Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2021
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BARCLAY & MATHIESON LIMITED
COMPANY INFORMATION
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BARCLAY & MATHIESON LIMITED
CONTENTS
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BARCLAY & MATHIESON LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors submit their annual Strategic Report of the Company for the year ended 31 December 2021.
The Company's principal activity is steel stockholding, operating a nationwide network of depots throughout the UK. The 2021 financial results, were the first full year of inclusion of the trading result for Steel Plate and Sections, who were purchased by the group in early 2020.
Our growth strategy over the past few years has significantly increased the size of the Company and provided a good platform for improved financial performance during 2021 and beyond, through extended geographic coverage, increased processing capabilities and enhanced purchasing power. The business continued to re-invest profits to support our strategy, including new vehicles to reduce the average age of our fleet vehicles, machinery to increase processing capacity across the business, successfully launched e-commerce platform and purchased Abram Pulman & Sons Limited, a steel processing business in Yorkshire The business operated throughout 2021 by implementing a safe system of work to mitigate the spread of Covid-19. Over the course of the 2021 financial year the business delivered a very strong set of financial results. Turnover increase from £96m in 2020 to £136m in 2021. Reporting a pre tax profit of £16.8m vs £0.3m in 2020. After adjusting for amortisation of IMS goodwill (£540k) and other one off non recurring items, adjusted trading profit was £18.5m, showing an vast improvement vs 2020. The Directors are satisfied that the current strategy will continue to deliver through 2022 and beyond. Underlying EBITDA prior to one-off adjustments for 2021 was £19.6m (2020: £3.08m). The Company maintains significant headroom in its fully committed banking facilities which are due for renewal in 2023. As a business we continue to improve our service to our customers, our customers come first in everything we do. Our record on service and quality has been excellent as this underpins our strategic business model and pricing.
We consider that our main Key Performance Indicators are underlying trading profit, and levels of stock. These are set out below for the last 4 years:
At an operational level, tonnes sold, gross profit per tonne, and gross profit percentage are our main KPI’S and these are closely monitored on a daily basis. Given these vary by business unit looking at them at the overall level is not conducive to understanding performance, hence they are not presented here.
The Company also monitors staff turnover at unit level, as retention of good employees is essential for the prosperity of the Company.
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BARCLAY & MATHIESON LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The management of the business and the execution of the Company’s strategy are subject to a number of risks.
Price Risk The price of steel fluctuates due to raw material cost and demand. Any tariffs imposed can also impact cost. This is a risk common to all companies operating within the steel industry. The Company’s strategy on this is to maintain a prudent approach to stock levels, actively managing stock using detailed system information to ensure that excess inventory is not carried, whilst also ensuring the stock range covers all our customer requirements. The Company works with a range of suppliers to ensure continuity of supply. UK Market Demand The business invested in a new reporting system in early 2021, this has been transformational in giving our business managers instant access to trading information. This information has enabled the business to react swiftly to any change in pricing/demand in the UK market. With the addition of the Steel Plate and Sections business in 2020, we now have a business that is growing on a global basis, with a strategy to accelerate further growth globally through 2022, thus reducing our dependency on the UK market. The business has adjusted its procurement activities to mitigate any potential impact from the UK import quota system.
The Company's principal financial assets are trade debtors, the majority of which are fully insured. The Company has no significant concentration of credit risk with a single counterparty as exposure is spread over a number of counterparties.
The Company's principal financial liabilities are its bank loans and trade creditors, which are managed through detailed cash forecasting.
Interest rate risk
The Company monitors the financial risk of interest rate movements on a regular basis, and the impact rises would have on profitability. Interest rates are expected to rise in the short to medium term, but the Company is well placed to deal with any such increases. Amounts owed from group undertakings are monitored and actively managed on a monthly basis to ensure these are at a level that is acceptable for all parties involved.
Covid-19 impact statement and Going Concern
The global Coronavirus pandemic has caused unprecedented uncertainty across a number of sectors with the direct impact and ripple effect of the economic fallout currently unknown. The health & safety and welfare of our staff, customers and suppliers is of paramount importance to our business. The business has developed and deployed, safe systems of work procedures with regards to Covid-19, these have helped mitigate the spread of Covid-19, enabling the business continues to trade during the pandemic. The Company continues to monitor closely the government and WHO guidance to ensure compliance with those guidelines in providing a safe environment for all concerned.
