AMEON_LIMITED - Accounts
AMEON_LIMITED - Accounts
The directors present the strategic report for the year ended 31 March 2018.
The company specialises in the provision of mechanical and electrical engineering services for construction projects in both the private and public sectors.
The majority of the company's activities are organised into five divisions:
- major mechanical and electrical contracts;
- maintenance contracts;
- mechanical small works contracts;
- electrical installations small works contracts;
- renewables contracts.
We are an environmentally conscious organisation, committed to the promotion of green technologies and their application in the industrial, commercial and domestic markets, as a way of reducing society's reliance on fossil fuels. Our services in the fields of renewable and low-carbon technologies reflect the many facets of renewable resource harvesting as a way of satisfying, in a sustainable way, the energy demands of the future.
The company's credentials include registered membership of or accreditation by, the following associations and industry bodies:
- Warranty & Bond Certificate of Insurance
- Constructionline UK - register of pre-qualified construction services
- CHAS (Construction Health & Safety Awareness Scheme) Accredited Contractor
- Building Engineering Services Association (BESA)
- Gas Safe Approved
- ISO 9001:2015 Quality Management System
- ISO 14001:2015 Environmental Management System
- OHSAS 18001:2007 Health & Safety Management System
Principal risks and uncertainties
We have set out below a number of risk factors that we believe could cause our actual future results to differ materially from expected results. However, other factors could adversely affect the results and so the factors set out below should not be considered to be a complete set of all potential risks and uncertainties.
Business conditions and the general economy
The profitability of the company could be adversely affected by a worsening of general economic conditions in the United Kingdom. Whilst a short term worsening in economic conditions in the United Kingdom should not significantly adversely impact profitability, a sustained downturn over a number of years would likely impact the level of construction activity in the economy and therefore potentially impact the company’s turnover and profitability.
Commercial risk
The company trades with a number of key customers, the loss of any of which could cause an impact on future trading. The company works closely with its key customers to maintain relationships as well as ensuring the highest level of quality is delivered across all its operations.
Compliance risk
The company has to meet numerous standards in its construction operations. The failure to comply with such standards could significantly damage the company’s reputation and potentially have a financial impact if uninsured financial claims arose due to non-compliance. The company operates quality management systems across all its construction operations to ensure the highest standards are met with continuous training and development of our site staff.
The company derives income from a variety of customers. The failure of a large customer could materially impact on the company’s financial position. It is the company's policy that all customers who wish to trade on credit terms are subject to credit vetting procedures. In addition, receivable balances are monitored on an ongoing basis to ensure potential issues are flagged at an early stage.
Turnover for the year ended 31 March 2018 fell to £24.26m compared with the exceptional level of £37.32m the previous year. Economic uncertainty, partly accountable to a lull in tendering following the Brexit vote led to a decline in our order book. In addition, Carillion, a key customer, entered compulsory liquidation during the year. The full financial impact of this has been recognised in these financial statements which has contributed to the fall in turnover and operating profit. However, we are seeing promising signs in respect of order levels and expect turnover for the year ending 31 March 2019 to reach £30m with positive indicators of secured turnover for the years ending 31 March 2020 and beyond. We will continue to strive to ensure jobs are carried out as efficiently as possible and keep control of overhead costs. Operating profit for the year fell to £1.70m compared to £4.23m the previous year.
| 2018 £ | 2017 £ |
Turnover | 24,260,673 | 37,320,649 |
Gross profit | 4,001,750 | 6,912,199 |
Operating profit | 1,695,653 | 4,230,033 |
Shareholders funds | 4,402,171 | 4,298,073 |
We consider a further key performance indicator to be our level of repeat business, afforded from high levels of customer service. We strive to offer the highest levels of quality and it is from this which has led us to continue to build on relationships with current customers and develop relationships with new customers.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2018.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,280,000. The directors do not recommend payment of a further dividend.
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
give a true and fair view of the state of the company's affairs as at 31 March 2018 and of its profit for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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 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.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.
Ameon Limited is a private company limited by shares incorporated in England and Wales. The registered office is Olympic Court, Boardmans Way, Blackpool, FY4 5GU.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Ameon Holdings Limited. These consolidated financial statements are available from Companies House, Crown Way, Cardiff, CF14 3UZ.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as prepayments provided it is probable they will be recovered.
Amounts recoverable on long term contracts, which are included in debtors, are stated at the net sales value of the work done after provision for contingencies and anticipated future losses on contracts, less amounts received as progress payments on account. Excess progress payments are included in creditors as payments on account. Pre-contract costs incurred before it is virtually certain that a contract will be awarded are charged to the profit and loss account. Once virtually certain of contract award, costs are held as amounts recoverable on contracts and form part of the accounting for the contract as a whole.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The fair value of equity-settled share based payments to employees is determined at the date of grant and is expensed on a straight-line basis over the vesting period based on the company’s estimate of shares or options that will eventually vest.
For granted options evaluated on non-market conditions or with no performance criteria, an expense is ultimately only recognised for options which vest. Where an option has a performance criteria, the cost of the option is recognised irrespective of whether the option vests unless an employee leaves during the vesting period. At each balance sheet date, the cumulative expense is calculated representing the extent to which the vesting period has expired and management's best estimate of the number of equity instruments that will ultimately vest. The movement in cumulative expense since the previous balance sheet date is recognised in the profit and loss account, with a corresponding entry in equity.
