R.H. Irving Industrials Limited Company accounts

RHI INDUSTRIALS LIMITED - Company Information

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COMPANY REGISTRATION NUMBER: 04233669

R.H. Irving Industrials Limited

Financial Statements

28 February 2022

R.H. Irving Industrials Limited

Financial Statements

Year ended 28 February 2022

Contents	Page

Officers and professional advisers	1

Strategic report	2

Directors' report	5

Independent auditor's report to the members	7

Statement of comprehensive income	11

Statement of financial position	12

Statement of changes in equity	13

Statement of cash flows	14

Notes to the financial statements	15

R.H. Irving Industrials Limited

Officers and Professional Advisers

The board of directors	Mr G M Dunn
	Mr R H Irving
	Mr B S H Field
	Mr M R C Souter
	Ms A Dodd

Company secretary	Mrs L Dunn

Registered office	Hylton House
	Borders Business Park
	Longtown
	Carlisle
	CA6 5TD

Auditor	Saint & Co
	Chartered Accountants & statutory auditor
	Sterling House
	Wavell Drive, Rosehill
	Carlisle, Cumbria
	CA1 2SA

Bankers	Svenska Handelsbanken AB (publ)
	1 Merchant's Drive
	Parkhouse
	Carlisle
	CA3 0JW

R.H. Irving Industrials Limited

Strategic Report

Year ended 28 February 2022

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW The principal activity of the Company during the year was the design, installation, manufacture and servicing of high security, fully integrated perimeter security systems as well as providing earthing and fabrication services. R H Irving Industrials Ltd continued to be engaged predominately on National Grid, but extending to other utility and infrastructure sites and well as commercial projects. We are engaged both direct and as sub-contractor to a wide range of clients both existing and new, within the private sector. The historic work stream of installing and maintaining high security perimeter fencing continues, but we have been consistently identifying opportunities to diversify into other areas of work which is is demonstrated in the growth of our earthing services division, our steel fabrication workshop and now undertaking project design work, ensuring a good distribution of revenue streams. RISK EXPOSURE The global COVID-19 pandemic has continued to impact on the business in 2021-22 with disruption to supply chain and staffing levels and Brexit has further exacerbated these issues. The price of materials has continued to rise throughout the year and seems set to continue. Just at the end of the financial year and into 2022-23 it has become apparent that the invasion of Ukraine by Russia is causing wider-ranging political and economic issues impacting on costs such as escalating energy prices. The business still has the underlying risks and uncertainties during typical operating years which are similar to that of the many businesses in our sector. These are increased competition; continuous monitoring and management of health and safety issues relating to our staff and sites; attracting, retaining and developing a skilled workforce and robust management team; ensuring skills and knowledge to understand current technology and security systems; securing and ensuring continuity of projects at a a competitive yet sustainable price, together with managing those projects within budget and timescale. With a predicted recession caused by the strain on the economy post pandemic, it is apparent that many households and businesses are suffering, so we are aware that not only is there more pressure as an employer to support struggling households, but there may be a higher risk of clients failing than in previous years, resulting in more significant exposure to bad debt and cashflow issues. KEY PERFORMANCE INDICATORS 2021-22 2020-21 Turnover Movement 15.09% 14.32% Gross Profit Margin 12.41% 18.86% Profit Before Tax Margin 2.28% 6.48% Turnover has increased by £1.8m on the previous year. However, the challenging economic circumstances in this financial year have impacted negatively on both gross and net profit margins. Escalating costs have made margins harder to maintain. This means a dynamic approach is necessary to ensure work is priced fairly, but cost-effectively for our clients. The business has continued to grow in the year though and we maintain a vigilant overview on costs, making efficiencies where possible. FUTURE DEVELOPMENTS R H Irving Industrials Ltd have been awarded some of the most keenly contested contracts within the industry and are responsible for some of the largest electric fencing systems in the UK. We offer a quality service and take a pro-active approach to client's requirements, often with a bespoke approach to project elements. We can do this by continuing to provide highly skilled, experienced operatives and ancillary services such as in-house design and fabrication to ensure innovative solutions to client specification. The industry is increasingly competitive and we aim to maintain our position at the forefront by continuing to monitor and maintain our high standards of delivery, whilst identifying opportunities for growth which enhances the services we offer to clients and supports our core work streams. R H Irving Industrials Ltd has multiple regional bases - plans to further expand by adding a location in the northwest during this financial year have been delayed, but we hope to see progress by the developers in the coming months. The impending post-pandemic recession forecast will no doubt impact significantly on the industry and our workforce, with economic recovery likely to take some time, therefore it is difficult to predict what the long-term impacts are on our industry. The Company will closely monitor all spending and ensure contingencies are in place to maintain the future security of our business and workforce. Opportunities are rigorously vetted to ensure we keep risk exposure to a minimum. It is important to continue with our strategy of ensuring the delivery of a quality product to a diverse existing and new client base, reducing any potential negative impact of risks associated with any one sector. Together with maintaining succession planning and ensuring a robust structure which is key to delivering a quality service to a range of clients, we will continue to adapt as necessary to a challenging and competitive business environment.

