REGISTERED NUMBER: 03415558 (England and Wales)

Strategic Report,

Report of the Directors and

Financial Statements

for the Year Ended 28th February 2018

for

GENERAL ENGINEERING

(TREATMENTS) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Profit and Loss Account

7

Other 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

DIRECTORS:

Mr A P Boulton

Mr A D Varley

SECRETARY:

Mr A P Boulton

REGISTERED OFFICE:

Monometer House

Rectory Grove

Leigh on Sea

Essex

SS9 2HN

REGISTERED NUMBER:

03415558 (England and Wales)

AUDITORS:

Barrons

Chartered Accountants

& Statutory Auditors

Monometer House

Rectory Grove

Leigh on Sea

Essex

SS9 2HN

The directors present their strategic report for the year ended 28th February 2018.

The principal activity of the Company continued to be that of the surface treatment of aerospace components during the

year ended 28th February 2018.

During the year under review the Company's turnover has decreased by 24.3% to £5,585,041 (2017: £7,377,193) and

had a gross profit margin of 36.3% (2017: 45.3%). During the year a major exercise was carried out to convert the

Chromic Acid Anodise lines to Tartaric Sulphuric Anodise lines. This decision was driven by Airbus and European

REACH requirements to move away from chrome-based treatments. The process disrupted throughput and ultimately

had an adverse effect on turnover and profit. The Company now operates and complies with all REACH Regulations and

although turnover is not expected to increase dramatically, the underlying profit margin should return to historical

figures.

Overall pre-tax profit for the year was £818,840 (2017: £2,021,999).

Senior management continue to effectively monitor key performance indicators via the production of accurate and timely

monthly management accounts.

The Company continues to monitor market trends and will continue to seek new customers and opportunities within its

sector.

The Company's operations are subject to the laws governing business in general including health and safety, labour and

employment practices and other matters.

After the balance sheet date the directors made the strategic decision to dispose of the 50% investment held in GEB

Surface Treatments Limited which has now completed and sold for proceeds in excess of carrying costs.

ON BEHALF OF THE BOARD:

Mr A P Boulton - Director

23rd November 2018

The directors present their report with the financial statements of the company for the year ended 28th February 2018.

DIVIDENDS

The total distribution of dividends for the year ended 28th February 2018 will be £ 552,021 .

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1st March 2017 to the date of this

report.

Mr A P Boulton

Mr A D Varley

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Annual Report 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 judgments and accounting estimates that are reasonable and prudent

- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed

and explained in the financial statements

- prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the 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 ought to have taken

as a director in order to make himself aware of any relevant audit information and to establish that the company's

auditors are aware of that information.

AUDITORS

The auditors, Barrons, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr A P Boulton - Director

23rd November 2018

Opinion

We have audited the financial statements of General Engineering (Treatments) Limited (the 'company') for the year

ended 28th February 2018 which comprise the Profit and Loss Account, Other 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 28th February 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 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

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 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 there is a material misstatement in the financial

statements or a material misstatement of the other information. If, based on the work we have performed, we conclude

that there is a material misstatement of this other information, we are required to report that fact. We have nothing to

report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the 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.

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.

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.

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.

Russell Tillbrook FCCA (Senior Statutory Auditor)

for and on behalf of Barrons

Chartered Accountants

& Statutory Auditors

Monometer House

Rectory Grove

Leigh on Sea

Essex

SS9 2HN

23rd November 2018

TURNOVER

3

5,585,041

7,377,193

Cost of sales

3,559,629

4,037,344

GROSS PROFIT

2,025,412

3,339,849

Administrative expenses

1,363,594

1,318,406

661,818

2,021,443

Other operating income

9,984

8,400

OPERATING PROFIT

5

671,802

2,029,843

Income from participating interests

150,000

-

Interest receivable and similar income

1,077

766

151,077

766

822,879

2,030,609

Interest payable and similar expenses

6

4,039

8,610

PROFIT BEFORE TAXATION

818,840

2,021,999

Tax on profit

7

137,055

420,123

PROFIT FOR THE FINANCIAL YEAR

681,785

1,601,876

PROFIT FOR THE YEAR

681,785

1,601,876

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

681,785

1,601,876

FIXED ASSETS

Tangible assets

9

1,043,180

951,135

Investments

10

1,000

1,000

1,044,180

952,135

CURRENT ASSETS

Stocks

11

25,839

24,372

Debtors

12

1,524,156

1,784,832

Cash at bank and in hand

3,189,475

3,576,951

4,739,470

5,386,155

CREDITORS

Amounts falling due within one year

13

635,032

1,285,890

NET CURRENT ASSETS

4,104,438

4,100,265

TOTAL ASSETS LESS CURRENT LIABILITIES

5,148,618

5,052,400

CREDITORS

Amounts falling due after more than one year

14

-

(45,497

)

PROVISIONS FOR LIABILITIES

17

(95,694

)

(83,743

)

NET ASSETS

5,052,924

4,923,160

CAPITAL AND RESERVES

Called up share capital

18

99

99

Retained earnings

5,052,825

4,923,061

SHAREHOLDERS' FUNDS

5,052,924

4,923,160

The financial statements were approved by the Board of Directors on 23rd November 2018 and were signed on its behalf by:

