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Company registration number: 13539463







ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 JANUARY 2023


TUNNELCRAFT HOLDINGS LIMITED






































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TUNNELCRAFT HOLDINGS LIMITED
 


 
COMPANY INFORMATION


Directors
C. P. Hicks 
J. J. Riordan 
J. P. Riordan 




Company secretary
J. P. Riordan



Registered number
13539463



Registered office
Ground Floor, Sidney House
Christy Close

Southfields Business Park

Basildon

Essex

SS15 6TN




Independent auditors
Menzies LLP
Chartered Accountants & Statutory Auditor

Ashcombe House

5 The Crescent

Leatherhead

Surrey

KT22 8DY





 


TUNNELCRAFT HOLDINGS LIMITED
 



CONTENTS



Page
Group Strategic Report
1 - 3
Directors' Report
4 - 5
Independent Auditors' Report
6 - 9
Consolidated Statement of Income and Retained Earnings
10
Consolidated Statement of Financial Position
11
Company Statement of Financial Position
12
Consolidated Statement of Changes in Equity
13
Company Statement of Changes in Equity
14
Consolidated Statement of Cash Flows
15 - 16
Consolidated Analysis of Net Debt
17
Notes to the Financial Statements
18 - 32


 


TUNNELCRAFT HOLDINGS LIMITED
 


 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2023

Introduction

The Directors present the strategic report for the year ended 31 January 2023. The principal activity of the Group was that of the supply of labour for the direct contracting for tunnelling projects.

Fair Review of the business
 
The Directors present the results for the year and the financial position at the year end and report these to be very satisfactory. The results were bolstered by the continuing labour works of the HS2 Birmingham (North) and the commencement of labour works in late August 22 of HS2 Atlas Road (West). Turnover has increased year on year by 145%, however gross margin has decreased marginally by 6% due to keener pricing. The Directors are satisfied with the financial year result. The Directors expect growth for the foreseeable future but are mindful of political changes which may affect the performance of the Group. It continues to seek out further labour supply works to mitigate any downturn in any other projects.
During the year, a reconstruction was completed on 1 October 2023. On that date, the assets and liabilities of the Company were hived down to the subsidiary Tunnelcraft Limited. 

Principle risks and uncertainties
 
All businesses are subject to risks and uncertainties and the key risks facing Tunnelcraft Holdings Limited are:
 
°Competition
°Cancellation of contracts
°Delays in completion of projects
°Political uncertainties
°Environmental and professional liabilities
°Health and safety issues
°Pandemics
°Force majeure

Financial risks and uncertainties
 
The Group's operations are exposed to a variety of financial risks that include the effects of changes in credit risk, liquidity risk and interest rate risk. The Group has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the Group by monitoring levels of the debt finance and the related finance costs. The Group does not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting is applied.
Given the size of the Group, the Directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the Group's finance department.
Price risk:
The Group has no exposure to equity securities price risks as it holds no listed or other equity investments.
Liquidity risk:
The Group manages the liquidity risk by ensuring there are sufficient funds to meet the operating needs of the business. In respect of bank balances, the liquidity risk is managed by maintaining a positive balance between continuity of funding and flexibility through an agreed payment policy. The Group does not maintain any short­ term debt finance.
Interest rate risk:
The Group has no interest-bearing assets but carries interest-bearing liabilities.
 
Page 1

 


TUNNELCRAFT HOLDINGS LIMITED
 



GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023


Regulatory risk:
The Group is exposed to a number of regulatory risks:

°Legislation risks – non-compliance with laws and statute. The Group has in place procedures to ensure changes or new legislation affecting the Group is adhere to and there are regular reviews. 
°Risk of non-compliance with internal policies and procedures – The Group is under a duty to ensure all employees have and are working in a safe environment and adherence to internal rules and policies are followed.
°Health and Safety – The Group is also under a duty to provide all necessary tools and safety clothing to carry out their work. It is also under a duty to ensure that employees are suitably qualified to carry out their work and that all employees hold the relevant construction cards.

