ACCOUNTS - Final Accounts

Operating loss

The operating loss is stated after charging:

DALES 2002 LIMITED - Company Information

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Registered number: SC234880

DALES 2002 LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017


DALES 2002 LIMITED

COMPANY INFORMATION

Directors	G A Mackie
	W Duncan
	N Mackie
	J B Duncan


Company secretary	Masson Glennie LLP


Registered number	SC234880


Registered office	Broad House
	Broad Street
	Peterhead
	AB42 1HY


Independent auditors	Anderson Anderson & Brown Audit LLP
	Statutory Auditor
	Kingshill View
	Kingswells
	Aberdeen
	AB15 8PU


DALES 2002 LIMITED

CONTENTS

	Page
Group strategic report	1
Directors' report	2
Directors' responsibilities statement	3
Independent auditors' report	4 - 6
Consolidated statement of comprehensive income	7
Consolidated balance sheet	8
Company balance sheet	9 - 10
Consolidated statement of changes in equity	11
Company statement of changes in equity	11
Consolidated Statement of cash flows	12
Notes to the financial statements	13 - 28


DALES 2002 LIMITED

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2017

Introduction

The principal activity of the group is that of the fabrication of materials and the provision of engineering
services to the energy industry.

Business review

The directors are disappointed with the results for the year which are attributed to the continuing difficult trading conditions in the sector.
The external commercial environment is expected to remain competitive in 2018; however the directors are optimistic with regards to the future.

Principal risks and uncertainties

The directors have considered the principal risks and uncertainties to be associated with the global oil and gas market where changes in political and operational landscapes could impact favourably or otherwise upon business and as such are continually monitoring new opportunities.

Financial key performance indicators

The directors consider turnover and gross profit to be key performance indicators and monitor these on an ongoing basis.

This report was approved by the board and signed on its behalf.

G A Mackie

Director

Date: 30 August 2018

Page 1


DALES 2002 LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2017

The directors present their report and the financial statements for the year ended 31 December 2017.

Results and dividends

The profit for the year, after taxation, amounted to £6,768 (2016 - loss £43,342).

Dividends of £100,000 were paid during the year (2016 - £nil).

Directors

The directors who served during the year were:

G A Mackie

W Duncan

N Mackie

J B Duncan

Future developments

The directors feel confident that the group will be able to maintain its position in the market, however, given the current and forecasted oil price, they do suggest that next 12 months will be competitive in the market.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Auditors

The auditors, Anderson Anderson & Brown Audit LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.

G A Mackie

Director

Date: 30 August 2018

Page 2


DALES 2002 LIMITED

DIRECTORS' RESPONSIBILITIES STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2017

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and 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 for the Group's financial statements and then apply them consistently;

∙make judgments and accounting estimates that are reasonable and prudent;

∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 3


DALES 2002 LIMITED

INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF

DALES 2002 LIMITED

Opinion

We have audited the financial statements of Dales 2002 Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2017, which comprise the Group Statement of comprehensive income, the Group and Company Balance sheets, the Group Statement of cash flows, the Group and Company Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2017 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 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 United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Page 4


DALES 2002 LIMITED

INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF

DALES 2002 LIMITED (CONTINUED)

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 Auditors' 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.

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 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 Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the 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 Directors' report.

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

∙adequate accounting records have not been kept 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 Directors' responsibilities statement on page 3, 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.

Page 5


DALES 2002 LIMITED

INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF

DALES 2002 LIMITED (CONTINUED)

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.

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 Auditors' 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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Derek Mair (Senior statutory auditor)

for and on behalf of

Anderson Anderson & Brown Audit LLP

Statutory Auditor

Kingshill View

Kingswells

Aberdeen

AB15 8PU

11 September 2018

Page 6


DALES 2002 LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2017

	2017	2016
Note	£	£


Turnover		11,025,136	9,258,039
Cost of sales		(8,320,291)	(7,016,445)
Gross profit		2,704,845	2,241,594
Administrative expenses		(2,731,348)	(2,393,711)
Operating loss		(26,503)	(152,117)
Interest receivable and similar income	9	51,212	43,926
Profit/(loss) before taxation		24,709	(108,191)
Tax on profit/(loss)	10	(17,941)	64,849
Profit/(loss) for the year		6,768	(43,342)

There were no recognised gains and losses for 2017 or 2016 other than those included in the consolidated statement of comprehensive income.

