M.P._BROTHERS_LIMITED - Accounts
M.P._BROTHERS_LIMITED - Accounts
Company Registration No. 01176469 (England and Wales)
FOR THE YEAR ENDED 31 AUGUST 2014
COMPANY INFORMATION
Directors
Company number
Registered office
Auditors
Business address
198-206 Acton Lane
Park Royal
London
NW10 7NH
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditors' report
4 - 5
Profit and loss account
6
Statement of total recognised gains and losses
7
Balance sheet
8
Cash flow statement
9
Notes to the cash flow statement
10
Notes to the financial statements
11 - 20
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2014
- 1 -
The directors present the strategic report and financial statements for the year ended 31 August 2014.
Review of the business
The company's sales have continued to grow with an increase in turnover this year to £12,785,018 (2013: £12,162,971).
Despite incurring a substantial SWAP break fee, the directors are pleased with the financial results and the year end position and envisage continued growth and profitability for the forthcoming year.
As the housing market continues to grow in the improving economic climate, there nevertheless remains a degree of caution in this industry and this illustrates an ever present credit and liquidity risk. The company endeavours to minimise this risk by using major credit reference agencies and by carrying out its own searches on the world wide web.
A process of ongoing liaison with suppliers and associates is designed to keep us informed and warn of any potential risk of defaults.
We have also improved our own working capital arrangements by breaking out of a non performing SWAP and as a result have changed our bankers and secured refinancing which has enhanced our liquidity.
The company relies on a number of Key Performance Indicators as an aid to setting performance targets and for monitoring purposes.
- Net assets: Increased from £1,931,912 in 2013 to £2,068,133 in 2014.
- Bank overdraft: Decreased from £489,049 in 2013 to £256,082 in 2014.
On behalf of the board
Director
21 May 2015
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2014
- 2 -
The directors present their report and financial statements for the year ended 31 August 2014.
Principal activities
Results and dividends
The results for the year are set out on page 6.
Future developments
Our plans for the future are to continue to win contract tenders thus increasing our turnover and in turn profits. Our aim is to achieve a total turnover of £25m within the next two financial years.
Directors
The following directors have held office since 1 September 2013:
Auditors
Berkeley Finch Limited were appointed auditors to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
- 3 -
Statement of disclosure to auditors
On behalf of the board
Director
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF M.P. BROTHERS LIMITED
- 4 -
We have audited the financial statements of M.P. Brothers Limited for the year ended 31 August 2014 set out on pages 6 to 20. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
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.
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.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on pages 2 - 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
-
give a true and fair view of the state of the company's affairs as at 31 August 2014 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF M.P. BROTHERS LIMITED
- 5 -
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
for and on behalf of Berkeley Finch Limited
Statutory Auditor
Chartered Accountants
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2014
- 6 -
2014
2013
Notes
£
£
Turnover
2
Cost of sales
(11,741,829 )
(11,132,898 )
Gross profit
Administrative expenses
(910,610 )
(779,667 )
Other operating income
Operating profit
3
Impairment gain
-
361,983
Profit on ordinary activities before interest
Interest payable and similar charges
4
(89,030 )
(129,691 )
Profit on ordinary activities before taxation
Tax on profit on ordinary activities
5
(44,453 )
(76,982 )
Profit for the year
14
The profit and loss account has been prepared on the basis that all operations are continuing operations.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 AUGUST 2014
- 7 -
2014
2013
Notes
£
£
Profit for the financial year
Unrealised (deficit)/surplus on revaluation of properties
-
Total recognised gains and losses relating to the year
Note of historical cost profits and losses
2014
2013
£
£
Reported profit on ordinary activities before taxation
Difference between an historical cost depreciation charge and the actual depreciation charge of the year calculated on the revalued amount
(11,086 )
(11,086 )
Historical cost profit on ordinary activities before taxation
Historical cost profit for the year retained after taxation, extraordinary items and dividends
BALANCE SHEET
AS AT
31 AUGUST 2014
- 8 -
2014
2013
Notes
£
£
£
£
Fixed assets
Tangible assets
7
Current assets
Stocks
8
Debtors: amounts falling due within one year
9
Debtors: amounts falling due after more than one year
9
Creditors: amounts falling due within one year
10
(3,772,757 )
(3,360,276 )
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more than one year
11
(2,427,768 )
(1,750,164 )
Provisions for liabilities
12
Deferred tax liability
-
(2,890 )
Capital and reserves
Called up share capital
13
Revaluation reserve
14
