Intoheat (Holdings) Limited - Limited company accounts 20.1

REGISTERED NUMBER: 08303573 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 March 2020

for

Intoheat (Holdings) Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

J G Rankin

C V Timbrell

R Pammenter

S J Carter

REGISTERED OFFICE:

Unit 6/7 Shortway

Thornbury Industrial Estate

Thornbury

Bristol

BS35 3UT

REGISTERED NUMBER:

08303573 (England and Wales)

AUDITORS:

Wormald & Partners

Chartered Accountants (ICAEW)

Redland House

157 Redland Road

Redland

Bristol

BS6 6YE

The directors present their strategic report of the company and the group for the year ended 31 March 2020.

REVIEW OF BUSINESS

The principal activity of the group was that of building service engineers.

The year ended 31 March 2020 has again proved to be another testing year for the construction industry with gross margins coming under constance pressure. This was further compounded by the National Government Lockdown towards the end of March 2020 as a result of the Covid 19 pandemic.

However throughout the year the group continued with its reviews of all operations paying particular attention to the management and operational effectiveness of long term contracts.This together with a continued detailed review of staffing levels has seen the group report a healthy profit for the year.

STRATEGY

The directors aim to continue with reducing the group's exposure to large long term contracts whereby the anticipated margins are not as expected. The group will continue to channel additional resources where necessary to ensure these contracts are completed without further costs being incurred that have not been contractually agreed. Where necessary, the group will ensure legal action is used to ensure it's contractual obligations are adequately protected and the group is not exposed to unforeseen losses.

The group will continue with its reviews of it's management and operational effectiveness together with ensuring staffing levels are set as required by the group. Further reviews of all of the group's overheads for the forthcoming accounting year will be conducted if necessary costs will be decreased where ever possible.

By adopting these measures the directors anticipate that budgeted turnover for future accounting periods maybe less than reported for the year ended 31 March 2020, but with improved margins.Together with the cost saving measures already undertaken by the group this will see a significant increase in profitability for future accounting periods.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risk and uncertainty facing the group relate to the ongoing impact of the Covid 19 pandemic. The directors ensure that they are fully up to date with the current legislation and closely monitor the ongoing impact this may have on the group.

These risks are further reviewed by the group insisting on the highest standards of hygiene and infection control as well as a clear Covid 19 operations plan that is adhered to by all members of staff. There has been an increase in costs to adopt such plans which the directors anticipate will continue into future accounting periods

Despite the above the group's projected level of turnover for the next financial year is indicating that the group's expectations over the next financial year are achievable. However, we will continue to be diligent to ensure that the group's future successes are carefully maintained and significantly improved wherever possible.

FINANCIAL INSTRUMENTS

The group's principal financial instruments comprise of bank balances, bank borrowings, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for and to finance the group's operations. In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and optimization of interest of funds placed in deposit accounts. The group manages the liquidity risk by ensuring there are sufficient funds to meet the payments. Trade creditors liquidity risk is managed by ensuring that sufficient funds are available to make the payments as and when they fall due. Trade debtors and cash flow are managed through credit processes to monitor and pursue overdue receipts from customers.

EMPLOYEE PRACTICES AND OTHER INFORMATION

An equal opportunities statement and policies to ensure employees are treated with dignity, respect, and equality, regardless of gender, race, nationality, ethnic identity, national origin, religious beliefs, disability, age, marital status, family circumstance, sexual orientation or trade union activity are embedded in the group's operations manual which governs all aspects of operations including recruitment, training, promotion and discipline of staff.

Other information and explanations

Whilst the current market conditions in the construction sector are challenging, the directors however are optimistic that there will be continued and sustained growth in the group for the foreseeable future.

ON BEHALF OF THE BOARD:

J G Rankin - Director

10 November 2020

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2020.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of building service engineers.

DIVIDENDS

Interim dividends per share were paid as follows:

9.17

- 6 April 2019

9.16

- 30 June 2019

10.00

- 1 November 2019

10.00

- 2 January 2020

38.33

The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 March 2020 will be £ 57,500 .

DIRECTORS

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

J G Rankin

C V Timbrell

R Pammenter

S J Carter

FINANCIAL INSTRUMENTS

The group's activities expose it to a number financial risks including price risk,credit risk,cash flow risk and liquidity risk.

