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Registered number: 00504927
WW Martin Ltd
Annual report and financial statements
For the Year Ended 28 February 2022
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WW Martin Ltd
Company Information
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Statutory Auditor & Chartered Accountants
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TN23 1PP
Fenwick Elliott
Aldwych House
71-91 Aldwych
London
WC2B 4HN
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WW Martin Ltd
Contents
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Independent auditors' report
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Statement of changes in equity
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Notes to the financial statements
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WW Martin Ltd
Strategic report
For the Year Ended 28 February 2022
The Directors are pleased to present their Report and the Financial Statements of the Company for the year ending 28th February 2022.
The Company is celebrating its 145th year. The business continues to perform well and is led by a strong leadership team, supported by loyal, professional and experienced staff.
This year’s turnover of £42.515M, has increased from last year (2021: £40.350M). Profit has also increased to £1.457M after tax (2021: £1.112M).
Next year the Board expects turnover to be £50M with profit in line with this year’s result.
Cash at the Year End has again increased from last year to £9.331M, in 2021 it was £6.395M. Cashflow continues to be closely monitored to ensure a good level of liquidity and strict credit control policies are in place. The Board expects liquidity to remain good throughout the coming year. We are committed to maintaining prompt payments to our supply chain.
Overall, the Directors are pleased with the direction and performance of the business and that it continues to perform well, delivering excellent services for our Clients. This has resulted in repeat negotiated work. Year-on-year we are becoming financially stronger, with good cash in hand and an ever-increasing Balance Sheet.
We are also pleased to report that we have been appointed as a construction partner by Kent County Council (KCC) on their £500M “Property Construction Partnership Framework”. This Framework will focus on education projects, but covers all property owned by KCC. We will operate as 1 of 4 construction companies appointed to deliver KCC’s programme of works over a minimum of 4 years.
As a business, we continue to work collaboratively with Clients to advise and assist with making projects as cost-effective as possible. We remain committed to protecting the business and will not chase contracts with limited margins just for the sake of turnover. We believe our non-adversarial, collaborative approach is appreciated by Clients and our supply chain alike.
Health and Safety is one of our core business values and we believe that effective Health, Safety and Environmental management actively contributes to our success. We are proud of our safety record. This is a testament to our staff who have an excellent culture of health and safety.
It is our policy to do all that is reasonably practicable to ensure that we provide a safe and healthy environment not just for those that work for us, but for any others who may be affected by our business activities.
Page 1
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WW Martin Ltd
Strategic report (continued)
For the Year Ended 28 February 2022
Principal risks and uncertainties
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The most high-profile risk that influenced the industry and therefore WW Martin was COVID-19. With meticulous site management and careful planning, our sites were managed safely in accordance with CLC Guidelines until such a time that it now no longer presents a high risk. We would like to thank our Clients for their support during this difficult period. We must however remain vigilant particularly as we enter the Winter period.
Currently, the greatest risk is the shortage of materials and labour and the ever-increasing and volatile price of materials. Our strong buying department is focussed on delivering materials to site on time, with very early planning as just in time delivery is not viable. Our long-term partnership with suppliers is paying dividends as they remain loyal to WW Martin with preferential treatment.
The market remains competitive, but the business is successful in securing work when an opportunity is specifically targeted and the risks in the project are carefully considered and mitigated where possible.
The business continues to partner and self-deliver where practicable to ensure projects are completed on time and to the required quality.
We have an incredible team of construction professionals who have built trusted relationships with a number of long-term clients. This reputation brings in regular new business.
Future Developments
We continue to carry out projects for the NHS under their Framework. Phase I of the new ED Expansion at East Kent Hospitals University NHS Foundation Trust at The Queen Elizabeth Queen Mother hospital in Margate is due to be complete this Autumn, with the whole scheme due for completion next Summer. This is both a logistically and technically challenging site and we are proud as a business that the NHS has put their trust in us to deliver such an important project.
We have also completed a number of smaller projects for the NHS at Maidstone, Dover, Medway and at Canterbury where we refurbished two operating theatres to provide them with state-of-the-art facilities.
The business’ workload continues to be very diverse which protects the business should a particular sector be affected by events. The business has had a number of successes in the education sector, industrial sector, and residential sector.
Following the commencement of the KCC Framework on 1st August we have been awarded nearly £25M of projects that are to commence as soon as possible, with a further £22M for various refurbishment projects to be completed under their Kent Communities initiative.
We were also delighted to return to the prestigious Turner Contemporary Gallery in Margate to complete the refurbishment of the exterior as part of its 10-year maintenance plan.
Our land led deal in partnership with Orbit Homes is progressing well. The 64-unit scheme has been successfully completed and in Spring we started another 55-unit land led scheme.
