Rowecord Holdings Limited - Limited company accounts 22.3

REGISTERED NUMBER: 02737904 (England and Wales)

Rowecord Holdings Limited

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 30th June 2022

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Consolidated Statement of Comprehensive Income

7

Consolidated Balance Sheet

8

Company Balance Sheet

9

Consolidated Statement of Changes in Equity

10

Company Statement of Changes in Equity

11

Consolidated Cash Flow Statement

12

Notes to the Consolidated Cash Flow Statement

13

Notes to the Consolidated Financial Statements

14

Directors:

A F Hoppe

I D Hoppe

Mrs A G Morris

Registered office:

Unit A, Leeway House

Leeway Industrial Estate

Newport

NP19 4SL

Registered number:

02737904 (England and Wales)

Auditors:

Haines Watts Wales LLP, Statutory Auditors

7 Neptune Court

Vanguard Way

Cardiff

CF24 5PJ

Bankers:

Lloyds Bank PLC

St William House

Tresillian Terrace

Cardiff

CF10 5BH

The directors present their strategic report of the company and the group for the year ended 30th June 2022.

Review of business

The group's key financial and other performance indicators during the year were as follows:

2022

2021

2020

£

£

£

Turnover

5,999,316

6,033,501

5,218,162

Gross profit margin (%)

44%

43%

35%

Profit/(Loss) before taxation

498,318

491,759

67,951

At the end of the year, the net assets of the group totalled £8,046,725 (2021: £7,944,408).

Principal risks and uncertainties

The business' principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of its bank facilities. All of the business' cash balances are held in such a way that achieves a competitive rate of interest.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.

The diversification of the group in terms of work product enables it to take advantage of many opportunities and helps to protect the future earning potential of the business.

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

On behalf of the board:

A F Hoppe - Director

5th December 2022

The directors present their report with the financial statements of the company and the group for the year ended 30th June 2022.

Principal activities

The principal activities of the group in the year under review were those of the supply and erection of fluid storage system and towers, the provision of scaffolding services and the managing the assets of the group.

Dividends

An interim dividend of £2.41 per share was paid on 8th October 2021. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 30th June 2022 will be £ 392,001 .

Directors

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

A F Hoppe

I D Hoppe

Mrs A G Morris

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

Auditors

The auditors, Haines Watts Wales LLP, Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

A F Hoppe - Director

5th December 2022

Qualified Opinion

We have audited the financial statements of Rowecord Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30th June 2022 which comprise the Consolidated Statement of 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:

-

give a true and fair view of the state of the group's and of the parent company affairs as at 30th June 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 qualified opinion

The group accounts do not include the disclosure of the assumptions and valuations used to establish the defined benefit pension scheme position as at 30 June 2022 in respect of Braithwaite Engineers Limited. Nor do they include any balance in relation to said scheme. In addition, we have not received external confirmation of the balance and have therefore not been provided with all of the information and explanations we required for our audit.

The tri-annual valuation statement prepared as at 31 December 2020 by the actuaries Mercer Limited in connection with the Braithwaite Engineers Limited scheme, shows an Actuarial surplus on the pension fund of £245,000. The group has not made a provision for the surplus in the accounts, as the amount has not been quantified under assumptions prevailing as at 30 June 2022.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified 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.

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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

Our planning procedures identify the legal and regulatory frameworks applicable to the operations and financial statements of the company. These are reviewed internally with the audit team including relevant industry experience and expectations as well as externally with the client management. The key laws and regulations we considered in this context were the UK Companies Act 2006, UK GAAP (FRS 102) and relevant tax legislation.

Once identified, we assess the risks of material misstatements in relation to the laws and regulations, irregularities, including fraud and adjust our testing accordingly. Our audit procedures include:

-

Discussing with Directors and management which areas of the business they believe to be more susceptible to fraud, and whether they have any knowledge or suspicion of fraudulent activities;

-

Obtaining an understanding of the key controls put in place by the company to address risks identified, assessing the effectiveness of those and discussing how these are maintained and monitored internally;

-

Assessing the risk of management override and review and testing of journal entries made into the accounting system;

-

Challenging assumptions and judgements made by the company in relation to the significant accounting estimates employed in the preparation of the financial statements;

-

Discussing with Directors and Management the legal and regulatory obligations of the business and whether they have any knowledge or suspicion of non compliance.

