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Registered number: 04276439









MCDONALD HIGHWAY SERVICES LIMITED









FINANCIAL STATEMENTS

INFORMATION FOR FILING WITH THE REGISTRAR

FOR THE YEAR ENDED 31 DECEMBER 2022

 
MCDONALD HIGHWAY SERVICES LIMITED
REGISTERED NUMBER: 04276439

BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Tangible assets
 4 
4,929,145
5,049,604

Current assets
  

Cash at bank and in hand
 6 
64,267
10,435

  
64,267
10,435

Creditors: amounts falling due within one year
 7 
(3,718,088)
(3,678,256)

Net current liabilities
  
 
 
(3,653,821)
 
 
(3,667,821)

Total assets less current liabilities
  
1,275,324
1,381,783

Provisions for liabilities
  

Deferred tax
 9 
(3,798)
(720)

Net assets
  
1,271,526
1,381,063


Capital and reserves
  

Called up share capital 
 10 
5,100
5,100

Profit and loss account
  
1,266,426
1,375,963

  
1,271,526
1,381,063


The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS102 Section 1A - small entities.

The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 September 2023.




................................................
M J Revell Esq
Director

The notes on pages 2 to 11 form part of these financial statements.

Page 1

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

McDonald Highway Services Ltd is a private company, limited by shares, registered in England and Wales. The company's registered office is Woolf House, 15 Regiment Business Park, Eagle Way, Little Waltham, Chelmsford, CM3 3FY. The principal activity of the company continues to be that of construction of roads and motorways.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Marlborough Highways Group Limited as at 31 December 2022 and these financial statements may be obtained from Companies House.

Page 2

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue 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 revenue is recognised:

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.

 
2.4

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.5

Tangible fixed assets

Tangible fixed assets under the cost model 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 their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Short-term leasehold property
-
straight line over the life of the lease
Plant and machinery
-
20% straight line
Motor vehicles
-
25% straight line
Fixtures and fittings
-
25% straight line

The assets' 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.

Page 3

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.6

Current and deferred taxation

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

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

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

  
2.7

Impairment of assets

At each reporting date, the company reviews the carrying value of its assets to determine whether there is any indication that those assets may have suffered an impairment loss. If any indication of impaitment exists, the recoverable amount of the asset is estimated in order to detennine if there is any impairment loss. 
The recoverable amount of an asset is the higher or fair value less costs to sell and value in use. Value in use is the present value of the future cash flows exceed to be derived from the asset or cash generating unit. The present values calculation involves estimating the future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal, applying an appropriate discount rate to those future cash flows.
Where the recoverable amount of an asset is less than carrying amount, an impairment loss is recognised immediately in profit or loss. An impairment loss recognised for all assets is reversed in a subsequent period if, and only if, the reasons for the impairment loss have ceased to apply. Impairment losses are charged to profit or loss.

 
2.8

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Page 4

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

  
2.9

Revenue

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.

 
2.10

Creditors

Short-term 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.

 
2.11

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.

 
2.12

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Balance sheet when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Page 5

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.12
Financial instruments (continued)


Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Page 6

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.12
Financial instruments (continued)

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

 
2.13

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.


3.


Employees

The number of directors to whom retirement benefits were accruing was Nil (2021: Nil).
The average monthly number of employees, including the directors, during the year was 4 (2021: 4).


Page 7

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

4.


Tangible fixed assets





Freehold property
Short-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Total

£
£
£
£
£
£



Cost or valuation


At 1 January 2022
4,897,925
3,139
790,033
169,980
22,103
5,883,180


Disposals
-
-
(109,599)
-
-
(109,599)



At 31 December 2022

4,897,925
3,139
680,434
169,980
22,103
5,773,581



Depreciation


At 1 January 2022
3,345
3,139
688,614
123,884
14,594
833,576


Charge for the year
97,959
-
-
-
-
97,959


Disposals
-
-
(87,099)
-
-
(87,099)



At 31 December 2022

101,304
3,139
601,515
123,884
14,594
844,436



Net book value



At 31 December 2022
4,796,621
-
78,919
46,096
7,509
4,929,145



At 31 December 2021
4,894,580
-
101,419
46,096
7,509
5,049,604


5.


Debtors


6.


Cash and cash equivalents

2022
2021
£
£

Cash at bank and in hand
64,267
10,435

64,267
10,435


Page 8

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

7.


Creditors: Amounts falling due within one year

2022
2021
£
£

Trade creditors
38,445
-

Amounts owed to group undertakings
3,679,643
3,678,256

3,718,088
3,678,256



8.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than 1 year
110,000
110,000

Later than 1 year and not later than 5 years
330,000
440,000

440,000
550,000

Page 9

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

9.


Deferred taxation




2022
2021


£

£






At beginning of year
720
(3,413)


Charged to profit or loss
3,078
4,133



At end of year
3,798
720

The provision for deferred taxation is made up as follows:

2022
2021
£
£


Accelerated capital allowances
3,798
720

3,798
720


10.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



5,080 (2021 - 5,080) Ordinary B shares of £1.00 each
5,080
5,080
20 (2021 - 20) Ordinary C shares of £1.00 each
20
20

5,100

5,100



11.


Contingent liabilities

A guarantee exists in favour of the group's bankers to cover bank borrowings of certain companies. At 31
December 2022 the net potential exposure in respect of this guarantee was £4,462,039 
(2021: £4,559,864). The figure is in respect of the gross borrowings and does not take into account the underlying assets of the respective group companies.
The bank has a debenture including a fixed charge over all present freehold and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and first floating charge over all assets and undertakings both present and future dated 13 June 2016.

Page 10

 
MCDONALD HIGHWAY SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

12.


Related party transactions

In accordance with FRS 102 Section 33 the Company has taken advantage of the exemption from the disclosure of transactions with the other wholly owned members of the group. The Company’s results form part of the consolidated financial statements prepared by its ultimate parent, Marlborough Highways Group Limited. The consolidated financial statements can be obtained from the Company at Woolf House, 15 Regiment Business Park, Chelmsford, CM3 3FY.


13.


Parent undertaking and ultimate parent party

Marlborough Highways Group Limited is regarded by the directors as being the company's ultimate 
parent company.


14.


Auditors' information

The auditors' report on the financial statements for the year ended 31 December 2022 was unqualified.

The audit report was signed on 29 September 2023 by Duncan Stannett (Senior statutory auditor) on behalf of Barnes Roffe LLP.

 
Page 11