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BARCLAY & MATHIESON LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Going concern As mentioned previously, the business has implemented, safe systems of work to manage the impacts and mitigate against the spread of Covid-19. The business has invested to ensure continued operations during periods of high levels of Covid 19. During 2020 the Company had taken measures to ensure that it remained in a position where it could continue to meet its forecast liabilities as they fall due. Steps included: - • Additional CLBILS funding – all repayments have been made on time during 2021. • Enhanced cost reduction measures. • Making use of relevant government support including the Coronavirus Job Retention Scheme. Based on the profitable financial results in 2021 and with the continued support of the Company’s bank, the financial statements have been prepared on a going concern basis.
Section 172(1) statement
The Company’s principal activity is steel stockholding, operating numerous depots throughout the United Kingdom. The Directors are empowered to ensure the business operates in a viable, sustainable, safe and efficient manner. The Board’s primary responsibility is to promote the long term success of the Company by delivering business performance that meets stakeholders (including shareholders, employees, customers and suppliers) expectations including on time, on budget and safely and to the highest quality standards so as to maintain the Company’s financial viability This is affected by setting out our strategy with ongoing performance monitoring. The Board holds Board meetings monthly to review the main aspects of our business, including financial reviews and forecasts, resources, internal controls, performance, opportunities and risks. All Directors are directly responsible for the strategic direction of the business, with day to day management carried out by senior management and must act in the way he/she considers, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard to key issues including the interests of the stakeholders in both the short and long term. The Directors work to a strategic plan, which covers a 4 year outlook cycle. Performance is measured against the plan on an ongoing basis. Some of the factors that are taken into consideration when drawing up the strategic plan include: market outlook, routes to market, inflation forecasts, operational footprint, historic performance, innovation/technology advancements, customers, employees, environmental, government, regulatory compliance, investors, shareholders, suppliers, societal trends, etc. The strategic plan is reviewed on an ongoing basis, with the plans being updated on an annual basis. The Directors review both long term and short term performance at the monthly board meetings and discuss new developments, opportunities, risks as well as monitoring the effectiveness of their decision making. The impact on our stakeholders are duly considered in all of our decision making.
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BARCLAY & MATHIESON LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The interest of our employees The Directors understand the importance of our employees to the long term success of the business. All staff are managed by a line manager, their performance is measured by their line manager against pre-agreed KPIs and training and development needs are identified in the annual PDRs as well as through ongoing on the job training and external training as necessary. We aim to recruit & retain motivated and competent people and we believe in promotion from within as reward for performance and dedication, and to demonstrate a clear path for progression. Over the years many employees have been promoted to senior positions in the Company. Ongoing training and personal development are key strategies in our HR principles and the Company communicates to our employees via internal group wide emails, presentations, and newsletters. Two -way communication is encouraged in areas such as Sales through Regional and Depot Managers meetings and in other areas once or twice a year through Town Hall meetings. The business has also focused on improving the content and uses of its social media channels, these developing to enhance communication. The interests of our customers and suppliers The Company has always believed in keeping good business relationships with customers and suppliers and is key to ongoing success. The Directors have developed close relationships with key customers and suppliers to ensure that we fully understand each other’s strategies and objectives and are able to support each other in achieving them. More recently closer relationships with key suppliers has resulted in improved efficiencies within the supply chain and better stock availability for our customers. A recent example of working closely with our key suppliers is the Covid 19 situation, where the business was able to ensure continuation of supply from our key suppliers, despite of impacts of the lockdown, reduced credit insurance limits, etc. The impact of the Company’s operations on the community and environment Our overriding objective is to have minimal impact on the local communities and environment on all of our projects. The Company has a well developed Environmental and Sustainability Policy with stringent targets, and is committed to protecting the environment. We acknowledge that the pursuit of economic growth and respect for the environment must be closely linked, with sustainable development being an integral part of our business philosophy and processes. We work on the basis that compliance with environmental legislation, and other requirements, is the very minimum that will apply to our activities and services and we are committed to continual environmental performance improvement, the prevention of pollution and having a positive impact on the environment. The business has recently invested a large amount of capital on a fleet of trucks, where environmental impact was one of the key factors in the decision. We work closely with our clients and suppliers, encouraging and educating our employees and supply chain to recognise their responsibilities regarding protecting the environment and achieving our environmental objectives and targets and communicating and consulting with all stakeholders as appropriate. Our policy is periodically reviewed to ensure its continuing suitability, has been communicated to all staff and is made available to interested parties. It is endorsed by the Company’s Directors and Management Team who take responsibility for the delivery of its aspirations and key objectives. The Company's high standards in the way we run our business and deal with all stakeholders, and our commitment to being the best have been key to our ongoing success.
