Kaby Engineers Limited - Limited company accounts 22.3

REGISTERED NUMBER: 01211144 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2022

FOR

KABY ENGINEERS LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

V L Nathwani

S T Williams

REGISTERED OFFICE:

10 Sheene Road

Leicester

Leicestershire

LE4 1BF

REGISTERED NUMBER:

01211144 (England and Wales)

AUDITORS:

SFB Group Limited

Chartered Accountants

Statutory Auditor

Unit 8 Oak Spinney Park

Ratby Lane

Leicester Forest East

Leicester

LE3 3AW

BANKERS:

Santander UK PLC

BBAM

Bridle Road

Bootle

Merseyside

L304GB

The directors present their strategic report of the company and the group for the year ended 31 March 2022.

REVIEW OF BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and nature of our business and is written in the context of the risks and uncertainties we face.

We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross margin and return on investment.

The accounts show a increase in turnover for the year of 30% with gross profit increasing from a loss of £307,237 to a profit of £2,212,134. The operating profit of £26,328 in 2021 decreased to a loss of £2,049,678.

The company declared a net loss after tax and other comprehensive income of £610,214 in the period compared to a loss of £1,726,704 in 2021.

The company's results for the year reflect a challenging environment for the global economy. The start of the year saw the effects on supply of raw materials beginning to take hold after the outbreak of COVID-19 which has brought unprecedented challenges not just for the company but the global economy. The company has responded well, by sourcing worldwide for raw materials and adapted to the changes in manufacturing lead times. Also the increased costs due to inflation and energy has resulted in cutting costs where necessary and passing on these costs to our customers. Whilst it is too early to quantify the financial and other implications of this unprecedented global event, the company is committed to continue finding innovative and cost effective ways to meet challenges head on to protect its financial performance. The company carried out a refinance post year end to help with increased working capital.

With these risks and uncertainties in mind, we acknowledge that any plans for future development may be affected by circumstances which are both unforeseen and beyond our control.

ON BEHALF OF THE BOARD:

S T Williams - Director

14 December 2022

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2022.

PRINCIPAL ACTIVITY

The principal activity of the company continued to be that of light engineering.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2022.

DIRECTORS

The directors who have held office during the period from 1 April 2021 to the date of this report are as follows:

B S Sanghera - resigned 4 November 2021

Mrs K K Sanghera - resigned 4 November 2021

V L Nathwani - appointed 19 April 2021

S T Williams - appointed 19 April 2021

EMPLOYEE INVOLVEMENT

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the employees in the company's performance.

DISABLED PERSONS

The company's policy is to recruit disabled workers for those vacancies that they are able to fill. All necessary assistance with initial training courses is given. Once employed, a career plan is developed so as to ensure suitable opportunities for each disabled person. Arrangements are made, wherever possible, for retraining employees who become disabled, to enable them to perform work identified as appropriate to their aptitudes and abilities.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

The auditors, SFB Group Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

S T Williams - Director

14 December 2022

Opinion

We have audited the financial statements of Kaby Engineers Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2022 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2022 and of the group's loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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 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 group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept 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 three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the 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.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

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

- 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;

- Enquiry of management around actual and potential litigation and claims;

- Enquiry of management to identify any instances of non-compliance with laws and regulations;

- We reviewed correspondence with legal and regulatory bodies where applicable;

- We agreed the financial statements disclosures to underlying supporting documentation

- We reviewed the detail of certain nominal accounts for indications of management override;

- We gained an understanding of the design and implementation of the processes and controls in place within the group which are designed to prevent, detect or correct fraud or error within the financial statements

- We challenged the accounting treatment applied in respect of revenue recognised during the year, in particular in relation to manual adjustments made to revenue, cut off between accounting periods;

- We identified and tested journal entries which we considered to be unusual and me be indicative of bias on the part of management or those charged with governance, investigating the rationale behind significant or unusual transactions.

