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COMPANY REGISTRATION NUMBER: 06348341
Makers Construction Limited
Financial Statements
31 December 2021
Makers Construction Limited
Financial Statements
Year ended 31 December 2021
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
4
Independent auditor's report to the members
6
Statement of income and retained earnings
10
Statement of financial position
11
Statement of cash flows
12
Notes to the financial statements
13
Makers Construction Limited
Officers and Professional Advisers
The board of directors
S. Lamb
S. Rooker
D. Wootton
Company secretary
S. Rooker
Registered office
Building 4
Shenstone Business Park
Lynn Lane
Shenstone
Staffordshire
WS14 OSB
Auditor
Edwards Pearson & White (Audit) Limited
Chartered Certified Accountants & statutory auditor
8 Jury Street
Warwick
CV34 4EW
Makers Construction Limited
Strategic Report
Year ended 31 December 2021
The directors present their strategic report together with the audited financial statements for the year ended 31 December 2021. Principal activities and review of the business. The company acts predominantly as a main contractor within the construction industry, more specifically in the car park refurbishment and structural repairs and waterproofing of commercial property. This it does predominantly throughout the UK and Ireland. We returned to full operations back in July 2020 with all staff returning to normal duties which in turn lead to more site visits and contract potentials. Our CPD program increased with the use of Teams and with many of the target audience continuing to work from home this has proved very beneficial. We continue to see growth in our emerging markets and are set for a strong 2022 with both our roofing and structural refurbishments divisions seeing positive growth. The suspension of activity from March had a knock on effect from a point of sales with the suspension of projects and ex-pected starts delayed until a much clearer position became known. After the first lockdown we managed to get all staff and sites open by July with all staff returning to office working but the sec-ond lockdown reversed the office working but we maintained all site capacity. Sales were lower than early predictions with strong activity in the first 2 quarters but this tailed off as Clients reviewed budgets due to protracted covid issues. Projects were put on hold or bumped into the new year resulting in the sales target falling short but the contribution target being met. Enquiry levels remained much in line with 2020 and the framework contributions removed a de-gree of uncertainty and with additional National agreements awarded during the year has provid-ed a strong platform for 2022. Our reporting systems and forecasting remained cohesive and despite pressures of payments from companies still working remotely due to covid we successfully navigated the additional obsta-cles presented resulting in strong cash positions. We continued to work out our retentions profile returning cash back to the business. Enquiry activity remained in line with 2020 with stronger levels towards the second half of the year but more selective tendering led to better margin contributions at contract level. Principal risks and uncertainties 2020 saw the biggest reduction in the supply chain availability with many workers removing them-selves from the industry and UK market. Despite the positivity of the furlough process introduced in 2020 when this ceased in September of that year many companies began to fold through lack of forward order books as the economic picture had not returned to pre pandemic levels, with many projects requiring decisions that were just to stall. This situation has led to wage inflation as rival companies returning out of covid require staff to ful-fil new orders have targeted employees with cash inducements to meet their demand. We have been successful in heading off these approaches and indeed have had success in recruitment with-in the market place as our reputation continues to grow in our expanding sectors. Our ability to promptly pay the supply chain and guarantee monies has allowed them to focus on delivery and not be dissuaded by others. We have maintained our supply chain throughout with others wishing to join and this will only be a positive for 2022. Despite a very successful vaccination campaign and having zero covid cases in 2020 the relaxation of the rules resulted in numerous secondary infections which were in the main mild but meant we had a deal with a degree of disruption leading to a drop in productivity and the inevitable pressure on contract completions as cases grew. Our partners have worked closely with us to eliminate material shortages and indeed changed the way they operate increasing UK stocks overcoming some of the issues presented by Brexit. Other than increased costs the impact has been relatively short and increased retained UK stock has ac-tually allowed us to forward plan and shorten contract start up times. All our staff have the capability to support our sites teams from home should the need arise and the technological investments we made during 2020 have proved beneficial. Whilst covid continues to migrate through 2021 despite not hitting our intended budget target we believe we have achieved a credible result and the outlook for 2022 is very positive. Future Developments 2022 will see our largest forward order book and significant contributions from our frameworks across our parking and roofing divisions. We are looking at continual growth of the business with the appointment of new apprentices planned for the new year and key personnel to support the new expected growth in both our roofing and structural refurbishment divisions. Our partnerships and suppliers have developed strongly through 2021 and we are looking to see more opportunity and activity from them during 2022. There continues to be pressure on prices both in the labour and material markets, but we shall have to wait and see how it affects each of our targeted sectors. At the time of writing conflict has escalated between Russia and Ukraine which has seen significant increases in fuel as the oil market price rises and supplies from Russia are curtailed which will no doubt have an effect on material prices. We have taken the necessary action of only holding ten-der prices for a maximum of 28 days for our normal product lines and 3 days if steel is required due to the volatility in the market. Liquidity and Key Performance Indicators (KPI's) 2020 2021 Gross Margin 15.04% 15.29% EBITDA 4.60% 3.05% Tender conversion 29.44% 28.18% Debtor Days 53.7 days 59.7 days
This report was approved by the board of directors on 18 August 2022 and signed on behalf of the board by:
S. Lamb
Director
Makers Construction Limited
Directors' Report
Year ended 31 December 2021
The directors present their report and the financial statements of the company for the year ended 31 December 2021 .
