Castelan Group Limited - Period Ending 2022-03-31
Castelan Group Limited - Period Ending 2022-03-31
Year Ended
Registration number:
Castelan Group Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Statement of Comprehensive Income |
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Consolidated Balance Sheet |
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Balance Sheet |
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Consolidated Statement of Changes in Equity |
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Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Notes to the Financial Statements |
Castelan Group Limited
Company Information
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Directors |
Mr I Annand Mr M J Napper Mr S D Armstrong |
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Registered office |
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Auditors |
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Castelan Group Limited
Strategic Report
Year Ended 31 March 2022
The directors present their strategic report for the year ended 31 March 2022.
Principal activity
The principal activity of the company is that of a holding company. The principal activity of the group is the marketing, distribution and claims handling of furniture and other warranty protection plans, as well as furniture and other repair services, and sale of care kits.
Review of the business
The year ending 31 March 2022 saw a return to profitability for Castelan with all business lines seeing strong performance from Q2 onwards. The financial year commenced in lock-down with the Covid-19 pandemic and the associated government actions continuing to hamper Castelan’s trading and financial performance in Q1. However, Q2 onwards saw a significant acceleration in demand for our services and products that has continued through to today. Despite the continued lock-down in Q1, the year resulted in net turnover increasing by 46.6% (2021 – 20% decrease) year on year to £10.8m to produce an EBITDA profit of £732k (2021 – EBITDA loss of £157k) and a net profit before tax of £471k (2021 – net loss before tax of £415k ).
Castelan has commenced repayment of debt facilities secured in the previous financial year to ensure sufficient liquidity whilst weathering the impact of the Covid-19 pandemic, leading to a decrease in loans and borrowings to £1,829,805 (2021 - £2,203,062). The year end cash position remains healthy at £998,749 (2021 - £1,159,249) and net assets stand at £800,186 (2021 - £179,488), reflecting the return to profit in the 2022 year end.
Retail trading post lock-down was strong with Castelan also benefiting from clients developing substantial order books whilst deliveries were frustrated by supply chain constraints. Castelan’s top line growth was further supported through securing a substantial contract from another major high street brand as well as securing additional contracts from existing clients. At the same time, following considerable work with clients, Castelan successfully completed the design and launch of its new furniture care plan, offering to provide customers with greater value through innovation and the provision of some of the most comprehensive cover offered to customers in the furniture warranty market. All these benefits and achievements served to underpin Castelan’s revenues in the medium term and through into 2022.
There were many other notable achievements during the year. Castelan continued to deploy rigorous Covid compliance measures to ensure our staff were kept safe whilst maintaining high standards of customer service throughout the year – comfortably achieving a Grade of Service >80% and answering customer calls in under 20 seconds. This achievement was helped by Castelan’s continued investment in its technology platform allowing claims to be seamlessly managed by staff working safely in the office as well as from home. Further investment was also made to reduce reliance upon 3rd-party platforms to ensure the maximum innovation and flexibility in meeting our client’s needs. Finally, Castelan is proud to have again achieved a RoSPA Gold award for Health and Safety and to have achieved a Corporate Social Responsibility rating (awarded by EcoVardis) to place Castelan in the top 1/3 of companies in the UK.
Castelan Group Limited
Strategic Report
Year Ended 31 March 2022
Strategy and Future Developments
Castelan's strategy continues to focus upon being a pre-eminent provider of claims handling, third party administration and maintenance services to our client base, including retail and commercial clients. Core to the business model remains sales and marketing in product protection and care plan provision across furniture, electrical and other markets. Castelan works closely with care plan clients to ensure they are fully briefed and ultimately compliant with the FCA’s Insurance Distribution Directive, as well as product governance and oversight obligations (including Value Measures and Consumer Duty). At the same time Castelan continues to pursue opportunities for growth from its Furniture Care Network and Commercial Services division through client growth and new business.
Looking to 2022/23, trading will undoubtedly be greatly influenced by the dramatic drop in consumer sentiment caused by the inflationary and economic outlook, the war in Ukraine, interest rates and political uncertainty. However, as mentioned above, due to Covid-related supply chain constraints Castelan’s clients commenced the year with substantial order books which are expected to support turnover through and into Q3 as deliveries catch up. In addition, Castelan won a further new contract from another major high street brand and faces a new business pipeline that contains multiple opportunities that could support growth prospects.
