Dow Group Limited - Limited company accounts 20.1
Dow Group Limited - Limited company accounts 20.1
REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Audited Financial Statements for the Year Ended 30 November 2021 |
for |
Dow Group Limited |
Dow Group Limited (Registered number: SC280783) |
Contents of the Financial Statements |
for the Year Ended 30 November 2021 |
Page |
Strategic Report | 1 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Statement of Comprehensive Income | 8 |
Balance Sheet | 9 |
Statement of Changes in Equity | 10 |
Cash Flow Statement | 11 |
Notes to the Cash Flow Statement | 12 |
Notes to the Financial Statements | 13 |
Dow Group Limited (Registered number: SC280783) |
Strategic Report |
for the Year Ended 30 November 2021 |
The directors present their strategic report for the year ended 30 November 2021. |
REVIEW OF BUSINESS |
The directors would like to report a successful trading year in which the company has generated turnover of £12,931,244, an increase of 20.4% from the £10,741,041 generated in the prior year. Profits before tax have also increased to £1,124,505 from £236,590 in the prior year. |
Gross margin has also increased from 17.4% to 21.4% in the current year. However, this does not reflect the impact of grants received in the current and prior year which predominantly relate to the support of direct wages during the Covid pandemic. When this is reevaluated, the current year margin is 21.6% whilst the prior year increases margin is 20.6%. |
At the year end the company had shareholders' funds of £2,794,626 (2020: £2,326,653) including retained earnings of £2,157,795 (2020: £1,662,139). The company has cash at the bank of £2,360,658 (2020: £2,194,277) with net current assets of £1,686,198 (2020: £827,846) and the directors believe the company's position to be satisfactory. |
Dow Group Limited (Registered number: SC280783) |
Strategic Report |
for the Year Ended 30 November 2021 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The principal risks and uncertainties that could impact the company's performance and our mitigating activities: |
Trading environment |
Impact on sales, margins, costs, profit and cash of: |
Economic conditions - the business is directly affected by the construction industry which is cyclical and typically lags behind the general economic cycle by 12 and 24 months. Mitigating activities include prudent management through the different phases of the economic cycle, achieved by the use of a flexible business model. We aim to have a sound capital structure and stringent financial management in recognition of the cyclical nature of our market and to be able to withstand market shocks. |
Competitor activity - in an already competitive market the company faces increased competition from large national competitors and smaller local operators which could result in a reduced market share and lower revenue. Mitigating activities include the regular monitoring of our market share and the performance of our competitors. We continue to create a commercial advantage by consistently providing the highest level of service at a price which offers value to our customers. We also aim to excel in areas that provide barriers to entry to newcomers and by differentiation of service, for example, avoidance of landfill through the process of Refuse Derived Fuels. |
Health and safety/environmental impact - compliance with laws and regulations governing occupational health and safety matters and the wider environment is essential to ensure the safety of employees, the public and the environment and avoid the risk of reputational damage to the company. Mitigating activities include ensuring that we have adequate insurance cover and maintaining and updating appropriate health and safety and environmental policies. We provide induction training for new staff and regular refresher training for existing staff to reinforce the policies and ensure a safe working environment. We also offer a programme of support to customers to allow them to fulfil their responsibilities to their own workforce when using our equipment. |
Business strategy |
We face a number of risks in the environment in which we operate as there are many competitors in this sector. We aim to manage and monitor these risks and any factors which could impact our plans for long-term sustainable growth of the company. We recognise that risk is inherent in all business activities and must be balanced when assessing returns. Successful management of these risks is therefore key to accomplishing our strategic objectives and the long-term sustainable growth of the business. |
Management and staff |