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BARCLAY & MATHIESON LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Key to this is the experience and ongoing professionalism and commitment of our employees and we continually strive to make our Company a place where all enjoy their work and have the opportunity to progress. We have a policy of promoting continual improvement and the setting of quality objectives and improvement programmes within the Company. These objectives address the risks and opportunities within the Company, as determined by senior management, and we believe that quality is critical to the success of our business, and base our approach on the key quality principles of customer focus, leadership, engagement of people, process approach, improvement and relationship management. The Interests of members of the Company Strategy and decisions by the Board are carefully considered in both the short and long term, the Directors are fully aware of the need to review all relevant factors to strike a fair balance between key stakeholders of the Company. Our key stakeholders would include: investor community, employees, regulators and government, local communities, customers and suppliers. The overriding objective is to ensure that the Company maintains its reputation for quality and integrity so as to continue as a successful and sustainable business for the long term benefit of the stakeholders.
This report was approved by the board on 22 July 2022
and signed on its behalf.
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BARCLAY & MATHIESON LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their report and the financial statements for the year ended 31 December 2021.
The profit for the year, after taxation, amounted to £
12,920,270
(2020 -
£
345,851
)
.
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 for the Company's financial statements 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.
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BARCLAY & MATHIESON LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Reporting Methodology
This report follows the Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance issued by DEFRA, using DEFRA's 2020 conversion factors. In some cases consumption has been extrapolated from available data or direct comparison made to a comparable period. The report was prepared using a financial control approach to define the organisational boundary. The report includes all material emission sources required by the regulations for which we deem ourselves to be responsible and have maintained records of all source data and calculations. Energy Efficient Actions During the Reporting Year As part of the Company's Environmental and Sustainability Policy, it is committed to reducing carbon emissions. In the year as part of the Company's fleet renewal process, the Company has replaced vehicles to those with lower emissions. Equally, when making upgrades to plant and machinery at depots, energy efficiency has been an important determinant in the decision making process.
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BARCLAY & MATHIESON LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Intensity Measurement
The intensity metric chosen is tCO2e per £m of revenue. The Company total is 24.3 tCO2e/£m of revenue.
The Company keeps employees informed of matters affecting them as employees and of the financial and economic factors affecting the performance of the Company. There are procedures in place for employees to make their views known to management so that the flow of information is maintained.
Disabled employees Applications for employment by disabled persons are given full and fair consideration for all vacancies having regard to their particular aptitudes and abilities. They are given equal treatment during their employment in regard to training, employment and career development. In the event of employees becoming disabled, every effort is made to retrain them in order that their employment with the Company may continue.
The directors have chosen to disclose information on the following, required by the Companies Act 2006 to be included in the Directors' Report, within the Strategic Report, found on pages 1 to 6:
- information on financial risk management and policies; and - information on regarding future developments of the business.
The auditors, Simmons Gainsford LLP, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
This report was approved by the board on
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BARCLAY & MATHIESON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BARCLAY & MATHIESON LIMITED
We have audited the financial statements of Barclay & Mathieson Limited (the 'Company') for the year ended 31 December 2021, 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 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 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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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BARCLAY & MATHIESON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BARCLAY & MATHIESON LIMITED (CONTINUED)
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.