Other reserves
14
Profit and loss account
14
Shareholders' funds
15
Approved by the Board and authorised for issue on 21 May 2015
Director
Company Registration No. 01176469
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2014
- 9 -
2014
2013
£
£
£
£
Net cash (outflow)/inflow from operating activities
(222,624)
1,157,935
Returns on investments and servicing of finance
Interest paid
(82,665)
(123,898)
Interest element of finance lease rentals
(6,365)
(5,793)
Net cash outflow for returns on investments and servicing of finance
(89,030)
(129,691)
Taxation
(63,075 )
(23,100 )
Capital expenditure
Payments to acquire tangible assets
(38,820)
(3,509)
Net cash outflow for capital expenditure
(38,820)
(3,509)
Equity dividends paid
-
(16,335)
Net cash (outflow)/inflow before management of liquid resources and financing
(413,549 )
Financing
New long term bank loan
2,000,000
-
Other new long term loans
-
600,000
Repayment of long term bank loan
(1,225,983)
(84,210)
Repayment of other long term loans
(100,000)
(905,000)
Repayment of other short term loans
-
(387,084)
Capital element of hire purchase contracts
(27,501)
(23,751)
Net cash inflow/(outflow) from financing
646,516
(800,045)
Increase in cash in the year
185,255
NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2014
- 10 -
1
Reconciliation of operating profit to net cash inflow/(outflow) from operating activities
2014
2013
£
£
Operating profit
Depreciation of tangible assets
117,528
113,771
Decrease/(increase) in stocks
13,871
(56,888)
(Increase)/decrease in debtors
(1,305,995)
727,539
Increase/(decrease) in creditors within one year
682,268
(24,700)
Net cash (outflow)/inflow from operating activities
(222,624)
1,157,935
2
Analysis of net debt
1 September 2013
Cash flow
Other non-cash changes
£
£
£
£
Net cash:
Bank overdrafts
(489,049 )
232,967
-
(256,082 )
Bank deposits
-
-
-
-
Debt:
Finance leases
(79,484)
7,501
10,000
(61,983)
Debts falling due within one year
(84,210)
21,088
-
(63,122)
Debts falling due after one year
(1,694,432)
(695,105)
-
(2,389,537)
(1,858,126)
(666,516)
10,000
(2,514,642)
Net debt
(2,347,175 )
(433,549)
10,000
(2,770,724 )
3
Reconciliation of net cash flow to movement in net debt
2014
2013
£
£
Increase in cash in the year
Cash (inflow)/outflow from (increase)/decrease in debt and lease financing
(666,516)
800,044
Change in net debt resulting from cash flows
(433,549)
985,299
New finance lease
10,000
-
Movement in net debt in the year
(423,549)
985,299
Opening net debt
(2,347,175 )
(3,332,474)
Closing net debt
(2,770,724 )
(2,347,175 )
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2014
- 11 -
1
Accounting policies
1.1
Accounting convention
1.2
Compliance with accounting standards
The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).
1.3
Turnover
In respect of long term contracts, turnover represents the value of work done in the year including estimates of amounts not invoiced. Turnover in respect of long term contracts is recognised by reference to stage of completion.
1.4
Tangible fixed assets and depreciation
Land and buildings Freehold
Plant and machinery
Office and computer equipment
Motor vehicles
1.5
Leasing
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.6
Stock and work in progress
Stock and work in progress are valued at the lower of cost and net realisable value.
1.7
Long term contracts
Amounts recoverable on long term contracts, which are included in debtors, are stated at the net sales value of the work done after provision for contingencies and anticipated future losses on contracts, less amounts received as progress payments on account. Excess progress payments are included in creditors as payments on account.
1.8
Deferred taxation
Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
- 12 -
2
Turnover
The total turnover of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
3
Operating profit
2014
2013
£
£
Operating profit is stated after charging:
Depreciation of tangible assets
Operating lease rentals
- Plant and machinery
-
1,729
Auditors' remuneration
Fees payable to the company's auditor for the audit of the company's annual accounts
Tax and consultancy
6,237
9,581
21,737
24,906
4
Interest payable
2014
2013
£
£
On bank loans and overdrafts
Lease finance charges
6,365
5,793
On overdue tax
-
38
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
- 13 -
5
Taxation
2014
2013
£
£
Domestic current year tax
U.K. corporation tax
Total current tax
Deferred tax
Origination and reversal of timing differences
(2,890)
(1,144)
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation
Profit on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 20.00% (2013 - 21%)
Effects of:
Non deductible expenses
Depreciation add back
23,506
23,767
Capital allowances
(14,205)
(5,039)
Other tax adjustments
-
(75,633)
11,208
(53,586)
Current tax charge for the year
6
Dividends
2014
2013
£
£
Ordinary interim paid
-
16,335
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
- 14 -
7
Tangible fixed assets
Land and buildings Freehold
Plant and machinery
Office and computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 September 2013
Additions
-
At 31 August 2014
Depreciation
At 1 September 2013
Charge for the year
At 31 August 2014
Net book value
At 31 August 2014
At 31 August 2013
The freehold and leasehold land and buildings were valued on an open market basis by a firm of independent Chartered Surveyors.