Price Risk

The group is exposed to subcontractor and supplier risk. The group manages its exposure to these risks well by engaging in ongoing negotiations with sub contractors and suppliers over prices.The group looks to fix prices where possible to reduce exposure to price fluctuations.

Credit Risk

The group's principal financial assets are bank and cash balances, trade debtors and other receivables. The group's credit risk is primarily attributable to its trade debtors.The amounts presented in the balance sheet are net of allowances for doubtful reserves.

Liquidity Risk

The group's approach to managing liquidity in respect of bank balances is by successfully maintaining a balance between the continuity of available funding from the company bankers.

Cash Flow Risk

The group's activities expose it primarily to the financial risk of recovering amounts due on contracts. The group manages this risk well by reviewing contract progress on a regular basis and agreeing with customers the stage of completion and amounts due.

POST BALANCE SHEET EVENTS

There have been no significant events affecting the group since the year end.

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). 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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Wormald & Partners, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J G Rankin - Director

10 November 2020

Opinion

We have audited the financial statements of Intoheat (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2020 which comprise the Consolidated Income Statement, Consolidated Other 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 the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2020 and of the group's 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.

Basis for opinion

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

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.

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.

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 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; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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.

DILIP R PATEL (Senior Statutory Auditor)

for and on behalf of Wormald & Partners

Chartered Accountants (ICAEW)

Redland House

157 Redland Road

Redland

Bristol

BS6 6YE

10 November 2020

TURNOVER

24,343,261

28,651,833

Cost of sales

19,736,903

24,919,396

GROSS PROFIT

4,606,358

3,732,437

Administrative expenses

2,948,165

3,366,934

OPERATING PROFIT

4

1,658,193

365,503

Interest receivable and similar income

6,696

3,414

1,664,889

368,917

Interest payable and similar expenses

5

(209

)

7,133

PROFIT BEFORE TAXATION

1,665,098

361,784

Tax on profit

6

328,540

88,022

PROFIT FOR THE FINANCIAL YEAR

1,336,558

273,762

Profit attributable to:

Owners of the parent

1,336,558

273,762

PROFIT FOR THE YEAR

1,336,558

273,762

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,336,558

273,762

Total comprehensive income attributable to:

Owners of the parent

1,336,558

273,762

FIXED ASSETS

Tangible assets

9

205,735

57,669

Investments

10

255,550

255,550

461,285

313,219

CURRENT ASSETS

Stocks

11

1,821,042

1,496,923

Debtors

12

1,316,426

2,093,344

Cash at bank

1,776,999

1,980,933

4,914,467

5,571,200

CREDITORS

Amounts falling due within one year

13

3,575,504

5,398,703

NET CURRENT ASSETS

1,338,963

172,497

TOTAL ASSETS LESS CURRENT LIABILITIES

1,800,248

485,716

CREDITORS

Amounts falling due after more than one year

14

(21,701

)

(929

)

PROVISIONS FOR LIABILITIES

17

(17,304

)

(2,602

)

NET ASSETS

1,761,243

482,185

CAPITAL AND RESERVES

Called up share capital

18

1,000

1,000

Retained earnings

19

1,760,243

481,185

SHAREHOLDERS' FUNDS

1,761,243

482,185

The financial statements were approved by the Board of Directors and authorised for issue on 10 November 2020 and were signed on its behalf by:

J G Rankin - Director

C V Timbrell - Director

FIXED ASSETS

Tangible assets

9

-

-

Investments

10

257,050

257,050

257,050

257,050

CURRENT ASSETS

Debtors

12

1,081,000

56,000

Cash at bank

25,284

-

1,106,284

56,000

CREDITORS

Amounts falling due within one year

13

279,950

257,050

NET CURRENT ASSETS/(LIABILITIES)

826,334

(201,050

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,083,384

56,000

CAPITAL AND RESERVES

Called up share capital

18

1,000

1,000

Retained earnings

19

1,082,384

55,000

SHAREHOLDERS' FUNDS

1,083,384

56,000

Company's profit for the financial year

1,084,884

55,000

The financial statements were approved by the Board of Directors and authorised for issue on 10 November 2020 and were signed on its behalf by:

J G Rankin - Director

C V Timbrell - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 November 2017

1,000

207,423

208,423

Changes in equity

Total comprehensive income

-

273,762

273,762

Balance at 31 March 2019

1,000

481,185

482,185

Changes in equity

Dividends

-

(57,500

)

