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REGISTERED NUMBER: SC191842 (Scotland)



















STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 APRIL 2023

FOR

HUGH L S MCCONNELL LIMITED

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)






CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 4

Report of the Independent Auditors 6

Statement of Income and Retained Earnings 10

Balance Sheet 11

Cash Flow Statement 12

Notes to the Cash Flow Statement 13

Notes to the Financial Statements 14


HUGH L S MCCONNELL LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 30 APRIL 2023







DIRECTORS: E McGarvey
R McGregor
A Burton
J Wallis
K Downs





REGISTERED OFFICE: 6 Inkerman Place
KILMARNOCK
Ayrshire
KA1 2RL





REGISTERED NUMBER: SC191842 (Scotland)





AUDITORS: Gilmour Hamilton
Statutory Auditor
37 Portland Road
KILMARNOCK
Ayrshire
KA1 2DJ

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2023

The directors present their strategic report for the year ended 30 April 2023.

PRINCIPAL ACTIVITY
The principal activity of the company are those of building & facility refurbishment and maintenance within the retail, commercial, residential, industrial and infrastructure sectors.

REVIEW AND ANALYSIS OF THE BUSINESS
We have delivered a solid year of growth in all aspects of the business. Revenue has increased from £25m (FY22) to £35m; Operating Profit from £1m (FY22) to £1.5m; and our year end cash position improved from £2m (FY22) to £3.8m.

Significant value long-term contracts were secured during the year, and we go into FY24 with a strong order book and large addressable pipeline of opportunities. Our customer base has been broadened significantly, particularly in London and the Southeast of England.

A major investment was made in our IT infrastructure with integration of new ERP software achieved in Q4, and continued major investment was made in progressively converting our fleet to EV and PHEV vehicles.
Total capital investment was £1.1m.

The Directors are very pleased with the overall performance of the business in FY23 and would again like to thank all employees, supply chain partners, advisors, and customers for their support, commitment, and loyalty.

OPERATIONAL RISKS AND UNCERTAINTIES

Operational Risk
The key operational risk is the management of higher value projects. The risk is mitigated by our continued investment in the management team, recruiting capable managers with relevant experience; our certified quality control procedures; and targeting projects that are comfortably within our leadership and management skill set, focussing on our core business and not overly diversifying.

Financial Risk
The global economy is under strain and the UK continues to be affected by rising interest rates, high inflation, rising costs, and political and economic uncertainty. The construction industry is being affected by all these factors.

McConnell continues to grow and strengthen without experiencing any material bad debt or credit encumbrances. We adopt a cautious approach to accounts provisioning, acknowledging the risks that exist within the construction sector.

The principal financial risk to the business is credit based. The possibility of a customer experiencing solvency issues during a significant project is the main exposure the business faces. This risk has been mitigated by continued diligent credit risk analysis prior to contractual commitment. All significant projects with customers who are not government or publicly funded are credit risk assessed. Our customer base consists of government & publicly funded organisations, and blue chip private and infrastructure clients.

Our liquidity risk is mitigated by daily cashflow monitoring. Senior management are provided with real-time cashflow projections to ensure that we have sufficient liquidity to meet all our commitments. An experienced Finance Director and capable Commercial team oversee cash management and commercial performance. During FY23 we reduced our CBILS loan by £170k to £510k,

We negotiate contracts to share the risk of rising costs and protect McConnell from having to absorb unexpected cost increases where they are not within our control. We also negotiate contracts to remove unfair risks and we avoid customers that have unreasonable expectations in that regard.

We believe McConnell is well placed to continue to effectively manage risk and capitalise on the opportunities that are materialising from increased funding entering the sectors that we operate in. We have a strong order book and opportunities pipeline for FY24 and look forward to another positive year in the development of the business.


HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2023

ON BEHALF OF THE BOARD:





E McGarvey - Director


21 November 2023

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 30 APRIL 2023

The directors present their report with the financial statements of the company for the year ended 30 April 2023.

PRINCIPAL ACTIVITIES
The principal activities of the company in the year under review were those of building & facility refurbishment and maintenance within the retail, commercial, residential, industrial and infrastructure sectors.

DIVIDENDS
The total distribution of dividends for the year ended 30 April 2023 was £164,000 (2022: £156,100).

DIRECTORS
The directors shown below have held office during the whole of the period from 1 May 2022 to the date of this report.