Key Performance Indicators
 
The key performance indicators used to determine the progress and performance of the Group are set out below:


2023
£
2022
£
Turnover
54,145,039
 22,087,291
Gross Profit
  4,848,924
3,310,818
Gross Profit Margin
9%
15%
Operating Profit
1,353,101
491,467
Earnings before interest, tax, finance costs, depreciation and Directors' pension (EBITFDP)
3,413,322
1,718,417

EBITFDP percentage of sales
Operating profit as a percentage of sales is viewed as a key performance indicator for the business and this is reviewed regularly. The EBITFDP is a more comparable measure of the performance of the business which shows that the EBITFDP percentage of sales has decreased to 6% [2022: 8%]. It is the intention of the Group to continue to strengthen its financial performance in the industry by concentrating on and improving its management processes and further expanding its market share, whilst at the same time closely monitoring both direct and indirect costs.

Employees
 
The Group operates an equal opportunities policy. The main aim of the policy is to ensure that there should be equal opportunity for all, and this applies to external recruitment, internal appointments, terms of employment, conditions of service and opportunity for training and promotion regardless of gender, ethnic origin or disability.
Disabled persons are given full and fair consideration for all types of vacancy in as much as opportunities available are considered by the practical limitations of the disability. Should, for whatever reason, an employee of the Group become disabled whilst in employment, every step, where applicable will be taken to assist with rehabilitation and suitable re-training.
The Group maintains its own health, safety and environmental policies covering all aspects of its operations. Regular meetings and inspections take place to ensure all legal requirements are adhered to and that the Group is responsive to the needs of the employees and the environment.

Statement of Financial Position
As at 31 January 2023, the Consolidated net assets were £9,222,589 (2022: £4,125,656) of which £2,419,645 (2022: £Nil) were cash and cash equivalents.
Group loans and borrowings were £7,592 as at 31 January 2023 (2022: £Nil). This is the balance on a working capital facility with Santander UK.

 
Page 2

 


TUNNELCRAFT HOLDINGS LIMITED
 



GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023

Section 172 Statement
The board collectively, have a duty to promote the success of the Group. A Director of a Group must act in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members, and in doing so have regard to:

°the likely consequences of any decision in the long term,
°the interests of the Group's employees,
°the need to foster the Group's business relationships with suppliers, customers, and others,
°the impact of the Group's operations on the community and the environment,
°the desirability of the Group maintaining a reputation for high standards of business conduct, and
°the need to act fairly as between members of the Group.


This report was approved by the board and signed on its behalf.



C. P. Hicks
Director

Date: 16 October 2023

Page 3

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2023

The Directors present their report and the financial statements for the year ended 31 January 2023.

Directors' responsibilities statement

The Directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the Directors are required to:


select suitable accounting policies for the Group's financial statements 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £763,099 (2022: £396,462).

The Directors recommended the payment of a dividend as disclosed in note 12.

Directors

The Directors who served during the year were:

C. P. Hicks 
J. J. Riordan 
J. P. Riordan 


The Company intends to build on its reputation as one of the leading tunnelling labour suppliers in the sector.

Matters covered in the Group Strategic Report

The Company has chosen, in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, to set out within the Group's Strategic Report the Company's Strategic Report Information Required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties. 

Page 4

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023

Disclosure of information to auditors

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

Menzies LLP have been appointed as the auditors of the Company to fill the casual vacancy following the resignation of Charterhouse (Audit) Limited.
Under section 487(2) of the Companies Act 2006Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.
 





C. P. Hicks
Director

Date: 16 October 2023

Page 5

 


TUNNELCRAFT HOLDINGS LIMITED
 

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TUNNELCRAFT HOLDINGS LIMITED

Opinion


We have audited the financial statements of Tunnelcraft Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 January 2023, which comprise the Consolidated Statement of Income and Retained Earnings, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 January 2023 and of the Group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 Group's or the parent 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 Auditors' Report thereon. The Directors are responsible for the other information contained within the Annual ReportOur 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.