Key risks would be reliance on key personnel along with the availability and retention of adequately qualified staff. Mitigating activities include succession planning, commitment to open communication with staff and monitoring employee satisfaction. Internal and external training is also available for all staff. Retention of staff is paramount to our business goals and we focus on this to ensure continuity, efficient use of resources and increased productivity to achieve the maximum profit. |
ON BEHALF OF THE BOARD: |
Dow Group Limited (Registered number: SC280783) |
Report of the Directors |
for the Year Ended 30 November 2021 |
The directors present their report with the financial statements of the company for the year ended 30 November 2021. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of the provision of waste management services. |
DIVIDENDS |
The total distribution of dividends for the year ended 30 November 2021 will be £358,000. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 December 2020 to the date of this report. |
Other changes in directors holding office are as follows: |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
Dow Group Limited (Registered number: SC280783) |
Report of the Directors |
for the Year Ended 30 November 2021 |
AUDITORS |
Drummond Laurie CA are deemed to be reappointed under section 487(2) of the Companies Act 2006. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Dow Group Limited |
Opinion |
We have audited the financial statements of Dow Group Limited (the 'company') for the year ended 30 November 2021 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 30 November 2021 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Dow Group Limited |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, 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. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the 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. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. |
Based on our understanding of the company, we identified that the principal risks of non-compliance with laws and regulations related to fraudulent manipulation of the financial statements, including the risk of override of controls, to reduce profits and tax liabilities. We determined that the most likely method of manipulation would be the posting of inappropriate journal entries. Audit procedures performed by the audit engagement team consisted of a review of large and unusual journal entries, challenging assumptions and judgements made by management in significant accounting estimates, discussions with management related to known or suspected instances of non-compliance with laws and regulations, review of Board minutes where available, and an evaluation of management controls designed to prevent and detect irregularities. |
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations or through collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Dow Group Limited |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditor |
Unit 5 |
Gateway Business Park |
Beancross Road |
Grangemouth |
FK3 8WX |
Dow Group Limited (Registered number: SC280783) |
Statement of Comprehensive Income |
for the Year Ended 30 November 2021 |
30.11.21 | 30.11.20 |
Notes | £ | £ |
TURNOVER |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
1,141,927 | (45,325 | ) |
Other operating income |
OPERATING PROFIT | 4 |
Interest payable and similar expenses | 5 | ( |
) | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 6 | ( |
) | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Prior year adjustment |
TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT |
Dow Group Limited (Registered number: SC280783) |
Balance Sheet |
30 November 2021 |
30.11.21 | 30.11.20 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 8 |
CURRENT ASSETS |
Stocks | 9 |
Debtors | 10 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 11 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
12 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 16 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 17 |
Revaluation reserve | 18 |
Other reserves | 18 |
Retained earnings | 18 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
Dow Group Limited (Registered number: SC280783) |
Statement of Changes in Equity |
for the Year Ended 30 November 2021 |
Called up |
share | Retained | Revaluation | Other | Total |
capital | earnings | reserve | reserves | equity |
£ | £ | £ | £ | £ |
Balance at 1 December 2019 |
Prior year adjustment | - | - | - |
As restated |
Changes in equity |
Dividends | - | ( |
) | - | - | ( |
) |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 30 November 2020 |
Changes in equity |
Dividends | - | ( |
) | - | - | ( |
) |
Total comprehensive income | - | ( |
) |
Balance at 30 November 2021 |
Dow Group Limited (Registered number: SC280783) |
Cash Flow Statement |
for the Year Ended 30 November 2021 |
30.11.21 | 30.11.20 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest element of hire purchase payments paid |
( |
) |
( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
New loans in year |
Loan repayments in year | ( |
) |
Capital repayments in year | ( |
) | ( |
) |
Amount introduced by directors | 158,781 | - |
Amount withdrawn by directors | - | (43,602 | ) |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
Increase in cash and cash equivalents |
Cash and cash equivalents at beginning of year |
2 |
1,323,896 |
Cash and cash equivalents at end of year | 2 | 2,360,658 | 2,194,277 |
Dow Group Limited (Registered number: SC280783) |
Notes to the Cash Flow Statement |
for the Year Ended 30 November 2021 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
30.11.21 | 30.11.20 |
£ | £ |
Profit before taxation |
Depreciation charges |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Finance costs | 47,315 | 53,994 |
1,809,672 | 967,240 |
Increase in stocks | ( |
) | ( |
) |
(Increase)/decrease in trade and other debtors | ( |
) |
(Decrease)/increase in trade and other creditors | ( |
) |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 30 November 2021 |
30.11.21 | 1.12.20 |
£ | £ |
Cash and cash equivalents | 2,360,658 | 2,194,277 |
Year ended 30 November 2020 |
30.11.20 | 1.12.19 |
£ | £ |
Cash and cash equivalents | 2,194,277 | 1,323,896 |
3. | ANALYSIS OF CHANGES IN NET FUNDS/(DEBT) |
Other |
non-cash |
At 1.12.20 | Cash flow | changes | At 30.11.21 |
£ | £ | £ | £ |
Net cash |
Cash at bank | 2,194,277 | 166,381 | 2,360,658 |
2,194,277 | 2,360,658 |
Debt |
Finance leases | (1,298,119 | ) | 771,338 | - | (1,569,729 | ) |
Debts falling due |
within 1 year | - | (49,564 | ) | - | (49,564 | ) |
Debts falling due |
after 1 year | - | (288,111 | ) | - | (288,111 | ) |
(1,298,119 | ) | 433,663 | - | (1,907,404 | ) |
Total | 896,158 | 600,044 | - | 453,254 |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements |
for the Year Ended 30 November 2021 |
1. | STATUTORY INFORMATION |
Dow Group Limited is a private company, limited by shares, domiciled in Scotland, registration number SC280783. The registered office is 23 Lenziemill Road, Lenziemill Industrial Estate, Cumbernauld, G67 2RL. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Turnover |
Waste management |
Turnover includes net invoiced sales of waste management services, excluding value added tax. Sales are recognised at the point at which the service is complete. |
Construction contracts |
Turnover includes the value of the construction services supplied by the company in the year, excluding value added tax. Turnover on long-term contracts is recognised at the appropriate stage of completion and is assessed on a contract by contract basis. |
Tangible fixed assets and depreciation |
Freehold property | - |
Short leasehold | - |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Tangible fixed assets are stated at cost less depreciation. Cost represent purchase price together with any incidental costs of acquisition. |
The directors have considered the residual value of all tangible fixed assets to be immaterial and therefore all tangible fixed assets are depreciated to nil value. |
No depreciation has been provided on freehold property as this is currently land and assets under the course of construction. |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost is represented by purchase price. |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either 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. |
Financial assets |
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. |
If transaction costs are immaterial and the credit period is short, amortised cost is equal to the nominal value less any allowance for credit losses. Amortised interest is recognised as Interest income within the Income Statement. |
Where loans are provided interest-free or below market rate, the market value on initial recognition is required to be estimated by discounting the loan amount to the present value of future payments using an equivalent rate of a similar instrument. |
Financial liabilities |
Short term trade 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. |
If transaction costs are immaterial and the credit period is short, amortised cost is equal to the nominal value. The amortisation of financial liabilities is recognised as an Interest expense within the Income Statement. |
Where loans are provided interest-free or below market rate, the market value on initial recognition is required to be estimated by discounting the loan amount to the present value of future payments using an equivalent rate of a similar instrument. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
2. | ACCOUNTING POLICIES - continued |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Provisions |
Provisions are recognised when the company has a legal or constructive obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Provisions are discounted where the time value of money is material. |