This report was approved by the board of directors on 9 November 2022 and signed on behalf of the board by:

Mr R H Irving

Director

Registered office:

Hylton House

Borders Business Park

Longtown

Carlisle

CA6 5TD

R.H. Irving Industrials Limited

Directors' Report

Year ended 28 February 2022

The directors present their report and the financial statements of the company for the year ended 28 February 2022 .

Directors

The directors who served the company during the year were as follows:

Mr G M Dunn
Mr R H Irving
Mr B S H Field
Mr M R C Souter
Ms A Dodd

Dividends

Particulars of recommended dividends are detailed in note 13 to the financial statements.

Disclosure of information in the strategic report

The company has chosen, in accordance with section 414C(11) of the Companies Act 2006(Strategic Report and Directors' Report) Regulations 2013, to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

Directors' responsibilities statement

The directors are responsible for preparing the strategic report, 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the 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 judgments 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. Auditor

Each of the persons who is a director at the date of approval of this report confirms that:

- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This report was approved by the board of directors on 9 November 2022 and signed on behalf of the board by:

Mr R H Irving

Director

Registered office:

Hylton House

Borders Business Park

Longtown

Carlisle

CA6 5TD

R.H. Irving Industrials Limited

Independent Auditor's Report to the Members of R.H. Irving Industrials Limited

Year ended 28 February 2022

Opinion

We have audited the financial statements of R.H. Irving Industrials Limited (the 'company') for the year ended 28 February 2022 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows 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 FRS 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; - 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 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 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 other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

- the information given in the 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

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

As explained more fully in the directors' responsibilities statement, 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.

Auditor's 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 an auditor’s 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: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with directors and other management; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company; - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; - To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures to identify any unusual or unexpected relationships; - tested journal entries to identify unusual transactions; - assessed whether judgements and assumptions made in determining the accounting estimates set out in the accounting policies were indicative of potential bias; and - investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; - enquiring of management as to actual and potential litigation and claims; and - reviewing correspondence with HMRC, relevant regulators and the company's legal advisors. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. 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 auditor’s report. 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 an auditor's 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.

Stuart Farrer

(Senior Statutory Auditor)

For and on behalf of

Saint & Co

Chartered Accountants & statutory auditor

Sterling House

Wavell Drive, Rosehill

Carlisle, Cumbria

CA1 2SA

24 November 2022

R.H. Irving Industrials Limited

Statement of Comprehensive Income

Year ended 28 February 2022

		2022	2021
Note		£	£
Turnover	4	13,799,495	11,989,618

Cost of sales	( 12,087,647)	( 9,728,773)
	--------------	--------------
Gross profit	1,711,848	2,260,845

Administrative expenses		( 1,381,783)	( 1,605,489)
Other operating income	5	11,111	141,838
		------------	------------
Operating profit	6	341,176	797,194

Other interest receivable and similar income	10	–	91
Interest payable and similar expenses	11	( 26,624)	( 20,625)
		------------	------------
Profit before taxation		314,552	776,660

Tax on profit	12	( 43,486)	( 161,426)
		----------	----------
Profit for the financial year and total comprehensive income		271,066	615,234
		----------	----------

All the activities of the company are from continuing operations.