The notes on pages 13 to 28 form part of these financial statements.

Page 7


DALES 2002 LIMITED REGISTERED NUMBER:SC234880

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2017

		2017		2016
Note		£		£

Fixed assets
Tangible assets	12		2,556,397		2,651,401
			2,556,397		2,651,401
Current assets
Stocks	14	827,495		1,052,493
Debtors: amounts falling due after more than one year	15	250,000		250,000
Debtors: amounts falling due within one year	15	1,658,193		1,820,380
Cash at bank and in hand	16	5,202,314		5,868,353
		7,938,002		8,991,226
Creditors: amounts falling due within one year	17	(799,926)		(1,851,404)
Net current assets			7,138,076		7,139,822
Total assets less current liabilities			9,694,473		9,791,223
Provisions for liabilities
Deferred taxation		(117,011)		(120,529)
			(117,011)		(120,529)
Net assets			9,577,462		9,670,694

Capital and reserves
Called up share capital	20	50,000	50,000
Profit and loss account		9,527,462	9,620,694
Equity attributable to owners of the parent Company		9,577,462	9,670,694

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

G A Mackie

Director

Date: 30 August 2018

Page 8


DALES 2002 LIMITED REGISTERED NUMBER:SC234880

COMPANY BALANCE SHEET

AS AT 31 DECEMBER 2017

		2017		2016
Note		£		£

Fixed assets
Tangible assets	12		2,079,279		2,128,971
Investments	13		1,257,072		1,257,072
			3,336,351		3,386,043
Current assets
Debtors: amounts falling due within one year	15	1,721		-
Cash at bank and in hand	16	12,880		28,709
		14,601		28,709
Creditors: amounts falling due within one year	17	(2,566,785)		(2,588,972)
Net current liabilities			(2,552,184)		(2,560,263)
Total assets less current liabilities			784,167		825,780

Provisions for liabilities
Deferred taxation	19	(48,789)		(47,174)
			(48,789)		(47,174)
Net assets excluding pension asset			735,378		778,606
Net assets			735,378		778,606

Capital and reserves
Called up share capital	20		50,000		50,000
Profit and loss account brought forward		728,606		617,990
Profit for the year		56,772		110,616
Dividends		(100,000)		-
Profit and loss account carried forward			685,378		728,606
			735,378		778,606

Page 9


DALES 2002 LIMITED REGISTERED NUMBER:SC234880

COMPANY BALANCE SHEET (CONTINUED)

AS AT 31 DECEMBER 2017

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

G A Mackie

Director

Date: 30 August 2018

Page 10


DALES 2002 LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2017

	Called up share capital	Profit and loss account	Equity attributable to owners of parent Company	Total equity
	£	£	£	£
At 1 January 2016	50,000	9,664,036	9,714,036	9,714,036

Loss for the year	-	(43,342)	(43,342)	(43,342)

At 1 January 2017	50,000	9,620,694	9,670,694	9,670,694

Profit for the year	-	6,768	6,768	6,768
Dividends: Equity capital	-	(100,000)	(100,000)	(100,000)
At 31 December 2017	50,000	9,527,462	9,577,462	9,577,462

The notes on pages 13 to 28 form part of these financial statements.

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2017

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 January 2016	50,000	617,990	667,990

Profit for the year	-	110,616	110,616

At 1 January 2017	50,000	728,606	778,606

Profit for the year	-	56,772	56,772
Dividends: Equity capital	-	(100,000)	(100,000)
At 31 December 2017	50,000	685,378	735,378

The notes on pages 13 to 28 form part of these financial statements.

