Rowecord Holdings Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02737904 (England and Wales)

Rowecord Holdings Limited

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 30th June 2020

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Consolidated Statement of Comprehensive Income

6

Consolidated Balance Sheet

7

Company Balance Sheet

8

Consolidated Statement of Changes in Equity

9

Company Statement of Changes in Equity

10

Consolidated Cash Flow Statement

11

Notes to the Consolidated Cash Flow Statement

12

Notes to the Consolidated Financial Statements

13

Directors:

A F Hoppe

I D Hoppe

Mrs A G Morris

Registered office:

Unit A, Leeway House

Leeway Industrial Estate

Newport

NP19 4SL

Registered number:

02737904 (England and Wales)

Auditors:

Haines Watts Wales LLP, Statutory Auditors

7 Neptune Court

Vanguard Way

Cardiff

CF24 5PJ

Bankers:

Lloyds Bank PLC

St William House

Tresillian Terrace

Cardiff

CF10 5BH

The directors present their strategic report of the company and the group for the year ended 30th June 2020.

Review of business

The group's key financial and other performance indicators during the year were as follows:

2020

2019

2018

£

£

£

Turnover

5,218,162

8,428,414

8,839,267

Gross profit margin (%)

35%

19%

20%

Profit/(Loss) before taxation

67,951

655,774

(3,402)

At the end of the year, the Net Assets of the Group totalled £7,762,706 (2019: £7,614,755).

Principal risks and uncertainties

The business' principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of its bank facilities. All of the business' cash balances are held in such a way that achieves a competitive rate of interest.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.

The diversification of the group in terms of work product enables it to take advantage of many opportunities and helps to protect the future earning potential of the business.

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

On behalf of the board:

A F Hoppe - Director

30th September 2020

The directors present their report with the financial statements of the company and the group for the year ended 30th June 2020.

Principal activities

The principal activities of the group in the year under review were those of the supply and erection of fluid storage system and towers, the provision of scaffolding services and the managing the assets of the group.

Dividends

No dividends will be distributed for the year ended 30th June 2020.

Directors

The directors shown below have held office during the whole of the period from 1st July 2019 to the date of this report.

A F Hoppe

I D Hoppe

Mrs A G Morris

Statement of directors' responsibilities

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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), 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement as to disclosure of information to auditors

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

Auditors

The auditors, Haines Watts Wales LLP, Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

A F Hoppe - Director

30th September 2020

Qualified Opinion

We have audited the financial statements of Rowecord Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30th June 2020 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the effects of the matter described in the 'Basis for qualified opinion' section of our audit report, the financial statements:

- give a true and fair view of the state of the group's affairs as at 30th June 2020 and of the group's profit for the year then ended;

- have been properly prepared in accordance with the United Kingdom Accepted Accounting Practice; and

- have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion

The group accounts do not include the disclosure of the assumptions and valuations used to establish the defined benefit pension scheme position as at 30 June 2020 in respect of Braithwaite Engineers Limited. Nor do they include any balance in relation to said scheme. In addition, we have not received external confirmation of the balance and have therefore not been provided with all of the information and explanations we required for our audit.

The tri-annual valuation statement prepared as at 31 December 2017 by the actuaries JLT Benefit Solutions Limited, in connection with the Braithwaite Engineers Limited scheme, shows an Actuarial surplus on the pension fund of £355,000. The group has not made a provision for the surplus in the accounts, as the amount have not been quantified under assumptions prevailing as at 30 June 2020.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

The impact of uncertainties due to COVID -19 on our audit

The Directors' view on the impact of COVID-19 is disclosed within the accounting polices note.

Uncertainties relating to the effects of COVID -19 are relevant to understanding our audit of the financial statements. All audits assess and challenge the reasonableness of estimates made by the directors, such as valuation of assets, appropriateness of the going concern basis of preparation of the financial statements and associated disclosures. All of these depend on assessments of the future economic environment and the company's future prospects and performance.

