Emery Brothers Limited - Limited company accounts 20.1

REGISTERED NUMBER: 08089338 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2021

for

EMERY BROTHERS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

14

DIRECTORS:

D Blackman

J R Emery

P W Rendell

M H Stewart

S G Emery

R J Griffin

REGISTERED OFFICE:

Bathford Works

34 Box Road

Bathford

Bath

BA1 7QH

REGISTERED NUMBER:

08089338 (England and Wales)

AUDITORS:

Richardson Swift Audit Ltd

Chartered Accountants

Statutory Auditor

11 Laura Place

Bath

BA2 4BL

The directors present their strategic report for the year ended 31 December 2021.

REVIEW OF BUSINESS

The company's principal activity is that of building contractors and joinery manufacturers in Bath and the surrounding areas.

PRINCIPAL RISKS AND UNCERTAINTIES

The main risks to the company's prosperity remain the variability of consumer demand and any downturn in the construction sector, together with the danger of the effects of inflation. Consequently, the company is currently avoiding starting long term projects on a fixed price.

The recent surge in inflation and energy costs is having a negative impact on project costs. The company is focusing on efficient working and minimising the effects of energy costs.

Scarcity of skilled labour has also hampered any efforts to increase turnover. The company is aiming for a more balanced work portfolio, reducing the amount of residential work, and focusing more on winning work with commercial clients.

KEY PERFORMANCE INDICATORS

The directors consider that the company's key performance indicators are turnover, gross and net operating margins, which combined, show the difficult trading conditions encountered this year.

In this financial year to December 2021 turnover fell by 1.85% (£254,000) and gross margin rose to £896,765, the net margin rose from -0.518 to +0.12%.

Turnover and profit are less than expected, due to one particular long term project making a large loss in 2022, which has been appropriately taken account of in 2021.

ON BEHALF OF THE BOARD:

J R Emery - Director

5 September 2022

The directors present their report with the financial statements of the company for the year ended 31 December 2021.

PRINCIPAL ACTIVITY

The company's principal activity is that of building contractors and joinery manufacturers.

DIVIDENDS

Final dividends per share were paid during the year as follows:

A Ordinary £1 - £250

B Ordinary £1 - £250

The total distribution of dividends for the year ended 31 December 2021 was £30,500.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

D Blackman

J R Emery

P W Rendell

M H Stewart

S G Emery

R J Griffin

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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 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.

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 company'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 company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

J R Emery - Director

5 September 2022

Opinion

We have audited the financial statements of Emery Brothers Limited (the 'company') for the year ended 31 December 2021 which comprise the Statement of 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 the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2021 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.

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 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 opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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 Directors 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 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 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.

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.

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 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach was as follows:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity by discussion with a director and consideration of our experience of clients in similar sectors.

We determined that the most significant laws and regulations which have a direct impact on the form and content of the financial statements of the entity are the Companies Act and UK GAAP, specifically FRS102.

We determined that the most significant operational laws and regulations for the entity are those governing the construction industry, including health and safety legislation and employment law. Significant laws and regulations with a financial impact include the Construction Industry Scheme and VAT reverse charges for subcontracting.

Based on the results or our risk assessment we designed our audit procedures to identify non-compliance with such laws and regulations identified above, with no issues arising.

We gained an understating of the entity's policy and procedures by discussion with a director and substantive audit work.

We assessed the risk of material misstatement in respect of fraud through our planning processes, and no significant risks were identified.

We considered the risk of fraud through management override and, in response, we incorporated testing of manual journal entries into our audit approach.

Based on the results of our risk assessment we designed our audit procedures to identify and to address material misstatements in relation to fraud.

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.

Catherine Edwards Bsc FCA (Senior Statutory Auditor)

for and on behalf of Richardson Swift Audit Ltd

Chartered Accountants

Statutory Auditor

11 Laura Place

Bath

BA2 4BL

20 September 2022

TURNOVER

3

13,504,347

13,758,813

Cost of sales

12,607,582

12,921,643

GROSS PROFIT

896,765

837,170

Administrative expenses

1,056,278

1,216,648

(159,513

)

(379,478

)

Other operating income

157,276

294,152

OPERATING LOSS

5

(2,237

)

(85,326

)

Interest receivable and similar income

523

71

(1,714

)

(85,255

)

Interest payable and similar expenses

6

2,024

2,694

LOSS BEFORE TAXATION

(3,738

)

(87,949

)

Tax on loss

7

(21,137

)

(16,545

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

17,399

(71,404

)

OTHER COMPREHENSIVE INCOME

Share buyback

(79,206

)

-

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(79,206

)

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(61,807

)

(71,404

)

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

335,860

257,557

Investments

11

-

51,000

335,860

308,557

CURRENT ASSETS

Stocks

12

15,000

15,000

Debtors

13

1,432,200

1,886,849

Cash at bank and in hand

1,229,133

848,341

2,676,333

2,750,190

CREDITORS

Amounts falling due within one year

14

1,842,621

1,863,718

NET CURRENT ASSETS

833,712

886,472

TOTAL ASSETS LESS CURRENT LIABILITIES

1,169,572

1,195,029

CREDITORS

Amounts falling due after more than one year

15

(107,142

)

(19,155

)

PROVISIONS FOR LIABILITIES

18

(27,799

)

(48,936

)