R.H. Irving Industrials Limited

Statement of Financial Position

28 February 2022

	2022		2021
Note	£	£	£

Fixed assets

Intangible assets	14	42,062	16,757
Tangible assets	15	1,222,261	1,082,251
		------------	------------
		1,264,323	1,099,008

Current assets

Stocks	16	114,002	147,009
Debtors	17	3,386,086	2,760,143
Cash at bank and in hand		661,154	1,330,796
		------------	------------
		4,161,242	4,237,948

Creditors: amounts falling due within one year	18	( 2,850,387)		( 2,880,477)
		------------		------------
Net current assets			1,310,855	1,357,471
			------------	------------
Total assets less current liabilities			2,575,178	2,456,479

Creditors: amounts falling due after more than one year	19		( 427,834)	( 461,574)

Provisions

Taxation including deferred tax	21	( 77,603)	18,770
		------------	------------
Net assets		2,069,741	2,013,675
		------------	------------

Capital and reserves

Called up share capital	25	1,449	1,486
Capital redemption reserve	26	151	114
Profit and loss account	26	2,068,141	2,012,075
		------------	------------
Shareholders funds		2,069,741	2,013,675
		------------	------------

These financial statements were approved by the board of directors and authorised for issue on 9 November 2022 , and are signed on behalf of the board by:

Mr R H Irving

Director

Company registration number: 04233669

R.H. Irving Industrials Limited

Statement of Changes in Equity

Year ended 28 February 2022

		Called up share capital	Capital redemption reserve	Profit and loss account	Total
		£	£	£	£
At 1 March 2020		1,523	77	1,611,841	1,613,441

Profit for the year				615,234	615,234
		-------	----	------------	------------
Total comprehensive income for the year		–	–	615,234	615,234

Dividends paid and payable	13	–	–	( 155,000)	( 155,000)
Cancellation of subscribed capital		( 37)	37	( 60,000)	( 60,000)
		-------	----	------------	------------
Total investments by and distributions to owners		( 37)	37	( 215,000)	( 215,000)

At 28 February 2021		1,486	114	2,012,075	2,013,675

Profit for the year				271,066	271,066
		-------	----	------------	------------
Total comprehensive income for the year		–	–	271,066	271,066

Dividends paid and payable	13	–	–	( 155,000)	( 155,000)
Cancellation of subscribed capital		( 37)	37	( 60,000)	( 60,000)
		----	----	----------	----------
Total investments by and distributions to owners		( 37)	37	( 215,000)	( 215,000)

		-------	----	------------	------------
At 28 February 2022		1,449	151	2,068,141	2,069,741
		-------	----	------------	------------

R.H. Irving Industrials Limited

Statement of Cash Flows

Year ended 28 February 2022

	2022	2021
	£	£

Cash flows from operating activities

Profit for the financial year	271,066	615,234

Adjustments for:
Depreciation of tangible assets	390,770	302,067
Amortisation of intangible assets	11,716	2,668
Government grant income	( 11,111)	( 141,838)
Other interest receivable and similar income	–	( 91)
Interest payable and similar expenses	26,624	20,625
Gains on disposal of tangible assets	( 48,707)	( 13,549)
Tax on profit	43,486	161,426
Accrued (income)/expenses	( 147,081)	262,199

Changes in:
Stocks	33,007	51,249
Trade and other debtors	( 625,943)	71,894
Trade and other creditors	141,354	( 68,618)
	----------	------------
Cash generated from operations	85,181	1,263,266

Interest paid	( 26,624)	( 20,625)
Interest received	–	91
Tax paid	( 113,809)	( 134,100)
	----------	------------
Net cash (used in)/from operating activities	( 55,252)	1,108,632
	----------	------------

Cash flows from investing activities

Purchase of tangible assets	( 530,875)	( 397,311)
Proceeds from sale of tangible assets	48,802	18,801
Purchase of intangible assets	( 37,021)	( 19,425)
	----------	------------
Net cash used in investing activities	( 519,094)	( 397,935)
	----------	------------

Cash flows from financing activities

Purchase of own shares	( 60,000)	( 60,000)
Proceeds from borrowings	( 18,164)	( 17,421)
Government grant income	11,111	141,838
Payments of finance lease liabilities	126,757	80,363
Dividends paid	( 155,000)	( 155,000)
	----------	------------
Net cash used in financing activities	( 95,296)	( 10,220)
	----------	------------

Net (decrease)/increase in cash and cash equivalents	( 669,642)	700,477
Cash and cash equivalents at beginning of year	1,330,796	630,319
	------------	------------
Cash and cash equivalents at end of year	661,154	1,330,796
	------------	------------

R.H. Irving Industrials Limited

Notes to the Financial Statements

Year ended 28 February 2022

1. General information

The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Hylton House, Borders Business Park, Longtown, Carlisle, CA6 5TD.

2. Statement of compliance

These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

3. Accounting policies

Basis of preparation

The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.