Driving increased efficiencies across the business and delivering robust profitability in its current and future trading remains a key focus. At the same time Castelan is pursuing several initiatives in recycling and lowering its carbon footprint to ensure that it is making continual improvement in sustainability.
Maintaining a responsive approach in meeting client needs remains a core strategic priority. Product development and the Castelan technology platform remains key for delivering improved consumer outcomes as well as enhancing the flexibility and efficiency by which they are achieved. It also continues to remain a priority to work closely with all Castelan’s strategic partners to develop a breadth & depth of new business opportunities across the full suite of products and services.
Recent years have been a truly testing period for many and it has demonstrated the resilience of Castelan as a business. Working together as a team has never been more important. The directors would like to thank all the stakeholders who have supported our company and re-state our thanks to all staff for their support, commitment, hard work, positivity and professionalism in serving our clients and their customers.
Castelan Group Limited
Strategic Report
Year Ended 31 March 2022
Principal risks and uncertainties
The principal risks and uncertainties facing the company in the short and medium-term remain any lingering influence of the Covid-19 pandemic but primarily the economic uncertainty caused by the inflationary pressures in the economy and the significant uncertainty created by the events in Ukraine.
The impact of regulation and the increasing oversight of General Insurance distribution chains on our retail clients remains a key focus. However, Castelan continues to work closely with clients to inform, build, further develop and implement product changes that meets the needs of their customers and maintains regulatory compliance at all times.
Castelan continues to be exposed to the changing consumer trends within the markets in which the company operates, the potential impact upon commercial conditions and any factors that could increase the insolvency risk of our retailer partners. Castelan remains vigilant in monitoring these conditions and their impacts.
The directors strive to monitor customer behaviour, ensure continual product & service improvement, inform and advise our retail clients regarding FCA compliance requirements and the development of new products to ensure that the company remains competitive and delivers the best service and value in the markets that it serves.
Approved by the
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Castelan Group Limited
Directors' Report
Year Ended 31 March 2022
The directors present their report and the for the year ended 31 March 2022.
Directors of the group
The directors who held office during the year were as follows:
Financial instruments
Objectives and policies
The group's activities expose it to a number of financial risks including price risk, credit risk, cash flow risk and liquidity risk. The use and nature of financial instruments are determined by the directors in the context of trading terms made available to the group by customers and suppliers, with the objective of securing the liquidity and profitability of the company.
The principal risks and uncertainties facing the Group in respect of financial instruments fall into the following categories:
Price risk, credit risk, liquidity risk and cash flow risk
Price risk
Due to the nature of the financial instruments used by the group there is a limited exposure to price risk.
Credit risk exposure
The group endeavours to minimise the risk of financial loss caused by credit default by only granting credit terms to customers who satisfy credit worthiness procedures and through limiting the value of credit extended.
Liquidity risk
The group mitigates liquidity risk by careful negotiation of terms with customers and suppliers. The group also has to ensure compliance with Financial Conduct Authority capital adequacy requirements and, in light of the significant impacts of the pandemic on the financial performance and position of the group, management carefully monitor and forecast the position, engaging with timely and open dialogue with the FCA where appropriate.
Cash flow risk
Trade debtors are managed in respect of credit and cash flow risk policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and limits.
Future developments
Information concerning likely future developments is given in the Strategic Report.
Castelan Group Limited
Directors' Report
Year Ended 31 March 2022
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved by the
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Castelan Group Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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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.
Castelan Group Limited
Independent Auditor's Report to the Members of Castelan Group Limited
Opinion
We have audited the financial statements of Castelan Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2022, which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2022 and of the group's profit for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 director's 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 original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Castelan Group Limited
Independent Auditor's Report to the Members of Castelan Group Limited
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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and 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 our knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors’ remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 7, 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 group’s and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.
Castelan Group Limited
Independent Auditor's Report to the Members of Castelan Group Limited
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:
As part of our audit planning we obtained an understanding of the legal and regulatory framework that is applicable to the entity and group as a whole and the sector in which it operates to identify the key laws and regulations affecting the entity. As part of this assessment process we discussed with management the laws and regulations applicable to the group, reviewed certification identified on the group website and other communications and considered findings from previous audits.