Directors
The directors who served the company during the year were as follows:
S. Lamb
S. Rooker
D. Wootton
Dividends
Particulars of recommended dividends are detailed in note 13 to the financial statements.
Qualifying indemnity provision
During the year the company took out Director's indemnity insurance.
Disclosure of information in the strategic report
Information regarding future developments is included in the Strategic Report.
Directors' responsibilities statement
The directors are responsible for preparing the directors' 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 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 accounting standards have been followed, subject to nay material departures disclosed and explained in the financial statements: and; - 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 18 August 2022 and signed on behalf of the board by:
S. Lamb
Director
Makers Construction Limited
Independent Auditor's Report to the Members of Makers Construction Limited
Year ended 31 December 2021
Opinion
We have audited the financial statements of Makers Construction Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and the related notes, 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 FRS 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 31 December 2021 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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 other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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 directors' report. We have nothing to report in respect of the following matters in relation to which 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 directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our assessment focused on key laws and regulations the company has to comply with and areas of the financial statements we assessed as being more susceptible to misstatement. These key laws and regulations included but were not limited to compliance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice and relevant tax legislation. We are not responsible for preventing irregularities. Our approach to detect irregularity included, but was not limited to, the following: 1. An understanding of the legal and regulatory framework applicable to the company and how the company is complying with that framework, including a review of legal and professional nominal codes and minutes of meetings. 2. Obtaining an understanding of the company's policies and procedures and how the company has complied with these, through discussions and sample testing. 3. An understanding of the company's risk assessment process, including the risk of fraud. 4. Performing audit work over the risk of management override of controls, including testing of journal entries for appropriateness. Whilst considering how our audit work addressed the detection of irregularities, we also consider the likelihood of detection based on our approach. Irregularities from fraud are inherently more difficult to detect than those arising from error. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. 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. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jonathan Cousins
(Senior Statutory Auditor)
For and on behalf of
Edwards Pearson & White (Audit) Limited
Chartered Certified Accountants & statutory auditor
8 Jury Street
Warwick
CV34 4EW
19 August 2022
Makers Construction Limited
Statement of Income and Retained Earnings
Year ended 31 December 2021
2021
2020
Note
£
£
Turnover
4
14,462,141
11,356,692
Cost of sales
12,226,120
9,648,306
------------
------------
Gross profit
2,236,021
1,708,386
Administrative expenses
1,878,247
1,525,010
Other operating income
5
14,768
273,853
-----------
-----------
Operating profit
6
372,542
457,229
Other interest receivable and similar income
10
928
Interest payable and similar expenses
11
1,697
-----------
-----------
Profit before taxation
370,845
458,157
Tax on profit
12
68,422
89,703
--------
--------
Profit for the financial year and total comprehensive income
302,423
368,454
--------
--------
Dividends paid and payable
13
( 102,000)
( 132,000)
Retained earnings at the start of the year
1,638,395
1,401,941
-----------
-----------
Retained earnings at the end of the year
1,838,818
1,638,395
-----------
-----------
All the activities of the company are from continuing operations.