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. |
Cash and cash equivalents |
Cash and cash equivalents include cash at bank and in hand and highly liquid interest-bearing securities with maturities of three months or less. In the cash-flow statement, cash and cash equivalents are shown net of bank overdrafts, which are included as current borrowings in liabilities on the balance sheet. |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
2. | ACCOUNTING POLICIES - continued |
Construction contracts |
The company classifies as construction contracts those contracts where the contract activity extends over more than one accounting period. Profit is recognised on construction contracts if the final outcome can be assessed with reasonable certainty, by including in the profit and loss account turnover and related costs as contract activity progresses. Turnover is calculated as total costs to date plus expected gross markup for that contract. Where the amount recognised as turnover exceeds the payments on account received and receivable in respect of that contract, the balance is included in debtors as amounts recoverable on contracts. Retentions and payments on account receivable are included in trade debtors. Payments on account received in excess of the value of work done are included in creditors. |
Significant estimates and judgements |
The preparation of financial statements required management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and assumptions are reviewed on an ongoing basis and revisions to estimates are recognised in the period in which the estimate is revised and in any future periods affected. The following are key estimates and judgements: |
a) Accounting for construction contracts |
The company estimates the outcome of its construction contracts. This is normally measured by total costs incurred to date plus expected markup for that contract. Estimated markups are based on management's detailed budgets and projections. Where management judge that the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. |
b) Bad debt provisions |
The company regularly reviews its sales ledger to identify any debtors which will potentially not be paid. The amounts not expected to be received are then provided for in the accounts to be prudent. |
Depreciation and provisions are also key estimates and judgements which are detailed in other accounting policies. |
3. | EMPLOYEES AND DIRECTORS |
30.11.21 | 30.11.20 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
30.11.21 | 30.11.20 |
Directors | 2 | 2 |
Management and admin | 16 | 18 |
Plant operators, drivers and depot staff | 50 | 50 |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
3. | EMPLOYEES AND DIRECTORS - continued |
30.11.21 | 30.11.20 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
4. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
30.11.21 | 30.11.20 |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Auditors' remuneration |
5. | INTEREST PAYABLE AND SIMILAR EXPENSES |
30.11.21 | 30.11.20 |
£ | £ |
Hire purchase |
6. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
30.11.21 | 30.11.20 |
£ | £ |
Current tax: |
UK corporation tax | ( |
) |
Over/under provision | 7,812 | - |
Total current tax | ( |
) |
Deferred tax |
Tax on profit |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
6. | TAXATION - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
30.11.21 | 30.11.20 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2020 - |
Effects of: |
Expenses not deductible for tax purposes |
Income not taxable for tax purposes | ( |
) |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Adjustments to tax charge in respect of previous periods |
Deferred tax movement | 239,026 | 95,710 |
Total tax charge | 298,532 | 48,439 |
7. | DIVIDENDS |
30.11.21 | 30.11.20 |
£ | £ |
Ordinary shares of £1 each |
Final |
8. | TANGIBLE FIXED ASSETS |
Freehold | Short | Plant and |
property | leasehold | machinery |
£ | £ | £ |
COST OR VALUATION |
At 1 December 2020 |
Additions |
Disposals | ( |
) |
At 30 November 2021 |
DEPRECIATION |
At 1 December 2020 |
Charge for year |
Eliminated on disposal | ( |
) |
At 30 November 2021 |
NET BOOK VALUE |
At 30 November 2021 |
At 30 November 2020 |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
8. | TANGIBLE FIXED ASSETS - continued |
Fixtures |
and | Motor |
fittings | vehicles | Totals |
£ | £ | £ |
COST OR VALUATION |
At 1 December 2020 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) |
At 30 November 2021 |
DEPRECIATION |
At 1 December 2020 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) |
At 30 November 2021 |
NET BOOK VALUE |
At 30 November 2021 |
At 30 November 2020 |
Included in cost or valuation of land and buildings is freehold land of £ 158,998 (2020 - £ 158,998 ) which is not depreciated. |