The key laws and regulations we identified were Health & Safety regulations, Financial Conduct Authority (FCA) regulations, General Data Protection Regulations (GDPR) and Employment Law.
We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, primarily Companies Act 2006 and Corporation Taxes Acts 2009 & 2010. We discussed with management how the compliance with these laws and regulations is monitored and discussed policies and procedures in place. We also identified the individuals who have responsibility for ensuring that the entity and group as a whole complies with laws and regulations and deal with reporting any issues if they arise. As part of our planning procedures, we assessed the risk of any non-compliance with laws and regulations on the entity’s and group's as a whole ability to continue trading and the risk of material misstatement to the financial statements.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved the following:
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Making enquiries of management; |
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Review of legal and professional costs; |
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Review of Board minutes and reports to the Board from the health and safety representative; |
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Review of returns to and correspondence with the Financial Conduct Authority; and |
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Review of GDPR breaches register and the ICO website. |
As part of our enquiries we discussed with management whether there have been any known instances, allegations or suspicions of fraud, of which management confirmed there had been none during or after the period. We also evaluated the risk of fraud through management override including that arising from management’s incentives. The key risk we identified was manipulation of results to adhere to FCA regulations and we determined that the principal risks were related to the overstatement of profit, either through overstating revenue, understating expenditure or management bias in accounting estimates.
In response to the identified risk, as part of our audit work we:
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Used data analytics to test journal entries throughout the year, for appropriateness; |
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Reviewed estimates and judgements made in the financial statements for any indication of bias and challenged assumptions used by management in making the estimates; |
Castelan Group Limited
Independent Auditor's Report to the Members of Castelan Group Limited
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Reviewed deferred income calculation and underlying assumptions; and |
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Reviewed cut-off in respect income and expenditure. |
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements. This risk increases the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements as we are less likely to become aware of instances of non-compliance. 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, collusion, omission or misrepresentation.
A further description of our responsibilities is available 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.
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Ground Floor
Blackbrook Gate 1
Blackbrook Business Park
Somerset
TA1 2PX
Castelan Group Limited
Consolidated Statement of Comprehensive Income
Year Ended 31 March 2022
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Note |
2022 |
2021 |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
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Administrative expenses |
( |
( |
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Other operating income |
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Operating profit/(loss) |
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( |
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Interest payable and similar charges |
( |
( |
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Profit/(loss) before tax |
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( |
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Taxation |
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Profit/(loss) for the financial year |
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( |
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Movement on deferred tax relating to property, plant and equipment revaluation |
(61,000) |
- |
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Total comprehensive income for the year |
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( |
Castelan Group Limited
Consolidated Balance Sheet
31 March 2022
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Note |
2022 |
(As restated) |
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Fixed assets |
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Intangible assets |
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Tangible assets |
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Current assets |
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Stocks |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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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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Deferred income |
(420,608) |
(433,837) |
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Provisions for liabilities |
( |
( |
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Net assets |
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Capital and reserves |
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Called up share capital |
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Revaluation reserve |
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Merger reserve |
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Profit and loss account |
( |
( |
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Total equity |
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Approved and authorised by the
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Company Registration Number: 09718286
Castelan Group Limited
Balance Sheet
31 March 2022
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Note |
2022 |
2021 |
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Fixed assets |
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Investments |
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Current assets |
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Debtors |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current liabilities |
( |
( |
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Net assets |
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Capital and reserves |
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Called up share capital |
2,625 |
2,625 |
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Shareholders' funds |
2,625 |
2,625 |
The company made a loss after tax for the financial year of £Nil (2021 - loss of £Nil).
