Company registration number 02923491 (England and Wales)
BDB DESIGN BUILD LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
BDB DESIGN BUILD LIMITED
COMPANY INFORMATION
Directors
N E Goodson
P R Burdekin
S M Brown
Secretary
A C Kelly
Company number
02923491
Registered office
Unit 10
Churchill Way
Chapeltown
Sheffield
South Yorkshire
S35 2PY
Auditor
BHP LLP
2 Rutland Park
Sheffield
S10 2PD
BDB DESIGN BUILD LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 23
BDB DESIGN BUILD LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Review of the business
We aim to present a balanced and comprehensive review of the development and performance of our business during the year and it's position at the year end. Our review is consistent with the size of our business and is written in the context of the risks and uncertainties we face. The company has seen a significant increase in its turnover compared to the prior year with a healthy profit. BDB continues to enjoy good relationships with existing customers whilst also obtaining new ones.
Principal risks and uncertainties
The company manages the risks inherent in its activities. External risks include political and economic conditions, actions of competitors, the effect of legislation or other regulatory action, credit risk, business continuity, environmental risks and litigation. Internal risks include control failure and inability to supply. The company seeks to mitigate exposure to all forms of risk, where practicable, and to transfer risk to insurers, where cost effective.
Key performance indicators
We consider that our key performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross profit margin and profit before taxation. The directors consider that the company has had a fairly strong year of trading. Whilst sales have increased by 95% compared to the previous year, the gross profit margin has reduced slightly to 4.1% (2022: 5.0%) and the company has generated a post tax profit of £663,514. A healthy balance sheet has been retained with shareholders funds amounting to £3.81 million and the directors believe that this will provide a continuing platform for future revenue and a stable year of trading with a positive order book going forward.
N E Goodson
Director
30 November 2023
BDB DESIGN BUILD LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of the design and build of industrial and commercial properties and motor retail developments.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
N E Goodson
P R Burdekin
S M Brown
Auditor
The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
BDB DESIGN BUILD LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
On behalf of the board
N E Goodson
Director
30 November 2023
BDB DESIGN BUILD LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BDB DESIGN BUILD LIMITED
- 4 -
Opinion
We have audited the financial statements of BDB Design Build Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 March 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 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information 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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
BDB DESIGN BUILD LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BDB DESIGN BUILD LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with management, and from our commercial knowledge and experience of the commercial and industrial construction industry;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environments and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
BDB DESIGN BUILD LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BDB DESIGN BUILD LIMITED
- 6 -
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
Paul Winwood
Senior Statutory Auditor
For and on behalf of BHP LLP
30 November 2023
Chartered Accountants
Statutory Auditor
2 Rutland Park
Sheffield
S10 2PD
BDB DESIGN BUILD LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
54,350,797
27,901,893
Cost of sales
(52,128,067)
(26,512,351)
Gross profit
2,222,730
1,389,542
Administrative expenses
(1,547,694)
(1,238,913)
Other operating income
1,984
50,254
Operating profit
4
677,020
200,883
Interest receivable and similar income
7
161,222
11,729
Interest payable and similar expenses
8
(943)
(968)
Profit before taxation
837,299
211,644
Tax on profit
9
(173,785)
340,121
Profit for the financial year
663,514
551,765
The profit and loss account has been prepared on the basis that all operations are continuing operations.
BDB DESIGN BUILD LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
591,490
662,666
Investment property
11
797,500
Investments
12
2
2
1,388,992
662,668
Current assets
Debtors
14
6,233,294
5,649,029
Cash at bank and in hand
10,035,956
4,529,136
16,269,250
10,178,165
Creditors: amounts falling due within one year
15
(13,824,903)
(7,661,302)
Net current assets
2,444,347
2,516,863
Total assets less current liabilities
3,833,339
3,179,531
Creditors: amounts falling due after more than one year
16
(22,389)
(32,095)
Net assets
3,810,950
3,147,436
Capital and reserves
Called up share capital
20
48,630
48,630
Share premium account
7,324
7,324
Capital redemption reserve
667
667
Other reserves
127,704
127,704
Profit and loss reserves
3,626,625
2,963,111
Total equity
3,810,950
3,147,436
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 30 November 2023 and are signed on its behalf by:
N E Goodson
Director
Company registration number 02923491 (England and Wales)
BDB DESIGN BUILD LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
Share capital
Share premium account
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 1 April 2021
48,630
7,324
667
127,704
2,411,346
2,595,671
Year ended 31 March 2022:
Profit and total comprehensive income
-
-
-
-
551,765
551,765
Balance at 31 March 2022
48,630
7,324
667
127,704
2,963,111
3,147,436
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
-
-
663,514
663,514
Balance at 31 March 2023
48,630
7,324
667
127,704
3,626,625
3,810,950
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
1
Accounting policies
Company information
BDB Design Build Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 10, Churchill Way, Chapeltown, Sheffield, South Yorkshire, S35 2PY.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of BDB Design Build Holdings Limited. These consolidated financial statements are available from its registered office, Unit 10, Churchill Way, Chapeltown, Sheffield, S35 2PY.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue represents amounts receivable in relation to long term construction contracts and is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
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.