If these properties were sold for their revalued amounts it would be necessary to replace them with similar property, and rollover relief against tax on the gain would be available. Accordingly, no timing differences arise and no provision has been made for deferred tax in respect of the revaluation.
Comparable historical cost for the land and buildings included at valuation:
£
Cost
At 1 September 2013 & at 31 August 2014
3,224,124
Depreciation based on cost
At 1 September 2013
804,306
Charge for the year
64,482
At 31 August 2014
868,788
Net book value
At 31 August 2014
2,355,336
At 31 August 2013
2,419,818
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
7
Tangible fixed assets
(Continued)
- 15 -
Included above are assets held under finance leases or hire purchase contracts as follows:
Plant and machinery
Motor vehicles
Total
£
£
£
Net book values
At 31 August 2014
At 31 August 2013
Depreciation charge for the year
At 31 August 2014
At 31 August 2013
8
Stocks and work in progress
2014
2013
£
£
Work in progress
Raw materials
9
Debtors
2014
2013
£
£
Trade debtors
Amounts recoverable on long term contracts
Other debtors
Amounts falling due after more than one year and included in the debtors above are:
2014
2013
£
£
Amounts recoverable on long term contracts
1,059,562
849,965
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
- 16 -
10
Creditors: amounts falling due within one year
2014
2013
£
£
Bank loans and overdrafts
Net obligations under finance leases
Trade creditors
Amounts owed to parent and fellow subsidiary undertakings
Corporation tax
Other taxes and social security costs
Directors' current accounts
Other creditors
Accruals and deferred income
The bank overdraft is secured by a fixed and floating charge over the assets of the company and the first legal charge over the company's freehold property together with a personal guarantee of £2.3m provided by the director Mr S Rabadiya and his spouse.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
- 17 -
11
Creditors: amounts falling due after more than one year
2014
2013
£
£
Bank loans
Other loans
Net obligations under finance leases
Analysis of loans
Not wholly repayable within five years by instalments:
Bank loan
1,952,659
1,178,642
Wholly repayable within five years
500,000
600,000
2,452,659
1,778,642
Included in current liabilities
(63,122)
(84,210)
2,389,537
1,694,432
Instalments not due within five years
1,637,049
757,590
Loan maturity analysis
In more than one year but not more than two years
In more than two years but not more than five years
In more than five years
The bank loan is secured by a fixed and floating charge over the assets of the company and the first legal charge over the company's freehold property together with a personal guarantee of £2.3m provided by the director Mr S Rabadiya and his spouse.
The company is required to pay the capital plus interest of the loan in monthly instalments of £12,664.
Net obligations under finance leases
Repayable within one year
23,752
23,752
Repayable between one and five years
38,231
55,732
61,983
79,484
Included in liabilities falling due within one year
(23,752 )
(23,752 )
38,231
55,732
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
- 18 -
12
Provisions for liabilities
Deferred tax liability
£
Balance at 1 September 2013
2,890
Profit and loss account
(2,890 )
Balance at 31 August 2014
-
Deferred tax is provided as follows:
2014
2013
£
£
Accelerated capital allowances
-
13
Share capital
2014
2013
£
£
Allotted, called up and fully paid
14
Statement of movements on reserves
Revaluation reserve
Other reserves
(see below)
(see below)
Profit
and loss
account
and loss
account
£
£
£
Balance at 1 September 2013
Profit for the year
-
-
Balance at 31 August 2014
Other reserves
Capital redemption reserve
Balance at 1 September 2013 & at 31 August 2014
370
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
- 19 -
15
Reconciliation of movements in shareholders' funds
2014
2013
£
£
Profit for the financial year
Dividends
-
(16,335 )
136,221
537,188
Other recognised gains and losses
-
554,285
Net addition to shareholders' funds
Opening shareholders' funds
Closing shareholders' funds
16
Financial commitments
At 31 August 2014 the company was committed to making the following payments under non-cancellable operating leases in the year to 31 August 2015:
Other
2014
2013
£
£
Operating leases which expire:
Within one year
17
Directors' remuneration
2014
2013
£
£
Remuneration for qualifying services
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2014
- 20 -
18
Employees
Number of employees
The average monthly number of employees (including directors) during the year was:
2014
2013
Number
Number
Production staff
33
33
Administrative staff
4
4
37
37
Employment costs
2014
2013
£
£
Wages and salaries
Social security costs
19
Control
The ultimate parent company is M B Bros Holdings Limited.
The ultimate controlling parties are Mr S. Rabadiya and Mrs S V Rabadiya by virtue of their 100% shareholding in M P Bros Holdings Limited.
20
Related party relationships and transactions
The company has taken advantage of the exemption available in FRS 8 "Related party disclosures" whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.