E McGarvey
R McGregor
A Burton
J Wallis
K Downs

FINANCIAL INSTRUMENTS
Interest rate risk
The company manages its cash and borrowing requirements to minimise interest expense whilst ensuring that it has sufficient liquid resources to meet the operating needs of the business. The company is exposed to increased interest costs should bank base rates increase.

Credit risk
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors' balances are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

The company's bank deposits are held by banks with high credit ratings assigned by international credit rating agencies.

DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 30 APRIL 2023


STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
The auditors, Gilmour Hamilton, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





E McGarvey - Director


21 November 2023

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HUGH L S MCCONNELL LIMITED

Opinion
We have audited the financial statements of Hugh L S McConnell Limited (the 'company') for the year ended 30 April 2023 which comprise the Statement of Income and Retained Earnings, Balance Sheet, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 30 April 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.

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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HUGH L S MCCONNELL LIMITED


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 Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HUGH L S MCCONNELL LIMITED


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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. A summary of the procedures we designed and executed to detect irregularities, including fraud is set out below:

- performing analytical procedures to identify unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud and tested accordingly;

- reviewing correspondence with regulatory bodies, such as HMRC, and reviewing documentation
for indications of non-compliance with laws and regulations;

- determining whether the accounting policies, treatments and presentation adopted in the financial
statements is in accordance with 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);

- identifying whether there are instances of potential bias in areas with significant degrees of
judgement such as amounts recoverable on contracts;

- in addressing the risk of fraud through management override of controls, testing the appropriateness
of journal entries and other adjustments; assessing whether the judgements made in making
accounting estimates are indicative of a potential bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of business;

- in addressing the risk of fraud in revenue recognition obtaining an understanding of the controls
in place and where possible testing the operating effectiveness of those controls. Substantive tests
were executed to supplement testing of controls;

- vouching balances and reconciling items in management's key control account reconciliations to
supporting documentation as at 30 April 2023; and

- carrying out detailed testing, on a sample basis, of material transactions, financial statement
categories and balances to appropriate documentary evidence to verify the completeness,
occurrence and accuracy of the reported financial statements.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentation or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, or the greater the concealment of irregularities, including fraud, the less likely we are to become aware of it.

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 Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HUGH L S MCCONNELL LIMITED


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.




Neil McConnell BAcc CA (Senior Statutory Auditor)
for and on behalf of Gilmour Hamilton
Statutory Auditor
37 Portland Road
KILMARNOCK
Ayrshire
KA1 2DJ

21 November 2023

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 APRIL 2023

2023 2022
Notes £    £    £    £   

TURNOVER 3 34,660,938 25,015,790

Other operating income 28,569 17,457
34,689,507 25,033,247

Raw materials and consumables 7,204,705 5,387,762
Other external expenses 17,137,062 12,497,590
24,341,767 17,885,352
10,347,740 7,147,895

Staff costs 4 6,767,929 4,926,157
Depreciation 224,965 130,875
Other operating expenses 1,855,439 1,075,525
8,848,333 6,132,557
OPERATING PROFIT 5 1,499,407 1,015,338


Interest payable and similar expenses 6 49,119 30,682
PROFIT BEFORE TAXATION 1,450,288 984,656

Tax on profit 7 220,728 116,430
PROFIT FOR THE FINANCIAL YEAR 1,229,560 868,226

Retained earnings at beginning of year 2,514,217 1,802,091

Dividends 8 (164,000 ) (156,100 )

RETAINED EARNINGS AT END OF
YEAR

3,579,777

2,514,217

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

BALANCE SHEET
30 APRIL 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 9 - -
Tangible assets 10 1,109,898 288,970
Investments 11 32,004 32,004
1,141,902 320,974

CURRENT ASSETS
Stocks 12 10,000 10,000
Debtors 13 7,848,958 6,648,710
Cash at bank and in hand 3,834,722 2,011,533
11,693,680 8,670,243
CREDITORS
Amounts falling due within one year 14 7,961,709 5,760,777
NET CURRENT ASSETS 3,731,971 2,909,466
TOTAL ASSETS LESS CURRENT
LIABILITIES

4,873,873

3,230,440

CREDITORS
Amounts falling due after more than one
year

15

(991,228

)

(601,617

)

