the resources to drive this forward and continues to invest in our core business. Further growth is expected in the coming years. We will continue to add value from the services and products we provide our clients and maintain sustainable growth going forward.
Key performance indicators
PROFITABILITY RATIOS:
2017 2016 2015
Gross Profit (%) 18.8% 17.0% 16.8%
Profit before Tax (%) 6.3% 5.2% 5.2%
EMPLOYEE RATIOS:
2017 2016 2015
No. of Employees 250 244 228
Profit/Employee (£'000) 8.3 7.7 7.6
The directors monitor the gross margin achieved on each project and utilise the resources available to maximise profits for the company.
R J Glendinning
Secretary
30 October 2017
TSG BUILDING SERVICES PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2017
- 2 -
The directors present their annual report and financial statements for the year ended 30 April 2017.
Principal activities
The principal activity of the company
was that of the provision of building services to Social Housing groups.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
S J Gwynn
J P Holloway
B L Rees
A J Thrussell
B P Thrussell
C A Thrussell
R J Glendinning
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
In accordance with the company's articles, a resolution proposing that Newton & Garner Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
• select suitable accounting policies and then apply them consistently;
-
• make judgements and accounting estimates that are reasonable and prudent;
-
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
TSG BUILDING SERVICES PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
- 3 -
Financial instruments and risk management
The company's financial assets and liabilities consist of trade debtors and creditors, cash balances,
|
finance leases and bank borrowings.
|
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The directors manage the company's exposure to financial risk by researching the credit worthiness of
customers and by seeking advice from the company's providers of finance.
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By order of the board
R J Glendinning
Secretary
30 October 2017
TSG BUILDING SERVICES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TSG BUILDING SERVICES PLC
- 4 -
We have audited the financial statements of TSG BUILDING SERVICES PLC for the year ended 30 April 2017 set out on pages 6 to 22. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
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.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities Statement set out on pages 2 - 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:
-
• give a true and fair view of the state of the company's affairs as at 30 April 2017 and of its profit for the year then ended;
-
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit, the information given in the Strategic Report and the Directors' 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.
true
TSG BUILDING SERVICES PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TSG BUILDING SERVICES PLC
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the Strategic Report and the Directors' Report
.
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.
Robert Knight, FCCA, ATII (Senior Statutory Auditor)
for and on behalf of Newton & Garner Limited
30 October 2017
Chartered Accountants
Statutory Auditor
Chartered Accountants
Building 2
30 Friern Park
North Finchley
London
N12 9DA
TSG BUILDING SERVICES PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2017
- 6 -
2017
2016
Notes
£
£
Turnover
3
32,615,704
36,238,050
Cost of sales
(26,492,924)
(30,086,323)
Gross profit
6,122,780
6,151,727
Administrative expenses
(4,052,015)
(4,259,737)
Other operating income
10,274
-
Operating profit
4
2,081,039
1,891,990
Interest receivable and similar income
7
2,523
3,047
Interest payable and similar expenses
8
(26,411)
(23,587)
Profit before taxation
2,057,151
1,871,450
Tax on profit
9
(438,504)
(391,304)
Profit for the financial year
1,618,647
1,480,146
The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.
TSG BUILDING SERVICES PLC
BALANCE SHEET
AS AT
30 APRIL 2017
30 April 2017
- 7 -
2017
2016
Notes
£
£
£
£
Fixed assets
Tangible assets
11
986,347
993,681
Investment properties
12
175,000
175,000
1,161,347
1,168,681
Current assets
Stocks
15
60,097
77,598
Debtors
14
8,340,095
8,416,563
Cash at bank and in hand
2,457,809
2,343,302
10,858,001
10,837,463
Creditors: amounts falling due within one year
16
(6,371,672)
(7,948,282)
Net current assets
4,486,329
2,889,181
Total assets less current liabilities
5,647,676
4,057,862
Creditors: amounts falling due after more than one year
17
(144,125)
(173,257)
Provisions for liabilities
19
(37,493)
(37,194)
Net assets
5,466,058
3,847,411
Capital and reserves
Called up share capital
22
54,000
54,000
Revaluation reserve
41,423
41,423
Capital redemption reserve
6,000
6,000
Profit and loss reserves
5,364,635
3,745,988
Total equity
5,466,058
3,847,411
The financial statements were approved by the board of directors and authorised for issue on 30 October 2017 and are signed on its behalf by:
A J Thrussell
Director
Company Registration No. 03908728
TSG BUILDING SERVICES PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2017
- 8 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 May 2015
54,000
41,423
6,000
3,265,842
3,367,265
Year ended 30 April 2016:
Profit and total comprehensive income for the year
-
-
-
1,480,146
1,480,146
Dividends
10
-
-
-
(1,000,000)
(1,000,000)
Balance at 30 April 2016
54,000
41,423
6,000
3,745,988
3,847,411
Year ended 30 April 2017:
Profit and total comprehensive income for the year
-
-
-
1,618,647
1,618,647
Balance at 30 April 2017
54,000
41,423
6,000
5,364,635
5,466,058
TSG BUILDING SERVICES PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2017
- 9 -
2017
2016
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
820,321
683,408
Interest paid
(26,411)
(23,587)
Income taxes paid
(569,290)
(374,035)
Net cash inflow from operating activities
224,620
285,786
Investing activities
Purchase of tangible fixed assets
(82,302)
(111,506)
Proceeds on disposal of tangible fixed assets
6,700
1,200
Interest received
2,523
3,047
Net cash used in investing activities
(73,079)
(107,259)
Financing activities
Repayment of bank loans
(37,034)
(35,216)
Dividends paid
-
(1,000,000)
Net cash used in financing activities
(37,034)
(1,035,216)
Net increase/(decrease) in cash and cash equivalents
114,507
(856,689)
Cash and cash equivalents at beginning of year
2,343,302
3,199,991
Cash and cash equivalents at end of year
2,457,809
2,343,302
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2017
- 10 -
1
Accounting policies
Company information
TSG BUILDING SERVICES PLC is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
TSG House, Cranbourne Industrial Estate, Carnborne Road, Potters Bar, Herts, EN6 3JN.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest
pound
.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from contracts is recognised by reference to the state of completion when the
state of completion, costs incurred and costs to complete can be estimated reliably.
