E & S Heating & Ventilation Limited - Limited company accounts 20.1

REGISTERED NUMBER: 01959886 (England and Wales)

E & S Heating & Ventilation Limited

Strategic Report, Report of the Director and

Audited Financial Statements for the Year Ended 30 April 2020

Page

Company Information

1

Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

6

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

16

DIRECTOR:

Ms A J Shephard

REGISTERED OFFICE:

Diplocks Way

Hailsham

East Sussex

BN27 3JF

REGISTERED NUMBER:

01959886 (England and Wales)

AUDITORS:

Swindells LLP

Chartered Accountants

and Statutory Auditor

Atlantic House

8 Bell Lane

Bellbrook Industrial Estate

Uckfield

East Sussex

TN22 1QL

The director presents her strategic report for the year ended 30 April 2020.

REVIEW OF BUSINESS

The year ended 30 April 2020 started well following the optimism felt at the end of the prior year. There was a slow down before the end of the calendar year as existing contracts ended and new contracts were slow to start. Despite these starting to move in early 2020 there was a further slowdown as many sites were closed in April due to the COVID-19 pandemic.

Following on from last year, the company had a strong order book and was delivering the work that had previously been secured across a number of sectors including Healthcare, Life Sciences and Crossrail.

The project slippage that continues to affect the construction industry is ongoing into the current year making forward planning very challenging.

The uncertainty around Brexit should resolve during the forthcoming year and we foresee many more construction projects in the pipeline, and the outlook for 2020 and beyond is optimistic.

The company continues to carry out significant projects in London and the South East of England and has

maintained its reputation for quality work delivered on time.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties are those facing any business in the manufacturing and construction sectors.

All such risks and uncertainties have been addressed by the director.

Financial risk

Financial risk management objectives and policies

The director has reviewed the company's risk management policies and considers them to be adequate.

Price risk, credit risk, liquidity risk and cash flow risk

The company's principal financial instruments comprise bank overdrafts, trade creditors and loans to the business. 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 overdrafts at floating rates of interest. All of the company's cash balances are held in such a way that achieves a competitive rate of interest.

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

The shareholder loan included in other creditors is repayable when cash reserves permit and no interest is accrued on the balance. The company manages the liquidity risk by ensuring that there are sufficient funds to service the loan repayments.

Future developments

The company has invested in the recruitment of skilled workers which will improve the efficiency and

productivity of the business in the future.

DEVELOPMENT AND PERFORMANCE OF THE BUSINESS

Key performance indicators

2020

2019

2018

2017

2015

Turnover

12,144,010

13,665,650

16,998,361

17,353,829

8,051,421

Turnover growth

(11.1%)

(19.6%

46.9%

115.5%

(6.6%

)

Position of the business

At the end of the year, the net assets totalled £1,534,861 (2019 - £1,473,696).

ON BEHALF OF THE BOARD:

Ms A J Shephard - Director

29 April 2021

The director presents her report with the financial statements of the company for the year ended 30 April 2020.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a heating, ventilation and air conditioning contractor.

DIVIDENDS

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

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTOR

Ms A J Shephard held office during the whole of the period from 1 May 2019 to the date of this report.

DISCLOSURE IN THE STRATEGIC REPORT

In accordance with s.414C(11) of the Companies Act 2006, information on financial and other risks required by Schedule 7 to be contained in the Director's Report, are set out in the Strategic Report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless she is 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 director is 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 director is 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 her to ensure that the financial statements comply with the Companies Act 2006. She is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

ON BEHALF OF THE BOARD:

Ms A J Shephard - Director

29 April 2021

Qualified opinion

We have audited the financial statements of E & S Heating & Ventilation Limited (the 'company') for the year ended 30 April 2020 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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 possible effects of the matter described in the basis for qualified opinion

section of our report, the financial statements:

-

give a true and fair view of the state of the company's affairs as at 30 April 2020 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 Companies Act 2006.

Basis for qualified opinion

We have not been able to obtain sufficient evidence to satisfy ourselves concerning the stock values of £138,065 held as at 30 April 2020. This is because we were not able to observe the counting of the physical stock as at 30 April 2020 as a result of the Covid-19 pandemic. Owing to the nature of the company’s records, we were unable to obtain sufficient appropriate audit evidence regarding the stock valuation by using other audit procedures. Consequently we were unable to determine whether any adjustment to this amount was necessary.