Approved and authorised by the
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Company Registration Number: 09718286
Castelan Group Limited
Consolidated Statement of Changes in Equity
Year Ended 31 March 2022
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Share capital |
Revaluation reserve |
Merger reserve |
Profit and loss account |
Total |
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At 1 April 2021 |
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( |
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Profit for the year |
- |
- |
- |
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Other comprehensive income |
- |
( |
- |
- |
( |
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Total comprehensive income |
- |
( |
- |
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Transfers |
- |
(21,000) |
- |
21,000 |
- |
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At 31 March 2022 |
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( |
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Share capital |
Revaluation reserve |
Other reserves |
Profit and loss account |
Total |
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At 1 April 2020 |
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( |
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Loss for the year |
- |
- |
- |
( |
( |
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Total comprehensive income |
- |
- |
- |
( |
( |
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At 31 March 2021 |
2,625 |
1,044,135 |
247,500 |
(1,114,772) |
179,488 |
Castelan Group Limited
Statement of Changes in Equity
Year Ended 31 March 2022
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Share capital |
Total |
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At 1 April 2021 |
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At 31 March 2022 |
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Share capital |
Total |
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At 1 April 2020 |
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At 31 March 2021 |
2,625 |
2,625 |
Castelan Group Limited
Consolidated Statement of Cash Flows
Year Ended 31 March 2022
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Note |
2022 |
2021 |
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Cash flows from operating activities |
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Profit/(loss) for the year |
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( |
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Adjustments to cash flows from non-cash items |
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Depreciation, amortisation and impairments |
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Finance costs |
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Tax expense |
( |
( |
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( |
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Working capital adjustments |
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Increase in stocks |
( |
( |
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Increase in debtors |
( |
( |
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Increase in creditors |
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Decrease in deferred income |
( |
( |
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Net cash flow from operating activities |
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( |
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Cash flows from investing activities |
|||
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Acquisitions of tangible assets |
( |
( |
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Acquisition of intangible assets |
( |
( |
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Net cash flows from investing activities |
( |
( |
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Cash flows from financing activities |
|||
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Interest paid |
( |
( |
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Net proceeds/(repayment) of bank borrowing |
(257,028) |
1,059,297 |
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Payments to finance lease creditors |
( |
( |
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Net cash flows from financing activities |
( |
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Net decrease in cash and cash equivalents |
( |
( |
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Cash and cash equivalents at 1 April |
|
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Cash and cash equivalents at 31 March |
998,749 |
1,159,249 |
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Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
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General information |
The company is a private company limited by share capital, incorporated in England & Wales.
The address of its registered office is:
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. There are no material departures from FRS 102.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 March 2022.
The group was formed as a result of a share for share exchange by Castelan Group Limited with Castelan Limited. As this constitutes a group restructure under FRS102 the financial statements have been prepared using merger accounting principles as if the group had been in existence for the current and previous financial periods.
No profit or loss account is presented for the company as permitted by Section 408 of the Companies Act 2006.
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
Going concern
Notwithstanding the impact on the underlying UK consumer market caused by ongoing and significant impacts of economic uncertainty caused by inflationary pressures, the lingering influence of the Covid-19 pandemic, political uncertainty and events in the Ukraine, the directors are satisfied, having considered also the impact of regulatory changes on retailer clients, that the going concern basis of preparation remains appropriate.
During the year and subsequently the Directors have remained in open dialogue with the FCA, keeping them abreast of our financial and capital adequacy position. Whilst noting that the financial year began in a challenging capital adequacy position, the directors are pleased to report that our positive 2021/22 performance and to date for 2022/23 gives the directors comfort that the company has returned to, and will continue to operate in, a compliant capital position from a regulatory perspective.
Having taken the above factors, bank facility availability and positive 2021/22 financial performance into consideration the directors have prepared forecasts to 31 March 2026 and are satisfied that the cash availability of the company will remain positive for the foreseeable future. The Directors recognise the inherent uncertainty within forecasts, in particular in respect of economic uncertainty and consumer sentiment, retailer supply chain uncertainty and the ongoing impact of the FCA’s Insurance Distribution Directive, but have also identified a number of further actions such that they are satisfied that the going concern basis of preparation remains appropriate.
Prior period adjustment
The comparative period disclosure of loans and borrowings due within and after one year was incorrectly stated in error and has been re-presented in line with the underlying loan documentation. Loans and borrowings as at 31 March 2021 due within one year have been reduced by £157,104 and the balance due after one year has been increased by £157,104. There is no impact on the profit for the comparative period of this adjustment.
Key judgements in applying accounting policies
The key judgement which has a significant effect on the financial statements is in respect of going concern, as described in the accounting policy above. |
In determining the revenue recognition policy of the group (described below) it is the directors' judgement that the majority of the work undertaken in respect of warranties is carried out upon initial set up and administration of the policies. Therefore, revenue is recognised such that the profit in respect of warranty policies is recognised upon initial set up of the new, or renewed, policy. The remainder of revenue is deferred and recognised over the life of the policy. |
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
Key sources of estimation uncertainty
In the application of the groups' accounting policies management is required to make estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The key estimates that have a significant effect on the amounts recognised in the financial statements are in respect of the carrying value of tangible fixed assets.