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 Auditors' 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:
In order to identify and assess the risks of material misstatements, including fraud and non-compliance with laws and regulations that could be expected to have a material impact on the financial statements, we have considered:
∙the results of our enquiries of management and those charged with governance of their assessment of the
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BARCLAY & MATHIESON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BARCLAY & MATHIESON LIMITED (CONTINUED)
risks of fraud and irregularities;
∙
the nature of the company, including its management structure and control systems (including the opportunity for management to override such controls);
∙
management’s incentives and opportunities for fraudulent manipulation of the financial statements including the company’s remuneration and bonus policies and performance targets; and
∙
the industry and environment in which it operates.
We also considered UK tax and pension legislation and laws and regulations relating to employment and the preparation and presentation of the financial statements such as the Companies Act 2006.
Based on this understanding we identified the following matters as being of significance to the entity:
∙
laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, tax and pension legislation and distributable profits legislation;
∙
the timing of the recognition of commercial income;
∙
compliance with legislation relating to health and safety, environmental legislation and ISO accreditation 45001;
∙
management bias in selecting accounting policies and determining estimates;
∙
inappropriate journal entries; and
∙
recoverability of debtors;
We communicated the outcomes of these discussions and enquiries, as well as consideration as to where and how fraud may occur in the entity, to all engagement team members
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised:
∙
enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations;
∙
enquiries with the same concerning any actual or potential litigation or claims;
∙
discussion with the same regarding any known or suspected instances of non-compliance with laws and regulation and fraud;
∙
inspection of relevant legal correspondence;
∙
assessment of matters reported to management and the result of the subsequent investigation;
∙
obtaining an understanding of the relevant controls during the period;
∙
obtaining an understanding of the policies and controls over the recognition of income and testing their implementation during the year;
∙
review documentation relating to compliance with the regulations relating to health and safety including review of certificates held;
∙
challenging assumptions made by management in their specific accounting policies and estimates, in particular relation to purchase accruals and depreciation;
∙
identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or crediting revenue or cash;
∙
accessing the recovery of debtors in the period since the balance sheet date and challenging assumptions made by management regarding the recovery of balances which remain outstanding;
∙
challenging key assumptions made by management;
∙
reviewing the financial statements for compliance with the relevant disclosure requirements;
∙
performing analytical procedures to identify any unusual or unexpected relationships or unexpected movements in account balances which may be indicative of fraud;
∙
reviewing the minutes of Board meetings and correspondence with HMRC;
∙
evaluating the underlying business reasons for any unusual transactions; and
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BARCLAY & MATHIESON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BARCLAY & MATHIESON LIMITED (CONTINUED)
∙
considered the implementation of controls during the year.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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 Auditors' 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 Auditors' 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 Auditors
14th Floor
33 Cavendish Square
W1G 0PW
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BARCLAY & MATHIESON LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
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BARCLAY & MATHIESON LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
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BARCLAY & MATHIESON LIMITED
REGISTERED NUMBER:
SC030987
BALANCE SHEET
AS AT
31 DECEMBER 2021
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BARCLAY & MATHIESON LIMITED
REGISTERED NUMBER:
SC030987
BALANCE SHEET
(CONTINUED)
AS AT
31 DECEMBER 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 19 to 41 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2021
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2020
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The company is a private limited company, incorporated in Scotland and its registered office is 180 Hardgate Road, Glasgow, Scotland, G51 4TB.
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 financial statements contain information about Barclay & Mathieson Limited as an individual company and do not contain consolidated financial information as the parent of the group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of Breal Capital Limited, a company registered in England & Wales, and the parent undertaking of the smallest group of which the company is a member and for which group financial statements are prepared.
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙
the requirements of Section 7 Statement of Cash Flows;
∙
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Breal Capital Limited as at 31 December 2021 and these financial statements may be obtained from 14th Floor, 33 Cavendish Square, London, W1G 0PW.
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
The global Coronavirus pandemic has caused unprecedented uncertainty across the manufacturing sector with the direct impact and ripple effect of the economic fallout currently unknown.
The directors acknowledge the presence of the coronavirus pandemic but are of the opinion that it will not have a significant impact on the company's ability to operate. For this reason, they continue to adopt the going concern basis in preparing the financial statements. There are no material uncertainties regarding going concern.