PROVISIONS FOR LIABILITIES 20 (227,868 ) (39,606 )
NET ASSETS 3,654,777 2,589,217

CAPITAL AND RESERVES
Called up share capital 21 75,000 75,000
Retained earnings 22 3,579,777 2,514,217
SHAREHOLDERS' FUNDS 3,654,777 2,589,217

The financial statements were approved by the Board of Directors and authorised for issue on 21 November 2023 and were signed on its behalf by:





E McGarvey - Director


HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 APRIL 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 2,503,946 533,119
Interest paid (27,537 ) (21,109 )
Interest element of hire purchase
payments paid

(21,582

)

(9,573

)
Tax paid 92 -
Net cash from operating activities 2,454,919 502,437

Cash flows from investing activities
Purchase of tangible fixed assets (1,108,369 ) (161,810 )
Sale of tangible fixed assets 62,482 1,175
Net cash from investing activities (1,045,887 ) (160,635 )

Cash flows from financing activities
New hire purchase agreement 821,268 24,623
Amount advanced by group undertakings 95,920 -
Hire purchase repayments in year (169,031 ) (67,411 )
Loan repayments in the year (170,000 ) (170,000 )
Equity dividends paid (164,000 ) (156,100 )
Net cash from financing activities 414,157 (368,888 )

Increase/(decrease) in cash and cash equivalents 1,823,189 (27,086 )
Cash and cash equivalents at
beginning of year

2

2,011,533

2,038,619

Cash and cash equivalents at end of
year

2

3,834,722

2,011,533

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 APRIL 2023

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
2023 2022
£    £   
Profit before taxation 1,450,288 984,656
Depreciation charges 261,404 130,783
(Profit)/loss on disposal of fixed assets (36,439 ) 92
Finance costs 49,119 30,682
1,724,372 1,146,213
Increase in trade and other debtors (1,200,251 ) (2,898,772 )
Increase in trade and other creditors 1,979,825 2,285,678
Cash generated from operations 2,503,946 533,119

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 30 April 2023
30.4.23 1.5.22
£    £   
Cash and cash equivalents 3,834,722 2,011,533
Year ended 30 April 2022
30.4.22 1.5.21
£    £   
Cash and cash equivalents 2,011,533 2,038,619


3. ANALYSIS OF CHANGES IN NET FUNDS

At 1.5.22 Cash flow At 30.4.23
£    £    £   
Net cash
Cash at bank and in hand 2,011,533 1,823,189 3,834,722
2,011,533 1,823,189 3,834,722
Debt
Finance leases (93,193 ) (652,237 ) (745,430 )
Debts falling due within 1 year (170,000 ) - (170,000 )
Debts falling due after 1 year (510,000 ) 170,000 (340,000 )
(773,193 ) (482,237 ) (1,255,430 )
Total 1,238,340 1,340,952 2,579,292

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

1. STATUTORY INFORMATION

Hugh L S McConnell Limited is a private company, limited by shares , registered in Scotland. The company's registered number and registered office address can be found on the Company Information page.

2. ACCOUNTING POLICIES

General information and basis of preparation
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared in pounds sterling which is the functional currency of the company and rounded to the nearest pound.

The significant accounting policies applied in the preparation of these financial statements are set out below.

Preparation of consolidated financial statements
The financial statements contain information about Hugh L S McConnell Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, McConnell Group Limited, United Kingdom.

Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported as assets, liabilities, revenues and expenses for the year. The key sources of estimation uncertainty are as follows:

Depreciation and amortisation of tangible and intangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The expected lives of assets and their residual values are assessed regularly and may vary depending on a number of factors including asset life cycles, maintenance programmes etc.

Impairment of assets
Tangible fixed assets, intangible fixed assets, fixed asset investments, stock and debtors are all reviewed for evidence of impairment.

In connection with fixed assets (tangible, intangible and investments) factors taken into consideration include the economic viability and the expected future financial performance of the assets.

Trade debtors are reviewed for evidence of impairment. Factors considered include ageing, past recovery rates, customer creditworthiness, and the stage and expected outcome of any recovery proceedings.

Contract accounting
When determining the amount to include as amounts recoverable on contracts and thereby the amount of profit to recognise on individual contracts, factors such as the stage of completion and forecasted outturn of the contract are taken into account.