Despite the audit being planned and conducted in accordance with ISAs (UK) there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularities likely involve collusion, forgery, intentional misrepresentation, or the override of internal controls.

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.

Clive Edwards (Senior Statutory Auditor)

for and on behalf of Haines Watts Wales LLP, Statutory Auditors

7 Neptune Court

Vanguard Way

Cardiff

CF24 5PJ

9th January 2023

Turnover

3

5,999,316

6,033,501

Cost of sales

(3,367,821

)

(3,465,151

)

Gross profit

2,631,495

2,568,350

Administrative expenses

(2,189,368

)

(2,114,591

)

442,127

453,759

Other operating income

37,277

57,750

Group operating profit

479,404

511,509

Share of operating loss in

Associates

-

(10,110

)

Interest receivable and similar income

26,243

7,374

505,647

508,773

Amounts written off investments

5

-

(10,000

)

505,647

498,773

Interest payable and similar expenses

6

(7,329

)

(7,014

)

Profit before taxation

7

498,318

491,759

Tax on profit

9

-

(10,057

)

Profit for the financial year

498,318

481,702

Other comprehensive income

-

-

Total comprehensive income for the year

498,318

481,702

Profit attributable to:

Owners of the parent

444,785

439,703

Non-controlling interests

53,533

41,999

498,318

481,702

Total comprehensive income attributable to:

Owners of the parent

444,785

439,703

Non-controlling interests

53,533

41,999

498,318

481,702

Fixed assets

Tangible assets

12

2,150,008

3,972,425

Investments

13

Interest in associate

-

1,500

Investment property

14

1,582,751

50,000

3,732,759

4,023,925

Current assets

Stocks

15

382,821

478,785

Debtors

16

1,630,232

1,711,077

Cash at bank and in hand

3,260,721

3,137,355

5,273,774

5,327,217

Creditors

Amounts falling due within one year

17

(884,550

)

(1,252,136

)

Net current assets

4,389,224

4,075,081

Total assets less current liabilities

8,121,983

8,099,006

Creditors

Amounts falling due after more than one year

18

(75,258

)

(154,598

)

Net assets

8,046,725

7,944,408

Capital and reserves

Called up share capital

20

162,500

162,500

Capital redemption reserve

21

37,510

37,510

Retained earnings

21

7,671,133

7,618,349

Shareholders' funds

7,871,143

7,818,359

Non-controlling interests

22

175,582

126,049

Total equity

8,046,725

7,944,408

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

I D Hoppe - Director

A F Hoppe - Director

Fixed assets

Tangible assets

12

980,780

2,613,104

Investments

13

455,485

1,359,775

Investment property

14

1,582,751

50,000

3,019,016

4,022,879

Current assets

Debtors

16

1,290,265

1,000,417

Cash at bank

2,626,074

2,956,890

3,916,339

3,957,307

Creditors

Amounts falling due within one year

17

(215,825

)

(329,752

)

Net current assets

3,700,514

3,627,555

Total assets less current liabilities

6,719,530

7,650,434

Creditors

Amounts falling due after more than one year

18

-

(41,667

)

Net assets

6,719,530

7,608,767

Capital and reserves

Called up share capital

20

162,500

162,500

Capital redemption reserve

21

37,500

37,500

Retained earnings

21

6,519,530

7,408,767

Shareholders' funds

6,719,530

7,608,767

Company's (loss)/profit for the financial year

(497,236

)

412,358

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

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

A F Hoppe - Director

Called up

Capital

share

Retained

redemption

capital

earnings

reserve

£

£

£

Balance at 1st July 2020

162,500

7,478,646

37,510

Changes in equity

Dividends

-

(300,000

)

-

Total comprehensive income

-

439,703

-

Balance at 30th June 2021

162,500

7,618,349

37,510

Changes in equity

Dividends

-

(392,001

)

-

Total comprehensive income

-

444,785

-

Balance at 30th June 2022

162,500

7,671,133

37,510

Non-controlling

Total

Total

interests

equity

£

£

£

Balance at 1st July 2020

7,678,656

4,050

7,682,706

Changes in equity

Movement in share capital

-

80,000

80,000

Dividends

(300,000

)

-

(300,000

)

Total comprehensive income

439,703

41,999

481,702

Balance at 30th June 2021

7,818,359

126,049

7,944,408

Changes in equity

Dividends

(392,001

)