The COVID -19 viral pandemic is one of the most significant economic events for the UK, and at the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. We have applied a standardised approach in response to that uncertainty when assessing the company's future prospects and performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a charity and this is particularly the case in relation to the COVID -19 pandemic.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Clive Edwards (Senior Statutory Auditor)

for and on behalf of Haines Watts Wales LLP, Statutory Auditors

7 Neptune Court

Vanguard Way

Cardiff

CF24 5PJ

14th October 2020

Turnover

3

5,218,162

8,428,414

Cost of sales

(3,392,848

)

(6,797,597

)

Gross profit

1,825,314

1,630,817

Administrative expenses

(2,100,498

)

(1,855,064

)

(275,184

)

(224,247

)

Other operating income

66,942

895

Operating loss

(208,242

)

(223,352

)

Exceptional items

5

227,888

868,376

19,646

645,024

Interest receivable and similar income

55,446

16,511

75,092

661,535

Interest payable and similar expenses

6

(7,141

)

(5,761

)

Profit before taxation

7

67,951

655,774

Tax on profit

9

-

-

Profit for the financial year

67,951

655,774

Other comprehensive income

-

-

Total comprehensive income for the year

67,951

655,774

Profit attributable to:

Owners of the parent

63,901

655,774

Non-controlling interests

4,050

-

67,951

655,774

Total comprehensive income attributable to:

Owners of the parent

63,901

655,774

Non-controlling interests

4,050

-

67,951

655,774

Fixed assets

Tangible assets

11

1,842,887

1,532,881

Investments

12

10,000

10,000

Investment property

13

351,400

353,900

2,204,287

1,896,781

Current assets

Stocks

14

325,279

401,684

Debtors

15

4,512,281

1,366,517

Cash at bank and in hand

1,824,655

5,392,740

6,662,215

7,160,941

Creditors

Amounts falling due within one year

16

(1,054,774

)

(1,347,137

)

Net current assets

5,607,441

5,813,804

Total assets less current liabilities

7,811,728

7,710,585

Creditors

Amounts falling due after more than one year

17

(49,022

)

(95,830

)

Net assets

7,762,706

7,614,755

Capital and reserves

Called up share capital

19

162,500

162,500

Capital redemption reserve

20

37,510

37,510

Retained earnings

20

7,478,646

7,414,745

Shareholders' funds

7,678,656

7,614,755

Non-controlling interests

21

84,050

-

Total equity

7,762,706

7,614,755

The financial statements were approved by the Board of Directors and authorised for issue on 30th September 2020 and were signed on its behalf by:

I D Hoppe - Director

A F Hoppe - Director

Fixed assets

Tangible assets

11

947,824

832,968

Investments

12

1,463,275

1,443,275

Investment property

13

351,400

353,900

2,762,499

2,630,143

Current assets

Debtors

15

3,680,170

243,539

Cash at bank

1,186,094

4,667,467

4,866,264

4,911,006

Creditors

Amounts falling due within one year

16

(132,354

)

(151,768

)

Net current assets

4,733,910

4,759,238

Total assets less current liabilities

7,496,409

7,389,381

Capital and reserves

Called up share capital

19

162,500

162,500

Capital redemption reserve

20

37,500

37,500

Retained earnings

20

7,296,409

7,189,381

Shareholders' funds

7,496,409

7,389,381

Company's profit for the financial year

107,028

780,292

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 30th September 2020 and were signed on its behalf by:

A F Hoppe - Director

Called up

Capital

share

Retained

redemption

capital

earnings

reserve

£

£

£

Balance at 1st July 2018

162,500

6,758,971

37,510

Changes in equity

Total comprehensive income

-

655,774

-

Balance at 30th June 2019

162,500

7,414,745

37,510

Changes in equity

Total comprehensive income

-

63,901

-

Balance at 30th June 2020

162,500

7,478,646

37,510

Non-controlling

Total

Total

interests

equity

£

£

£

Balance at 1st July 2018

6,958,981

-

6,958,981

Changes in equity

Total comprehensive income

655,774

-

655,774

Balance at 30th June 2019

7,614,755

-

7,614,755

Changes in equity

Movement in share capital

-

80,000

80,000

Total comprehensive income

63,901

4,050

67,951

Balance at 30th June 2020

7,678,656

84,050

7,762,706

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1st July 2018

162,500

6,409,089

37,500

6,609,089

Changes in equity

Total comprehensive income

-

780,292

-

780,292

Balance at 30th June 2019

162,500

7,189,381

37,500

7,389,381

Changes in equity

Total comprehensive income

-

107,028

-

107,028

Balance at 30th June 2020

162,500

7,296,409

37,500

7,496,409

Cash flows from operating activities

Cash generated from operations

1

(3,127,438

)

1,612,121

Interest paid

(7,141

)

(5,761

)

Net cash from operating activities

(3,134,579

)

1,606,360

Cash flows from investing activities

Purchase of tangible fixed assets

(545,519

)

(1,311,887

)

Purchase of fixed asset investments

-

(10,000

)