Goodwill
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
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.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers. Revaluation gains and losses are recognised in the Statement of Comprehensive Income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss. 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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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
The Company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, finance leases, and loans from related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. However if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. Financial assets that are 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. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a 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. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date. 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. Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity. Financial liabilities and equity instruments are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form.
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
Financial liabilities, including trade and other payables, bank loans, loans from fellow group companies, are initially measured at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest rate method. A liability is derecognised when the contract that gives rise to it is settled, sold, cancelled or expires. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Functional and presentation currency
Transactions and balances
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
The difference between the market value of the assets of the scheme and the present value of accrued pension liabilities is shown as an asset (if the company believes it will benefit from reduced future contributions) or liability on the balance sheet. Any difference between the expected return on assets and that actually achieved is recognised in the statement of comprehensive income along with differences which arise from experience of assumption changes. Further information on pension arrangements is set out in the note to the financial statements. For defined contribution schemes the amount charged to the profit and loss account in respect of pension cost is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below: Carrying value of stock Management review the market value of and demand for the company's stocks on a periodic basis to ensure stock is recorded in the financial statements at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Any provision for impairment is recorded against the carrying value of stocks. Management use their knowledge of market conditions, historical experiences and estimates of future events to assess future demand for the company's products and achievable selling prices. Revaluation of tangible fixed assets The Company engages independent valuation specialists to determine the fair value of its freehold and leasehold property interests on an annual basis. Details of the key assumptions and techniques utilised by the valuer have been detailed in the note to the financial statements. It is the company’s policy to measure freehold and leasehold properties at fair value less depreciation. The residual values of the properties are taken into consideration in this calculation. As at 31 December 2021 the directors do not consider the residual value of the properties to be materially different to the revalued amounts, therefore the depreciation charge on buildings is £nil. Defined benefit pension scheme The Company engages independent actuarial specialists to determine the level of contribution required into the scheme and to assess the level of pension surplus or deficit in relation to the scheme. Details of the key assumptions and techniques utilised by the actuary have been detailed in the note to the financial statements.
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Analysis of turnover by country of destination:
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page 27
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page 28
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The Company has estimated tax losses of £Nil (2020: £4.2m) available to carry forward against future profits.
On 3 March 2021. the Government announced an increase in the rate of corporation tax to 25% from 1 April 2023 on all profits when they exceed £250,000 and this change in rate was enacted on 10 June 2021. Deferred tax has been applied at this rate.
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page 30
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page 31
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
16.
Tangible fixed assets (continued)
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page 33
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page 34
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page 35
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page 36
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Revaluation reserve
Capital redemption reserve
Other reserves
Profit and loss account
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The Company operates a Defined Benefit Pension Scheme.
The Company operates one pension scheme, the Barclay & Mathieson Limited Retirement and Death Benefits Scheme, providing benefits based on final pensionable pay. The assets of the scheme are held separately from those of the Company, being invested by professional investment managers. An actuarial valuation of the pension scheme was carried out at 31 August 2019 by a qualified independent actuary. The scheme was closed to new members in May 2005 and closed to future accrual for current members on 1 May 2012.
The Company has agreed to make contributions over a fixed period to the pension scheme as part of the ongoing recovery plan. The Company paid no contributions for the year ended 31 December 2021 as the pension scheme is in surplus. Should a funding shortfall exist the Company has agreed to pay an annual contribution of the funding shortfall or £400,000, whichever is lower. In deciding upon the foregoing contribution levels of the Company it considered the cost accrual of future benefits on the assumptions underlying the FRS 102 calculations. By setting the contributions at the levels chosen, the Company anticipated that the agreed contributions would be in excess of the costs of the accruing FRS 102 based liability.
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
28.
Pension scheme (continued)
Page 39
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
28.
Pension scheme (continued)
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BARCLAY & MATHIESON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
At 31 December 2021, the immediate parent undertaking is MBM Group Services Limited and the ultimate parent undertaking is Breal Capital Limited, both incorporated in England & Wales.
Page 41
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