Notable completions include the construction of 26 industrial units and a dance studio for Kent County Council and 40 new homes for ex-servicemen, for the RBLI at their Centenary Village.
Page 2
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WW Martin Ltd
Strategic report (continued)
For the Year Ended 28 February 2022
Research and Development
As in previous years, the business continues to invest in research and development on leading edge technologies in order to deal with challenging projects, which results in the realisation of tax incentives.
Financial key performance indicators
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The company’s financial key performance indicators are Gross Profit Percentage, Current Ratio and Return on Capital Employed.
2022 2021
Gross Profit Percentage 8.17% 8.67%
Current Ratio 1.18 1.18
Return on Capital Employed 35% 36%
Conclusion
The Board is extremely pleased with the strategic position of the business. We are confident that the measures that we have taken place us in the very best position to organically grow over the coming year.
This report was approved by the board and signed on its behalf.
Page 3
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WW Martin Ltd
Directors' report
For the Year Ended 28 February 2022
The directors present their report and the financial statements for the year ended 28 February 2022.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic report, the Directors' report 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 for the company's financial statements 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 to 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.
The company's principal activity continues to be that of building contractors.
The profit for the year, after taxation, amounted to £1,456,848 (2021 - £1,111,617).
The directors declared a dividend totalling £268,000 for the year ended 28 February 2022 (2021 - £Nil). During the year the company has not paid any dividend.
The directors who served during the year were:
Page 4
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WW Martin Ltd
Directors' report (continued)
For the Year Ended 28 February 2022
The company finances its operations through various financial instruments comprising bank balances, bank overdrafts, finance leases, trade debtors and trade creditors.
Due to the nature of the financial instruments used by the company during the period there is no exposure to price risk.
The company ensures its liquidity is maintained by entering into short term financial instruments to support operational and other funding requirements. The company's liquidity management process includes projecting cashflows and considering the level of liquid assets.
Trade debtors are managed in respect of credit and cashflow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.
Under section 487(2) of the Companies Act 2006, Kreston Reeves LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
Page 5
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WW Martin Ltd
Independent auditors' report to the members of WW Martin Ltd
We have audited the financial statements of WW Martin Ltd (the 'company') for the year ended 28 February 2022, which comprise the Profit and loss account, the Balance sheet, the Statement of cash flows, the Statement of changes in equity and the related notes, 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 28 February 2022 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.
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 United Kingdom, including the Financial Reporting Council'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
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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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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.
Page 6
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WW Martin Ltd
Independent auditors' report to the members of WW Martin Ltd (continued)
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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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 Directors' report.
We have nothing to report in respect of the following matters in relation to which 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
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As explained more fully in the Directors' responsibilities statement set out on page 4, 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 is 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.
Page 7
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WW Martin Ltd
Independent auditors' report to the members of WW Martin Ltd (continued)
Auditors' responsibilities for the audit of the financial statements
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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 an Auditors' report 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Capability of the audit in detecting irregularities, including fraud
The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks.
Based on our understanding of the Company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, taxation and pension legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure and management bias in accounting estimates and judgemental areas of the financial statements such as revenue recognition and amounts recoverable on long-term contracts. Audit procedures performed by the engagement team included:
• Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud;
• Challenging assumptions and judgements made by management in its significant accounting estimates;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
• Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
• Physical inspection of tangible fixed assets susceptible to fraud or irregularity; and
• Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Page 8
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WW Martin Ltd
Independent auditors' report to the members of WW Martin Ltd (continued)
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
Stephen Tanner BSc(Econ) FCA (Senior statutory auditor)
for and on behalf of
Kreston Reeves LLP
Statutory Auditor
Chartered Accountants
London
27 October 2022
Page 9
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WW Martin Ltd
Profit and loss account
For the Year Ended 28 February 2022
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Income from unlisted fixed asset investments
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Interest receivable and similar income
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Interest payable and similar expenses
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There were no recognised gains and losses for 2022 or 2021 other than those included in the profit and loss account.
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The notes on pages 15 to 31 form part of these financial statements.
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Page 10
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WW Martin Ltd
Registered number: 00504927
Balance sheet
As at 28 February 2022
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 31 form part of these financial statements.
Page 11
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Statement of changes in equity
For the Year Ended 28 February 2022
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Capital redemption reserve
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Transfer to/(from) profit and loss account
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Dividends: Equity capital
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Transfer to/(from) profit and loss account
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The notes on pages 15 to 31 form part of these financial statements.
