Severn Drives & Energy Limited - Period Ending 2022-03-31

Severn Drives & Energy Limited

Contents

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

Severn Drives & Energy Limited

Company Information

Directors

M M Critchley J S Jones

Registered office

2nd Floor 65 London Road Gloucester GL1 3HF

Auditors

Hazlewoods LLP Windsor House Bayshill Road Cheltenham GL50 3AT

Severn Drives & Energy Limited

(Registration number: 05150600)
Balance Sheet as at 31 March 2022

	Note	2022  £	Unaudited 2021  £
Fixed assets
Tangible assets	4	46,549	29,383
Current assets
Stocks		207,473	29,563
Debtors	5	392,463	382,711
Cash at bank and in hand		89,016	43,906
		688,952	456,180
Creditors: Amounts falling due within one year	6	(609,723)	(522,504)
Net current assets/(liabilities)		79,229	(66,324)
Net assets/(liabilities)		125,778	(36,941)
Capital and reserves
Called up share capital		100	100
Profit and loss account		125,678	(37,041)
Total equity		125,778	(36,941)

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 22 December 2022 and signed on its behalf by:
 

M M Critchley
Director

Severn Drives & Energy Limited

Notes to the Financial Statements for the Year Ended 31 March 2022

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:
2nd Floor
65 London Road
Gloucester
GL1 3HF

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.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company. The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits can be reliably measured, and it is probable that future economic benefits will flow to the entity.

The company deem that the risks and rewards of ownership pass when products are delivered to customers and it is at this point revenue is recognised.

Critical accounting judgements and key sources of estimation uncertainty

No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.

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 those 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 revision and future periods if the revision affects both current and future periods.

Judgements

No significant judgements have been made by management in preparing these financial statements.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Severn Drives & Energy Limited

Notes to the Financial Statements for the Year Ended 31 March 2022

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.

Tangible assets

Tangible assets are stated in the balance sheet 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
Plant and machinery	20% on cost

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 debtors

Trade debtors are amounts due from customers for merchandise sold or 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.

Stocks

Stock and work in progress are valued at the lower of cost and net realisable value, after due regard fro obsolete and slow moving stocks. Net realisable value is based on selling price less anticipated costs to be completion and selling costs. Costs include all direct costs are an appropriate proportion of fixed and variable overheads.

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.

Severn Drives & Energy Limited

Notes to the Financial Statements for the Year Ended 31 March 2022

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.

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.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Severn Drives & Energy Limited

Notes to the Financial Statements for the Year Ended 31 March 2022

Financial instruments

Classification
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as trade and other receivables and payables, loans from related parties and investments in non-puttable ordinary shares.

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.

Debt instruments like loans and other receivables and payables are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms of financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and subsequently, at the present value of future payments discounted at a market rate of interest for a similar debt instrument.

 Recognition and measurement
Financial assets that are measured at cost and amortised cost 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 profit or loss. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an assets carrying value and the present value of estimated cash flows discounted at the assets original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an assets carrying amount and the best estimate, which is an approximation, of the amount that the company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount recognised in the statement of financial position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

 Impairment
At each reporting date non-financial assets not carried at fair value, such as property, plant and equipment are reviewed to determine whether there is an indication that an asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any asset or group of related assets, which is the higher of value in use and the fair value less costs to sell, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised immediately in profit or loss.

3

Staff numbers

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

	2022  No.	Unaudited 2021  No.
Average number of employees	6	4

Severn Drives & Energy Limited

Notes to the Financial Statements for the Year Ended 31 March 2022

4

Tangible assets

	Plant and machinery  £
Cost
At 1 April 2021	99,117
Additions	25,058
At 31 March 2022	124,175
Depreciation
At 1 April 2021	69,734
Charge for the year	7,892
At 31 March 2022	77,626
Carrying amount
At 31 March 2022	46,549
At 31 March 2021	29,383

5

Debtors

	2022  £	Unaudited 2021  £
Trade debtors	151,301	274,404
Amounts owed by related parties	127,589	3,367
Other debtors	98,164	95,489
Prepayments	15,409	9,451
	392,463	382,711

6

Creditors

	Note	2022  £	Unaudited 2021  £
Due within one year
Loans and borrowings	7	10,000	12,000
Trade creditors		156,398	336,976
Amounts due to related parties	9	305,109	8,797
Social security and other taxes		9,696	14,726
Outstanding defined contribution pension costs		-	3,871
Other creditors		126,517	137,884
Accrued expenses		2,003	8,250
		609,723	522,504

Severn Drives & Energy Limited

Notes to the Financial Statements for the Year Ended 31 March 2022

7

Loans and borrowings

	2022 £	Unaudited 2021 £
Current loans and borrowings
Director's loan accounts	10,000	12,000

8

Contingent liabilities

Amounts not provided for in the balance sheet

The total amount of financial commitments not included in the balance sheet is £17,500 (2021 - £26,250).

9

Related party transactions

At 31 March 2022, the company owed £10,000 and was owed £96,000 (2021 - £11,000 and owed £1,000) to a director and the son of a director respectively as director's loan accounts. The loans are interest free and there are no fixed repayment terms.

10

Parent and ultimate parent undertaking

The company is controlled by Critchley Engineering Group Limited, a company registered in England and Wales. The ultimate controlling party is M M Critchley.

11

Disclosure under Section 444(5B) CA 2006 relating to the independent auditor's report

As permitted by Section 444 CA 2006, these accounts do not contain a copy of the company’s Profit and Loss account or a copy of the Directors’ Report. Accordingly, the Independent Auditors’ Report has also been omitted.

The Independent Auditor's Report was unqualified. The corresponding figures for the year ended 31 March 2021 shown in the financial statements are derived from the financial statements prepared for that period that were not audited. The name of the Senior Statutory Auditor who signed the audit report on 22 December 2022 was Martin Howard, who signed for and on behalf of Hazlewoods LLP.