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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Determining the expected profit on a contract by contract basis requires an estimation of the expected outcome of each contract. Each contract is reviewed each quarter by management for the expected final profit margin. There is not expected to be a material difference between the profit margin estimated and the profit margin achieved, except for unforeseen circumstances that happen after the reporting date.
An analysis of the company's turnover is as follows:
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2017 - 5).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Finance lease payments represent rentals payable by the company for certain motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Finance leases are secured over the assets to which they relate.
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Of the deferred tax liability, a total of £71 is expected to reverse in the next 12 months.
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. At the year end, contributions payable to the fund that are included in creditors totalled £6,408 (2017: £5,907).
On 20 June 2006 the company established an EMI scheme for key employees and granted the following options, all of which relate to B Ordinary Shares in the parent company:
50,000 options which may be exercised at any time (30,000 of these options were exercised during the year ended 31 March 2007, with a further 16,000 exercised during the year ended 31 March 2016 and the remaining 4,000 were forfeited);
6,000 options which may only be exercised upon sale of the company;
Up to 65,000 share options which may only be exercised upon sale of the company. The number of these options which could be exercised depended on the performance of the company over the 5 year period from 1 April 2006 to 31 March 2011. Upon completion of this 5 year period, the number of options which could be exercised was 16,250. The other 48,750 share options were forfeited. A further 8,250 were forfeited in the year ended 31 March 2016.
All the above options are considered to vest immediately and have been valued using a Black-Scholes model. All options are to be exercised at a price of £1 per share and there is no expiry date for the options granted.
The following table illustrates the number and exercise prices of, and movements in, shares under option during the year:
The weighted average share price at the date of exercise for share options exercised during the year was £1 (2017 - £1).
Leases are held by the company in respect of the building premises the company operates from, a number of vehicles and various office equipment. Each lease is negotiated on a case by case basis.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year the company entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
An intercompany debenture is in place between Ameon Limited, Ameon Group Limited and Ameon Holdings Limited in respect of borrowings from the group's bankers and a director of each company. At the balance sheet date, group borrowings outstanding from these parties totalled £100,000 (2017:£700,000).
The company has taken advantage of the exemption conferred by Section 1 FRS102 from disclosing transactions covered by Section 33 FRS102, namely any entered into between two or more members of the group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
Mr R C Lawson's director's loan account with the company was overdrawn at 1 April 2017 by £2,192 and the overdrawn balance at 31 March 2018 was £3,045. During this period, personal expenditure totalling £4,991 was met on behalf of Mr R C Lawson. During the same period, cash repayments totalling £4,138 were received. During the period, the maximum overdrawn balance on the loan was £3,899.
During the previous year, Mr R C Lawson's director's loan account with the company was overdrawn on 1 April 2016 by £7,434 and the overdrawn balance at 31 March 2017 was £2,192. During this period, personal expenditure totalling £3,076 was met on behalf of Mr R C Lawson. During the same period, cash repayments totalling £8,318 were received. During the period, the maximum overdrawn balance on the loan was £7,434.
Mr A W Sutton's director's loan account with the company was overdrawn at 1 April 2017 by £4,674 and the overdrawn balance at 31 March 2018 was £3,688. During this period, personal expenditure totalling £3,688 was met on behalf of Mr A W Sutton. During the same period, cash repayments totalling £4,674 were received. During the period, the maximum overdrawn balance on the loan was £7,825.
During the previous year, Mr A W Sutton's director's loan account with the company was overdrawn at 1 April 2016 by £1,512 and the overdrawn balance at 31 March 2017 was £4,674. During this period, personal expenditure totalling £4,674 was met on behalf of Mr A W Sutton. During the same period, cash repayments totalling £1,512 were received. During the period, the maximum overdrawn balance on the loan was £6,186.
Mr R Bunce’s director's loan account with the company was overdrawn at 1 April 2017 by £781 and the overdrawn balance at 31 March 2018 was £2,155. During this period, personal expenditure totalling £9,591 was met on behalf of Mr R Bunce. During the same period, cash repayments totalling £8,217 were received. During the period, the maximum overdrawn balance on the loan was £2,431.
During the previous year, Mr R Bunce's director's loan account with the company was overdrawn at 1 April 2016 by £103 and the overdrawn balance at 31 March 2017 was £781. During this period, personal expenditure totalling £5,739 was met on behalf of Mr R Bunce. During the same period, cash repayments totalling £5,061 were received. During the period, the maximum overdrawn balance on the loan was £1,318.
Mr M A Court’s director’s loan account with the company was overdrawn at 1 April 2017 by £1,151 and the overdrawn balance at 31 March 2018 was £155. During this period, expenditure totalling £155 was met on behalf of Mr M A Court. During the same period, cash repayments totalling £1,151 were received. During the period, the maximum overdrawn balance on the loan was £1,306.
During the previous year, Mr M A Court’s director’s loan account with the company became overdrawn on 10 August 2016 and the overdrawn balance at 31 March 2017 was £1,151. During this period, expenditure totalling £1,151 was met on behalf of Mr M A Court. During the period, the maximum overdrawn balance on the loan was £1,151.
All of the loan accounts are repayable on demand and no interest has been charged.
The company's ultimate parent company is Ameon Holdings Limited, a company registered in England and Wales. There is no single controlling party of that company.
The immediate parent company is Ameon Group Limited.
The largest and smallest group for which consolidated financial statements are prepared is the group headed by Ameon Holdings Limited. Copies of the consolidated financial statements can be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.