The stage of
completion is calculated by comparing costs incurred, mainly in relation
to labour and materials, as a proportion of total costs. Where the outcome cannot be
estimated reliably, revenue is recognised only to the extent of the expenses
recognised that are recoverable.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
Held at open market value
Plant and machinery
10% - 25% of cost per annum
Fixtures, fittings & equipment
10% of cost per annum
Motor vehicles
25% of cost per annum
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
1
Accounting policies
(Continued)
- 11 -
1.5
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure
. Subsequently it is measured
at fair value a
t
the reporting end date.
The surplus or deficit on revaluation is recognised in the profit and loss account.
Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as tangible fixed assets.
1.6
Impairment of fixed assets
At each reporting end date, the
company
reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash at bank and in hand
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in
creditors falling due within one year
.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
1
Accounting policies
(Continued)
- 12 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
1
Accounting policies
(Continued)
- 14 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements
and estimates
have had the most significant
effect on amounts recognised in the financial statements.
Revenue Recognition
The company assess the most likely outcome of each contract based on a number of technical & contractual factors. The company applies a prudent approach in assessing the carrying value in amounts recoverable on contracts and will provide for any debts not deemed recoverable.
Freehold and Investment Properties
The properties was valued at open market value by the directors and by using independent assessments from RONA partnership and JR property services in 2014. The directors do not consider the value has altered significantly since this date. There are significant judgements and estimates involved in arriving at a value.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2017
2016
£
£
Turnover analysed by class of business
Building services
32,615,704
36,238,050
4
Operating profit
2017
2016
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditors for the audit of the company's financial statements
19,500
19,500
Depreciation of owned tangible fixed assets
75,878
60,565
Loss on disposal of tangible fixed assets
7,060
2,868
Operating lease charges
537,802
590,413
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2017
2016
Number
Number
Office and administration
82
73
Production and site
168
171
250
244
Their aggregate remuneration comprised:
2017
2016
£
£
Wages and salaries
7,985,202
8,498,105
Social security costs
843,586
859,408
Pension costs
86,958
119,227
8,915,746
9,476,740
6
Directors' remuneration
2017
2016
£
£
Remuneration for qualifying services
714,774
724,654
Company pension contributions to defined contribution schemes
47,762
24,412
762,536
749,066
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 6 (2016 - 6).
Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
127,961
132,091
Company pension contributions to defined contribution schemes
21,675
7,500
7
Interest receivable and similar income
2017
2016
£
£
Interest income
Interest on bank deposits
2,523
3,047
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
- 17 -
8
Interest payable and similar expenses
2017
2016
£
£
Interest on bank overdrafts and loans
10,535
9,979
Other interest
15,876
13,608
26,411
23,587
9
Taxation
2017
2016
£
£
Current tax
UK corporation tax on profits for the current period
438,205
389,190
Deferred tax
Origination and reversal of timing differences
299
2,114
Total tax charge
438,504
391,304
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2017
2016
£
£
Profit before taxation
2,057,151
1,871,450
Expected tax charge based on the standard rate of corporation tax in the UK of 19.92% (2016: 20.00%)
409,739
374,290
Tax effect of expenses that are not deductible in determining taxable profit
28,872
18,050
Effect of change in corporation tax rate
(107)
(1,036)
Taxation charge for the year
438,504
391,304
10
Dividends
2017
2016
£
£
Interim paid
-
1,000,000
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
- 18 -
11
Tangible fixed assets
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 May 2016
788,000
249,523
9,250
174,465
1,221,238
Additions
-
7,561
-
74,741
82,302
Disposals
-
-
-
(16,354)
(16,354)
At 30 April 2017
788,000
257,084
9,250
232,852
1,287,186
Depreciation and impairment
At 1 May 2016
-
139,627
925
87,003
227,555
Depreciation charged in the year
-
25,271
925
49,682
75,878
Eliminated in respect of disposals
-
-
-
(2,594)
(2,594)
At 30 April 2017
-
164,898
1,850
134,091
300,839
Carrying amount
At 30 April 2017
788,000
92,186
7,400
98,761
986,347
At 30 April 2016
788,000
109,894
8,325
87,462
993,681
The land and buildings was valued at open market value by the directors and by using independent assessments from RONA partnership in April 2014. The directors do not consider the value has altered significantly since this date.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
2017
2016
£
£
Cost
727,567
727,567
Accumulated depreciation
-
-
Carrying value
727,567
727,567
12
Investment property
2017
£
Fair value
At 1 May 2016
-
Transfers from owner-occupied property
175,000
At 30 April 2017
175,000
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
12
Investment property
(Continued)
- 19 -
The properties was valued at open market value by the directors and by using independent assessments from JR property services in 2014. The directors do not consider the value has altered significantly since this date.
13
Financial instruments
2017
2016
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
5,721,488
5,724,744
Carrying amount of financial liabilities
Measured at amortised cost
5,916,573
7,338,090
14
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
5,668,712
5,380,622
Gross amounts due from contract customers
1,525,596
2,343,221
Other debtors
384,366
383,506
Prepayments and accrued income
761,421
309,214
8,340,095
8,416,563
15
Stocks
2017
2016
£
£
Raw materials and consumables
60,097
77,598
16
Creditors: amounts falling due within one year
2017
2016
Notes
£
£
Bank loans and overdrafts
18
37,493
45,395
Trade creditors
5,258,091
5,749,908
Corporation tax
258,115
389,198
Other taxation and social security
341,109
394,251
Other creditors
196,436
975,588
Accruals and deferred income
280,428
393,942
6,371,672
7,948,282
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
- 20 -
17
Creditors: amounts falling due after more than one year
2017
2016
Notes
£
£
Bank loans and overdrafts
18
144,125
173,257
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
18,710
18
Loans and overdrafts
2017
2016
£
£
Bank loans
181,618
218,652
Payable within one year
37,493
45,395
Payable after one year
144,125
173,257
The bank loan is secured by a fixed charge over the property held by the company and is at a rate of 3.75% over the bank base rate repayable over ten years.
The directors' loan are unsecured, interest free and repayable on demand. The loans represents amounts owed to C A Thrussell, B P Thrussell and A J Thrussell,
19
Provisions for liabilities
2017
2016
Notes
£
£
Deferred tax liabilities
20
37,493
37,194
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2017
2016
Balances:
£
£
ACAs
26,483
26,184
Revaluations
11,010
11,010
37,493
37,194
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
20
Deferred taxation
(Continued)
- 21 -
2017
Movements in the year:
£
Liability at 1 May 2016
37,194
Charge to profit or loss
406
Effect of change in tax rate - profit or loss
(107)
Liability at 30 April 2017
37,493
21
Retirement benefit schemes
2017
2016
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
86,958
119,227
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
22
Share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
54,000 Ordinary shares of £1 each
54,000
54,000
54,000
54,000
23
Financial commitments, guarantees and contingent liabilities
Bonds to Local Authorities are £250,000 (2016 - £250,000).
Barclays Bank PLC have a fixed and floating charge on 10 Maynard Place, Cuffley.
TSG BUILDING SERVICES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2017
- 22 -
24
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2017
2016
£
£
Within one year
270,430
163,731
Between two and five years
226,769
27,524
497,199
191,255
25
Related party transactions
A J Thrussell, B P Thrussell and R J Glendinning are directros of Swift Contact Ltd. During the year the company had the following transactions with Swift Contact Ltd: -
-
The company made sales of £250,012 (2016: - £156,258) in respect of management services. There is a balance of £418,259 shown as debtors at the year end.
-
Swift Contact Ltd made sales of £318,911 (2016: - £253,112) to the company. There is a balance of £686,433 shown as creditors at the year end.
26
Cash generated from operations
2017
2016
£
£
Profit for the year after tax
1,618,647
1,480,146
Adjustments for:
Taxation charged
438,504
391,304
Finance costs
26,411
23,587
Investment income
(2,523)
(3,047)
Loss on disposal of tangible fixed assets
7,060
2,868
Depreciation and impairment of tangible fixed assets
75,878
60,565
Movements in working capital:
Decrease in stocks
17,501
106,851
Decrease/(increase) in debtors
368,674
(1,479,169)
(Decrease)/increase in creditors
(1,729,831)
100,303
Cash generated from operations
820,321
683,408
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