Company registration number 03840706 (England and Wales)
JESSOPS CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
JESSOPS CONSTRUCTION LIMITED
COMPANY INFORMATION
Director
R Wherry
Secretary
K Yarwood
Company number
03840706
Registered office
The Firs
67 London Road
Newark
Nottinghamshire
NG24 1RZ
Auditor
Mercer & Hole LLP
Trinity Court
Church Street
Rickmansworth
WD3 1RT
Business address
The Firs
67 London Road
Newark
Nottinghamshire
NG24 1RZ
JESSOPS CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
JESSOPS CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -
The director presents the strategic report for the year ended 31 May 2023.
Review and analysis of the business during the current year
The company’s principle activity during the period was construction.
The focus of the management team is to deliver high quality service to our clients.
Trading conditions remained challenging given the impact of the pandemic and material and labour supply issues within the sector. The director has focused on securing contracts whilst limiting the exposure to risk for these issues.
Turnover has increased to £9,216,839 (2022 -£7,066,363) with a gross margin achieved of 18.5% (2022: 17.93%)
The profit for the year before taxation amount to £492,227 (2022: £198,841).
Principal risks and uncertainties facing the business
Management continually monitor the key risks facing the company, together with assessing the controls used for managing these risks. The board of directors formally reviews and documents the principal risks facing the business at least annually.
The principal risks and uncertainties facing the company are as follows:
i) Contract risk –Time is invested in the tendering process, ensuring a realistic programme and margin to reduce this risk. Projects are closely monitored for performance and any indicators of performance issues are swiftly reviewed and monitored by a pro-active management team.
ii) Competitor pressure – trading conditions remain competitive, and therefore competitor pressure could result in losing sales to key competitors. The company manages this risk by carrying out high quality work and maintaining strong relationships with its key customers.
iii) People – The company depends upon its management team and highly skilled workforce but acknowledge the increasingly competitive market for people. Management seek to ensure that all personnel are appropriately remunerated and ensure that good performance is rewarded.
iv) Health & safety issues – The company operates high standards of health & safety with regular training for all employees and subcontractor’s.
Key performance indicators
Management use a range of performance measures to monitor and manage the business. The KPIs used to determine the progress and performance of the company are set out below:
i) Gross profit margin -The company's gross profit margin in the year under review has increased to 18.5% (2022: 17.93%).
ii) Net current assets – net current assets represents the liquidity of the company and amounted to £3,242,384 (2022: £2,741,973).
iii) Financing – The company continues to operate without any bank debt and retains significant cash resources within the Group to provide funding if required.
JESSOPS CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
Outlook
The company has secured contracts for 2024 and 2025 and the director is confident of increasing trading activity in the forthcoming years.
R Wherry
Director
30 October 2023
JESSOPS CONSTRUCTION LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -
The director presents his annual report and financial statements for the year ended 31 May 2023.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
R Wherry
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Financial instruments
The company's principal financial instruments comprise of bank balances. The main purpose of its financial instrument is to finance the company's operations.
In respect of bank balances, the liquidity risk is managed by transferring funds between the accounts of the company to obtain the maximum rate of interest, whilst not impacting on the immediate financial needs of the company.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Liquidity risk in respect of creditors is managed by ensuring sufficient funds are available to meet amounts due.
Future developments
Presently, the company has already secured contracts for the next 12 months with the aim of improving performance in the next year.
Auditor
The auditor, Mercer & Hole LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
R Wherry
Director
30 October 2023
JESSOPS CONSTRUCTION LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2023
- 4 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
JESSOPS CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF JESSOPS CONSTRUCTION LIMITED
- 5 -
Opinion
We have audited the financial statements of Jessops Construction Limited (the 'company') for the year ended 31 May 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 May 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 director's 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 director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. 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. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
JESSOPS CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF JESSOPS CONSTRUCTION LIMITED
- 6 -
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 director's 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to, the Companies Act 2006 and tax legislation.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure and management bias in accounting estimates.
Audit procedures performed by the engagement team included:
discussions with management, including considerations of known or suspected instances of non- compliance with laws and regulations and fraud;
gaining an understanding of management's controls designed to prevent and detect irregularities; and
identifying and testing journal entries.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non- compliance and cannot be expected to detect non-compliance with all laws and regulations.
JESSOPS CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF JESSOPS CONSTRUCTION LIMITED
- 7 -
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.
