48 false false false false true false false false false false false true false false true true true true No description of principal activity 2022-07-01 Sage Accounts Production Advanced 2023 - FRS102_2023 1,779,954 2,008,195 107,601 2,548 105,053 xbrli:pure xbrli:shares iso4217:GBP 05863706 2022-07-01 2023-06-30 05863706 2023-06-30 05863706 2022-06-30 05863706 2021-07-01 2022-06-30 05863706 2022-06-30 05863706 2021-06-30 05863706 core:LandBuildings core:OwnedOrFreeholdAssets 2022-07-01 2023-06-30 05863706 core:PlantMachinery 2022-07-01 2023-06-30 05863706 core:MotorVehicles 2022-07-01 2023-06-30 05863706 bus:RegisteredOffice 2022-07-01 2023-06-30 05863706 bus:OrdinaryShareClass1 2022-07-01 2023-06-30 05863706 bus:OrdinaryShareClass2 2022-07-01 2023-06-30 05863706 bus:LeadAgentIfApplicable 2022-07-01 2023-06-30 05863706 bus:Director1 2022-07-01 2023-06-30 05863706 bus:Director2 2022-07-01 2023-06-30 05863706 bus:Director3 2022-07-01 2023-06-30 05863706 core:WithinOneYear 2023-06-30 05863706 core:WithinOneYear 2022-06-30 05863706 core:LandBuildings core:OwnedOrFreeholdAssets 2022-06-30 05863706 core:PlantMachinery 2022-06-30 05863706 core:FurnitureFittings 2022-06-30 05863706 core:MotorVehicles 2022-06-30 05863706 core:LandBuildings core:OwnedOrFreeholdAssets 2023-06-30 05863706 core:PlantMachinery 2023-06-30 05863706 core:FurnitureFittings 2023-06-30 05863706 core:MotorVehicles 2023-06-30 05863706 core:FurnitureFittings 2022-07-01 2023-06-30 05863706 core:AfterOneYear 2023-06-30 05863706 core:AfterOneYear 2022-06-30 05863706 core:UKTax 2022-07-01 2023-06-30 05863706 core:UKTax 2021-07-01 2022-06-30 05863706 core:RetainedEarningsAccumulatedLosses 2022-07-01 2023-06-30 05863706 core:RetainedEarningsAccumulatedLosses 2021-07-01 2022-06-30 05863706 bus:AllOrdinaryShares 2022-07-01 2023-06-30 05863706 bus:AllOrdinaryShares 2021-07-01 2022-06-30 05863706 core:RetainedEarningsAccumulatedLosses 2022-06-30 05863706 core:RetainedEarningsAccumulatedLosses 2021-06-30 05863706 core:RetainedEarningsAccumulatedLosses 2023-06-30 05863706 core:RetainedEarningsAccumulatedLosses 2022-06-30 05863706 core:ShareCapital 2023-06-30 05863706 core:ShareCapital 2022-06-30 05863706 core:BetweenOneFiveYears 2023-06-30 05863706 core:BetweenOneFiveYears 2022-06-30 05863706 core:DeferredTaxation 2022-07-01 2023-06-30 05863706 core:AcceleratedTaxDepreciationDeferredTax 2023-06-30 05863706 core:AcceleratedTaxDepreciationDeferredTax 2022-06-30 05863706 core:LandBuildings core:OwnedOrFreeholdAssets 2022-06-30 05863706 core:PlantMachinery 2022-06-30 05863706 core:FurnitureFittings 2022-06-30 05863706 core:MotorVehicles 2022-06-30 05863706 core:LeasedAssetsHeldAsLessee core:MotorVehicles 2023-06-30 05863706 core:LeasedAssetsHeldAsLessee core:MotorVehicles 2022-06-30 05863706 core:DeferredTaxation 2022-06-30 05863706 core:DeferredTaxation 2023-06-30 05863706 bus:LeadAgentIfApplicable 2021-07-01 2022-06-30 05863706 bus:Director1 2021-06-30 05863706 bus:Director2 2021-06-30 05863706 bus:Director3 2021-06-30 05863706 bus:Director1 2021-07-01 2022-06-30 05863706 bus:Director2 2021-07-01 2022-06-30 05863706 bus:Director3 2021-07-01 2022-06-30 05863706 bus:MediumEntities 2022-07-01 2023-06-30 05863706 bus:Audited 2022-07-01 2023-06-30 05863706 bus:Medium-sizedCompaniesRegimeForAccounts 2022-07-01 2023-06-30 05863706 bus:PrivateLimitedCompanyLtd 2022-07-01 2023-06-30 05863706 bus:FullAccounts 2022-07-01 2023-06-30 05863706 bus:OrdinaryShareClass1 2023-06-30 05863706 bus:OrdinaryShareClass1 2022-06-30 05863706 bus:OrdinaryShareClass2 2023-06-30 05863706 bus:OrdinaryShareClass2 2022-06-30 05863706 bus:AllOrdinaryShares 2023-06-30 05863706 bus:AllOrdinaryShares 2022-06-30
COMPANY REGISTRATION NUMBER: 05863706
Constructionlines Limited
Financial Statements
30 June 2023
Constructionlines Limited
Financial Statements
Year ended 30 June 2023
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
4
Independent auditor's report to the members
7
Statement of income and retained earnings
11
Statement of financial position
12
Notes to the financial statements
13
Constructionlines Limited
Officers and Professional Advisers
The board of directors