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

2. ACCOUNTING POLICIES - continued

Turnover
Turnover is measured at the fair value of consideration received net of VAT. The policy adopted for the recognition of turnover are as follows:

Construction contracts
When the outcome of a construction contract can be estimated reliably, contract costs and turnover are recognised by reference to the stage of completion at the balance sheet date. Stage of completion is measured by reference to agreed valuations, current and projected contract costs and expected sales value.

Where the outcome cannot be measured reliably, contract costs are recognised as an expense in the period in which they are incurred and contract turnover is recognised to the extent of costs incurred that it is probable will be recoverable.

When it is probable that contract costs will exceed the total contract turnover, the expected loss is recognised as an expense immediately, with a corresponding provision.

Goodwill
The company has elected not to restate any business combinations which took place prior to the transition to FRS102. Goodwill therefore includes other intangible assets (such as customer lists) which were acquired prior to the transition date.

Goodwill is measured at cost less accumulated amortisation and any accumulated impairment losses. It has been amortised evenly over its estimated useful life of twenty years.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.
Plant and machinery - 25% on cost and 25% on reducing balance
Fixtures and fittings - 33.33% on cost and 15% on reducing balance
Motor vehicles - 25% on cost

Investments in subsidiaries
Investments in subsidiary undertakings are recognised at cost less any provision for impairment.

Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing stock to its present location and condition. Cost is calculated using the first-in, first-out formula. Provision is made for damaged, obsolete and slow-moving stock where appropriate.

Taxation
Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and previous periods. It is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expense in tax assessments in periods different from those in which they are recognised in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences.

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

2. ACCOUNTING POLICIES - continued

Hire purchase and leasing commitments
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

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

Pension costs and other post-retirement benefits
The company makes payments to defined contribution pension schemes on behalf of employees. The assets of the schemes are held separately from those of the company in independently administered funds. Contributions payable for the year are charged in the profit and loss account.

Employee benefits
When employees have rendered service to the company, short term benefits (including holiday pay) to which employees are entitled are recognised at the undiscounted amount expected to be paid in exchange for that service.

Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the company will comply with conditions attaching to them and the grants will be received using the accrual model.

Financial instruments
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other external charges.

Cash on the balance sheet comprises cash in hand and cash at bank.

3. TURNOVER

The turnover and profit before taxation are attributable to the principal activities of the company.

An analysis of turnover by class of business is given below:

2023 2022
£    £   
Construction contracts 34,660,938 25,015,790
34,660,938 25,015,790

An analysis of turnover by geographical market is given below:

2023 2022
£    £   
United Kingdom 34,660,938 25,015,790
34,660,938 25,015,790

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

4. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 5,802,833 4,286,426
Social security costs 656,855 479,975
Other pension costs 308,241 159,756
6,767,929 4,926,157

The average number of employees during the year was as follows:
2023 2022

Directors 5 3
Supervisory, sales and admin 70 49
Production 46 37
121 89

2023 2022
£    £   
Directors' remuneration 466,970 367,995
Directors' pension contributions to money purchase schemes 179,478 66,401
Compensation to director for loss of office - 30,000

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 5 6

Information regarding the highest paid director is as follows:
2023 2022
£    £   
Emoluments etc 166,923 126,796
Pension contributions to money purchase schemes 12,973 1,321

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2023 2022
£    £   
Hire of equipment 1,404,381 840,553
Operating leases 181,777 130,071
Depreciation - owned assets 106,104 54,496
Depreciation - assets on hire purchase contracts 155,294 76,287
(Profit)/loss on disposal of fixed assets (36,439 ) 92
Auditors' remuneration 28,763 12,800
Government and other grants (12,449 ) (11,318 )
Cost of stock recognised as an expense 7,204,705 5,387,762
Impairment of debtors 146,281 33,333

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank loan interest 27,445 21,109
HMRC interest 92 -
Hire purchase 21,582 9,573
49,119 30,682

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 115,771 89,108
Prior years (83,306 ) -
Total current tax 32,465 89,108

Deferred tax - origination and reversal of timing
differences

188,263

27,322
Tax on profit 220,728 116,430

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
Profit before tax 1,450,288 984,656
Profit multiplied by the standard rate of corporation tax in the UK of
19.493% (2022 - 19%)

282,705

187,085

Effects of:
Expenses not deductible for tax purposes 1,662 4,129
Depreciation in excess of capital allowances 10,377 3,743
Utilisation of tax losses - (44,818 )
Adjustments to tax charge in respect of previous periods (83,306 ) -
Group relief (11,636 ) (29,621 )
Super deduction (20,544 ) (8,128 )
Change in tax rate 41,470 4,040
Total tax charge 220,728 116,430

Factors that may affect future tax charges
The UK Corporation tax rate from 19% to 25% on 1 April 2023. The effective rate of corporation tax for the period is therefore 19.493%. The increased rate will impact the company's future tax charge accordingly. The value of the deferred tax liability at the balance sheet date has been calculated using the applicable rate when the liability is expected to be realised.