Makers Construction Limited
Statement of Financial Position
31 December 2021
2021
2020
Note
£
£
£
Fixed assets
Tangible assets
14
241,988
102,733
Current assets
Stocks
15
2,500
2,500
Debtors
16
3,436,810
2,346,409
Cash at bank and in hand
2,463,537
3,283,901
-----------
-----------
5,902,847
5,632,810
Prepayments and accrued income
99,385
55,028
Creditors: amounts falling due within one year
17
4,273,058
4,084,896
-----------
-----------
Net current assets
1,729,174
1,602,942
-----------
-----------
Total assets less current liabilities
1,971,162
1,705,675
Creditors: amounts falling due after more than one year
18
98,578
48,301
Provisions
Taxation including deferred tax
20
33,166
18,379
-----------
-----------
Net assets
1,839,418
1,638,995
-----------
-----------
Capital and reserves
Called up share capital
24
600
600
Profit and loss account
1,838,818
1,638,395
-----------
-----------
Shareholders funds
1,839,418
1,638,995
-----------
-----------
These financial statements were approved by the board of directors and authorised for issue on 18 August 2022 , and are signed on behalf of the board by:
S. Rooker
Director
Company registration number: 06348341
Makers Construction Limited
Statement of Cash Flows
Year ended 31 December 2021
2021
2020
£
£
Cash flows from operating activities
Profit for the financial year
302,423
368,454
Adjustments for:
Depreciation of tangible assets
67,884
63,742
Government grant income
( 14,768)
( 273,853)
Other interest receivable and similar income
( 928)
Interest payable and similar expenses
1,697
Gains on disposal of tangible assets
( 200)
( 203)
Tax on profit
68,422
89,703
Changes in:
Stocks
8,568
Trade and other debtors
( 1,134,758)
175,565
Trade and other creditors
181,722
1,292,810
-----------
-----------
Cash generated from operations
( 527,578)
1,723,858
Interest paid
( 1,697)
Interest received
928
Tax paid
( 53,635)
( 97,144)
--------
-----------
Net cash (used in)/from operating activities
( 582,910)
1,627,642
--------
-----------
Cash flows from investing activities
Purchase of tangible assets
( 207,139)
( 23,257)
Proceeds from sale of tangible assets
200
203
--------
-----------
Net cash used in investing activities
( 206,939)
( 23,054)
--------
-----------
Cash flows from financing activities
Government grant income
14,768
273,853
Payments of finance lease liabilities
56,717
Dividends paid
( 102,000)
( 132,000)
--------
-----------
Net cash (used in)/from financing activities
( 30,515)
141,853
--------
-----------
Net (decrease)/increase in cash and cash equivalents
( 820,364)
1,746,441
Cash and cash equivalents at beginning of year
3,283,901
1,537,460
-----------
-----------
Cash and cash equivalents at end of year
2,463,537
3,283,901
-----------
-----------
Makers Construction Limited
Notes to the Financial Statements
Year ended 31 December 2021
1. General information
The company is a private company limited by shares incorporated, registered and trading in United Kingdom and Ireland with company number 06348341 . The address of the registered office is Building 4, Shenstone Business Park, Lynn Lane, Shenstone, Staffordshire, WS14 0SB.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss. The financial statements are prepared in sterling, which is the functional currency of the company and rounded to the nearest £.