The financial statements are prepared in sterling, which is the functional currency of the entity.

Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgements The directors consider there to be no significant judgements made in the preparation of the financial statements. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amount of assets and liabilities within the next financial year are as follow: - Valuations of Work in Progress - these have been calculated by management based on the value of work completed in the year but not invoiced at the year end.

Revenue recognition

The turnover shown in the profit and loss account represents amounts invoiced during the year, exclusive of Value Added Tax. In respect of long-term contracts and contracts for on-going services, turnover represents the value of work done in the year, including estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.

Taxation

The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

Intangible assets

Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.

Amortisation

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:

	Computer software	-	25% straight line

If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

Tangible assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

Depreciation

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

Plant and machinery	-	25% straight line
Motor vehicles	-	25% straight line
Computer equipment	-	25% straight line

No depreciation has been charged on the company's Freehold Property, as the directors are of the opinion that the nature of the property, it's standard of repair, length of Useful Life and residual value render depreciation immaterial.

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition. Work in progress is valued at the lower of cost and net realisable value. Cost includes all direct expenditure and an appropriate proportion of fixed and variable overheads.

Finance leases and hire purchase contracts

Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.

Government grants

Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable.

Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

Financial instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability. Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Defined contribution plans

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

4. Turnover

Turnover arises from:

	2022	2021
	£	£
Perimeter Security Systems	13,799,495	11,989,618
	--------------	--------------

The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.

5. Other operating income

	2022	2021
	£	£
Government grant income	11,111	141,838
	--------	----------

6. Operating profit

Operating profit or loss is stated after charging/crediting:

	2022	2021
	£	£
Amortisation of intangible assets	11,716	2,668
Depreciation of tangible assets	390,770	302,067
Gains on disposal of tangible assets	( 48,707)	( 13,549)
Impairment of trade debtors	33,116	725
	----------	----------

7. Auditor's remuneration

	2022	2021
	£	£
Fees payable for the audit of the financial statements	5,050	4,900
	-------	-------

8. Staff costs

The average number of persons employed by the company during the year, including the directors, amounted to:

	2022	2021
	No.	No.
Other staff inc directors	115	97
	----	----

The aggregate payroll costs incurred during the year, relating to the above, were:

	2022	2021
	£	£
Wages and salaries	4,516,807	4,532,233
Social security costs	595,973	79,076
Other pension costs	194,131	208,844
	------------	------------
	5,306,911	4,820,153
	------------	------------

9. Directors' remuneration

The directors' aggregate remuneration in respect of qualifying services was:

	2022	2021
	£	£
Remuneration	386,759	605,377
Company contributions to defined contribution pension plans	7,667	47,793
	----------	----------
	394,426	653,170
	----------	----------

The number of directors who accrued benefits under company pension plans was as follows:

	2022	2021
	No.	No.
Defined contribution plans	3	3
	----	----

Remuneration of the highest paid director in respect of qualifying services:

	2022	2021
	£	£
Aggregate remuneration	155,673	350,000
Company contributions to defined contribution pension plans	3,588	30,000
	----------	----------
	159,261	380,000
	----------	----------

10. Other interest receivable and similar income

	2022	2021
	£	£
Interest on cash and cash equivalents	–	91
	----	----

11. Interest payable and similar expenses

	2022	2021
	£	£
Interest on banks loans and overdrafts	699	1,385
Interest on obligations under finance leases and hire purchase contracts	25,925	19,240
	--------	--------
	26,624	20,625
	--------	--------

12. Tax on profit

Major components of tax expense

	2022	2021
	£	£

Current tax:

UK current tax (income)/expense	( 40,344)	128,738
Adjustments in respect of prior periods	( 12,543)	51,458
	--------	----------
Total current tax	( 52,887)	180,196
	--------	----------

Deferred tax:

Origination and reversal of timing differences	96,373	( 18,770)
	--------	----------
Tax on profit	43,486	161,426
	--------	----------

Reconciliation of tax expense

The tax assessed on the profit on ordinary activities for the year is lower than (2021: higher than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).

	2022	2021
	£	£
Profit on ordinary activities before taxation	314,552	776,660
	----------	----------
Profit on ordinary activities by rate of tax	59,765	147,565
Adjustment to tax charge in respect of prior periods	( 12,543)	51,458
Effect of capital allowances and depreciation	( 37,069)	( 30,317)
Movement in short term timing differences	( 63,040)	11,490
Movement in deferred tax	96,373	( 18,770)
	----------	----------
Tax on profit	43,486	161,426
	----------	----------

Factors that may affect future tax expense

The rate of corporation tax is due to increase to 25% from 1 April 2023. This change was substantively enacted at the year end.