(57,500

)

Total comprehensive income

-

1,336,558

1,336,558

Balance at 31 March 2020

1,000

1,760,243

1,761,243

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 November 2017

1,000

-

1,000

Changes in equity

Total comprehensive income

-

55,000

55,000

Balance at 31 March 2019

1,000

55,000

56,000

Changes in equity

Dividends

-

(57,500

)

(57,500

)

Total comprehensive income

-

1,084,884

1,084,884

Balance at 31 March 2020

1,000

1,082,384

1,083,384

Cash flows from operating activities

Cash generated from operations

1

380,089

1,000,555

Interest paid

786

(6,689

)

Interest element of hire purchase payments paid

(577

)

(444

)

Tax paid

(89,997

)

(37,121

)

Net cash from operating activities

290,301

956,301

Cash flows from investing activities

Purchase of tangible fixed assets

(195,099

)

(7,491

)

Interest received

6,696

3,414

Net cash from investing activities

(188,403

)

(4,077

)

Cash flows from financing activities

New loans in year

-

(118,276

)

Loan repayments in year

(26,639

)

-

Capital repayments in year

29,388

(3,160

)

Amount introduced by directors

125,319

-

Amount withdrawn by directors

22,900

(112,069

)

Equity dividends paid

(57,500

)

-

Net cash from financing activities

93,468

(233,505

)

Increase in cash and cash equivalents

195,366

718,719

Cash and cash equivalents at beginning of year

2

1,488,985

770,266

Cash and cash equivalents at end of year

2

1,684,351

1,488,985

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

1.11.17

Year Ended

to

31.3.20

31.3.19

£

£

Profit before taxation

1,665,098

361,784

Depreciation charges

47,034

33,878

Finance costs

(209

)

7,133

Finance income

(6,696

)

(3,414

)

1,705,227

399,381

(Increase)/decrease in stocks

(324,119

)

1,607,887

Decrease/(increase) in trade and other debtors

776,918

(1,200,996

)

(Decrease)/increase in trade and other creditors

(1,777,937

)

194,283

Cash generated from operations

380,089

1,000,555

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 31 March 2020

31.3.20

1.4.19

£

£

Cash and cash equivalents

1,776,999

1,980,933

Bank overdrafts

(92,648

)

(491,948

)

1,684,351

1,488,985

Period ended 31 March 2019

31.3.19

1.11.17

£

£

Cash and cash equivalents

1,980,933

946,683

Bank overdrafts

(491,948

)

(176,417

)

1,488,985

770,266

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.4.19

Cash flow

At 31.3.20

£

£

£

Net cash

Cash at bank

1,980,933

(203,934

)

1,776,999

Bank overdrafts

(491,948

)

399,300

(92,648

)

1,488,985

195,366

1,684,351

Debt

Finance leases

(3,159

)

(29,388

)

(32,547

)

Debts falling due within 1 year

(26,638

)

26,638

-

(29,797

)

(2,750

)

(32,547

)

Total

1,459,188

192,616

1,651,804

1.	STATUTORY INFORMATION

Intoheat (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.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

-

25% on straight line basis

Fixtures and fittings

-

15% on reducing balance basis

Motor vehicles

-

25% on reducing balance basis

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Financial instruments

The group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third 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 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 debtors and creditors, are measured , initially and subsequently , at the undiscounted amount of the cash or other consideration to be paid or received.

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 Statement of Comprehensive Income.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, 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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

Period

1.11.17

Year Ended

to

31.3.20

31.3.19

£

£

Wages and salaries

3,556,944

4,291,560

Social security costs

351,928

413,329

Other pension costs

162,414

210,519

4,071,286

4,915,408

The average number of employees during the year was as follows:

Period

1.11.17

Year Ended

to

31.3.20

31.3.19

Management & Administration

13

12

Operational

74

60

87

72

Period

1.11.17

Year Ended

to

31.3.20

31.3.19

£

£

Directors' remuneration

374,708

443,233

Directors' pension contributions to money purchase schemes

79,837

147,100

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

4

3

Information regarding the highest paid director is as follows:

Period

1.11.17

Year Ended

to

31.3.20

31.3.19

£

£

Emoluments etc

113,975

123,112

Pension contributions to money purchase schemes

8,665

3,500