Sale of tangible fixed assets

20,667

3,377,336

Sale of investment property

-

222,098

Interest received

55,446

16,511

Net cash from investing activities

(469,406

)

2,294,058

Cash flows from financing activities

New loans in year

43,422

220,870

Loan repayments in year

(87,522

)

(48,533

)

Non-controlling interest share issue

80,000

-

Net cash from financing activities

35,900

172,337

(Decrease)/increase in cash and cash equivalents

(3,568,085

)

4,072,755

Cash and cash equivalents at beginning of year

2

5,392,740

1,319,985

Cash and cash equivalents at end of year

2

1,824,655

5,392,740

1.	Reconciliation of profit before taxation to cash generated from operations

2020

2019

£

£

Profit before taxation

67,951

655,774

Depreciation charges

231,897

172,353

Profit on disposal of fixed assets

(14,551

)

(19,234

)

Finance costs

7,141

5,761

Finance income

(55,446

)

(16,511

)

236,992

798,143

Decrease in stocks

76,405

95,545

(Increase)/decrease in trade and other debtors

(3,145,764

)

977,748

Decrease in trade and other creditors

(295,071

)

(259,315

)

Cash generated from operations

(3,127,438

)

1,612,121

2.	Cash and cash equivalents

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 30th June 2020

30.6.20

1.7.19

£

£

Cash and cash equivalents

1,824,655

5,392,740

Year ended 30th June 2019

30.6.19

1.7.18

£

£

Cash and cash equivalents

5,392,740

1,319,985

3.	Analysis of changes in net funds

At 1.7.19

Cash flow

At 30.6.20

£

£

£

Net cash

Cash at bank and in hand

5,392,740

(3,568,085

)

1,824,655

5,392,740

(3,568,085

)

1,824,655

Debt

Debts falling due within 1 year

(76,506

)

(2,709

)

(79,215

)

Debts falling due after 1 year

(95,830

)

46,808

(49,022

)

(172,336

)

44,099

(128,237

)

Total

5,220,404

(3,523,986

)

1,696,418

1.	Statutory information

Rowecord Holdings Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	Accounting policies

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared on a going concern basis. The Directors have reviewed and considered relevant information, including the rolling forecasts and future cash flows in making their assessment. In particular, in response to the COVID-19 pandemic, the Directors have tested their cash flow analysis to take into account the impact on their business of possible scenarios brought on by the impact of COVID-19, alongside the measures that they can take to mitigate the impact. Based on these assessments, given the measures that could be undertaken to mitigate the current adverse conditions, and the current resources available, the Directors have concluded that they can continue to adopt the going concern basis in preparing the annual report and accounts.

Basis of consolidation

The group financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 June 2020.

Subsidiary undertakings are included using the acquisitions method of accounting. Under this method the group profit and loss account and statement of cashflows include the results and cashflows of subsidiaries from the date of acquisition and to the date of sale outside the group in the case of disposals of subsidiaries. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.

Critical accounting 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 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.

Turnover

Turnover represents amounts chargeable, net of value added tax, in respect of building and civil engineering, scaffolding and the supply of fluid storage systems and towers and fabrication and erection of structural steel, adjusted for amounts recoverable on contracts.

Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs (as defined above) as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer. Full provision is made for losses on all contracts in the year in which they are first foreseen.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Freehold property

- 1-10% straight line

Plant and machinery

- Between 50% and 10% on cost

Fixtures and fittings

- 25% on cost and 15% on cost

Motor vehicles

- 25% on cost and 20% on cost

Fixed asset investments

Fixed asset investments are stated as historical cost less provision for any diminution in value.

Government grants

Government grants relates to income receivables in relation to the UK government COVID-19 job retention scheme.

Investment property

Investment properties are recognised at fair value by valuation. The properties held for investment proposes have not been re-stated on transition to FRS102 as the directors' deemed the required adjustment to be immaterial to the financial statements.

Stocks

Stock is valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

Net realisable value is also based on the estimated useful life of stock which is written down over 2 - 4 years.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Transactions in foreign currencies are recorded at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the closing rates at the balance sheet date. All exchange differences are included in the profit and loss account.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions are recognised in the profit and loss account in the period in which they become payable in accordance with the rules of the scheme.

One subsidiary company operates a defined benefit pension scheme but has not incorporated them into these accounts. In the opinion of the directors, the cost of providing the additional accounting disclosures for the defined benefit pension scheme as at 30 June 2020 would far outweigh the benefit to the group.