13. Dividends

Dividends paid during the year (excluding those for which a liability existed at the end of the prior year):

	2022	2021
	£	£
Equity dividends on ordinary shares	55,000	55,000
Equity dividends on ordinary B shares	100,000	100,000
	----------	----------
	155,000	155,000
	----------	----------

14. Intangible assets

	Computer software
	£
Cost
At 1 March 2021	19,425
Additions	37,021
	--------
At 28 February 2022	56,446
	--------
Amortisation
At 1 March 2021	2,668
Charge for the year	11,716
	--------
At 28 February 2022	14,384
	--------
Carrying amount
At 28 February 2022	42,062
	--------
At 28 February 2021	16,757
	--------

Included within the carrying value of intangible assets is £ 29,886 (2021: £nil) relating to assets held under finance leases or hire purchase agreement.

15. Tangible assets

	Land and buildings	Plant and machinery	Motor vehicles	Computer Equipment	Total
	£	£	£	£	£
Cost
At 1 March 2021	249,662	239,736	1,592,431	185,936	2,267,765
Additions	36,075	22,731	428,444	43,625	530,875
Disposals	–	( 345)	( 258,424)	( 12,250)	( 271,019)
	----------	----------	------------	----------	------------
At 28 February 2022	285,737	262,122	1,762,451	217,311	2,527,621
	----------	----------	------------	----------	------------
Depreciation
At 1 March 2021	–	196,741	852,534	136,239	1,185,514
Charge for the year	–	21,268	344,018	25,484	390,770
Disposals	–	( 251)	( 258,423)	( 12,250)	( 270,924)
	----------	----------	------------	----------	------------
At 28 February 2022	–	217,758	938,129	149,473	1,305,360
	----------	----------	------------	----------	------------
Carrying amount
At 28 February 2022	285,737	44,364	824,322	67,838	1,222,261
	----------	----------	------------	----------	------------
At 28 February 2021	249,662	42,995	739,897	49,697	1,082,251
	----------	----------	------------	----------	------------

The Company has adopted a policy of non-depreciation of the company's buildings on the grounds of materiality as disclosed in note 3. The value of the buildings are therefore retained subject to the requirement to test assets for impairment in accordance with section 17 of FRS102.

Finance leases and hire purchase contracts

Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:

	Motor vehicles	Computer Equipment	Total
	£	£	£
At 28 February 2022	848,907	19,318	868,225
	----------	--------	----------
At 28 February 2021	735,991	–	735,991
	----------	--------	----------

Capital commitments

	2022	2021
	£	£
Contracted for but not provided for in the financial statements	324,675	–
	----------	----

During the year ended 28th February 2022 the company paid a deposit on a freehold building which is under construction. The building and sale are expected to be completed later in 2022 when the company will be expected to pay £324,675.

16. Stocks

	2022	2021
	£	£
Raw materials and consumables	114,002	147,009
	----------	----------

17. Debtors

	2022	2021
	£	£
Trade debtors	3,354,624	2,647,898
Corporation tax repayable	16,012	–
Directors loan account	9,628	105,959
Other debtors	5,822	6,286
	------------	------------
	3,386,086	2,760,143
	------------	------------

Included within trade debtors is £485,758 (2021: £223,570) relating to retentions due in more than one year.

18. Creditors: amounts falling due within one year

	2022	2021
	£	£
Bank loans and overdrafts	9,191	17,586
Trade creditors	1,469,337	914,610
Accruals and deferred income	747,417	894,498
Corporation tax	–	166,696
Social security and other taxes	233,208	656,960
Obligations under finance leases and hire purchase contracts	380,855	230,127
Other creditors	10,379	–
	------------	------------
	2,850,387	2,880,477
	------------	------------

The following liabilities disclosed under creditors falling due within one year are secured by the company:

	2022	2021
	£	£
Bank loans	9,191	9,769
Hire purchase agreements	380,855	230,127
	----------	----------
	390,046	239,896
	----------	----------

The bank loan is secured by a Debenture dated 21 November 2013 and a Legal charge over the land known as Unit 11, Lee Close, Washington, NE38 8QF and a fixed charge over all plant and machinery owned by the company and its interest in any plant and machinery in its possession located at the property, all fixtures and fittings from time to time attached at the property, all other chattels of the Company located at the Property and not ordinarily disposed of in its ordinary course of business dated 29 29 January 2014, both in favour of Svenska Handelsbanken.