Page 11


DALES 2002 LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2017

			2017	2016
			£	£

Cash flows from operating activities
Profit for the financial year	6,768	(43,342)
Adjustments for:
Depreciation of tangible assets	143,963	147,108
Loss on disposal of tangible assets	(228)	-
Decrease/(increase) in stocks	224,998	(155,127)
Interest received	(51,212)	(43,926)
Taxation charge	17,941	(64,849)
Decrease/(increase) in debtors	107,955	(130,459)
(Decrease)/increase in creditors	(1,073,045)	914,946
Taxation received/(paid)	54,340	(46,482)
Net cash generated from operating activities	(568,520)	577,869
Cash flows from investing activities
Purchase of tangible fixed assets	(49,231)	(56,931)
Sale of tangible fixed assets	500	-
Interest received	51,212	43,926
Net cash from investing activities	2,481	(13,005)
Cash flows from financing activities
Dividends paid	(100,000)	-
Net cash used in financing activities	(100,000)	-
Net increase / (decrease) in cash and cash equivalents	(666,039)	564,864
Cash and cash equivalents at beginning of year	5,868,353	5,303,489
Cash and cash equivalents at the end of year	5,202,314	5,868,353

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	5,202,314	5,868,353
	5,202,314	5,868,353

The notes on pages 13 to 28 form part of these financial statements.

Page 12


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

1.	General information

Dales 2002 Limited is incorporated in Scotland. The registered office is Broad House, Broad Street, Peterhead, AB42 1HY. The principal activity of the group is that of the fabrication of materials and the provision of engineering services to the energy industry.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The following principal accounting policies have been applied:

2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

2.3

Going concern

The directors, having made due and careful enquiry are of the opinion that the company has adequate working capital to execute its operations over the next 12 months. The directors, therefore, have made an informed judgement, at the time of approving the financial statements, that there is a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. As a result, the directors have continued to adopt the going concern basis of accounting in preparing the annual financial statements.

Page 13


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

2.Accounting policies (continued)

2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

∙the amount of revenue can be measured reliably;

∙it is probable that the Group will receive the consideration due under the contract;

∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and

∙the costs incurred and the costs to complete the contract can be measured reliably.

2.5

Operating leases

Rentals paid under operating leases are charged to the Consolidated statement of comprehensive income on a straight line basis over the lease term.

2.6

Interest income

Interest income is recognised in the Consolidated statement of comprehensive income using the effective interest method.

2.7

Pensions

Defined contribution pension plan
The Group contributes to a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payments obligations.
The contributions are recognised as an expense in the statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

Page 14


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

2.Accounting policies (continued)

2.8

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Consolidated statement of comprehensive income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Freehold property	-	2% straight line
Plant & machinery	-	15% reducing balance
Motor vehicles	-	20-25% reducing balance
Office equipment	-	15% straight line

Page 15


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

2.Accounting policies (continued)

2.10

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment. Where merger relief is available, the cost of the investment in a subsidiary undertaking is measured at the nominal value of the shares issued together with the fair value of any additional consideration paid.

Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.

2.11

Stocks & Work In Progress

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
Work in progress is valued at cost less progress payments and any foreseeable losses. A prudent estimate of the profit attributable to work completed is recognised on contracts once the outcome of the contract can be assessed with reasonable certainty.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in statement of comprehensive income.

2.12

Profit recognition on long term 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 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 or there is a reasonable degree of certainty that they will be accepted. Full provision is made for losses on all contracts in the year in which they are first foreseen.
Amounts recoverable on contracts are included in debtors and represent turnover recognised in excess of payments on account. The excess of payments on accounts over the value of the work done on individual contracts is included in creditors.

2.13

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Debtors due after more than one year are measured at the present value of future payments discounted at a market rate of interest.

Page 16


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

2.Accounting policies (continued)

2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

2.15

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Consolidated statement of comprehensive income in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.

2.17

Financial instruments

The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors and loans from group companies. These are measured at amortised cost and are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

2.18

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 17


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements, requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Balance Sheet date and the amounts reported during the year for revenue and costs. However, the nature of estimation means that actual outcomes could differ from those estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The following judgements and estimates have had the most significant impact on amounts recognised in the financial statements.
Profit recognition on long term contracts
In assessing profit on long term contracts that span the period end, an estimate is required for the stage of completion on individual contracts (where the outcome can be assessed with reasonable certainty). The estimate is determined by management making use of all information available at the time, in order to make a reasonable judgement on the stage of completion and the forecast profitability of the overall contract.

Turnover

	All turnover arose within the United Kingdom.
	Turnover represents net invoiced supply of services, excluding value added tax. Turnover relates to the rendering of services.