Page 6

 


TUNNELCRAFT HOLDINGS LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TUNNELCRAFT HOLDINGS LIMITED (CONTINUED)

Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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 set out on page 4, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 


TUNNELCRAFT HOLDINGS LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TUNNELCRAFT HOLDINGS LIMITED (CONTINUED)

Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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 Group 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:

The Group is subject to laws and regulations that directly affect the financial statements including financial reporting
legislation. We determined that the following laws and regulations that were most significant included:

The Companies Act 2006;
Financial Reporting Standard 102;
UK employment legislation;
UK health and safety legislation;
General Data Protection Regulations; and
UK tax legislation.

We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

We understood how the Group is complying with those legal and regulatory frameworks by, making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes.

The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.

We assessed the susceptibility of the Group financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:

Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
Challenging assumptions and judgments made by management in its significant accounting estimates; and
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.

As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:

The application of inappropriate judgments or estimation to manipulate the Group's financial position;
Posting of unusual journals and complex transactions; and
The use of management override of controls to manipulate results, or to cause the Group to enter into transactions not in its best interests.

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.

Page 8

 


TUNNELCRAFT HOLDINGS LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TUNNELCRAFT HOLDINGS LIMITED (CONTINUED)

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 Auditors' 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 2006Our 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 Auditors' 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.





Andrew Hookway FCA (Senior Statutory Auditor)
for and on behalf of
Menzies LLP
Chartered Accountants
Statutory Auditor
Ashcombe House
5 The Crescent
Leatherhead
Surrey
KT22 8DY

17 October 2023
Page 9

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 JANUARY 2023

2023
2022
Note
£
£

  

Turnover
 4 
54,145,039
22,087,291

Cost of sales
  
(49,295,115)
(18,776,473)

Gross profit
  
4,849,924
3,310,818

Administrative expenses
  
(3,496,823)
(2,825,120)

Other operating income
  
-
5,769

Operating profit
 6 
1,353,101
491,467

Interest receivable and similar income
  
-
301

Interest payable and similar expenses
  
(302)
-

Profit before tax
  
1,352,799
491,768

Tax on profit
 11 
(589,700)
(95,306)

Profit after tax
  
763,099
396,462

  

  

Retained earnings at the beginning of the year
  
4,124,946
3,728,484

  
4,124,946
3,728,484

Profit for the year attributable to the owners of the parent
  
763,099
396,462

Dividends declared and paid
  
(850,000)
-

Retained earnings at the end of the year
  
4,038,045
4,124,946

Non-controlling interest at the end of the year
  

The notes on pages 18 to 32 form part of these financial statements.

Page 10

 


TUNNELCRAFT HOLDINGS LIMITED
REGISTERED NUMBER:13539463



CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
12,600,000
-

Tangible assets
 14 
90,400
81,739

Investments
 15 
-
12,741,680

  
12,690,400
12,823,419

Current assets
  

Debtors: amounts falling due within one year
 16 
7,928,070
-

Cash at bank and in hand
  
2,419,645
-

  
10,347,715
-

Creditors: amounts falling due within one year
 17 
(6,048,008)
(1,553,252)

Net current assets/(liabilities)
  
 
 
4,299,707
 
 
(1,553,252)

Total assets less current liabilities
  
16,990,107
11,270,167

Provisions for liabilities
  

Other provisions
 18 
(7,767,518)
(7,144,511)

  
 
 
(7,767,518)
 
 
(7,144,511)

Net assets
  
9,222,589
4,125,656


Capital and reserves
  

Called up share capital 
 19 
5,184,544
710

Profit and loss account
 20 
4,038,045
4,124,946

Equity attributable to owners of the parent Company
  
9,222,589
4,125,656

  
9,222,589
4,125,656


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 
 




C. P. Hicks
J. J. Riordan
Director
Director


Date: 16 October 2023

The notes on pages 18 to 32 form part of these financial statements.