Jolene Upshall FCA
Senior Statutory Auditor
For and on behalf of Mercer & Hole LLP
31 October 2023
Chartered Accountants
Statutory Auditor
Trinity Court
Church Street
Rickmansworth
WD3 1RT
JESSOPS CONSTRUCTION LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
9,216,839
7,066,364
Cost of sales
(7,504,519)
(5,799,324)
Gross profit
1,712,320
1,267,040
Administrative expenses
(1,237,881)
(1,087,822)
Other operating income
16,492
19,623
Operating profit
4
490,931
198,841
Interest receivable and similar income
8
1,296
Profit before taxation
492,227
198,841
Tax on profit
9
8,184
(16,780)
Profit for the financial year
500,411
182,061
The profit and loss account has been prepared on the basis that all operations are continuing operations.
JESSOPS CONSTRUCTION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 9 -
2023
2022
£
£
Profit for the year
500,411
182,061
Other comprehensive income
-
-
Total comprehensive income for the year
500,411
182,061
JESSOPS CONSTRUCTION LIMITED
BALANCE SHEET
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
425,569
331,688
Current assets
Debtors
12
3,403,434
2,628,003
Cash at bank and in hand
1,669,635
1,664,456
5,073,069
4,292,459
Creditors: amounts falling due within one year
13
(2,213,406)
(1,820,676)
Net current assets
2,859,663
2,471,783
Total assets less current liabilities
3,285,232
2,803,471
Provisions for liabilities
14
(42,848)
(61,498)
Net assets
3,242,384
2,741,973
Capital and reserves
Called up share capital
16
14,875
14,875
Capital redemption reserve
55,440
55,440
Profit and loss reserves
3,172,069
2,671,658
Total equity
3,242,384
2,741,973
The financial statements were approved and signed by the director and authorised for issue on 30 October 2023
R Wherry
Director
Company Registration No. 03840706
JESSOPS CONSTRUCTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 June 2021
14,875
396,229
55,440
3,953,368
4,419,912
Year ended 31 May 2022:
Profit and total comprehensive income
-
-
-
182,061
182,061
Dividends
10
-
-
-
(1,860,000)
(1,860,000)
Transfers
-
(396,229)
-
396,229
-
Balance at 31 May 2022
14,875
55,440
2,671,658
2,741,973
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
-
500,411
500,411
Balance at 31 May 2023
14,875
55,440
3,172,069
3,242,384
JESSOPS CONSTRUCTION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
19
159,679
2,344,935
Income taxes refunded/(paid)
53,507
(31,443)
Net cash inflow from operating activities
213,186
2,313,492
Investing activities
Purchase of tangible fixed assets
(226,303)
(71,996)
Proceeds from disposal of tangible fixed assets
17,000
51,169
Interest received
1,296
Net cash used in investing activities
(208,007)
(20,827)
Financing activities
Dividends paid
(1,860,000)
Net cash used in financing activities
-
(1,860,000)
Net increase in cash and cash equivalents
5,179
432,665
Cash and cash equivalents at beginning of year
1,664,456
1,231,791
Cash and cash equivalents at end of year
1,669,635
1,664,456
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 13 -
1
Accounting policies
Company information
Jessops Construction Limited is a company limited by shares incorporated in England and Wales. The registered office is The Firs, 67 London Road, Newark, Nottinghamshire, NG24 1RZ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents the value of construction work done during the year net of value added tax. The value of work done is calculated as the certified work, plus the amount anticipated to be certified, adjusted for over and under measure. As described in more detail in note 1.6, revenue and costs are recognised by reference to the stage of completion of construction contracts where it can be reliably measured.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
25% reducing balance
Fixtures, fittings & equipment
25% reducing balance
During the year, the company changed it's depreciation rate for fixtures, fittings & equipment from 15% reducing balance to 25% reducing balance. The Director believes 25% reducing balance reflects the useful life of the fixed assets.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 14 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
The value of work done is calculated as the certified work, plus the amount anticipated to be certified, allowing for over and under measure, this is then used to determine the appropriate amount to recognise as income in a given period. The stage of completion is also measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs.
Amounts due from contract customers (amounts recoverable on contracts) at the year end are included in debtors and are calculated at the estimated value of work done at the balance sheet date that has not been invoiced.
1.7
Cash at bank and in hand
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts.