Land and buildings are carried at fair value based on the valuation carried out by a professional independent valuer or by the directors. The valuations used observable market prices adjusted as necessary for any difference in the future, location or conditions of the specific asset. The carrying amount is £1,933,327 (2021 - £1,968,333).
Trade debtors are held on the balance sheet at their recoverable value. The directors utilise all information readily available in order to estimate the recoverable value of trade debtors as at the balance sheet date and make provisions where necessary. The carrying amount is £5,299,594 (2021 - £2,927,212).
Deferred tax asset values in respect of tax losses included in the deferred tax provision are calculated using estimated future profitability as forecast by management. The carrying value of deferred tax assets relating to tax losses set against the deferred tax provision is £245,000 (2021 - £Nil).
Turnover
Fees, excluding Value Added Tax and Insurance Premium Tax, receivable for the administration and claims handling of fabric, furniture and electrical warranty protection insurance policies are recognised or deferred on the basis that reflects the company's average experience of costs incurred to set up, maintain and manage claims handling over the life of such policies. This policy gives rise to a deferred income balance which is shown separately on the face of the balance sheet.
Revenue in respect of care kit sales are recognised immediately in the profit and loss account upon delivery to the customer.
Revenue in respect of retail unit fixtures and fittings installation and refurbishment of commercial units is recognised on practical completion of the build.
Government grants
Government revenue grants are accounted for under the accruals method. These are credited to the profit and loss account when the company is entitled to the income.
Goodwill
Negative goodwill arises when the aggregate fair values of the identifiable assets and liabilities of the trade and assets acquired exceed the acquisition cost, and is recognised in the profit and loss account in the periods in which the non-monetary assets are written back in the profit and loss account over the period expected to benefit from that negative goodwill, in proportion to the period of consumption of the underlying assets. Negative goodwill has been fully amortised over the life of the underlying assets.
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
Intangible assets
Intangible software assets are stated in the balance sheet at cost, less any subsequent accumulated amortisation and subsequent accumulated impairment losses.
Amortisation
Amortisation is provided on intangible assets, with the exception of assets under construction, so as to write off the cost, less any estimated residual value, over their useful life as follows. Amortisation charge is presented within administrative expenses in the profit and loss account.
|
Asset class |
Amortisation method and rate |
|
Software |
Straight line over 3 - 7 years |
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Land and buildings held and used in the company's own activities are stated in the balance sheet at their revalued amounts. The revalued amounts equate to fair value at the date of revaluation, less depreciation or impairment losses subsequently accumulated. Revaluations are carried out regularly so that the carrying amounts do not materially differ from the fair value at the balance sheet date.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is provided on tangible fixed assets other than land, so as to write off the cost, less any estimated residual value, over their expected useful economic lives.
Freehold land is not depreciated.
|
Asset class |
Depreciation method and rate |
|
Freehold buildings |
Straight line over 50 years |
|
Plant & machinery |
Straight line over 1 - 7 years |
|
Fixtures & fittings |
Straight line over 5 - 7 years |
|
Equipment |
Straight line over 3 - 7 years |
Investments
Investments in subsidiaries are measured at cost less impairment.
Stock
Stock is valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving items. Net realisable value is based on selling price less selling costs.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except in respect of a tax change attributable to an item of income or expense recognised as other comprehensive income when the tax is also recognised directly in other comprehensive income.
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date.
Deferred tax assets relating to taxable trading losses are recognised only where there is a strong probability that there will be future profits from which losses can be recovered. The Directors take a prudent approach to this judgement which is based upon all available evidence including past experience.
Foreign currency transactions and balances
Leases
Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over the lease term.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. The treatment of finance leases is as set out in the accounting policy for financial instruments detailed below.
Defined contribution pension obligation
The group contributes to defined contribution pension plans for eligible staff. Contributions are charged in the profit and loss account as they become payable in accordance with the rules of the scheme.
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
Financial instruments
Classification
• Short term trade and other debtors and creditors;
• Hire purchase and finance lease agreements;
• Bank loans; and
• Cash and bank balances.