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

8. DIVIDENDS
2023 2022
£    £   
Interim 164,000 156,100

9. INTANGIBLE FIXED ASSETS
Goodwill
£   
COST
At 1 May 2022
and 30 April 2023 422,220
AMORTISATION
At 1 May 2022
and 30 April 2023 422,220
NET BOOK VALUE
At 30 April 2023 -
At 30 April 2022 -

10. TANGIBLE FIXED ASSETS
Fixtures
Plant and and Motor
machinery fittings vehicles Totals
£    £    £    £   
COST
At 1 May 2022 136,815 225,443 368,930 731,188
Additions 32,614 150,198 925,557 1,108,369
Disposals - - (115,106 ) (115,106 )
At 30 April 2023 169,429 375,641 1,179,381 1,724,451
DEPRECIATION
At 1 May 2022 103,020 95,674 243,524 442,218
Charge for year 14,663 64,127 182,608 261,398
Eliminated on disposal - - (89,063 ) (89,063 )
At 30 April 2023 117,683 159,801 337,069 614,553
NET BOOK VALUE
At 30 April 2023 51,746 215,840 842,312 1,109,898
At 30 April 2022 33,795 129,769 125,406 288,970

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

10. TANGIBLE FIXED ASSETS - continued

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Motor
vehicles
£   
COST
At 1 May 2022 305,147
Additions 821,267
Disposals (70,373 )
Transfer to ownership (188,866 )
At 30 April 2023 867,175
DEPRECIATION
At 1 May 2022 191,109
Charge for year 155,294
Eliminated on disposal (44,330 )
Transfer to ownership (184,770 )
At 30 April 2023 117,303
NET BOOK VALUE
At 30 April 2023 749,872
At 30 April 2022 114,038

11. FIXED ASSET INVESTMENTS
Shares in
group
undertakings
£   
COST
At 1 May 2022
and 30 April 2023 907,518
PROVISIONS
At 1 May 2022
and 30 April 2023 875,514
NET BOOK VALUE
At 30 April 2023 32,004
At 30 April 2022 32,004

The company's investments at the Balance Sheet date in the share capital of companies include the following:

McDonald Davis Limited
Registered office: United Kingdom
Nature of business: Dormant company
%
Class of shares: holding
Ordinary shares 100.00
2023 2022
£    £   
Aggregate capital and reserves 30,000 30,000

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

11. FIXED ASSET INVESTMENTS - continued

John Law & Sons Limited
Registered office: United KIngdom
Nature of business: Dormant company
%
Class of shares: holding
Ordinary shares 100.00
2023 2022
£    £   
Aggregate capital and reserves 2,000 2,000

McConnell Seamless Roofing Limited
Registered office: United Kingdom
Nature of business: Dormant company
%
Class of shares: holding
Ordinary shares 100.00
2023 2022
£    £   
Aggregate capital and reserves 2 2

McConnell Decorators Limited
Registered office: United Kingdom
Nature of business: Dormant company
%
Class of shares: holding
Ordinary shares 100.00
2023 2022
£    £   
Aggregate capital and reserves 2 2

12. STOCKS
2023 2022
£    £   
Raw materials and consumables 10,000 10,000

13. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade debtors 4,185,226 3,218,456
Amounts recoverable on contracts 3,571,125 3,316,646
Prepayments 92,607 113,608
7,848,958 6,648,710

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Bank loans and overdrafts (see note 16) 170,000 170,000
Hire purchase contracts (see note 17) 126,202 33,576
Payments on account 1,379,765 -
Trade creditors 1,364,238 1,767,891
Amounts owed to group undertakings 95,920 -
Tax 121,665 89,108
Social security and other taxes 1,280,977 719,912
Accrued expenses 3,422,942 2,980,290
7,961,709 5,760,777

Included in Creditors: amounts falling due within one year is £27,788 (2022: £35,402) in respect of pension payments.