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 or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Carvell BFP FCA (Senior Statutory Auditor)

for and on behalf of SFB Group Limited

Chartered Accountants

Statutory Auditor

Unit 8 Oak Spinney Park

Ratby Lane

Leicester Forest East

Leicester

LE3 3AW

14 December 2022

TURNOVER

3

17,175,693

13,173,838

Cost of sales

14,963,559

13,481,075

GROSS PROFIT/(LOSS)

2,212,134

(307,237

)

Distribution costs

206,163

159,439

Administrative expenses

4,262,592

934,470

4,468,755

1,093,909

(2,256,621

)

(1,401,146

)

Other operating income

206,943

1,427,504

OPERATING (LOSS)/PROFIT

6

(2,049,678

)

26,358

Irrecoverable Loans

7

-

155,146

(2,049,678

)

(128,788

)

Interest receivable and similar income

8

-

1,166

(2,049,678

)

(127,622

)

Interest payable and similar expenses

9

159,412

165,579

LOSS BEFORE TAXATION

(2,209,090

)

(293,201

)

Tax on loss

10

12,340

-

LOSS FOR THE FINANCIAL YEAR

(2,221,430

)

(293,201

)

Loss attributable to:

Owners of the parent

(2,221,430

)

(293,201

)

LOSS FOR THE YEAR

(2,221,430

)

(293,201

)

OTHER COMPREHENSIVE INCOME

Revaluation on freehold property

1,611,216

(1,433,503

)

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

1,611,216

(1,433,503

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(610,214

)

(1,726,704

)

Total comprehensive income attributable to:

Owners of the parent

(610,214

)

(1,726,704

)

FIXED ASSETS

Intangible assets

12

283,804

378,400

Tangible assets

13

5,160,952

3,814,191

Investments

14

-

-

Investment property

15

-

51,080

5,444,756

4,243,671

CURRENT ASSETS

Stocks

16

1,722,852

1,866,128

Debtors

17

3,780,568

4,720,476

Cash at bank

73,034

662,395

5,576,454

7,248,999

CREDITORS

Amounts falling due within one year

18

6,967,076

7,687,391

NET CURRENT LIABILITIES

(1,390,622

)

(438,392

)

TOTAL ASSETS LESS CURRENT LIABILITIES

4,054,134

3,805,279

CREDITORS

Amounts falling due after more than one year

19

1,581,194

722,125

NET ASSETS

2,472,940

3,083,154

CAPITAL AND RESERVES

Called up share capital

22

100,000

100,000

Revaluation reserve

-

114,526

Fair value reserve

1,611,216

-

Retained earnings

761,724

2,868,628

SHAREHOLDERS' FUNDS

2,472,940

3,083,154

The financial statements were approved by the Board of Directors and authorised for issue on 14 December 2022 and were signed on its behalf by:

S T Williams - Director

FIXED ASSETS

Intangible assets

12

283,804

378,400

Tangible assets

13

5,140,360

3,789,966

Investments

14

250,752

250,752

Investment property

15

-

51,080

5,674,916

4,470,198

CURRENT ASSETS

Stocks

16

1,722,852

1,866,128

Debtors

17

4,245,877

5,250,785

Cash at bank

72,965

661,996

6,041,694

7,778,909

CREDITORS

Amounts falling due within one year

18

6,963,475

7,684,691

NET CURRENT (LIABILITIES)/ASSETS

(921,781

)

94,218

TOTAL ASSETS LESS CURRENT LIABILITIES

4,753,135

4,564,416

CREDITORS

Amounts falling due after more than one year

19

1,581,194

722,125

NET ASSETS

3,171,941

3,842,291

CAPITAL AND RESERVES

Called up share capital

22

100,000

100,000

Revaluation reserve

-

114,526

Fair value reserve

1,611,216

-

Retained earnings

1,460,725

3,627,765

SHAREHOLDERS' FUNDS

3,171,941

3,842,291

Company's loss for the financial year

(2,281,566

)

(385,929

)

The financial statements were approved by the Board of Directors and authorised for issue on 14 December 2022 and were signed on its behalf by:

S T Williams - Director

Called up

Fair

share

Retained

Revaluation

value

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 April 2020

100,000

3,161,829

1,548,029

-

4,809,858

Changes in equity

Total comprehensive income

-

(293,201

)

(1,433,503

)

-

(1,726,704

)

Balance at 31 March 2021

100,000

2,868,628

114,526

-

3,083,154

Changes in equity

Total comprehensive income

-

(2,106,904

)

(114,526

)

1,611,216

(610,214

)

Balance at 31 March 2022

100,000

761,724

-

1,611,216

2,472,940

Called up

Fair

share

Retained

Revaluation

value

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 April 2020

100,000

4,013,694

1,548,029

-

5,661,723

Changes in equity

Total comprehensive income

-

(385,929

)

(1,433,503

)

-

(1,819,432

)