Page 11

 


TUNNELCRAFT HOLDINGS LIMITED
REGISTERED NUMBER:13539463



COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 15 
710
710

  
710
710

Current assets
  

Debtors: amounts falling due within one year
 16 
5,548,668
-

  
5,548,668
-

Creditors: amounts falling due within one year
 17 
(248,164)
(5,000)

Net current assets/(liabilities)
  
 
 
5,300,504
 
 
(5,000)

Total assets less current liabilities
  
5,301,214
(4,290)

  

  

Net assets/(liabilities)
  
5,301,214
(4,290)


Capital and reserves
  

Called up share capital 
 19 
5,184,544
710

Profit and loss account brought forward
  
(5,000)
-

Profit/(loss) for the year
  
971,670
(5,000)

Other changes in the profit and loss account

  

(850,000)
-

Profit and loss account carried forward
  
116,670
(5,000)

  
5,301,214
(4,290)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


 


C. P. Hicks
J. J. Riordan
Director
Director


Date: 16 October 2023

The notes on pages 18 to 32 form part of these financial statements.

Page 12

 


TUNNELCRAFT HOLDINGS LIMITED
 



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 February 2021
710
3,728,484
3,729,194


Comprehensive income for the year

Profit for the year
-
396,462
396,462



At 1 February 2022
710
4,124,946
4,125,656


Comprehensive income for the year

Profit for the year

-
763,099
763,099
Total comprehensive income for the year
-
763,099
763,099


Contributions by and distributions to owners

Dividends: Equity capital
-
(850,000)
(850,000)

Shares issued during the year
5,183,834
-
5,183,834


At 31 January 2023
5,184,544
4,038,045
9,222,589


The notes on pages 18 to 32 form part of these financial statements.

Page 13

 


TUNNELCRAFT HOLDINGS LIMITED
 



COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 February 2021
710
-
710


Comprehensive income for the year

Loss for the year

-
(5,000)
(5,000)
Total comprehensive income for the year
-
(5,000)
(5,000)



At 1 February 2022
710
(5,000)
(4,290)


Comprehensive income for the year

Profit for the year

-
971,670
971,670
Total comprehensive income for the year
-
971,670
971,670


Contributions by and distributions to owners

Dividends: Equity capital
-
(850,000)
(850,000)

Shares issued during the year
5,183,834
-
5,183,834


Total transactions with owners
5,183,834
(850,000)
4,333,834


At 31 January 2023
5,184,544
116,670
5,301,214


The notes on pages 18 to 32 form part of these financial statements.

Page 14

 


TUNNELCRAFT HOLDINGS LIMITED
 



CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
763,099
396,462

Adjustments for:

Amortisation of intangible assets
1,400,000
-

Depreciation of tangible assets
37,214
12,968

Inter group hive up
12,741,680
-

Loss on disposal of tangible assets
-
(9,631)

Interest paid
302
-

Government grants
-
(5,769)

Interest received
-
(301)

Taxation charge
589,700
95,306

(Increase)/decrease in debtors
(7,078,070)
41,223

Increase in creditors
3,184,168
1,132,753

Increase in provisions
623,007
1,215,082

Corporation tax (paid)
(129,112)
(346,973)

Net cash generated from operating activities

12,131,988
2,531,120


Cash flows from investing activities

Purchase of intangible fixed assets
(14,000,000)
-

Purchase of tangible fixed assets
(45,875)
(78,634)

Sale of tangible fixed assets
-
9,631

Purchase of unlisted and other investments
-
(2,468,187)

Government grants received
-
5,769

Interest received
-
301

Net cash from investing activities

(14,045,875)
(2,531,120)
Page 15

 


TUNNELCRAFT HOLDINGS LIMITED
 



CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023


2023
2022

£
£



Cash flows from financing activities

Issue of ordinary shares
5,183,834
-

New secured loans
(7,592)
-

Dividends paid
(850,000)
-

Interest paid
(302)
-

Net cash used in financing activities
4,325,940
-

Net increase in cash and cash equivalents
2,412,053
-

Cash and cash equivalents at the end of year
2,412,053
-


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,419,645
-

Bank overdrafts
(7,592)
-

2,412,053
-


The notes on pages 18 to 32 form part of these financial statements.