Hire Purchase liabilities are secured on the assets bought under Hire Purchase.

19. Creditors: amounts falling due after more than one year

	2022	2021
	£	£
Bank loans and overdrafts	–	9,769
Obligations under finance leases and hire purchase contracts	427,834	451,805
	----------	----------
	427,834	461,574
	----------	----------

The following liabilities disclosed under creditors falling due after more than one year are secured by the company:

	2022	2021
	£	£
Bank loans	Nil	9,769
Hire purchase agreements	427,834	451,805
	----------	----------
	427,834	461,574
	----------	----------

Hire Purchase liabilities are secured on the assets bought under Hire Purchase.

20. Finance leases and hire purchase contracts

The total future minimum lease payments under finance leases and hire purchase contracts are as follows:

	2022	2021
	£	£
Not later than 1 year	380,855	230,127
Later than 1 year and not later than 5 years	427,834	451,805
	----------	----------
	808,689	681,932
	----------	----------

21. Provisions

	Deferred tax (note 22)
	£
At 1 March 2021	( 18,770)
Additions	96,373
	--------
At 28 February 2022	77,603
	--------

22. Deferred tax

The deferred tax included in the statement of financial position is as follows:

	2022	2021
	£	£
Included in provisions (note 21)	77,603	( 18,770)
	--------	--------

The deferred tax account consists of the tax effect of timing differences in respect of:

	2022	2021
	£	£
Accelerated capital allowances	141,027	92,473
Provisions	( 63,424)	( 111,243)
	----------	----------
	77,603	(18,770)
	----------	----------

The net amount of deferred tax assets and liabilities that are expected to reverse within one year of the balance sheet date is £73,000 (2021: £52,000) relating to the reversal of existing timing differences on tangible and fixed assets.

23. Employee benefits

Defined contribution plans

The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 194,131 (2021: £ 208,844 ).

At the balance sheet date there were outstanding contributions of £ 10,379 (2021: £nil) owing to the scheme.

24. Government grants

The amounts recognised in the financial statements for government grants are as follows:

	2022	2021
	£	£

Recognised in other operating income:

Government grants recognised directly in income	11,111	141,838
	--------	----------

Government grants related to income received under the Coronavirus Job Retention Scheme.

25. Called up share capital

Issued, called up and fully paid

	2022		2021
	No.	£	No.	£
Ordinary shares of £ 1 each	849	849	886	886
Ordinary B shares of £ 1 each	600	600	600	600
	-------	-------	-------	-------
	1,449	1,449	1,486	1,486
	-------	-------	-------	-------

Each ordinary share is entitled to one vote in any circumstances. Ordinary B shareholders are not entitled to vote in any circumstances and only entitled to one pound per share in the event of a distribution or disposal.

26. Reserves

Profit and loss account - This reserve records retained earnings and accumulated losses .

27. Analysis of changes in net debt

	At 1 Mar 2021	Cash flows	At 28 Feb 2022
	£	£	£
Cash at bank and in hand	1,330,796	(669,642)	661,154
Debt due within one year	(247,713)	(142,333)	(390,046)
Debt due after one year	(461,574)	33,740	(427,834)
	------------	----------	----------
	621,509	( 778,235)	( 156,726)
	------------	----------	----------

28. Operating leases

The total future minimum lease payments under non-cancellable operating leases are as follows:

	2022	2021
	£	£
Not later than 1 year	108,457	89,969
Later than 1 year and not later than 5 years	111,852	150,274
	----------	----------
	220,309	240,243
	----------	----------

29. Directors' advances, credits and guarantees

Advances and credits to directors are interest free and repayable on demand.

30. Related party transactions

Included within other creditors falling due within one year is £4,075 (2021: debtor £104,342)being the amount owing to Mr G M Dunn , a director of RH Irving Industrials. No advances were made during the year repayments totalled £105,727 and other transactions related to mileage claims and travel expenses. Included within other debtors is £11,617 (2021: £1,617) being the amount owed by Mr R C Souter, a director of RH Irving Industrials. During the year advances totalled £10,000. Included within other debtors is £2,086 (2021: £nil) being the amount owed by Ms A M Dodd, a director of RH Irving Industrials. During the year advances totalled £2,086. The loans were interest free and repayable on demand.