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Page 12
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WW Martin Ltd
Statement of cash flows
For the Year Ended 28 February 2022
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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(Increase)/decrease in stocks
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Corporation tax received/(paid)
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Sale of investment properties
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Purchase of unlisted investments
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Net cash from investing activities
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Cash flows from financing activities
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Purchase of ordinary shares
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Repayment of finance leases
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Net cash used in financing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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Page 13
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WW Martin Ltd
Analysis of Net Debt
For the Year Ended 28 February 2022
The notes on pages 15 to 31 form part of these financial statements.
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Page 14
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
1.Accounting policies
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Basis of preparation of financial statements
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WW Martin Ltd is a limited liability company incorporated in England. The company's registered office is Dane Park Road, Ramsgate, Kent, CT11 7LT. The company's registered number is 00504927.
The company's principal activity continues to be that of building contractors.
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 2).
The company's functional and presentational currency is Pounds Sterling.
The company's financial statements are presented to the nearest Pound.
The following principal accounting policies have been applied:
In the opinion of the directors, there are no factors in existence that would result in the company not being considered as a going concern. As such, the financial statements have been prepared on a going concern basis.
Revenue is recognised to the extent that it is probable 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:
Construction contracts
Revenue is only recognised on a construction contract where the outcome can be estimated reliably. Revenue and costs are recognised by reference to the stage of completion of contract activity at the balance sheet date. This is measured by surveys of work performed to date.
Contracts are only treated as construction contracts when they have been specifically negotiated for the construction of a development or property. When it is probable that the total costs on a construction contract will exceed total contract revenue, the expected loss is recognised as an expense in the profit and loss account immediately.
Page 15
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
1.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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over 5 - 10 years to residual value
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Assets under construction
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'Administrative expenses' in the profit and loss account.
Assets in the course of construction are included at cost. Depreciation on these assets is not charged until they are brought into use and reclassified to freehold property.
Revaluation of tangible fixed assets
As permitted by Financial Reporting Standard 102, the company has elected not to adopt a policy of revaluation of tangible fixed assets. The company will retain the book value of land and buildings, previously revalued at 28 February 2011 as deemed cost. Under the cost model, land and buildings will not be subject to any further revaluations.
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Operating leases: the company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Investments in unlisted company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Profit and loss account for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Page 16
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
1.Accounting policies (continued)
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Stocks and work in progress
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Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in first out basis.
The company recognises costs that relate to future activity on a construction contract, such as for materials or labour, as an asset in work in progress if it is probable that the costs will be recovered.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the company's cash management.
Short-term 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.
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. 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 profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Page 17
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
1.Accounting policies (continued)
The company 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, loans to related parties and investments in ordinary shares.
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 the 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 expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
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 and loss account.
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. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current 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 best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet 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.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Profit and loss account in the same period as the related expenditure.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Page 18
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
1.Accounting policies (continued)
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
Interest income is recognised in profit or loss using the effective interest method.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Page 19
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following judgements have had the most significant impact on amounts recognised in the financial statements:
Lease commitments
The company has entered into a range of lease commitments in respect of property, plant and equipment. The classification of these leases as either financial or operating leases requires the directors to consider whether the terms and conditions of each lease are such that the company has acquired the risks and rewards associated with the ownership of the underlying assets.
The following are the company’s key sources of estimation uncertainty:
Construction contracts
As a building contractor, the company has entered into a number of construction contracts in the year. When the outcome of a construction contract can be estimated reliably, the company has recognised contract revenue and contract costs associated with the construction contract as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period (often referred to as the percentage of completion method).
Reliable estimation of the outcome requires reliable estimates of the stage of completion, future costs and collectability of billings. The company determines the stage of completion of a construction contract using surveys of work performed.
Taxation
A deferred tax liability has been recognised in the financial statements amounting to £67,701 at the reporting date (see note 23). This is based upon estimates of the availability of future taxable profits, the timing of the reversal of timing differences upon which the provision is based and the tax rates that will be in force at that time together with an assessment of the impact of future tax planning strategies.
Page 20
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
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All turnover arose within the United Kingdom.
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An analysis of turnover by class of business is as follows:
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The following amounts are recorded in respect of construction contracts:
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Gross amount due from customers for contract work included in debtors
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Gross amount due to customers for contract work included in creditors
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Service charge receivable
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CJRS government grants receivable
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Insurance claims receivable
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The operating profit is stated after charging:
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Other operating lease rentals
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Fees payable to the company's auditor and its associates for the audit of the company's annual accounts
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Page 21
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 4 directors (2021 - 4) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £184,383 (2021 - £123,955).
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The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £8,100 (2021 - £7,237).