Page 16

 


TUNNELCRAFT HOLDINGS LIMITED
 



CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 JANUARY 2023



Cash flows
At 31 January 2023
£

£

Cash at bank and in hand

2,419,645

2,419,645

Bank overdrafts

(7,592)

(7,592)


2,412,053
2,412,053

The notes on pages 18 to 32 form part of these financial statements.

Page 17

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

1.


General information

Tunnelcraft Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered address and the business address is presented on the Company's Information page.

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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Income and Retained Earnings in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Income and Retained Earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102.

 
2.3

Revenue

Revenue is recognised at the fair value of consideration received or receivable from the expense recharges, agency commission and license fees, provided in the normal course of business and is shown net of VAT.

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 Group 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.

Page 18

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

 
2.4

Operating leases: the Group 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.

 
2.5

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. 
Grants of a revenue nature are recognised in the Consolidated Statement of Income and Retained Earnings in the same period as the related expenditure.

 
2.6

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.

 
2.7

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

Page 19

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

 
2.8

Current and deferred taxation

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 reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting 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 reporting date.

  
2.9

Intangible assets

Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Income and Retained Earnings over its useful economic life.

 
2.10

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Income and Retained Earnings over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Page 20

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

 
2.11

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:

Plant and machinery
-
25%
Motor vehicles
-
25%
Fixtures and fittings
-
25%
Office equipment
-
25%

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.

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.13

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group 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 Group becomes aware of the obligation, and are measured at the best estimate at the reporting 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 Statement of Financial Position.

 
2.14

Financial instruments

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

Financial instruments are recognised in the Group's Statement of Financial Position when the Group 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.

 

Page 21

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)


2.14
Financial instruments (continued)

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.

Discounting is omitted where the effect of discounting is immaterial. The Group'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 Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies 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.


 
Page 22

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)


2.14
Financial instruments (continued)

The Company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's balance sheet when the Company becomes party to the contractual provisions of the instrument.

 
2.15

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the Company's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Establishing useful economic lives for depreciation purposes of tangible fixed asset
Tangible fixed assets, consisting primarily of fixtures and fittings, computer equipment and motor vehicles. The annual depreciation charge depends on the estimated useful economic lives of each type of asset and estimated residual values. The Directors regularly review these asset useful lives and change them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset useful lives can have an impact on depreciation charges for the period. Detail of useful economic lives is included in the accounting policies.
Estimating provisions
The Company makes an estimate of provisions which is based on employee costs for the year, amounts paid in previous years and the movement in CPI. Any significant change in the amounts paid would have an impact on the operating results. The amount of accrual is reviewed on an on-going basis.
Goodwill valuation and impairment
The Company makes a judgement on the valuation of goodwill on the acquisition of trade during the year. Further this leads to an estimate on the impairment of goodwill. Impairment reviews are carried out on a timely basis to ensure that the accounting policy adopted reflects a true and fair value of the assets.

Page 23

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Labour supply
54,145,039
22,087,291

54,145,039
22,087,291


All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£

Government grants receivable
-
5,769

-
5,769



6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation
37,214
12,868

Profit on disposal of assets
(11,000)
(9,631)

Other operating lease rentals
26,660
-

Amortisation
1,400,000
-


7.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Group's auditors for the audit of the consolidated and parent Company's financial statements and the financial statements of the Company's subsidiaries

48,380
17,000

Page 24

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

8.


Employees

Staff costs, including Directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
31,280,956
14,550,093
19,323,469
-

Social security costs
3,971,873
1,738,897
2,420,194
-

Cost of defined contribution scheme
990,308
1,407,982
230,743
-

36,243,137
17,696,972
21,974,406
-


The average monthly number of employees, including the Directors, during the year was as follows:



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Construction
327
179
-
-



Administration
7
7
3
3

334
186
3
3


9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
17,973
-

Company pension contributions to defined benefit schemes
623,007
1,215,082

640,980
1,215,082


During the year retirement benefits were accruing to 2 Directors (2022 - 2) in respect of defined contribution pension schemes.


10.