15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
2023 2022
£    £   
Bank loans (see note 16) 340,000 510,000
Hire purchase contracts (see note 17) 619,228 59,617
Amounts owed to group undertakings 32,000 32,000
991,228 601,617

16. LOANS

An analysis of the maturity of loans is given below:

2023 2022
£    £   
Amounts falling due within one year or on demand:
Business interruption loan 170,000 170,000

Amounts falling due between one and two years:
Business interruption loan 170,000 170,000

Amounts falling due between two and five years:
Business interruption loan 170,000 340,000

The business interruption loan is repayable in 60 equal monthly instalments commencing May 2021. Interest is at 3.37% above base rate, with the first year's interest met by the government under the Coronavirus Business Interruption Loan Scheme.

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

17. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Hire purchase contracts
2023 2022
£    £   
Gross obligations repayable:
Within one year 166,719 38,996
Between one and five years 682,582 63,457
849,301 102,453

Finance charges repayable:
Within one year 40,517 5,420
Between one and five years 63,354 3,840
103,871 9,260

Net obligations repayable:
Within one year 126,202 33,576
Between one and five years 619,228 59,617
745,430 93,193

Non-cancellable operating leases
2023 2022
£    £   
Within one year 199,568 210,273
Between one and five years 482,087 583,624
In more than five years 24,723 85,041
706,378 878,938

18. SECURED DEBTS

The following secured debts are included within creditors:

2023 2022
£    £   
Hire purchase contracts 745,430 93,193
Business interruption loan 510,000 680,000
1,255,430 773,193

Hire purchase liabilities are secured over the particular assets.

The business interruption loan is secured by a bond and floating charge over the company's assets and by a government guarantee.

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

19. FINANCIAL INSTRUMENTS

The carrying amount of the company's financial instruments are as follows:
2023 2022
£    £   
Financial assets
Debt instruments measured at amortised cost
Cash at bank and in hand 3,834,723 2,011,534
Trade and other debtors 7,848,958 6,648,710

Equity instruments measured at cost less impairment
Fixed asset unlisted in subsidiary undertakings 32,004 32,004

Financial liabilities
Measured at amortised cost
Trade creditors 1,364,238 1,767,891
Accrued expenses 3,422,942 2,980,290
Amounts owed to group undertakings 127,920 32,000
Hire purchase liabilities 745,430 93,193
Bank loans 510,000 680,000

20. PROVISIONS FOR LIABILITIES
2023 2022
£    £   
Deferred tax
Accelerated capital allowances 231,546 42,545
Other timing differences (3,678 ) (2,939 )
227,868 39,606

Deferred
tax
£   
Balance at 1 May 2022 39,606
Charged to statement of income 188,262
Balance at 30 April 2023 227,868

21. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
75,000 Ordinary shares £1 75,000 75,000

HUGH L S MCCONNELL LIMITED (REGISTERED NUMBER: SC191842)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 APRIL 2023

22. RESERVES
Retained
earnings
£   

At 1 May 2022 2,514,217
Profit for the year 1,229,560
Dividends (164,000 )
At 30 April 2023 3,579,777

Retained earnings
Retained earnings represents cumulative profits and losses net of dividends and other adjustments.

23. CONTINGENT LIABILITIES

On completion of some of its roofing contracts, the company provides a written guarantee for its works. Under the terms of the guarantees, which mostly last for ten years, the company is required to make good any defects which appear in its work during the guarantee period.

This guarantee system has been in place for over ten years and, in general, only minor repairs (if any ) have been required. Since any estimate of the future costs of these minor repairs would be wholly subjective, no provision is made for them in the accounts and their cost is charged to the profit and loss account in the year in which they occur. If however any substantial post year end repairs are identified, the cost of such repairs would be accrued in the accounts.

24. CAPITAL COMMITMENTS
2023 2022
£    £   
Contracted but not provided for in the
financial statements 297,729 202,926

25. RELATED PARTY DISCLOSURES

The company has granted security over its assets in connection with group borrowings.

The company's immediate and ultimate parent company is McConnell Group Limited, registered in the United Kingdom, which is controlled by its directors.