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Page 22
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
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Dividends received from unlisted investments
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Other interest receivable
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Interest payable and similar expenses
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Finance leases and hire purchase contracts
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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Page 23
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
12.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Utilisation of tax losses
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Adjustments to tax charge in respect of prior periods
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Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
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Changes in tax rate leading to an increase (decrease) in the tax charge
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Unrelieved tax losses carried forward
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Total tax charge for the year
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Factors that may affect future tax charges
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The main rate of corporation tax is due to increase on 1 April 2023 to 25%, for companies with taxable profits above £250,000. Companies with taxable profits below £50,000 will continue to pay at 19%, and marginal relief will apply between these thresholds. This change formed part of The Finance Bill 2021, which was substantively enacted on 24 May 2021, and is applicable at the reporting date.
Deferred taxes have been measured using rates substantively enacted at the reporting date and reflected in these financial statements.
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Dividends on ordinary shares
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Page 24
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
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Freehold land and buildings
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Assets under construction
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Charge for the year on owned assets
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Included in land and buildings is freehold land at deemed cost of £360,027 (2021: £360,027), historic cost £30,145 (2021: £30,145) which is not depreciated.
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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The company has revalued its freehold property in the past which now represents deemed cost as permitted by FRS102.
The company's freehold property was independently revalued at 28 February 2011 to open market value of £508,298 by Somersby Estates Limited, who are members of the Royal Institute of Chartered Surveyors. Subsequent additions and depreciation charged on freehold land and buildings has resulted in a carrying value of £471,930 at 28 February 2022.
Page 25
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
14.Tangible fixed assets (continued)
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If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:
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The company has an investment in East Kent Brickwork Ltd, a company under common control.
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Page 26
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
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Due after more than one year
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Prepayments and accrued income
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Amounts recoverable on long term contracts
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Payments received on account
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Page 27
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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The bank loans are secured by a charge over freehold land and buildings.
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Page 28
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
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Charged to the profit or loss
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The deferred taxation balance is made up as follows:
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Accelerated capital allowances
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Tax losses carried forward
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Allotted, called up and fully paid
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Nil (2021 - 9,775) Ordinary shares shares of £1.00 each
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7,820 (2021 - Nil) Ordinary "A" shares shares of £1.00 each
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977 (2021 - Nil) Ordinary "B" shares shares of £1.00 each
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978 (2021 - Nil) Ordinary "C" shares shares of £1.00 each
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This represents the nominal value of shares that have been issued by the company.
During the year ended 28 February 2022 there was a subdivision of the 9,775 ordinary shares into three classes of shares ranking pari passu, as illustrated in the note above. No new ordinary shares were allotted/repurchased by the company.
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Page 29
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
Share premium account
This reserve records the amount above the nominal value received for shares issued by the company. Share premium may only be utilised to write-off any expenses incurred or commissions paid on the issue of those shares, or to pay up new shares to be allotted to members as fully paid bonus shares.
Revaluation reserve
Prior to the adoption of FRS102 the company adopted the revaluation model for the measurement of its land and buildings. This reserve records the legacy revaluation surplus recognised less the related provision for deferred tax. The amount of depreciation provided on book value which represents valuation surpluses is transferred each year by way of a reserve movement to the profit and loss account.
Capital redemption reserve
This reserve records the nominal value of shares repurchased by the company.
Profit & loss account
This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the company’s shareholders.
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The company operates a money purchase scheme for its present directors. The assets of the scheme
are held separately from those of the company in an independently administered fund.
The company operates a defined contributions scheme for present employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
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Commitments under operating leases
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At 28 February 2022 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Page 30
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WW Martin Ltd
Notes to the financial statements
For the Year Ended 28 February 2022
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Related party transactions
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During the year the company entered into transactions, in the ordinary course of business, with other related parties. Transactions entered into, and trading balances outstanding at 28 February, are as follows:
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Repayment of working capital loan
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In addition, during the year aggregate remuneration of £130,034 (2021: £103,010) was paid to close family of certain directors in respect of non-management services provided to the company.
Also, £7,500 (2021: £Nil) dividend income was received in the year from the company's fixed asset investment, which shares a director in common.
Terms and conditions of transactions with related parties
Sales and purchases between related parties are made at normal market prices. Outstanding balances with entities are unsecured, interest free and cash settlement is expected within the company's standard terms and conditions. The company has not provided or benefited from any guarantees for any related party receivables or payables.
Key management personnel
All directors have authority and responsibility for planning, directing and controlling the activities of the company and are considered to be key management personnel. Total remuneration is respect of these individuals is comprised of directors remuneration totalling £699,304 (2021: £486,835) and employers national insurance contributions of £79,212 (2021: £48,638).
Total dividends paid in the year to directors totals £268,000 (2021: £Nil).
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In the opinion of the directors, there is no overall controlling party.
Page 31
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