Included within freehold property is £145,666 (2020: £47,276) of assets under construction at the year end. |
Cost or valuation at 30 November 2021 is represented by: |
Freehold | Short | Plant and |
property | leasehold | machinery |
£ | £ | £ |
Valuation in 2015 | - | - | 276,829 |
Cost | 304,664 | 26,136 | 4,019,848 |
304,664 | 26,136 | 4,296,677 |
Fixtures |
and | Motor |
fittings | vehicles | Totals |
£ | £ | £ |
Valuation in 2015 | - | - | 276,829 |
Cost | 63,719 | 2,342,640 | 6,757,007 |
63,719 | 2,342,640 | 7,033,836 |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
8. | TANGIBLE FIXED ASSETS - continued |
If plant and machinery had not been revalued it would have been included at the following historical cost: |
30.11.21 | 30.11.20 |
£ | £ |
Cost | 600,000 | 600,000 |
Aggregate depreciation | 600,000 | 600,000 |
Plant and machinery was valued on an open market basis on 11 December 2014 by EMS Environmental Marketing Solutions Ltd . |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Plant and | Motor |
machinery | vehicles | Totals |
£ | £ | £ |
COST OR VALUATION |
At 1 December 2020 |
Additions |
Transfer to ownership | 839,918 | (158,140 | ) | 681,778 |
At 30 November 2021 |
DEPRECIATION |
At 1 December 2020 |
Charge for year |
Transfer to ownership | 615,163 | (269,460 | ) | 345,703 |
At 30 November 2021 |
NET BOOK VALUE |
At 30 November 2021 |
At 30 November 2020 |
9. | STOCKS |
30.11.21 | 30.11.20 |
£ | £ |
Raw materials |
10. | DEBTORS |
30.11.21 | 30.11.20 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Amounts owed by related parties |
Amounts recoverable on contract |
Other debtors |
Prepayments and accrued income |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
10. | DEBTORS - continued |
30.11.21 | 30.11.20 |
£ | £ |
Amounts falling due after more than one year: |
Amounts owed by related parties |
Aggregate amounts |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
30.11.21 | 30.11.20 |
£ | £ |
Bank loans and overdrafts (see note 13) |
Hire purchase contracts (see note 14) |
Trade creditors |
Amounts owed to related parties | 39,995 | 10,847 |
Tax |
Social security and other taxes |
VAT | 171,879 | 226,193 |
Other creditors |
Directors' current accounts | 320,000 | 161,219 |
Accruals and deferred income |
12. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
30.11.21 | 30.11.20 |
£ | £ |
Bank loans (see note 13) |
Hire purchase contracts (see note 14) |
13. | LOANS |
An analysis of the maturity of loans is given below: |
30.11.21 | 30.11.20 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
Amounts falling due in more than five years: |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
13. | LOANS - continued |
30.11.21 | 30.11.20 |
£ | £ |
Amounts falling due in more than five years: |
Repayable by instalments |
Bank loans more 5 yr by instal | 51,669 | - |
In September 2021 the company obtained a £350,000 loan through the Coronavirus Business Interruption Loan Scheme from Close Brothers. Capital repayments are made in 72 monthly installments from September 2021 with interest charged at 3.5% from September 2022. |
14. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
30.11.21 | 30.11.20 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable operating | leases |
30.11.21 | 30.11.20 |
£ | £ |
Within one year |
15. | SECURED DEBTS |
The following secured debts are included within creditors: |
30.11.21 | 30.11.20 |
£ | £ |
Hire purchase contracts | 1,569,729 | 1,298,119 |
Hire purchase contracts are secured on the assets to which they relate. |
16. | PROVISIONS FOR LIABILITIES |
30.11.21 | 30.11.20 |
£ | £ |
Deferred tax | 448,521 | 209,495 |
Deferred |
tax |
£ |
Balance at 1 December 2020 |
Provided during year |
Balance at 30 November 2021 |
Dow Group Limited (Registered number: SC280783) |
Notes to the Financial Statements - continued |
for the Year Ended 30 November 2021 |
17. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 30.11.21 | 30.11.20 |
value: | £ | £ |
Ordinary | £1 | 100 | 100 |
18. | RESERVES |
Retained | Revaluation | Other |
earnings | reserve | reserves | Totals |
£ | £ | £ | £ |
At 1 December 2020 | 2,326,553 |
Profit for the year |
Dividends | ( |
) | ( |
) |
Transfer | 27,683 | (27,683 | ) | - | - |
At 30 November 2021 | 2,794,526 |
For a number of specific assets, the company operates a policy of self insurance due to restrictively high quoted costs. The directors consider it prudent to allocate a proportion of reserves to cover potential repairs or replacement of these assets due to unexpected breakdown or damage. |
19. | RELATED PARTY DISCLOSURES |
30.11.21 | 30.11.20 |
£ | £ |
Sales |
Purchases |
Amount due from related party |
Amount due to related party |
30.11.21 | 30.11.20 |
£ | £ |
Rent payable |
Amount due to related party |
20. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party is the Board of Directors. |