Mr P Shaw
Mr S Tame
Mr S McAneaney
Registered office
Heanor Road
Loscoe
Heanor
Derbyshire
DE75 7JT
Auditor
Gregory Priestley & Stewart
Chartered Accountants & statutory auditor
Lyndhurst
1 Cranmer Street
Long Eaton
Nottingham
NG10 1NJ
Bankers
Lloyds Bank Plc
Constructionlines Limited
Strategic Report
Year ended 30 June 2023
Review of business
The company's principal activity continues to be builders merchants operating within the United Kingdom from a location situated at Loscoe, Heanor. The company started the financial year in the midst of global price increases. Whilst there has been some stabilising of prices, there hasn't been a significant reduction, particularly in energy costs. The most significant challenge we face trading into 2024 are increasing interest rates and inflation, which impact on the housebuilder trade as mortgages become unaffordable and potential buyers are forced to rent or stay put. We have already identified a downturn in housebuilder activity levels during 2023 and expect that this will continue into 2024 until interest rates are more stable or inflation reduces. Constructionlines has largely kept its gross margins intact, however some fluctuation has been experienced due to a change in the mix of civil engineering and housebuilder trade. Overheads are monitored and where we can manage increases in costs we have and will continue to do so, such as fixing utility energy prices until 2025. This said we have an excellent leadership team, long standing employees and a solid financial position which enables the company to continue to meet its operational and financial obligations. We remain optimistic about our growth and prospects and continue to focus on customer satisfaction, market expansion and investment in our workforce and infrastructure.
Key performance indicators
The directors monitor the performance of the company by reference to the following KPIs:
2023 2022
Gross profit as percentage of sales 16 17
Operating profit as a percentage of sales 7 7
The KPIs show that company has remained broadly consistent in its trading performance from 2022, managing to maintain reasonable margins in spite of increasing direct costs and overheads and a slowdown in the housebuilder industry.
Results and performance
The results of the company for the year, as set out in the statement of income and retained earnings, are summarised below:
2023 2022
£ £
Profit before taxation 2,286,339 2,466,373
This report was approved by the board of directors on 9 October 2023 and signed on behalf of the board by:
Mr S McAneaney
Director
Registered office:
Heanor Road
Loscoe
Heanor
Derbyshire
DE75 7JT
Constructionlines Limited
Directors' Report
Year ended 30 June 2023
The directors present their report and the financial statements of the company for the year ended 30 June 2023 .
Directors
The directors who served the company during the year were as follows:
Mr P Shaw
Mr S Tame
Mr S McAneaney
Dividends
Particulars of dividends paid during the year are detailed in note 13 to the financial statements.
Future developments
The directors continually review the business to identify opportunities to be developed to help improve the performance of the company.
Financial instruments
The Company's principal financial instruments comprise bank loans and hire purchase contracts. The main purpose of these financial instruments is to manage the Company's funding and liquidity requirements.
The Company has other financial assets and liabilities such as trade debtors and trade creditors, which arise directly from its operating activities. The principal financial risks to which the Company is exposed are those of interest rate, liquidity and credit. Each is managed as set out below.
Interest rate risk
Interest rates are determined by money market conditions outside of the Company's control. Interest rates on bank loans and hire purchase contracts are fixed whenever possible.
Liquidity risk
The Company manages liquidity risk by using bank financing facilities such as loans and hire purchase contracts for the acquisition of large assets, allowing it to spread the cost of such acquisitions over a number of years.