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 11 -
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:
Freehold land and buildings
2.5% straight line
Fixtures, fittings & equipment
33% straight line
Motor vehicles
33% straight line
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
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.6
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
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.
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.
1.8
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.
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 12 -
See note 2 for further information on the construction contract accounting policy.
1.9
Cash and cash equivalents
Cash and cash equivalents 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. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
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.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal 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.
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
1.11
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.
1.12
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.
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
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.
1.13
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.
1.14
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.15
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.
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience 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
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Turnover from long term construction contracts
Turnover is generated from long term contracts. The group recognises contract revenue and contract costs associated with each contract using the percentage of completion method. The recognition of revenue and profit therefore rely on estimates in relation to the stage of completion and the forecast total costs of each contract.
At each month end, all contracts are valued by the internal quantity surveyor allocated to the project. The valuation is compared to the expected total turnover on the contract and this forms the basis for the stage of completion. The margin is calculated at the outset based on the job budget and then reforecast on a monthly basis so any changes to expected final outturn are reflected in the accounts promptly. The profit to be recognised monthly is calculated on a cumulative basis so that the overall expected outturn is reflected in the cumulative position each month.
This method ensures that profit is recognised equally across the life of the project. The calculation of expected outturn is based on the following factors:
- Variations to overall contract value (expected turnover) which have been agreed with the client
- Costs incurred to date allocated to the project
- Budgeted overall costs as calculated at the beginning of the project during the tender process which are used to calculate the expected costs to complete
The degree of estimation uncertainty centres around the expected costs to complete the contract which, combined with the contract turnover, are used to calculate the expected margin outturn on each project.
When contract losses are anticipated these are recognised in full at the time of identification in so far as they can be measured reliably.
At the date the accounts were approved, amounts recoverable on contracts balances of £286k were still outstanding awaiting final contract resolution.
Recoverability of other debtors
Included within other debtors is an amount of £295,000 due from a connected company. At the date of sign off of these accounts, the full amount remains outstanding and no provision is included against the debtor balance in these accounts. The recoverability of the debtor represents an element of uncertainty however the Directors believe the balance to be recoverable have not deemed a provision necessary at this point.
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 16 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Design & building services
54,350,797
27,901,893
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
54,350,797
27,901,893
2023
2022
£
£
Other revenue
Interest income
161,222
11,729
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,060
18,630
Depreciation of owned tangible fixed assets
99,131
97,253
Profit on disposal of tangible fixed assets
-
(2,625)
Operating lease charges
37,080
64,050
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Average Number of Employees
26
24
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,603,746
1,188,604
Social security costs
167,927
127,191
Pension costs
116,344
39,841
1,888,017
1,355,636
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
309,940
223,496
Company pension contributions to defined contribution schemes
4,599
4,458
314,539
227,954
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
148,812
110,203
Company pension contributions to defined contribution schemes
4,599
4,458
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
160,213
335
Other interest income
1,009
11,394
Total income
161,222
11,729
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
943
968
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
181,785
53,578
Adjustments in respect of prior periods
(381,453)
Total current tax
181,785
(327,875)
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
9
Taxation
2023
2022
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
(8,000)
(12,246)
Total tax charge/(credit)
173,785
(340,121)
The actual charge/(credit) 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
837,299
211,644
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
159,087
40,212
Tax effect of expenses that are not deductible in determining taxable profit
10,996
2,487
Change in unrecognised deferred tax assets
(321)
(107)
Permanent capital allowances in excess of depreciation
5,866
394
Research and development tax credit
(381,453)
Remeasurement of deferred tax for changes in tax rates
(1,843)
(1,654)
Taxation charge/(credit) for the year
173,785
(340,121)
10
Tangible fixed assets
Freehold land and buildings
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2022
785,250
185,576
208,069
1,178,895
Additions
27,955
27,955
At 31 March 2023
785,250
213,531
208,069
1,206,850
Depreciation and impairment
At 1 April 2022
266,657
180,216
69,356
516,229
Depreciation charged in the year
19,631
10,144
69,356
99,131
At 31 March 2023
286,288
190,360
138,712
615,360
Carrying amount
At 31 March 2023
498,962
23,171
69,357
591,490
At 31 March 2022
518,593
5,360
138,713
662,666
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
11
Investment property
2023
£
Fair value
At 1 April 2022
Additions through external acquisition
797,500
At 31 March 2023
797,500
Investment property comprises a residential property purchased in October 2022. The directors do not believe the fair value of the property is materially different to its cost hence it remains valued at cost. This assessment has been made by reference to market evidence of transaction prices for similar properties.