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities
Basic financial liabilities, including creditors are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 17 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 18 -
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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 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.
Critical judgements
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment assets, the director has considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no material indicators of impairments identified during the current financial year other than in respect of bad and doubtful trade debtor balances recognised in the financial statements and change in property valuations.
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 19 -
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.
Revenue recognition in respect of services
The company uses the percentage of completion method to recognise project revenue for fixed-price contracts. This method requires the director to estimate the level of services performed at each reporting date as a proportion of the total services to be performed to complete the contract. Variations to estimates could result in the over or under recognition of revenue.
Recoverability of receivables
The company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the director considers factors such as the aging of the receivables, past experience of recoverability and the credit profile of individuals or groups of customers.
Determining residual values and useful economic lives of property, plant and equipment
The company depreciates tangible assets over their estimated useful lives. The estimation of the useful lives of the assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.
Judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the company would currently obtain for the disposal of the asset, if it were already of the condition expected a the end of its useful economic life. Where possible this is done with reference to external market prices.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sales
9,172,999
7,028,240
Sundry sales
43,840
38,124
9,216,839
7,066,364
2023
2022
£
£
Turnover analysed by geographical market
UK sales
9,216,839
7,066,364
2023
2022
£
£
Other revenue
Interest income
1,296
-
Grants received
3,000
15,663
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(3,000)
(15,663)
Depreciation of owned tangible fixed assets
121,581
134,388
Profit on disposal of tangible fixed assets
(6,159)
(48,439)
Operating lease charges
193,206
29,415
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,080
16,800
For other services
All other non-audit services
12,500
16,280
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Management
5
5
Administration
5
4
Construction
10
10
Total
20
19
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,199,681
907,112
Social security costs
10,819
10,942
Pension costs
68,845
67,496
1,279,345
985,550
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
7
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
88,000
87,888
Company pension contributions to defined contribution schemes
40,000
28,000
128,000
115,888
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1,296
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
1,296
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current year
81,889
45,922
Adjustments in respect of prior periods
(71,423)
(27,549)
Total current tax
10,466
18,373
Deferred tax
Origination and reversal of timing differences
(18,650)
(1,593)
Total tax (credit)/charge
(8,184)
16,780
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
9
Taxation
(Continued)
- 22 -
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
492,227
198,841
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
98,445
37,780
Tax effect of expenses that are not deductible in determining taxable profit
5,433
4,173
Gains not taxable
(1,232)
(9,026)
Adjustments in respect of prior years
943
Permanent capital allowances in excess of depreciation
(20,757)
12,996
Research and development tax credit
(71,423)
(28,493)
Deferred tax adjustments
(18,650)
(1,593)
Taxation (credit)/charge for the year
(8,184)
16,780
10
Dividends
2023
2022
£
£
Final paid
1,860,000
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 23 -
11
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
Cost or valuation
At 1 June 2022
995,437
148,885
1,144,322
Additions
114,816
111,487
226,303
Disposals
(267,490)
(80,051)
(347,541)
At 31 May 2023
842,763
180,321
1,023,084
Depreciation and impairment
At 1 June 2022
726,001
86,633
812,634
Depreciation charged in the year
88,933
32,648
121,581
Eliminated in respect of disposals
(261,934)
(74,766)
(336,700)
At 31 May 2023
553,000
44,515
597,515
Carrying amount
At 31 May 2023
289,763
135,806
425,569
At 31 May 2022
269,436
62,252
331,688
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
828,782
914,354
Amounts owed by group undertakings
2,472,893
1,522,893
Other debtors
35,770
82,800
Prepayments and accrued income
65,989
107,956
3,403,434
2,628,003
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 24 -
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,751,649
1,500,381
Corporation tax
81,889
17,916
Other taxation and social security
247,556
185,178
Other creditors
39,892
6,039
Accruals and deferred income
92,420
111,162
2,213,406
1,820,676
14
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
42,848
61,498
2023
Movements in the year:
£
Liability at 1 June 2022
61,498
Credit to profit or loss
(18,650)
Liability at 31 May 2023
42,848
The deferred tax liability set out above is expected to reverse over the life of the qualifying assets and relates to accelerated capital allowances.