Credit risk
The Company is exposed to credit risk on trade debtors. Credit limits are set as deemed appropriate for each customer. The Company is exposed mainly to customers from the construction industry. Where appropriate, the Company endeavours to minimise risks associated by the use of credit insurance.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, 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; - 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 9 October 2023 and signed on behalf of the board by:
Mr S McAneaney
Director
Registered office:
Heanor Road
Loscoe
Heanor
Derbyshire
DE75 7JT
Constructionlines Limited
Independent Auditor's Report to the Members of Constructionlines Limited
Year ended 30 June 2023
Opinion
We have audited the financial statements of Constructionlines Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of income and retained earnings, statement of financial position 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 30 June 2023 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: In respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following: - the nature of the business and its industry, the level of autonomy of management and the controls put in place by those charged with governance and business performance. - results of our enquiries of management and those charged with governance regarding their own identification and assessment of the risks of irregularities. -any matters we identified having documented and tested the company's policies and procedures including compliance with laws and regulations, internal controls and also from discussion within the audit engagement team and associated internal specialists regarding how and where fraud might occur and whether there were any potential indicators of fraud. Because of these procedures, we considered the value of stock and recoverability of trade debtors were at significant risk of misstatement. We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context were Companies Act 2006 (UK), employment law and tax legislations. 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. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. 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 auditor’s report. 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.
Peter Stewart
(Senior Statutory Auditor)
For and on behalf of
Gregory Priestley & Stewart
Chartered Accountants & statutory auditor
Lyndhurst
1 Cranmer Street
Long Eaton
Nottingham
NG10 1NJ
9 October 2023
Constructionlines Limited
Statement of Income and Retained Earnings
Year ended 30 June 2023
2023
2022
Note
£
£
Turnover
4
33,862,466
34,607,778
Cost of sales
28,350,219
28,643,680
-------------
-------------
Gross profit
5,512,247
5,964,098
Administrative expenses
3,241,556
3,493,740
Other operating income
5
41,000
31,485
------------
------------
Operating profit
6
2,311,691
2,501,843
Other interest receivable and similar income
10
15,261
301
Interest payable and similar expenses
11
40,613
35,771
------------
------------
Profit before taxation
2,286,339
2,466,373
Tax on profit
12
506,385
458,178
------------
------------
Profit for the financial year and total comprehensive income
1,779,954
2,008,195
------------
------------
Dividends paid and payable
13
( 1,500,000)
( 1,750,000)
Retained earnings at the start of the year
5,145,254
4,887,059
------------
------------
Retained earnings at the end of the year
5,425,208
5,145,254
------------
------------
All the activities of the company are from continuing operations.
Constructionlines Limited
Statement of Financial Position
30 June 2023
2023
2022
Note
£
£
Fixed assets
Tangible assets
14
1,286,809
1,471,623
Current assets
Stocks
15
1,443,470
1,976,116
Debtors
16
6,450,411
8,439,335
Cash at bank and in hand
4,073,887
3,549,514
-------------
-------------
11,967,768
13,964,965
Creditors: amounts falling due within one year
17
7,410,019
9,358,099
-------------
-------------
Net current assets
4,557,749
4,606,866
------------
------------
Total assets less current liabilities
5,844,558
6,078,489
Creditors: amounts falling due after more than one year
18
264,297
775,634
Provisions
20
105,053
107,601
------------
------------
Net assets
5,475,208
5,195,254
------------
------------
Capital and reserves
Called up share capital
23
50,000
50,000
Profit and loss account
5,425,208
5,145,254
------------
------------
Shareholders funds
5,475,208
5,195,254
------------
------------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 9 October 2023 , and are signed on behalf of the board by:
Mr S McAneaney
Director
Company registration number: 05863706
Constructionlines Limited
Notes to the Financial Statements
Year ended 30 June 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Heanor Road, Loscoe, Heanor, Derbyshire, DE75 7JT.
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
(i) Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity.
(ii) Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Constructionlines Holdings Limited (registration number: 09064555) which can be obtained from Companies House. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) Disclosures in respect of each class of share capital have not been presented. (b) No cash flow statement has been presented for the company.
(iii) Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Depreciation charge is calculated based on estimates and assumptions on asset useful economic lives and expected residual values.
(iv) Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied, stated net of discounts and of Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods 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. Where goods are despatched directly to the customer from the supplier, revenue is recognised at the point that the supplier invoices the company for the goods.
(v) Taxation
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.
(vi) 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.
(vii) Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
(viii) 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:
Freehold property
-
5% straight line
Plant and machinery
-
20% straight line
Fixtures and fittings
-
25% - 33.33% reducing balance
Motor vehicles
-
25% reducing balance
Land has not been depreciated due to its enduring nature and value.