Interest payable and similar expenses

2023
2022
£
£


Other interest payable
302
-

302
-

Page 25

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
557,124
129,716

Adjustments in respect of previous periods
32,576
(34,410)


589,700
95,306


Total current tax
589,700
95,306

Deferred tax

Total deferred tax
-
-


Taxation on profit on ordinary activities
589,700
95,306

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,352,799
491,768


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
257,032
93,436

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
15,828
-

Capital allowances for year in excess of depreciation
19,214
(75,059)

Depreciation added back
-
12,968

Adjustments to tax charge in respect of prior periods
32,576
-

Unrelieved tax losses brought  forward
(950)
-

Unrelieved tax losses carried forward
-
950

Share of loss in investment
-
63,011

Amortisation added back
266,000
-

Total tax charge for the year
589,700
95,306


Factors that may affect future tax charges

On 3 March 2021, the UK Government announced that from 1 April 2023, the main rate Corporation Tax on profits over £250,000 will be increased to 25%.

Page 26

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

12.


Dividends

2023
2022
£
£


Dividends
850,000
-

850,000
-


13.


Intangible assets

Group





Goodwill

£



Cost


Additions
14,000,000



At 31 January 2023

14,000,000



Amortisation


Charge for the year on owned assets
1,400,000



At 31 January 2023

1,400,000



Net book value



At 31 January 2023
12,600,000



At 31 January 2022
-



Page 27

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
 
           13.Intangible assets (continued)

Company




Goodwill

£





Additions
14,000,000


Disposals
(14,000,000)



At 31 January 2023

-






Net book value



At 31 January 2023
-



At 31 January 2022
-


14.


Tangible fixed assets

Group






Plant and machinery
Motor vehicles
Fixtures and fittings
Office equipment
Total

£
£
£
£
£



Cost or valuation


At 1 February 2022
34,476
96,568
10,304
71,916
213,264


Additions
-
42,730
-
3,145
45,875


Disposals
-
(26,929)
-
-
(26,929)



At 31 January 2023

34,476
112,369
10,304
75,061
232,210



Depreciation


At 1 February 2022
1,937
71,884
7,483
50,221
131,525


Charge for the year
8,619
17,265
802
10,528
37,214


Disposals
-
(26,929)
-
-
(26,929)



At 31 January 2023

10,556
62,220
8,285
60,749
141,810



Net book value



At 31 January 2023
23,920
50,149
2,019
14,312
90,400



At 31 January 2022
32,539
24,684
2,821
21,695
81,739

Page 28

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

15.


Fixed asset investments

Group





Unlisted investments

£





At 1 February 2022
12,741,680


Transfers intra group
(12,741,680)



At 31 January 2023
-




Company





Investments in subsidiary companies

£



Cost or valuation


At 1 February 2022
710



At 31 January 2023
710





The carrying value of the investments and the aggregate of the share capital and reserves as at 31 January 2023 and the profit or loss for the year ended on that date for the subsidiary undertaking was as follows:



Subsidiary undertaking


The following was a subsidiary undertaking of the Company.

Name

Registered office

Class of shares

Holding

Tunnelcraft Limited
Ground Floor, Sidney House, Christy Close, Southfields Business Park, Basildon, Essex, SS15 6TN
Ordinary
100%

The aggregate of the share capital and reserves as at 31 January 2023 and the profit or loss for the year ended on that date for the subsidiary undertaking were as follows:

Name
Aggregate of share capital and reserves
Profit/(loss)

Tunnelcraft Limited
3,922,085
(208,571)

Page 29

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

16.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
576,346
-
-
-

Amounts owed by group undertakings
850,000
-
5,548,668
-

Other debtors
410,764
-
-
-

Prepayments and accrued income
144,792
-
-
-

Amounts recoverable on long-term contracts
5,946,168
-
-
-

7,928,070
-
5,548,668
-



17.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank overdrafts
7,592
-
-
-

Trade creditors
89,999
-
-
-

Amounts owed to group undertakings
850,000
-
-
-

Corporation tax
557,124
96,536
243,164
-

Other taxation and social security
2,359,715
-
-
-

Other creditors
544,714
385,358
-
-

Accruals and deferred income
1,638,864
1,071,358
5,000
5,000

6,048,008
1,553,252
248,164
5,000



18.