Mr A P Boulton - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1st March 2016

99

3,834,609

3,834,708

Changes in equity

Dividends

-

(513,424

)

(513,424

)

Total comprehensive income

-

1,601,876

1,601,876

Balance at 28th February 2017

99

4,923,061

4,923,160

Changes in equity

Dividends

-

(552,021

)

(552,021

)

Total comprehensive income

-

681,785

681,785

Balance at 28th February 2018

99

5,052,825

5,052,924

Cash flows from operating activities

Cash generated from operations

1

823,870

2,545,662

Interest element of hire purchase payments paid

(4,039

)

(8,610

)

Tax paid

(420,713

)

(246,761

)

Net cash from operating activities

399,118

2,290,291

Cash flows from investing activities

Purchase of tangible fixed assets

(305,565

)

(182,128

)

Interest received

1,077

766

Dividends received

150,000

-

Net cash from investing activities

(154,488

)

(181,362

)

Cash flows from financing activities

Capital repayments in year

(80,085

)

(93,706

)

Equity dividends paid

(552,021

)

(513,424

)

Net cash from financing activities

(632,106

)

(607,130

)

(Decrease)/increase in cash and cash equivalents

(387,476

)

1,501,799

Cash and cash equivalents at beginning of year

2

3,576,951

2,075,152

Cash and cash equivalents at end of year

2

3,189,475

3,576,951

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2018

2017

£

£

Profit before taxation

818,840

2,021,999

Depreciation charges

211,292

193,942

Loss on disposal of fixed assets

2,228

-

Finance costs

4,039

8,610

Finance income

(151,077

)

(766

)

885,322

2,223,785

Increase in stocks

(1,467

)

(4,412

)

Decrease in trade and other debtors

260,676

203,253

(Decrease)/increase in trade and other creditors

(320,661

)

123,036

Cash generated from operations

823,870

2,545,662

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 28th February 2018

28.2.18

1.3.17

£

£

Cash and cash equivalents

3,189,475

3,576,951

Year ended 28th February 2017

28.2.17

1.3.16

£

£

Cash and cash equivalents

3,576,951

2,075,152

1.	STATUTORY INFORMATION

General Engineering (Treatments) Limited is a private company, limited by shares , registered in England and

Wales. The company's registered number and registered office address can be found on the Company

Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Significant judgements and estimates

In the application of the company's accounting policies, which are described in note 1, 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.

Turnover

The turnover is measured as the fair value of the consideration received or receivable, excluding discounts,

rebates, value added tax and other sales taxes. The following criteria must also be met before the revenue is

recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

-

the Company has transferred the significant risks and rewards of ownership to the buyer;

-

the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

-

the amount of revenue can be measured reliably;

-

it is probable that the Company will receive the consideration due under the transaction; and

-

the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in

accordance with the stage of completion of the contract when all of the following conditions are satisfied:

-

the amount of revenue can be measured reliably;

-

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

-

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

-

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

Tangible fixed assets

Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment

losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and

condition necessary for it to be capable of operating in the manner intended by management.

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

using either a straight line or reducing balance method, as indicated below.

Improvements to property

- 10% on cost

Plant and machinery

- 10% and 20% on cost

Fixtures and fittings

- 20% and 33% on cost

Motor vehicles

- 25% on cost

The asset's residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if

appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are

recognised in profit or loss.

Investments in associates

Investments in associate undertakings are recognised at cost.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on

the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and

attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If Stock is impaired, the carrying amount is

reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in

profit and loss.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Account,

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.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at

the date of transaction. Exchange differences are taken into account in arriving at the operating result.

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.

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments

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 money purchase pension scheme. Contributions payable to the company's pension

scheme are charged to the profit and loss account in the period to which they relate to.

Financial instruments

The Company only enters into basic financial instruments transactions that result in the recognition of financial

assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to

related parties and investments in non-puttable ordinary shares.

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 and loss.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet 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.

Debtors

Basic financial assets, including trade and other debtors, are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost

using the effective interest method, less any impairment.

Cash and cash equivalents

Cash and cash equivalents are represented by cash in hand, deposits held at call with financial institutions, and

other short-term highly liquid investments that mature in no more than three months from the date of acquisition

and that are readily convertible to known amount of cash with insignificant risk of change in value.

Creditors

Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related

parties, 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. Such instruments are subsequently carried at amortised cost using effective interest method, less any

impairment.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2018

2017

£

£

United Kingdom

4,162,782

6,120,518

Rest of the World

1,422,259

1,256,675

5,585,041

7,377,193

4.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

1,936,175

2,018,749

Social security costs

170,679

203,827

Other pension costs

21,326

4,800

2,128,180

2,227,376

The average number of employees during the year was as follows:

2018

2017

Production

60

70

Administration

9

11

69

81

2018

2017

£

£

Directors' remuneration

90,682

90,090

Directors' pension contributions to money purchase schemes

8,800

4,800

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1