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
2
2
13
Subsidiaries
Details of the company's subsidiaries at 31 March 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Cemetery Road Developments Limited
England & Wales
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Cemetery Road Developments Limited
2
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,615,805
4,271,938
Gross amounts owed by contract customers
590,369
500,025
Corporation tax recoverable
67,272
67,272
Amounts owed by group undertakings
15,620
15,622
Other debtors
731,621
604,440
Prepayments and accrued income
197,607
182,732
6,218,294
5,642,029
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
14
Debtors
(Continued)
- 20 -
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 18)
15,000
7,000
Total debtors
6,233,294
5,649,029
Included within trade debtors are amounts due over one year amounting to £918,036 (2022: £406,945).
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
10,000
10,000
Payments received on account
4,828,878
1,395,555
Trade creditors
6,774,863
5,037,805
Amounts owed to group undertakings
2
Corporation tax
181,785
60,855
Other taxation and social security
1,230,172
674,387
Other creditors
1,235
1,420
Accruals and deferred income
797,970
481,278
13,824,903
7,661,302
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
22,389
32,095
17
Loans and overdrafts
2023
2022
£
£
Bank loans
32,389
42,095
Payable within one year
10,000
10,000
Payable after one year
22,389
32,095
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
17
Loans and overdrafts
(Continued)
- 21 -
The bank loan is secured by way of a charge over the company's property at Unit 10, Churchill Way, Sheffield. Further security is held by the bank in the form of a floating charge over the net assets of the company.
The bank loan of £42,095 is repayable in monthly instalments with full repayment due in May 2026. Interest on the loan is charged at 2.5%.
18
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:
Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
(18,000)
(26,000)
Short term timing differences
33,000
33,000
15,000
7,000
2023
Movements in the year:
£
Asset at 1 April 2022
(7,000)
Credit to profit or loss
(8,000)
Asset at 31 March 2023
(15,000)
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
116,344
39,841
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.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
48,630
48,630
48,630
48,630
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
21
Financial commitments, guarantees and contingent liabilities
The company had performance bonds issued in favour of customers totalling £975,812 (2022: £2,714,615) at year end.
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
47,786
55,747
Between two and five years
33,478
38,456
81,264
94,203
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
650,000
24
Events after the reporting date
Following the year end, in October 2023, the company disposed of investment property held of £797,500 for proceeds less selling costs of £869,334.
25
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Other information
Highlander Computing Solutions Limited is a company in which S M Brown is also a director. During the year the company made purchases of £18,163 (2022: £21,918) from Highlander Computing Solutions Limited for computing services. At the year end Highlander Computing Solutions Limited owed the company £18 (2022: £72).
BDB DESIGN BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
26
Directors' transactions
Description
% Rate
Opening balance
Amounts advanced
Closing balance
£
£
£
N E Goodson -
2.00
220,294
196,254
416,548
220,294
196,254
416,548
27
Ultimate controlling party
The immediate parent company is BDB Design Build Holdings Limited, by virtue of its 100% shareholding in the company. BDB Design Build Holdings Limited prepares consolidated accounts which include the results of this company which can be obtained from its registered office, Unit 10, Churchill Way, Sheffield, S35 2PY.
The ultimate controlling party is N E Goodson by virtue of a majority shareholding in the parent company.
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