Provisions


Group






Retirement benefits

£





At 1 February 2022
7,144,511


Charged to profit or loss
623,007



At 31 January 2023
7,767,518



Page 30

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

17.


Provisions (continued)

Retirement benefits
2023
Retirement benefits
2022
£
£

Group


At 1 February 2022
7,144,511
5,929,429

Additional provision
623,007
1,215,082

At 31 January 2023
7,767,518
7,144,511

The Group provides a pension benefit in respect of senior employees. Amounts payable are charged to the profit and loss account in the year the contracts are entered into between the Group and the employees. The number of Directors to whom pension benefits are accruing under these pension agreements is 2 (2022 - 2).
The contributions and potential liabilities of the Group is respect of the pension agreements are fixed at least until the date of retirement of the employees which is over 10 years from the year end date. 
Although under section 28 of FRS102 this pension agreement is regarded as being a defined benefit scheme, the Directors are of the opinion that it does not bear any of the hallmarks of what is usually considered to be a defined benefit scheme and therefore no further disclosures are considered necessary in order to understand the nature and measurement of the liability. 
The Directors are also of the opinion that the liability as disclosed in the financial statements represents the full and final amount which could be expect, at this stage, to be paid in the future to settle the pension agreement liabilities.


19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



236 (2022 - 236) Ordinary A shares of £1.00 each
236
236
236 (2022 - 236) Ordinary B shares of £1.00 each
236
236
238 (2022 - 238) Ordinary C shares of £1.00 each
238
238
5,184,544 (2022 - 0) Redeemable preference shares of £1.00 each
5,183,834
-

5,184,544

710


5,184,544 redeemable preference shares were issued during the year in return for the trade, assets and liabilities of Tunnelcraft Labour Services LLP.

Redeemable preference shares are classified as equity in accordance with Section 22 (liabilities and equity) as they are redeemable at the option of the issuer and carry no right to a return. The Company is not obliged to redeem these shares and merely has the option to do so. No premium is required to be paid on redemption.  Each ordinary share entitles the holder to receive notice of all general meetings and to attend and vote at any general meeting. One vote per member on a show of hands, one vote per share on a poll.
Each preference share is entitled to receive notice of meetings but not attend or vote, unless specific business is in discussion. They are not entitled to participation in the profits or assets except on a winding up or liquidation.

Page 31

 


TUNNELCRAFT HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

20.


Reserves

Profit and loss account

This reserve records retained earnings and accumulated losses.


21.


Retirement benefit schemes


The Group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. The above pension charge includes an amount of £230,743 (2022 - £192,900) in respect of defined contribution scheme paid by the Group to the funds.
The Group also provided pension benefits in respect of senior employees. Amounts payable are charged to the profit and loss account in the year the contracts are entered into between the Group and the employees. The number of Directors to whom pension benefits are accruing under these pension agreements is 2 (2022 - 2).
The contributions and potential liabilities of the Group in respect of the pension agreements are fixed at least until the date of retirement of the employees which is over 10 years from the end date.
Although under section 28 of FRS 102 this pension arrangement is regarded as being a defined benefit scheme, the Directors are of the opinion that it does not bear any of the hallmarks of what is usually considered to be a defined benefit scheme and therefore no further disclosures are considered necessary in order to understand the nature and measurement of the liability.
The Directors are also of the opinion that the liability as disclosed in the financial statements represents the full and final amount which could be expected, at this stage, to be paid in the future to settle the pension agreement liabilities.


22.


Commitments under operating leases

At 31 January 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Not later than 1 year
20,000
20,000
20,000
20,000

Later than 1 year and not later than 5 years
16,667
16,667
16,667
16,667

36,667
36,667
36,667
36,667


23.


Controlling party

The Company is controlled by its Directors with no one party having ultimate control.

 
Page 32