Judgements and key sources of estimation uncertainty
In preparing these financial statements the directors have had to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Estimates and associated assumptions are based on historic experience and various other factors including expectations of future events that are believed to be reasonable under the circumstances, however actual results may differ from these estimates. The estimates and underlying assumptions on contracts 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.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Leasehold Property
-
25% straight line
Plant & Machinery
-
25% straight line
Fixtures & Fittings
-
25% straight line
Motor Vehicles
-
33% straight line
Equipment
-
25% straight line
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Construction contracts
Where the outcome of construction contracts can be reliably estimated, contract revenue and contract costs are recognised by reference to the stage of completion of the contract activity as at the period end. Where the outcome of construction contracts cannot be estimated reliably, revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable, and contract costs are recognised as an expense in the period in which they are incurred. The entity uses the percentage of completion method to determine the amounts to be recognised in the period. The stage of completion is measured by reference to the contract costs incurred up to the end of the reporting period as a percentage of total estimated costs for each contract. Costs incurred for work performed to date do not include costs relating to future activity, such as for materials or prepayments.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
The company only has basic financial instruments. - Financial assets Financial assets comprise items such as cash at bank and in hand and trade and other debtors. These are initially recorded at cost on the date they originate, the company considers evidence of impairment for all individual elements comprising financial assets and any subsequent impairment is recognised in profit and loss. - Financial liabilities Financial liabilities comprise items such as corporation and other taxes, bank and other loans, accruals and trade and other creditors. These are initially recorded at cost on the date they originate, net of transaction costs where applicable, the company considers evidence of impairment for all individual elements comprising financial liabilities and any subsequent impairment is recognised in profit and loss.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2021
2020
£
£
Construction contracts
14,462,141
11,356,692
------------
------------
The whole of the turnover is attributable to the principal activity of the compamy wholly undertaken in the United Kingdom and Ireland.
5. Other operating income
2021
2020
£
£
Government grant income
14,768
273,853
-------
--------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2021
2020
£
£
Depreciation of tangible assets
67,884
63,742
Gains on disposal of tangible assets
( 200)
( 203)
Impairment of trade debtors
4,045
Foreign exchange differences
512
117
Lease payments
29,838
29,838
-------
-------
7. Auditor's remuneration
2021
2020
£
£
Fees payable for the audit of the financial statements
4,450
4,325
------
------
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2021
2020
No.
No.
Production staff
45
46
Administrative staff
3
3
Management staff
3
3
----
----
51
52
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2021
2020
£
£
Wages and salaries
2,103,041
1,876,948
Social security costs
219,532
188,888
Other pension costs
117,256
118,196
-----------
-----------
2,439,829
2,184,032
-----------
-----------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2021
2020
£
£
Remuneration
273,069
248,632
Company contributions to defined contribution pension plans
51,767
54,653
--------
--------
324,836
303,285
--------
--------
The number of directors who accrued benefits under company pension plans was as follows:
2021
2020
No.
No.
Defined contribution plans
3
3
----
----
Remuneration of the highest paid director in respect of qualifying services:
2021
2020
£
£
Aggregate remuneration
112,263
104,633
Company contributions to defined contribution pension plans
19,261
19,705
--------
--------
131,524
124,338
--------
--------
10. Other interest receivable and similar income
2021
2020
£
£
Interest on cash and cash equivalents
928
----
----
11. Interest payable and similar expenses
2021
2020
£
£
Interest on obligations under finance leases and hire purchase contracts
1,697
------
----
12. Tax on profit
Major components of tax expense
2021
2020
£
£
Current tax:
UK current tax expense
53,635
97,144
Deferred tax:
Origination and reversal of timing differences
14,787
( 7,441)
-------
-------
Tax on profit
68,422
89,703
-------
-------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is lower than (2020: higher than) the standard rate of corporation tax in the UK of 19 % (2020: 19 %).