All financial instruments are classified as basic.
Recognition and measurement
Except for bank loans and finance leases, such instruments are initially measured at transaction price, including transaction costs, and are subsequently carried at the undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments.
Bank loans are initially measured at transaction price, including transaction costs, and are subsequently carried at amortised cost using the effective interest method.
Assets held under finance leases and hire purchase contracts are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Finance lease obligations are subsequently measured at amortised cost using the effective interest method.
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Revenue |
The analysis of the group's revenue for the year from continuing operations is as follows:
|
2022 |
2021 |
|
|
Sale of goods |
|
|
|
Rendering of services |
|
|
|
|
|
The analysis of the group's turnover for the year by market is as follows:
|
2022 |
2021 |
|
|
UK |
|
|
|
Europe |
|
|
|
|
|
In the opinion of the directors, presentation of an analysis of turnover by class of business would be seriously prejudicial to the group and therefore this information is not disclosed.
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
|
2022 |
2021 |
|
|
Government grants |
|
|
|
Operating profit/(loss) |
Arrived at after charging/(crediting)
|
2022 |
2021 |
|
|
Depreciation expense |
|
|
|
Amortisation expense |
|
|
|
Foreign exchange (losses)/gains |
( |
|
|
Auditor's remuneration |
|
2022 |
2021 |
|
|
Audit of these financial statements |
1,750 |
1,560 |
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2022 |
2021 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
|
2022 |
2021 |
|
|
Administration and support |
|
|
|
Management |
|
|
|
Sales |
|
|
|
Network |
|
|
|
Claims |
|
|
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2022 |
2021 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase pension schemes |
|
|
|
327,652 |
293,268 |
During the year the number of directors who were receiving benefits was as follows:
|
2022 |
2021 |
|
|
Accruing benefits under money purchase pension scheme |
|
|
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
In respect of the highest paid director:
|
2022 |
2021 |
|
|
Remuneration |
|
|
|
Company contributions to money purchase pension schemes |
|
|
|
Interest payable and similar expenses |
|
2022 |
2021 |
|
|
Interest on bank overdrafts and borrowings |
|
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
|
|
|
|
Taxation |
Tax charged in the profit and loss account
|
2022 |
2021 |
|
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
( |
( |
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2021 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2022 |
2021 |
|
|
Profit/(loss) before tax |
|
( |
|
Corporation tax at standard rate |
|
( |
|
Expenses not deductible for tax purposes |
|
|
|
Deferred tax credit relating to changes in tax rates or laws |
( |
- |
|
(Decrease)/Increase from tax losses for which no deferred tax asset was recognised |
( |
|
|
Deferred tax expense/(credit) from unrecognised temporary difference from a prior period |
|
( |
|
Total tax credit |
( |
( |
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
Deferred tax
Group
Deferred tax assets and liabilities
|
2022 |
Asset |
Liability |
|
Deferred tax arising on revaluation of property |
- |
|
|
Accelerated capital allowances |
- |
|
|
Other short-term timing differences |
|
- |
|
Unutilised tax losses |
|
- |
|
|
|
|
2021 |
Asset |
Liability |
|
Deferred tax arising on revaluation of property |
- |
|
|
Accelerated capital allowances |
- |
|
|
Other short-term timing differences |
|
- |
|
Unutilised tax losses |
- |
- |
|
|
|
There are £Nil of unused tax losses (2021 - £1,423,526) for which no deferred tax asset is recognised in the Balance Sheet.