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 Auditor’s 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 director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company'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.

Key audit matters

Except for the matter described in the basis for qualified opinion section, we have determined that there are no key audit matters to be communicated in our report.

Other information

The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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.

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the stock quantities of £138,065 at 30 April 2020. We have concluded that where the other information refers to the stock balance or related balances such as cost of sales, it may be materially misstated for the same reason.

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 Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

Except for the matter described in the basis for qualified opinion section of our report, 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 Report of the Directors.

Arising solely from the limitation on the scope of our work relating to stock, referred to above:

-

we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

-

we were unable to determine whether adequate accounting records have been kept.

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:

-	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 director's remuneration specified by law are not made.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is 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 director determines 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 director is responsible for assessing the 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 director either intends to liquidate the company or to cease operations, or has 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.

Melanie Richardson BA(Hons) FCA (Senior Statutory Auditor)

for and on behalf of Swindells LLP

Chartered Accountants

and Statutory Auditor

Atlantic House

8 Bell Lane

Bellbrook Industrial Estate

Uckfield

East Sussex

TN22 1QL

29 April 2021

TURNOVER

12,144,010

13,665,650

Cost of sales

9,028,008

9,964,933

GROSS PROFIT

3,116,002

3,700,717

Administrative expenses

3,045,886

3,463,055

70,116

237,662

Other operating income

25,124

-

OPERATING PROFIT

5

95,240

237,662

Interest receivable and similar income

6

34

1

95,274

237,663

Interest payable and similar expenses

7

6,312

9,226

PROFIT BEFORE TAXATION

88,962

228,437

Tax on profit

8

29,348

50,061

PROFIT FOR THE FINANCIAL YEAR

59,614

178,376

PROFIT FOR THE YEAR

59,614

178,376

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

59,614

178,376

FIXED ASSETS

Intangible assets

9

838,505

931,506

Tangible assets

10

84,329

98,682

922,834

1,030,188

CURRENT ASSETS

Stocks

11

138,065

132,293

Debtors

12

4,214,096

3,664,357

Cash at bank and in hand

1,061

109,526

4,353,222

3,906,176

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

13

3,742,746

3,462,668

NET CURRENT ASSETS

610,476

443,508

TOTAL ASSETS LESS CURRENT LIABILITIES

1,533,310

1,473,696

CAPITAL AND RESERVES

Called up share capital

17

534,871

534,871

Share premium

18

259,168

259,168

Retained earnings

18

739,271

679,657

SHAREHOLDERS' FUNDS

1,533,310

1,473,696

The financial statements were approved by the director and authorised for issue on 29 April 2021 and were signed by:

Ms A J Shephard - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 May 2018

132

501,281

259,168

760,581

Changes in equity

Issue of share capital

534,739

-

-

534,739

Total comprehensive income

-

178,376

-

178,376

Balance at 30 April 2019

534,871

679,657

259,168

1,473,696

Changes in equity

Total comprehensive income

-

59,614

-

59,614

Balance at 30 April 2020

534,871

739,271

259,168

1,533,310

Cash flows from operating activities

Cash generated from operations

1

(74,931

)

1,015,420

Interest paid

(6,312

)

(9,226

)

Tax paid

(50,060

)

(18,333

)

Net cash from operating activities

(131,303

)

987,861

Cash flows from investing activities

Purchase of tangible fixed assets

(14,200

)

(22,585

)

Sale of tangible fixed assets

-

764

Interest received

34

1

Net cash from investing activities

(14,166

)

(21,820

)

Cash flows from financing activities

Loan repayments in year

(420,669

)

(960,044

)

Share issue

-

534,739

Net cash from financing activities

(420,669

)

(425,305

)

(Decrease)/increase in cash and cash equivalents

(566,138

)

540,736

Cash and cash equivalents at beginning of year

2

109,526

(431,210

)

Cash and cash equivalents at end of year

2

(456,612

)