2021
2020
£
£
Profit on ordinary activities before taxation
370,845
458,157
--------
--------
Profit on ordinary activities by rate of tax
70,461
87,050
Effect of expenses not deductible for tax purposes
5,744
2,691
Effect of capital allowances and depreciation
( 7,783)
Rounding on tax charge
( 38)
--------
--------
Tax on profit
68,422
89,703
--------
--------
13. Dividends
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year):
2021
2020
£
£
Equity dividends on ordinary shares
102,000
132,000
--------
--------
Dividends proposed after the year end and not recognised as a liability:
2021
2020
£
£
Equity dividends on ordinary shares
42,000
42,000
-------
-------
14. Tangible assets
Land and buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Equipment
Total
£
£
£
£
£
£
Cost
At 1 Jan 2021
12,822
145,133
12,260
459,775
145,180
775,170
Additions
3,940
196,986
6,213
207,139
Disposals
( 30,680)
( 1,895)
( 32,575)
-------
--------
-------
--------
--------
--------
At 31 Dec 2021
12,822
149,073
12,260
626,081
149,498
949,734
-------
--------
-------
--------
--------
--------
Depreciation
At 1 Jan 2021
12,822
110,877
12,260
414,846
121,632
672,437
Charge for the year
14,147
41,076
12,661
67,884
Disposals
( 30,680)
( 1,895)
( 32,575)
-------
--------
-------
--------
--------
--------
At 31 Dec 2021
12,822
125,024
12,260
425,242
132,398
707,746
-------
--------
-------
--------
--------
--------
Carrying amount
At 31 Dec 2021
24,049
200,839
17,100
241,988
-------
--------
-------
--------
--------
--------
At 31 Dec 2020
34,256
44,929
23,548
102,733
-------
--------
-------
--------
--------
--------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Motor vehicles
£
At 31 December 2021
59,266
-------
At 31 December 2020
-------
Capital commitments
2021
2020
£
£
Contracted for but not provided for in the financial statements
12,967
-------
----
15. Stocks
2021
2020
£
£
Raw materials and consumables
2,500
2,500
------
------
16. Debtors
2021
2020
£
£
Trade debtors
2,367,423
1,671,330
Amounts owed by customers on construction contracts
1,058,887
675,079
Directors loan account
10,000
Other debtors
500
-----------
-----------
3,436,810
2,346,409
-----------
-----------
The debtors above include the following amounts falling due after more than one year:
2021
2020
£
£
Trade debtors
225,098
150,621
--------
--------
17. Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
3,067,700
3,041,997
Social security and other taxes
642,398
391,424
Obligations under finance leases and hire purchase contracts
13,961
Other creditors
548,999
651,475
-----------
-----------
4,273,058
4,084,896
-----------
-----------
18. Creditors: amounts falling due after more than one year
2021
2020
£
£
Obligations under finance leases and hire purchase contracts
42,756
Other creditors
55,822
48,301
-------
-------
98,578
48,301
-------
-------
19. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2021
2020
£
£
Not later than 1 year
13,961
Later than 1 year and not later than 5 years
42,756
-------
----
56,717
-------
----
20. Provisions
Deferred tax (note 21)
£
At 1 January 2021
18,379
Additions
14,787
-------
At 31 December 2021
33,166
-------
21. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2021
2020
£
£
Included in provisions (note 20)
33,166
18,379
-------
-------
The deferred tax account consists of the tax effect of timing differences in respect of:
2021
2020
£
£
Accelerated capital allowances
33,166
18,379
-------
-------
22. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 117,256 (2020: £ 118,196 ).
23. Government grants
The amounts recognised in the financial statements for government grants are as follows:
2021
2020
£
£
Recognised in other operating income:
Government grants recognised directly in income
14,768
273,853
-------
--------
24. Called up share capital
Issued, called up and fully paid
2021
2020
No.
£
No.
£
Ordinary shares of £ 1 each
600
600
600
600
----
----
----
----
The shares all have full voting rights, full dividend rights and full distribution rights.
25. Analysis of changes in net debt
At 1 Jan 2021
Cash flows
At 31 Dec 2021
£
£
£
Cash at bank and in hand
3,283,901
(820,364)
2,463,537
Debt due within one year
(13,961)
(13,961)
Debt due after one year
(42,756)
(42,756)
-----------
--------
-----------
3,283,901
( 877,081)
2,406,820
-----------
--------
-----------
26. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2021
2020
£
£
Not later than 1 year
29,838
29,838
Later than 1 year and not later than 5 years
7,460
37,298
-------
-------
37,298
67,136
-------
-------
27. Limitation of auditors liability
The company on 1st February 2022 has entered into a limitation of auditors liability with the auditor limiting the auditor's liability to a maximum of £1,000,000(including interest).
28. Directors' advances, credits and guarantees
At the reporting date the directors loan account was in debit by £10,000 (2020: £Nil). There is no fixed term for repayment and no interest is charged. Transactions during the year can be summarised as follows: Opening Balance Brought Forward £0 Net Advance in the year £10,000 Closing Balance Carried Forward £10,000
29. Related party transactions
There were no related party transactions during the year.