NET ASSETS

1,034,631

1,126,938

CAPITAL AND RESERVES

Called up share capital

19

122

140

Share premium

11,966

11,966

Capital redemption reserve

18

-

Retained earnings

1,022,525

1,114,832

SHAREHOLDERS' FUNDS

1,034,631

1,126,938

The financial statements were approved by the Board of Directors and authorised for issue on 5 September 2022 and were signed on its behalf by:

J R Emery - Director

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 January 2020

140

1,186,236

11,966

-

1,198,342

Changes in equity

Total comprehensive income

-

(71,404

)

-

-

(71,404

)

Balance at 31 December 2020

140

1,114,832

11,966

-

1,126,938

Changes in equity

Reduction in share capital

(18

)

-

-

18

-

Dividends

-

(30,500

)

-

-

(30,500

)

Total comprehensive income

-

(61,807

)

-

-

(61,807

)

Balance at 31 December 2021

122

1,022,525

11,966

18

1,034,631

Cash flows from operating activities

Cash generated from operations

1

405,191

170,036

Interest element of hire purchase payments paid

(2,024

)

(2,694

)

Tax paid/refund

11,661

(36,534

)

Net cash from operating activities

414,828

130,808

Cash flows from investing activities

Purchase of tangible fixed assets

(258,536

)

(66,996

)

Sale of tangible fixed assets

112,343

-

Sale of fixed asset investments

129,984

-

Interest received

523

71

Net cash from investing activities

(15,686

)

(66,925

)

Cash flows from financing activities

Capital repayments/advances in year

98,966

(29,306

)

Amount withdrawn by directors

(7,610

)

-

Share buyback

(79,206

)

-

Equity dividends paid

(30,500

)

-

Net cash from financing activities

(18,350

)

(29,306

)

Increase in cash and cash equivalents

380,792

34,577

Cash and cash equivalents at beginning of year

2

848,341

813,764

Cash and cash equivalents at end of year

2

1,229,133

848,341

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

2021

2020

£

£

Loss before taxation

(3,738

)

(87,949

)

Depreciation charges

139,224

92,702

Profit on disposal of fixed assets

(150,318

)

-

Finance costs

2,024

2,694

Finance income

(523

)

(71

)

(13,331

)

7,376

Decrease in trade and other debtors

442,988

495,012

Decrease in trade and other creditors

(24,466

)

(332,352

)

Cash generated from operations

405,191

170,036

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 December 2021

31.12.21

1.1.21

£

£

Cash and cash equivalents

1,229,133

848,341

Year ended 31 December 2020

31.12.20

1.1.20

£

£

Cash and cash equivalents

848,341

813,764

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.21

Cash flow

At 31.12.21

£

£

£

Net cash

Cash at bank and in hand

848,341

380,792

1,229,133

848,341

380,792

1,229,133

Debt

Finance leases

(48,462

)

(98,966

)

(147,428

)

(48,462

)

(98,966

)

(147,428

)

Total

799,879

281,826

1,081,705

1.	STATUTORY INFORMATION

Emery Brothers 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.

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.

Critical accounting judgements and key sources of estimation uncertainty

In accounting for construction contracts, the stage of completion, amounts recoverable on contracts and relevant contract costs involve an element of estimation and use of judgement.

There are no other critical accounting judgements or estimates made by the directors in preparing the financial statements.

Turnover

Revenue is recognised to the extent that it is probably that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

- The amount of revenue can be measured reliably;

- It is probable that the company will receive the consideration due under the contract;

- The stage of completion of the contract can be measured reliably; and

- The costs incurred and the costs to complete the contract can be measured reliably.

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirers interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis over 5 years.

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.

Fixtures and fittings

-

33% on cost

Motor vehicles

-

25% on reducing balance

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

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

Financial instruments

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors, loans from banks and other third parties.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit or loss.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the best estimate, which is an approximation, of the amount the company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Taxation

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

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

Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

When it is probable that total costs will exceed total contract turnover, the expected loss is recognised as a loss immediately.

Where the outcome of a construction contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognized to the extent of contract costs incurred where it is probable that they will be recoverable.

The percentage of completion method is used to determine the appropriate amount to recognised in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract cost in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

3.

TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2021

2020

£

£

United Kingdom

13,504,347

13,758,813

13,504,347

13,758,813

4.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

2,801,788

2,767,756

Social security costs

276,207

258,356

Other pension costs

78,985

59,795

3,156,980

3,085,907

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

2021

2020

Management

6

6

Administration

21

17

Workforce

50

54

77

77

2021

2020

£

£

Directors' remuneration

376,657

462,235

Directors' pension contributions to money purchase schemes

33,306

37,013

Information regarding the highest paid director is as follows:

2021

2020

£

£

Emoluments etc

90,167

88,500

5.	OPERATING LOSS

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

2021

2020

£

£

Hire of plant and machinery

261,001

241,031

Other operating leases

79,600

62,100

Depreciation - owned assets

139,224

92,702

Profit on disposal of fixed assets

(150,318

)

-

Auditors' remuneration

10,000

10,000

Accountancy fees

5,700

620

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Hire purchase

2,024

2,694

7.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

2021

2020

£

£

Current tax:

Losses c/back

-

(11,661

)

Deferred tax

(21,137

)

(4,884

)

Tax on loss

(21,137

)

(16,545

)