Tax relating to items recognised in other comprehensive income or equity
|
2022 |
2021 |
|
|
Deferred tax related to items recognised as items of other comprehensive income |
|
- |
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Intangible assets |
Group
|
Goodwill |
Software |
Assets under construction |
Total |
|
|
Cost or valuation |
||||
|
At 1 April 2021 |
( |
|
|
|
|
Additions acquired separately |
- |
- |
|
|
|
Impairment |
- |
167,709 |
(167,709) |
- |
|
At 31 March 2022 |
( |
|
|
|
|
Amortisation |
||||
|
At 1 April 2021 |
( |
|
- |
|
|
Amortisation charge |
- |
|
- |
|
|
At 31 March 2022 |
( |
|
- |
|
|
Carrying amount |
||||
|
At 31 March 2022 |
- |
|
|
|
|
At 31 March 2021 |
- |
|
|
|
Intangible assets held under finance leases
Included within intangible assets are the following assets held under finance lease:
|
2022
|
2021
|
|
|
Computer software |
7,290 |
24,785 |
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Tangible assets |
Group
|
Land and buildings |
Furniture, fittings and equipment |
Plant and equipment |
Total |
|
|
Cost or valuation |
||||
|
At 1 April 2021 |
|
|
|
|
|
Additions |
- |
|
|
|
|
At 31 March 2022 |
|
|
|
|
|
Depreciation |
||||
|
At 1 April 2021 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
At 31 March 2022 |
|
|
|
|
|
Carrying amount |
||||
|
At 31 March 2022 |
|
|
|
|
|
At 31 March 2021 |
|
|
|
|
Included within the net book value of land and buildings above is £1,933,327 (2021 - £1,968,333) in respect of freehold land and buildings, of which £300,000 (2020 - £300,000) is in respect of land which is not depreciated.
Revaluation
The fair value of the company's land and buildings was revalued on
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
|
2022 |
2021 |
|
|
Plant & machinery |
- |
293 |
Restriction on title and pledged as security
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Investments |
Company
|
2022 |
2021 |
|
|
Investments in subsidiaries |
|
|
|
Subsidiaries |
£ |
|
Cost or valuation |
|
|
At 1 April 2021 |
|
|
At 31 March 2022 |
|
|
Carrying amount |
|
|
At 31 March 2022 |
|
|
At 31 March 2021 |
|
Details of undertakings
Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
|
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
|
2022 |
2021 |
|||
|
Subsidiary undertakings |
||||
|
|
Alpha House,
|
A & B ordinary shares |
|
|
|
|
Alpha House,
|
Ordinary shares |
|
|
|
|
Alpha House,
|
Ordinary shares |
|
|
|
|
Alpha House,
|
Ordinary shares |
|
|
|
|
Alpha House,
|
Ordinary shares |
|
|
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Subsidiary undertakings |
|
Castelan Limited The principal activity of Castelan Limited is |
|
Castelan Services Limited The principal activity of Castelan Services Limited is |
|
Castelan Premier Care Limited The principal activity of Castelan Premier Care Limited is |
|
Castelan Furniture Care Limited The principal activity of Castelan Furniture Care Limited is |
|
Furniture Build Network Limited The principal activity of Furniture Build Network Limited is |
The investments in Castelan Premier Care Limited, Castelan Furniture Limited and Furniture Build Network Limited are held indirectly.
|
Stock |
|
Group |
Company |
|||
|
2022 |
2021 |
2022 |
2021 |
|
|
Raw materials and consumables |
|
|
- |
- |
|
Finished goods |
|
|
- |
- |
|
|
|
- |
- |
|
|
Debtors |
|
Group |
Company |
|||
|
2022 |
2021 |
2022 |
2021 |
|
|
Trade debtors |
|
|
- |
- |
|
Amounts due from group undertakings |
- |
- |
|
|
|
Other debtors |
|
|
- |
- |
|
Prepayments and accrued income |
|
|
- |
- |
|
|
|
|
|
|
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Cash and cash equivalents |
|
Group |
Company |
|||
|
2022 |
2021 |
2022 |
2021 |
|
|
Cash at bank |
|
|
- |
- |
|
Analysis of cash and cash equivalents and net debt |
|
At 1 April 2021 |
Cash flow |
Non cash movements |
At 31 March 2022 |
|
|
(as restated) |
||||
|
£ |
£ |
£ |
£ |
|
|
Cash at bank and on hand |
1,159,249 |
(160,500) |
- |
998,749 |
|
Bank overdrafts |
- |
- |
- |
- |
|
Cash and cash equivalents |
1,159,249 |
(160,500) |
- |
998,749 |
|
Finance lease obligations due within one year |
(38,644) |
18,934 |
3,794 |
(15,916) |
|
Finance lease obligations due after one year |
(5,405) |
(3,794) |
(9,199) |
|
|
Bank borrowings due within one year |
(58,651) |
257,028 |
(266,765) |
(68,388) |
|
Bank borrowings due after one year |
(2,003,067) |