Balance at 31 March 2021

100,000

3,627,765

114,526

-

3,842,291

Changes in equity

Total comprehensive income

-

(2,167,040

)

(114,526

)

1,611,216

(670,350

)

Balance at 31 March 2022

100,000

1,460,725

-

1,611,216

3,171,941

Cash flows from operating activities

Cash generated from operations

1

(472,150

)

(467,176

)

Interest paid

(98,539

)

(92,620

)

Interest element of hire purchase payments paid

(60,873

)

(72,959

)

Tax paid

(30,484

)

(116,785

)

Net cash from operating activities

(662,046

)

(749,540

)

Cash flows from investing activities

Purchase of tangible fixed assets

(273,882

)

(38,502

)

Sale of tangible fixed assets

203,998

3,409,354

Sale of investment property

51,080

-

Interest received

-

1,166

Net cash from investing activities

(18,804

)

3,372,018

Cash flows from financing activities

Loan repayments in year

(143,284

)

(1,135,820

)

Capital advances / (repayments) in year

(394,085

)

(305,053

)

Amount introduced by directors

628,858

-

Amount withdrawn by directors

-

(175,862

)

Net cash from financing activities

91,489

(1,616,735

)

(Decrease)/increase in cash and cash equivalents

(589,361

)

1,005,743

Cash and cash equivalents at beginning of year

2

662,395

(343,348

)

Cash and cash equivalents at end of year

2

73,034

662,395

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

2022

2021

£

£

Loss before taxation

(2,209,090

)

(293,201

)

Depreciation charges

523,764

566,498

Profit on disposal of fixed assets

(94,829

)

(3,379,356

)

Finance costs

159,412

165,579

Finance income

-

(1,166

)

(1,620,743

)

(2,941,646

)

Decrease in stocks

143,276

2,085,108

Decrease in trade and other debtors

311,050

22,175

Increase in trade and other creditors

694,267

367,187

Cash generated from operations

(472,150

)

(467,176

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 March 2022

31.3.22

1.4.21

£

£

Cash and cash equivalents

73,034

662,395

Year ended 31 March 2021

31.3.21

1.4.20

£

£

Cash and cash equivalents

662,395

164,816

Bank overdrafts

-

(508,164

)

662,395

(343,348

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.4.21

Cash flow

At 31.3.22

£

£

£

Net cash

Cash at bank

662,395

(589,361

)

73,034

662,395

(589,361

)

73,034

Debt

Finance leases

(515,575

)

394,085

(121,490

)

Debts falling due within 1 year

(143,284

)

-

(143,284

)

Debts falling due after 1 year

(620,896

)

143,284

(477,612

)

(1,279,755

)

537,369

(742,386

)

Total

(617,360

)

(51,992

)

(669,352

)

1.	STATUTORY INFORMATION

Kaby Engineers Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

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

2.	ACCOUNTING POLICIES

Compliance with accounting standards

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard Applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value.

The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).

Basis of consolidation

The consolidated profit and loss account and balance sheet include the financial statements of the company and its subsidiary undertakings made up to 31 March 2022. The results of subsidiaries sold or acquired are included in the profit and loss account up to, or from the date control passes. Intra-group sales and profits are eliminated fully on consolidation.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover from the sale of goods is recognised when significant risks and rewards of ownership of the goods have transferred to the buyer, the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. This is usually on dispatch of the goods.

Intangible fixed assets

Intangible fixed assets represent capitalised research and development costs. No amortisation is to be applied in the year of acquisition. The balance as at 31 March 2022 will be amortised over three years.

Tangible fixed assets

Tangible fixed assets include investment properties professionally valued by Chartered Surveyors on an existing use open market value basis. Tangible fixed assets other than freehold land are stated at cost or valuation less depreciation. Depreciation is provided at rates calculated to write off the cost or valuation less estimated residual value of each asset over its expected useful life, as follows:

Freehold buildings - 2% per annum of cost or valuation

Leasehold property improvement - Straight line over 7 years

Plant, machinery, fixtures and fittings - 10%-50% per annum of cost & 15% reducing balance

Office equipment - 20% reducing balance

Motor vehicles - 20% per annum of cost & 25% reducing balance

Investment property

Investment properties are included in the balance sheet at their open market value. Any aggregate surplus or deficit arising from changes in fair value is recognised in other comprehensive income.

Stocks

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

Cost includes all direct expenditure and an appropriate proportion of fixed and variable overheads.

Debtors and creditors receivable / payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.