Depreciation of tangible fixed assets	143,963	147,108
Operating lease rentals: - plant and machinery	14,284	3,402
- land and buildings	112,388	84,000

Defined contribution pension cost	217,021	61,013

6.	Auditors' remuneration
		2017	2016
		£	£

	Fees payable to the Group's auditor and its associates for the audit of the Group's annual accounts	17,500	17,500
		17,500	17,500

Page 18


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

7.	Employees
	Staff costs, including directors' remuneration, were as follows:

		Group	Group
		2017	2016
		£	£


Wages and salaries	4,462,502	3,994,707
Social security costs	486,189	431,033
Cost of defined contribution scheme	223,201	61,013
	5,171,892	4,486,753

The average monthly number of employees, including the directors, during the year was as follows:

	2017	2016
	No.	No.

Administration	26	26
Production	78	74

	104	100

Page 19


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

8.	Directors' remuneration
		2017	2016
		£	£

Directors' emoluments	363,273	318,316
Company contributions to defined contribution pension schemes	154,000	-
	517,273	318,316

	During the year retirement benefits were accruing to 2 directors (2016 - 1) in respect of defined contribution pension schemes.
	The highest paid director received remuneration of £183,353 (2016 - £158,184).
	The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2016 - £NIL).

9.	Interest receivable
		2017	2016
		£	£

Bank interest receivable

51,212

43,926

Page 20


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

Corporation tax
Current tax on profits for the year	21,459	(2,860)
Adjustments in respect of previous periods	-	(52,636)

Total current tax	21,459	(55,496)

Deferred tax
Origination and reversal of timing differences	(3,449)	(2,141)
Changes to tax rates	-	(7,212)
Adjustments in respect of prior periods	(69)	-
Total deferred tax	(3,518)	(9,353)


	Taxation on profit/(loss) on ordinary activities	17,941	(64,849)

Profit on ordinary activities before tax

24,709

(108,191)

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19.25% (2016 - 20%)	4,756	(21,638)
Effects of:
Expenses not deductible for tax purposes	4,860	8,010
Fixed asset differences	7,938	8,249
Adjustments to tax charge in respect of prior periods	(69)	(52,636)
Adjust deferred tax to average rate	456	(6,834)
Total tax charge for the year	17,941	(64,849)

Page 21


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

11.	Dividends
		2017	2016
		£	£

	Dividends paid - 'B' ordinary shares amounting to £50 (2016 - £Nil) per share.	100,000	-
		100,000	-

12.	Tangible fixed assets
	Group

	Freehold property	Plant & machinery	Motor vehicles	Office equipment	Total
	£	£	£	£	£
Cost or valuation
At 1 January 2017	2,485,284	1,327,862	167,960	92,930	4,074,036
Additions	-	17,086	12,475	19,670	49,231
Disposals	-	(10,400)	-	-	(10,400)
At 31 December 2017	2,485,284	1,334,548	180,435	112,600	4,112,867
Depreciation
At 1 January 2017	356,313	928,140	89,558	48,624	1,422,635
Charge for the year on owned assets	49,692	61,228	21,264	11,779	143,963
Disposals	-	(10,128)	-	-	(10,128)
At 31 December 2017	406,005	979,240	110,822	60,403	1,556,470
Net book value
At 31 December 2017	2,079,279	355,308	69,613	52,197	2,556,397
At 31 December 2016	2,128,971	399,722	78,402	44,306	2,651,401

Page 22


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

	Company

		Freehold property
		£
	Cost or valuation
	At 1 January 2017	2,485,284
	At 31 December 2017	2,485,284
	Depreciation
	At 1 January 2017	356,313
	Charge for the year on owned assets	49,692
	At 31 December 2017	406,005
	Net book value
	At 31 December 2017	2,079,279
	At 31 December 2016	2,128,971

Page 23


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

13.	Fixed asset investments

Subsidiary undertakings
The following were subsidiary undertakings of the Company:
Name	Class of shares	Holding	Principal activity

Dales Engineering Services Limited

Ordinary

100%

Farbrication of materials and the provision of engineering services to the energy industry

	Company

		Investments in subsidiary companies
		£
	Cost or valuation
	At 1 January 2017	1,257,072
	At 31 December 2017	1,257,072

	Net book value
	At 31 December 2017	1,257,072
	At 31 December 2016	1,257,072

14.	Stocks
		Group	Group	Company	Company
		2017	2016	2017	2016
		£	£	£	£

Raw materials and consumables	426,218	386,105	-	-
Work in progress	401,277	666,388	-	-
	827,495	1,052,493	-	-

The difference between purchase price or production cost of stocks and their replacement cost is not material.