109,526

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

2020

2019

£

£

Profit before taxation

88,962

228,437

Depreciation charges

121,554

128,748

Loss on disposal of fixed assets

-

796

Finance costs

6,312

9,226

Finance income

(34

)

(1

)

216,794

367,206

(Increase)/decrease in stocks

(5,772

)

121,815

Decrease in trade and other debtors

7,647

1,616,375

Decrease in trade and other creditors

(293,600

)

(1,089,976

)

Cash generated from operations

(74,931

)

1,015,420

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 30 April 2020

30.4.20

1.5.19

£

£

Cash and cash equivalents

1,061

109,526

Bank overdrafts

(457,673

)

-

(456,612

)

109,526

Year ended 30 April 2019

30.4.19

1.5.18

£

£

Cash and cash equivalents

109,526

1,248

Bank overdrafts

-

(432,458

)

109,526

(431,210

)

3.	ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 1.5.19

Cash flow

At 30.4.20

£

£

£

Net cash

Cash at bank and in hand

109,526

(108,465

)

1,061

Bank overdrafts

-

(457,673

)

(457,673

)

109,526

(566,138

)

(456,612

)

Total

109,526

(566,138

)

(456,612

)

1.	STATUTORY INFORMATION

E & S Heating & Ventilation 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 Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

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 represents the value of work carried out in the year. Profit is recognised net of VAT and discounts on long term contracts in proportion to the work completed after making allowance for future risks and uncertainties. Immediate provision is made for all foreseeable losses.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2010, is being amortised evenly over its estimated useful life of twenty years.

Intangible fixed assets

Computer software is being amortised evenly over its estimated useful life of three years.

Other intangible fixed assets, being capitalised development expenditure, is being amortised evenly over its estimated useful life of three years. The development costs have been capitalised due to their use in future business sales.

Amortisation is included within administrative expenses in the income statement.

Tangible fixed assets

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

Plant and machinery

-

15% on reducing balance

Fixtures and fittings

-

20% on cost

Motor vehicles

-

25% on cost

Computer equipment

-

33% on cost

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

Government grants

Government grants in respect of capital expenditure are credited to a deferred income account and released to profit over the expected useful lives of the relevant assets in equal annual instalments.

Government grants of a revenue nature are credited to income so as to match them with the expenditure to which they relate.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Equity instruments

Non-redeemable preference shares are classified as equity as they bear discretionary dividends, do not contain any obligations to deliver cash or other financial assets and do not require settlement in a variable number of the company's equity instruments. Discretionary dividends thereon are recognised as equity distributions on approval by the Company's shareholders.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Operating leases

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

Long term contracts

Long term contracts are stated at costs incurred, net of amounts transferred to the profit and loss account in respect of work carried out to date, less foreseeable losses and applicable payments on account. The net balances are shown as debtors (amounts recoverable on contracts) and creditors (advance payments on account of contracts).

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Creditors

Short term trade creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Going concern

The director has assessed whether the going concern basis of preparation continues to be appropriate, based on whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the company to continue as a going concern. This assessment has been required in the light of the significant uncertainty around the short to medium term impact of the spread of the Covid-19 virus.

At the time of approving the financial statements the director believes that all appropriate measures have been or will be taken to ensure that the company will be able to continue its operations for at least the next 12 months and thus conclude that the going concern basis remains appropriate.

3.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

2,739,052

2,917,559

Social security costs

290,463

287,071

Other pension costs

71,301

59,046

3,100,816

3,263,676

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

2020

2019

Sales and manufacturing

70

76

Directors

1

1

71

77

4.	DIRECTORS' EMOLUMENTS

2020

2019

£

£

Director's remuneration

88,700

84,010

Director's pension contributions to money purchase schemes

5,040

4,472

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

Money purchase schemes

1

1

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2020

2019

£

£

Depreciation - owned assets

28,553

29,228

Loss on disposal of fixed assets

-

796

Goodwill amortisation

79,777

79,777

Other intangibles amortisation

13,338

13,297

Computer software amortisation

(114

)

6,446

Auditors' remuneration

11,936

18,685

6.

INTEREST RECEIVABLE AND SIMILAR INCOME

2020

2019

£

£

Deposit account interest

11

1

Other interest receivable

23

-

34

1