Registered number:
For the year ended
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Manchester and Cheshire Construction Company Limited
Company Information
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Manchester and Cheshire Construction Company Limited
Contents
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Manchester and Cheshire Construction Company Limited
Strategic Report
For the year ended 30 September 2023
The directors present the strategic report for the year ended 30 September 2023.
The company measures its financial performance in the year by its ability to make an accounting profit, to generate a sustainable cash flow and to manage its debtors. To this end the three main KPI’s that the company sets itself are a profit before tax target, a free cash flow target and a debtor days target.
The company has had an excellent year of trading, increasing both turnover and gross margin which has resulted in a significant uplift in profit before tax compared to prior year. The directors are very pleased with the overall profitability, together with the control of working capital. The company remains in a strong financial position and has a secure order book going forward. The directors are confident that the current business strategy, together with the dedication of the workforce will allow the delivery of all targets and objectives for the forthcoming year.
The company undertakes contracts on a fixed price basis. There is an element of risk that unforeseen events occur resulting in costs being incurred which cannot be recovered from the client. This risk is mitigated internally by employing suitably qualified and experienced staff to manage the process.
A significant proportion of the turnover is generated from contracts entered into with public funded organisations, and consequently, the company’s activities are exposed to variations in Government spending policy.
The key financial performance indicators are as follows:
This report was approved by the board and signed on its behalf.
Page 1
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Manchester and Cheshire Construction Company Limited
Directors' Report
For the year ended 30 September 2023
The directors present their report and the financial statements for the year ended 30 September 2023.
The directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 for the company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The 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 to 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.
The profit for the year, after taxation, amounted to £1,620,935 (2022 -£737,880).
Dividends paid during the year amounted to £363,000 (2022 - £131,000).
The directors do not recommend a final dividend.
The directors who served during the year were:
An indication of the likely future developments in the company's business is included in the strategic report.
Page 2
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Manchester and Cheshire Construction Company Limited
Directors' Report (continued)
For the year ended 30 September 2023
The company continues to carry out research and development into construction related processes and methodologies.
There have been no significant events affecting the company since the year end.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Manchester and Cheshire Construction Company Limited
Independent Auditors' Report to the Members of Manchester and Cheshire Construction Company Limited
We have audited the financial statements of Manchester and Cheshire Construction Company Limited (the 'company') for the year ended 30 September 2023, which comprise the statement of comprehensive income, the statement of financial position, the statement of cash flows, the anlysis of net debt, the statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 auditors' 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.
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Manchester and Cheshire Construction Company Limited
Independent Auditors' Report to the Members of Manchester and Cheshire Construction Company Limited (continued)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
Page 5
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Manchester and Cheshire Construction Company Limited
Independent Auditors' Report to the Members of Manchester and Cheshire Construction Company Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
∙The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets
∙The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.
∙Supporting documentation relating to the Company's policies and procedures for:
- Identifying, evaluating, and complying with laws and regulations - Detecting and responding to the risks of fraud
∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
∙The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
∙Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
∙Enquiring of management about any actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Manchester and Cheshire Construction Company Limited
Independent Auditors' Report to the Members of Manchester and Cheshire Construction Company Limited (continued)
We have also considered the risk of fraud through management override of controls by:
∙Testing the appropriateness of journal entries and other adjustments; we have used data analytics software to run tests designed to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.
∙Challenging assumptions made by management in their significant accounting estimates, and 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.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, 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 or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
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 auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
Cheshire
SK1 1TD
Page 7
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Manchester and Cheshire Construction Company Limited
Statement of Comprehensive Income
For the year ended 30 September 2023
Page 8
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Manchester and Cheshire Construction Company Limited
Registered number: 01021959
Statement of Financial Position
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 28 form part of these financial statements.
Page 9
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Manchester and Cheshire Construction Company Limited
Statement of Changes in Equity
For the year ended 30 September 2023
Statement of Changes in Equity
For the year ended 30 September 2022
Page 10
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Manchester and Cheshire Construction Company Limited
Statement of Cash Flows
For the year ended 30 September 2023
Page 11
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Manchester and Cheshire Construction Company Limited
Statement of Cash Flows (continued)
For the year ended 30 September 2023
Page 12
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Manchester and Cheshire Construction Company Limited
Analysis of Net Debt
For the year ended 30 September 2023
Page 13
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Manchester and Cheshire Construction Company Limited is a private company limited by share capital incorporated in England number 01021959. The address of the registered office and principal place of business is 6 Oldfield Road, Salford, Manchester, M5 4WB.
The nature of the company’s operation and its principal activity is that of construction.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).
Functional and presentation currency
The company's functional and presentational currency is GBP.
The following principal accounting policies have been applied:
Page 14
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
2.Accounting policies (continued)
When the outcome of construction contracts can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion at the end of the reporting period. The stage of completion of contracts in progress is based on the proportion of costs incurred for work performed to date in relation to the estimated total costs. Reliable estimation of the outcome of construction contracts requires reliable estimates of the stage of completion, future costs and collectability of billings. When the outcome of a construction contract cannot be estimated reliably, revenue is only recognised to the extent of contract costs incurred that it is probable will be recoverable. When it is probable that total contract costs will exceed total contract revenue on a construction contract, the expected loss shall be recognised as an expense immediately, with a corresponding provision for an onerous contract. Revenue in respect of variations to contracts and incentive payments is recognised when it is probable it will be agreed by the customer. Where costs incurred plus recognised profits less recognised losses exceed progress billings, the balance is shown as due from customers on construction contracts within debtors. Where progress billings exceed costs incurred plus recognised profits less recognised losses, the balance is shown as due to customers on construction contracts within creditors. Own developments Revenue derived from the sale of speculative developments is recognised upon the transfer of risks and rewards of ownership to the buyer, when there is an exchange of unconditional contracts.
Page 15
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
2.Accounting policies (continued)
Page 16
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
2.Accounting policies (continued)
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Provisions are charged as an expense to profit or loss in the year that the company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the statement of financial position.
The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors.
Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the statement of income and retained earnings.
Page 17
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
2.Accounting policies (continued)
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the reporting date. Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is an 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. Revenue and margin recognition The company's revenue recognition and margin recognition policies, which are set out in note 2.2, are central to how the company values the work it has carried out in each financial year. These policies require forecasts to be made of the outcomes of construction contracts, which require assessments and judgements to be made. The company reviews and, when necessary, revises the estimates of revenue and costs as the contract progresses. Provisions Provisions are liabilities of uncertain timing or amount and therefore making a reliable estimate of the quantum and timing of liabilities judgement is applied and re-evaluated at each reporting date. The company recognised provisions at 30 September 2023 of £536,013 (2022 - £508,513).
Page 18
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Page 19
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Page 20
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Page 21
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
12.Taxation (continued)
Page 22
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Page 23
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Page 24
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Page 25
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Page 26
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Capital redemption reserve
Profit and loss account
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £108,187 (2022 - £296,092). Contributions totalling £17,485 (2022 - £13,420) were payable to the fund at the balance sheet date.
Page 27
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Manchester and Cheshire Construction Company Limited
Notes to the Financial Statements
For the year ended 30 September 2023
Advances were made to directors totalling £12,000 (2022 - £25,000). Amounts repaid during the period totalled £30,100 (2022 - £Nil). The outstanding balance due from directors at the balance sheet date was £6,900 (2022 - £25,000).
Page 28
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