Page 24


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

15.	Debtors
		Group	Group	Company	Company
		2017	2016	2017	2016
		£	£	£	£

Due after more than one year
Other debtors	250,000	250,000	-	-
	250,000	250,000	-	-

Group	Group	Company	Company
2017	2016	2017	2016
£	£	£	£

Due within one year
Trade debtors	1,247,909	1,567,001	-	-
Other debtors	1,721	54,232	1,721	-
Prepayments and accrued income	408,563	199,147	-	-
	1,658,193	1,820,380	1,721	-

16.	Cash and cash equivalents
		Group	Group	Company	Company
		2017	2016	2017	2016
		£	£	£	£

Cash at bank and in hand	5,202,314	5,868,353	12,880	28,709
	5,202,314	5,868,353	12,880	28,709

17.	Creditors: Amounts falling due within one year
		Group	Group	Company	Company
		2017	2016	2017	2016
		£	£	£	£

Trade creditors	320,229	902,845	-	-
Amounts owed to group undertakings	-	-	2,514,836	2,562,836
Corporation tax	21,567	-	21,459	-
Taxation and social security	401,519	389,229	16,107	16,136
Accruals and deferred income	56,611	559,330	14,383	10,000
	799,926	1,851,404	2,566,785	2,588,972

The bank holds a bond and floating charge over the assets of the company.
Cross guarantees exist with Dales Engineering Services Limited in respect of bank borrowings.

Page 25


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

18.	Financial instruments
		Group	Group	Company	Company
		2017	2016	2017	2016
		£	£	£	£

Financial assets
Financial assets measured at fair value through profit or loss	5,452,314	6,118,353	12,880	28,709
Financial assets that are debt instruments measured at amortised cost	1,582,109	1,747,280	1,721	-
	7,034,423	7,865,633	14,601	28,709

	Financial liabilities
	Financial liabilities measured at amortised cost	(376,840)	(1,462,175)	(2,529,219)	(2,572,836)

	Financial assets measured at fair value through profit or loss comprise bank balances and long term debtors.
	Financial assets measured at amortised cost comprise trade debtors, amounts owed by group undertakings, other debtors and accrued income.
	Financial liabilities measured at amortised cost comprise bank overdrafts, trade creditors, accruals and deferred income.

Page 26


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

19.	Deferred taxation
	Group

		2017
		£

	At beginning of year	(120,529)
	Charged to the profit or loss	3,518
	At end of year	(117,011)

Company

		2017
		£

	At beginning of year	(47,174)
	Charged to the profit or loss	(1,615)
	At end of year	(48,789)

The provision for deferred taxation is made up as follows:
	Group	Group	Company	Company
	2017	2016	2017	2016
	£	£	£	£

Accelerated capital allowances	(118,106)	(121,590)	(48,789)	(47,174)
Short term timing differences	1,095	1,061	-	-
	(117,011)	(120,529)	(48,789)	(47,174)

20.	Share capital
		2017	2016
		£	£

Allotted, called up and fully paid

48,000 'A' ordinary shares of £1 each	48,000	48,000
2,000 'B' ordinary shares of £1 each	2,000	2,000

	50,000	50,000

Both classes of shares rank pari passu in respect of capital distribution on winding up. The 'B' ordinary shares have no voting rights.

Page 27


DALES 2002 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

21.	Pension commitments

During the year the group made contributions to defined contribution pension schemes of £223,201 (2016 - £61,013). No balance was outstanding relating to contributions owed as at the year end. (2016- £NIL)

22.	Commitments under operating leases
	At 31 December 2017 the Group had future minimum lease payments under non-cancellable operating leases as follows:
		Group	Group
		2017	2016
		£	£


Not later than 1 year	10,718	14,287
Later than 1 year and not later than 5 years	7,160	17,878
	17,878	32,165

23.

Related party transactions

Control
Throughout the year the group was controlled by the directors.
Transactions
The group has taken advantage of the exemption conferred by the Financial Reporting Standard 102 Section 33.1A "Related Party Disclosures" from the need to disclose transactions between group entities that have been eliminated on consolidation in these consolidated financial statements, copies of which are publicly available.

Page 28