(4,000

)

(396,001

)

Total comprehensive income

444,785

53,533

498,318

Balance at 30th June 2022

7,871,143

175,582

8,046,725

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1st July 2020

162,500

7,296,409

37,500

7,496,409

Changes in equity

Dividends

-

(300,000

)

-

(300,000

)

Total comprehensive income

-

412,358

-

412,358

Balance at 30th June 2021

162,500

7,408,767

37,500

7,608,767

Changes in equity

Dividends

-

(392,001

)

-

(392,001

)

Total comprehensive income

-

(497,236

)

-

(497,236

)

Balance at 30th June 2022

162,500

6,519,530

37,500

6,719,530

Cash flows from operating activities

Cash generated from operations

1

352,162

3,360,097

Interest paid

(7,329

)

(7,014

)

Net cash from operating activities

344,833

3,353,083

Cash flows from investing activities

Purchase of tangible fixed assets

(261,078

)

(2,501,368

)

Purchase of fixed asset investments

-

(1,500

)

Purchase of investment property

(5,000

)

-

Sale of tangible fixed assets

14,250

1,780

Sale of investment property

526,500

642,000

Interest received

26,243

7,374

Net cash from investing activities

300,915

(1,851,714

)

Cash flows from financing activities

New loans in year

-

150,000

Loan repayments in year

(126,381

)

(38,669

)

Non-controlling interest dividend paid

(4,000

)

-

Equity dividends paid

(392,001

)

(300,000

)

Net cash from financing activities

(522,382

)

(188,669

)

Increase in cash and cash equivalents

123,366

1,312,700

Cash and cash equivalents at beginning of year

2

3,137,355

1,824,655

Cash and cash equivalents at end of year

2

3,260,721

3,137,355

1.	Reconciliation of profit before taxation to cash generated from operations

2022

2021

£

£

Profit before taxation

498,318

491,759

Depreciation charges

503,485

371,824

Profit on disposal of fixed assets

(486,991

)

(332,378

)

Tax paid

(10,057

)

(17,490

)

Finance costs

7,329

7,014

Finance income

(26,243

)

(7,374

)

485,841

513,355

Decrease/(increase) in stocks

95,964

(153,506

)

Decrease in trade and other debtors

80,845

2,801,204

(Decrease)/increase in trade and other creditors

(310,488

)

199,044

Cash generated from operations

352,162

3,360,097

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 30th June 2022

30.6.22

1.7.21

£

£

Cash and cash equivalents

3,260,721

3,137,355

Year ended 30th June 2021

30.6.21

1.7.20

£

£

Cash and cash equivalents

3,137,355

1,824,655

3.	Analysis of changes in net funds

At 1.7.21

Cash flow

At 30.6.22

£

£

£

Net cash

Cash at bank and in hand

3,137,355

123,366

3,260,721

3,137,355

123,366

3,260,721

Debt

Debts falling due within 1 year

(84,970

)

47,042

(37,928

)

Debts falling due after 1 year

(154,598

)

79,340

(75,258

)

(239,568

)

126,382

(113,186

)

Total

2,897,787

249,748

3,147,535

1.	Statutory information

Rowecord Holdings 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.

2.	Accounting policies

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

The group financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 June 2022.

Subsidiary undertakings are included using the acquisitions method of accounting. Under this method the group profit and loss account and statement of cashflows include the results and cashflows of subsidiaries from the date of acquisition and to the date of sale outside the group in the case of disposals of subsidiaries. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated 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.

Turnover

Turnover represents amounts chargeable, net of value added tax, in respect of building and civil engineering, scaffolding and the supply of fluid storage systems and towers, adjusted for amounts recoverable on contracts.

Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs (as defined above) as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer. Full provision is made for losses on all contracts in the year in which they are first foreseen.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Freehold property

- 1-10% straight line

Plant and machinery

- Between 50% and 10% on cost

Fixtures and fittings

- 25% on cost and 15% on cost

Motor vehicles

- 25% on cost and 20% on cost

Fixed asset investments

Fixed asset investments are stated as historical cost less provision for any diminution in value.

Investments in associates

Investments in associate undertakings are recognised at cost.

Investment property

Investment properties are recognised at fair value by valuation. The properties held for investment purposes have not been re-stated on transition to FRS102 as the directors' deemed the required adjustment to be immaterial to the financial statements.