(266,765) |
(1,736,302) |
|
|
Net debt |
(946,518) |
115,462 |
- |
(831,056) |
|
Creditors |
|
Group |
Company |
||||
|
Note |
2022 |
(As restated)
|
2022 |
2021 |
|
|
Due within one year |
|||||
|
Loans and borrowings |
|
|
- |
- |
|
|
Trade creditors |
|
|
- |
- |
|
|
Amounts due to group undertakings |
- |
- |
|
|
|
|
Social security and other taxes |
|
|
- |
- |
|
|
Outstanding defined contribution pension costs |
|
|
- |
- |
|
|
Other creditors |
|
|
|
|
|
|
Accrued expenses |
|
|
- |
- |
|
|
|
|
|
|
||
|
Due after one year |
|||||
|
Loans and borrowings |
|
|
- |
- |
|
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Loans and borrowings |
|
Group |
Company |
|||
|
2022 |
(As restated)
|
2022 |
2021 |
|
|
Current loans and borrowings |
||||
|
Bank borrowings |
|
|
- |
- |
|
Finance lease liabilities |
|
|
- |
- |
|
|
|
- |
- |
|
|
Group |
Company |
|||
|
2022 |
(As restated)
|
2022 |
2021 |
|
|
Non-current loans and borrowings |
||||
|
Bank borrowings |
|
|
- |
- |
|
Finance lease liabilities |
|
|
- |
- |
|
|
|
- |
- |
|
Group
Loans and borrowings
|
The mortgage is secured by a debenture against all the assets of the group and a legal charge over the freehold property.The mortgage was refinanced in the prior year and was eligible for a 12 month repayment holiday. After the first 12 months the mortgage is repayable in monthly instalments, with the balance due on the maturity date. |
|
As with the mortgage, the loan is secured by a debenture against all the assets of the group and a legal charge over the freehold property.The CBILS was drawn down in the year and was eligible for a 12 month repayment holiday for both interest and principal payments. No arrangement fee was incurred on the loan. After the first 12 months the loan is repayable in monthly instalments, with the balance due on the maturity date. |
The invoice discounting facility is denominated in sterling with a nominal interest of 2%. The carrying amount at the year end is £168,174 asset (2021 - £102,811 asset).The invoice discounting facility is secured by a debenture against all the assets of the company and a legal charge over the freehold property.
Finance lease liabilities with a carrying amount of £25,115 (2021 - £44,049) are denominated in sterling with a nominal interest rate of 7-10%.
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
Finance lease liabilities are secured on the assets to which they relate.
Included in the loans and borrowings are the following amounts due after more than five years:
|
2022 |
2021 |
|
|
After more than five years by instalments |
- |
|
|
Deferred income |
Group
|
2022 |
|
|
At 1 April 2021 |
433,837 |
|
Released to profit during the year |
(433,837) |
|
Received during the year |
420,608 |
|
At 31 March 2022 |
420,608 |
|
Obligations under leases and hire purchase contracts |
Group
Finance leases
The total of future minimum lease payments is as follows:
|
2022 |
2021 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
Operating leases
The total of future minimum lease payments is as follows:
|
2022 |
2021 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Deferred tax provisions |
Group
|
Deferred tax |
|
|
At 1 April 2021 |
|
|
Decrease in existing provisions |
( |
|
At 31 March 2022 |
|
|
|
|
|
Pension scheme |
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Contributions totalling £
|
Share capital |
Allotted, called up and fully paid shares
|
2022 |
2021 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
2,500 |
|
2,500 |
|
|
|
125 |
|
125 |
|
|
|
|
|
|
Rights, preferences and restrictions
|
Holders of Ordinary A shares are entitled to one vote per share held which also confers rights to dividends declared and distribution made on winding up. The Ordinary A shares are not redeemable. |
|
Ordinary B shares carry no rights to participate in any voting. They carry rights to dividends declared and distribution made on winding up. The Ordinary B shares are not redeemable. |
Castelan Group Limited
Notes to the Financial Statements
Year Ended 31 March 2022
|
Related party transactions |
Group
Key management compensation
|
2022 |
2021 |
|
|
Key management compensation |
|
|
|
Transactions with directors |
During the year the group incurred consultancy fees due to one of the directors of £15,100 (2021 - £14,202). The amount owed to the director at the year end was £nil (2021 - £4,800).