Kendall & Davies Limited - Period Ending 2020-03-31

Registration number: 02942278

Prepared for the registrar

Kendall & Davies Limited

Annual Report and Unaudited Financial Statements

for the Year Ended 31 March 2020

Kendall & Davies Limited

Contents

Company Information	1
Balance Sheet	2
Notes to the Financial Statements	3 to 8

Kendall & Davies Limited

Company Information

Directors

F M Allen C P Davies H G Davies R L Davies R Wellington

Company secretary

H G Davies

Registered office

Station Road Bourton On The Water Gloucestershire GL54 2AA

Accountants

Hazlewoods LLP  Windsor House Bayshill Road Cheltenham GL50 3AT

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Kendall & Davies Limited

(Registration number: 02942278)
Balance Sheet as at 31 March 2020

	Note	2020  £	2019  £
Fixed assets
Tangible assets	5	38,186	22,494
Current assets
Debtors	6	384,472	527,731
Cash at bank and in hand		104,056	90,891
		488,528	618,622
Creditors: Amounts falling due within one year	7	(228,434)	(476,417)
Net current assets		260,094	142,205
Total assets less current liabilities		298,280	164,699
Provisions	8	(10,241)	-
Deferred tax liabilities		(6,481)	(8,870)
Net assets		281,558	155,829
Capital and reserves
Called up share capital		1,400	1,400
Profit and loss account		280,158	154,429
Total equity		281,558	155,829

For the financial year ending 31 March 2020 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

•	The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and
•	The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 3 December 2020 and signed on its behalf by:
 

.........................................

R L Davies
Director

The notes on pages 3 to 8 form an integral part of these financial statements.
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Kendall & Davies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Station Road
Bourton On The Water
Gloucestershire
GL54 2AA

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Going concern

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern. For example, it is difficult to evaluate all of the potential implications of the current COVID-19 outbreak on the company’s trade, employees, customers, suppliers and the wider economy.

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 amounts 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.
 

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Kendall & Davies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Key sources of estimation uncertainty

Bad debt provision - Due to the nature of the business, there are high levels of trade debtors at the year end, and therefore a risk that some of these balances may be irrecoverable. A bad debt review is carried out, where debts are assessed and provided against when the recoverability of these balances is considered to be uncertain. The carrying amount is £23,653 (2019 -£31,788).

Amounts recoverable on contracts - The process of accessing amounts recoverable on contracts requires various estimates and judgements to be made. Fee earners are required to record time spent on client assignments and this is used as the basis for the amounts recoverable on contracts and work in progress estimates. A year end report of time on all assignments is circulated to fee earners to identify likely recoverable amounts. The carrying amount is £189,786 (2019 -£234,636).

Revenue recognition

Fee income represents the fair value of services provided during the year on client assignments. Fair value reflects amounts expected to be recoverable on clients based on time spent, skills provided and expenses incurred, and excludes VAT. Income is recognised as contract activity progresses and the right to consideration is secured, except where the final outcome cannot be assessed with reasonable certainty.

Income in respect of contingent fee assignments is recognised in the period when the contingent event occurs and collectability of the fee is assured.

Unbilled income on individual client assignments is included as amounts recoverable on contracts within debtors.

Corporation tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2005, has now been fully amortised.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets over their estimated useful lives as follows:

Asset class	Depreciation method and rate
Fixtures and fittings	20% on reducing balance
Computer equipment	33% on reducing balance

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Kendall & Davies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Trade debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Provisions

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

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Kendall & Davies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Financial instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
 

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Kendall & Davies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

3

Staff numbers

The average number of persons employed by the company (including directors) during the year, was as follows:

	2020  No.	2019  No.
Average number of employees	32	33

4

Intangible assets

	Goodwill  £
Cost
At 1 April 2019 and 31 March 2020	990,000
Amortisation
At 1 April 2019 and 31 March 2020	990,000
Carrying amount
At 1 April 2019 and 31 March 2020	-

5

Tangible assets

	Fixtures & fittings  £	Computer equipment  £	Total £
Cost
At 1 April 2019	34,995	59,110	94,105
Additions	24,087	-	24,087
At 31 March 2020	59,082	59,110	118,192
Depreciation
At 1 April 2019	21,631	49,980	71,611
Charge for the year	4,956	3,439	8,395
At 31 March 2020	26,587	53,419	80,006
Carrying amount
At 31 March 2020	32,495	5,691	38,186
At 31 March 2019	13,364	9,130	22,494

6

Debtors

	2020  £	2019  £
Trade debtors	107,806	185,339
Amounts recoverable on contracts	189,786	234,636
Other debtors	73,152	6,500
Prepayments	13,728	101,256
	384,472	527,731

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Kendall & Davies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

7

Creditors

Creditors: amounts falling due within one year

	Note	2020  £	2019  £
Due within one year
Loans and borrowings	9	-	46,060
Trade creditors		1,173	1,200
Directors' loan accounts		-	121,951
Social security and other taxes		96,539	97,833
Other creditors		247	64,875
Accrued expenses		18,074	22,279
Corporation tax liability		112,401	122,219
		228,434	476,417

8

Provisions

	Client claims provisions £
Additional provisions	10,241
At 31 March 2020	10,241

9

Loans and borrowings

	2020 £	2019 £
Current loans and borrowings
Bank overdrafts	-	46,060

10

Financial commitments, guarantees and contingencies

Amounts not provided for in the balance sheet

The total amount of financial commitments not included in the balance sheet is £88,927 (2019 - £112,009).

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