(ix) 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.
(x) Stocks
Stocks are measured at the lower of cost and estimated selling price. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition. Stocks are valued on a FIFO basis, ensuring as far as possible that stocks on site represent most closely the current wholesale prices.
(xi) Debtors
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
(xii) 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.
(xiii) Creditors
Short term trade creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
(xiv) 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.
(xv) Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
(xvi) 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.
4. Turnover
Turnover arises from:
2023
2022
£
£
Sale of goods
33,862,466
34,607,778
-------------
-------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
2023
2022
£
£
Management charge receivable
41,000
30,000
Other operating income
1,485
--------
--------
41,000
31,485
--------
--------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Depreciation of tangible assets
198,575
232,422
(Gains)/loss on disposal of tangible assets
( 99)
16,667
Impairment of trade debtors
63,410
234,755
Foreign exchange differences
2
---------
---------
7. Auditor's remuneration
2023
2022
£
£
Fees payable for the audit of the financial statements
11,500
11,500
--------
--------
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023
2022
No.
No.
Distribution staff
28
29
Administrative staff
17
15
Management staff
3
3
----
----
48
47
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
1,683,116
1,632,568
Social security costs
172,125
155,235
Other pension costs
63,331
40,505
------------
------------
1,918,572
1,828,308
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
103,618
133,813
Company contributions to defined contribution pension plans
30,000
5,000
---------
---------
133,618
138,813
---------
---------
The number of directors who accrued benefits under company pension plans was as follows:
2023
2022
No.
No.
Defined contribution plans
1
1
----
----
10. Other interest receivable and similar income
2023
2022
£
£
Interest on cash and cash equivalents
15,261
301
--------
----
11. Interest payable and similar expenses
2023
2022
£
£
Interest on banks loans and overdrafts
36,822
23,443
Interest on obligations under finance leases and hire purchase contracts
3,659
11,301
Other interest payable and similar charges
132
1,027
--------
--------
40,613
35,771
--------
--------
12. Tax on profit
Major components of tax expense
2023
2022
£
£
Current tax:
UK current tax expense
508,834
444,094
Adjustments in respect of prior periods
98
---------
---------
Total current tax
508,932
444,094
---------
---------
Deferred tax:
Origination and reversal of timing differences
( 2,547)
14,084
---------
---------
Tax on profit
506,385
458,178
---------
---------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2022: lower than) the standard rate of corporation tax in the UK of 20.50 % (2022: 19 %).
2023
2022
£
£
Profit on ordinary activities before taxation
2,286,339
2,466,373
------------
------------
Profit on ordinary activities by rate of tax
468,699
468,611
Adjustment to tax charge in respect of prior periods
( 494)
Effect of expenses not deductible for tax purposes
10,975
6,194
Effect of capital allowances and depreciation
( 628)
( 16,074)
Rounding on tax charge
( 3)
Group relief
(62)
(59)
Effect of change in tax rates on deferred tax
27,404
------------
------------
Tax on profit
506,385
458,178
------------
------------
Factors that may affect future tax expense
If the company's profits remain in excess of £250,000, the rate of corporation tax payable by the company will be at 25%.
13. Dividends
2023
2022
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
1,500,000
1,750,000
------------
------------
14. Tangible assets
Freehold property
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 July 2022
1,017,711
64,072
19,697
1,722,599
2,824,079
Additions
14,062
14,062
Disposals
( 417)
( 417)
------------
--------
--------
------------
------------
At 30 June 2023
1,017,711
64,072
33,342
1,722,599
2,837,724
------------
--------
--------
------------
------------
Depreciation
At 1 July 2022
172,287
39,591
7,183
1,133,395
1,352,456
Charge for the year
33,856
8,016
9,402
147,301
198,575
Disposals
( 116)
( 116)
------------
--------
--------
------------
------------
At 30 June 2023
206,143
47,607
16,469
1,280,696
1,550,915
------------
--------
--------
------------
------------
Carrying amount
At 30 June 2023
811,568
16,465
16,873
441,903
1,286,809
------------
--------
--------
------------
------------
At 30 June 2022
845,424
24,481
12,514
589,204
1,471,623
------------
--------
--------
------------
------------
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 30 June 2023
169,687
---------
At 30 June 2022
307,645
---------
15. Stocks
2023
2022
£
£
Finished goods and goods for resale
1,443,470
1,976,116
------------
------------
16. Debtors
2023
2022
£
£
Trade debtors
6,367,606
8,299,771
Prepayments and accrued income
50,071
29,484
Other debtors
32,734
110,080
------------
------------
6,450,411
8,439,335
------------
------------
17. Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
190,438
209,020
Trade creditors
5,940,123
7,317,791
Amounts owed to group undertakings
582,567
1,117,398
Amounts owed to undertakings in which the company has a participating interest
46,800
Accruals and deferred income
51,200
51,200
Corporation tax
269,039
169,007
Social security and other taxes
281,196
314,874
Obligations under finance leases and hire purchase contracts
79,971
112,236
Other creditors
9,485
19,773
Pension scheme loan
6,000
------------
------------
7,410,019
9,358,099
------------
------------
The bank loan and obligations under finance leases and hire purchase contracts are secured against the assets to which they relate. The total value of secured liabilities falling due in under 1 year is £261,789 (2022 - £321,256).
18. Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
248,485
679,814
Obligations under finance leases and hire purchase contracts
15,812
95,820
---------
---------
264,297
775,634
---------
---------
The bank loan and obligations under finance leases and hire purchase contracts are secured against the assets to which they relate. The total value of secured liabilities falling due after more than 1 year is £264,297 (2022 - £775,634).
Bank loans are secured by a legal first charge on land and buildings, situated at Heanor Road, Loscoe. The banking facilities provided are secured by a debenture creating a fixed and floating charge over the assets of the company.
Interest of 1.92% above the Base Rate per annum is incurred on the Coronavirus Business Interruption Loan (CBIL). The loan is repayable in monthly instalments commencing December 2020 and the final repayment is due 19 May 2027. Government grants cover the first 12 months of interest incurred on the CBIL.
Included within creditors: amounts falling due after more than one year is an amount of £Nil (2022: £26,758) in respect of liabilities payable or repayable by instalments which fall due for payment after more than five years from the reporting date.
19. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2023
2022
£
£
Not later than 1 year
79,971
112,236
Later than 1 year and not later than 5 years
15,812
95,820
--------
---------
95,783
208,056
--------
---------
20. Provisions
Deferred tax (note 21)
£
At 1 July 2022
107,601
Charge against provision
( 2,548)
---------
At 30 June 2023
105,053
---------
21. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
£
£
Included in provisions (note 20)
105,053
107,601
---------
---------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
£
£
Accelerated capital allowances
105,053
107,601
---------
---------
22. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 63,331 (2022: £ 40,505 ).
23. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
37,500
37,500
37,500
37,500
A Ordinary shares of £ 1 each
12,500
12,500
12,500
12,500
--------
--------
--------
--------
50,000
50,000
50,000
50,000
--------
--------
--------
--------
The different Ordinary Share classes both hold the right to attend and vote at meetings, the right to participate in dividends and the right to participate in distributions. Dividends may be declared on each class of share independently of any dividend on any other class of share.
24. Directors' advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company:
2023
Balance brought forward
Amounts repaid
Balance outstanding
£
£
£
Mr P Shaw
Mr S Tame
Mr S McAneaney
----
----
----
----
----
----
2022
Balance brought forward
Amounts repaid
Balance outstanding
£
£
£
Mr P Shaw
121,792
( 121,792)
Mr S Tame
34,739
( 34,739)
Mr S McAneaney
6,577
( 6,577)
---------
---------
----
163,108
( 163,108)
---------
---------
----
The company has loans from the directors which are interest free and repayable on demand. At the year end the amount due to the directors was £Nil (2022 - £Nil).
25. Related party transactions
During the year the company entered into the following transactions with related parties:
Transaction value
Balance owed by/(owed to)
2023
2022
2023
2022
£
£
£
£
Companies in which directors have a shareholding interest
592,854
558,107
92,940
Pension fund
118,000
93,600
6,000
46,800
---------
---------
-------
--------
The transactions relating to companies in which the directors have a shareholding interest relates to amounts advanced to two companies in which the directors jointly share a controlling interest. The loans are interest free and there are no fixed terms of repayment. A management charge of £41,000 (2022 - £30,000) is payable by one of the companies and Constructionlines Limited also paid £Nil (2022 - £30,000) in management charges to another company. Both are included within the value of transactions above. The pension fund loan represents rents received on behalf of the pension fund.
26. Controlling party
The company's parent undertaking is Constructionlines Holdings Limited, a company registered in the United Kingdom and whose registered office is situated at 1 Cranmer Street, Long Eaton, Nottingham, NG10 1NJ.