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
68,845
67,496
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
14,875
14,875
14,875
14,875
17
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sale of construction services
2023
2022
£
£
Related party entities
9,696
5,186,516
The following amounts were outstanding at the reporting end date:
2023
Balance
Amounts owed by related parties
£
Related party entities
1,700
2022
Balance
Amounts owed in previous period
£
Related party entities
2,432
The company has taken advantage of the exemption conferred by paragraph 33.1A of FRS 102 "Related Party Disclosures" not to disclose transactions with other group entities, whose voting rights are 100% controlled within the group, and where consolidated financial statements of the group are publicly available. This exemption is available as Jessops Construction Limited is a wholly owned subsidiary of Jessops (Holdings) Limited.
All transactions were made on an arm's length basis. The amounts due are trading balances and therefore are due under normal credit terms.
18
Ultimate controlling party
In the current and prior year, the company was a wholly owned subsidiary of Jessops (Holdings) Limited, as it owned 100% of the issued share capital.
The largest and smallest group in which results of the company are consolidated is that of Jessops (Holdings) Limited. Jessops (Holdings) Limited has a registered office of The Firs, 67 London Road, Newark, Nottinghamshire, NG24 1RZ.
R Wherry was the ultimate controlling party throughout the prior and current year as he owns 100% of the issued share capital of Jessops (Holdings) Limited.
JESSOPS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 26 -
19
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
500,411
182,061
Adjustments for:
Taxation (credited)/charged
(8,184)
16,780
Investment income
(1,296)
Gain on disposal of tangible fixed assets
(6,159)
(48,439)
Depreciation and impairment of tangible fixed assets
121,581
134,388
Movements in working capital:
(Increase)/decrease in debtors
(775,431)
2,099,437
Increase/(decrease) in creditors
328,757
(39,292)
Cash generated from operations
159,679
2,344,935
20
Analysis of changes in net funds
1 June 2022
Cash flows
31 May 2023
£
£
£
Cash at bank and in hand
1,664,456
5,179
1,669,635
2023-05-312022-06-01falseCCH SoftwareCCH Accounts Production 2023.200No description of principal activityR WherryK Yarwood500411038407062022-06-012023-05-3103840706bus:Director12022-06-012023-05-3103840706bus:CompanySecretary12022-06-012023-05-3103840706bus:RegisteredOffice2022-06-012023-05-31038407062023-05-31038407062021-06-012022-05-3103840706core:RetainedEarningsAccumulatedLosses2021-06-012022-05-3103840706core:RetainedEarningsAccumulatedLosses2022-06-012023-05-31038407062022-05-3103840706core:PlantMachinery2023-05-3103840706core:FurnitureFittings2023-05-3103840706core:PlantMachinery2022-05-3103840706core:FurnitureFittings2022-05-3103840706core:CurrentFinancialInstrumentscore:WithinOneYear2023-05-3103840706core:CurrentFinancialInstrumentscore:WithinOneYear2022-05-3103840706core:CurrentFinancialInstruments2023-05-3103840706core:CurrentFinancialInstruments2022-05-3103840706core:ShareCapital2023-05-3103840706core:ShareCapital2022-05-3103840706core:CapitalRedemptionReserve2023-05-3103840706core:CapitalRedemptionReserve2022-05-3103840706core:RetainedEarningsAccumulatedLosses2023-05-3103840706core:RetainedEarningsAccumulatedLosses2022-05-3103840706core:ShareCapital2021-05-3103840706core:RevaluationReserve2021-05-3103840706core:CapitalRedemptionReserve2021-05-3103840706core:RetainedEarningsAccumulatedLosses2021-05-3103840706core:RevaluationReserve2022-05-3103840706core:RevaluationReserve2023-05-31038407062022-05-31038407062021-05-3103840706core:PlantMachinery2022-06-012023-05-3103840706core:FurnitureFittings2022-06-012023-05-3103840706core:UKTax2022-06-012023-05-3103840706core:UKTax2021-06-012022-05-310384070612022-06-012023-05-310384070612021-06-012022-05-310384070622022-06-012023-05-310384070622021-06-012022-05-3103840706core:PlantMachinery2022-05-3103840706core:FurnitureFittings2022-05-3103840706bus:PrivateLimitedCompanyLtd2022-06-012023-05-3103840706bus:FRS1022022-06-012023-05-3103840706bus:Audited2022-06-012023-05-3103840706bus:FullAccounts2022-06-012023-05-31xbrli:purexbrli:sharesiso4217:GBP