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Registered number: 01021959









Manchester and Cheshire Construction Company Limited









Annual Report and Financial Statements

For the year ended 30 September 2023

 
Manchester and Cheshire Construction Company Limited
 
 
Company Information


Directors
M T Purcell 
D M Lowe 
C J Purcell 
G D Glendenning (appointed 1 May 2023)
R Forshaw (appointed 1 May 2023)




Registered number
01021959



Registered office
6 Oldfield Road
Salford

Manchester

M5 4WB




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

Lancashire Gate

21 Tiviot Dale

Stockport

Cheshire

SK1 1TD





 
Manchester and Cheshire Construction Company Limited
 

Contents



Page
Strategic Report
 
1
Directors' Report
 
2 - 3
Independent Auditors' Report
 
4 - 7
Statement of Comprehensive Income
 
8
Statement of Financial Position
 
9
Statement of Changes in Equity
 
10
Statement of Cash Flows
 
11 - 12
Analysis of Net Debt
 
13
Notes to the Financial Statements
 
14 - 28


 
Manchester and Cheshire Construction Company Limited
 
 
Strategic Report
For the year ended 30 September 2023

Introduction
 
The directors present the strategic report for the year ended 30 September 2023.

Business review
 
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.

Principal risks and uncertainties
 
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.

Financial key performance indicators
 
The key financial performance indicators are as follows:


2023
2022
Turnover £'000
19,712
15,190
Profit before tax £'000
1,795
897
Net assets £'000
5,420
4,162
Net funds £'000
5,514
2,466
Debtor days
74
87



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



R Forshaw
Director

Date: 30 January 2024

Page 1

 
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.

Directors' responsibilities statement

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 2006They 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.

Results and dividends

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. 

Directors

The directors who served during the year were:

M T Purcell 
D M Lowe 
C J Purcell 
G D Glendenning (appointed 1 May 2023)
R Forshaw (appointed 1 May 2023)

Future developments

An indication of the likely future developments in the company's business is included in the strategic report.

Page 2

 
Manchester and Cheshire Construction Company Limited
 
 
 
Directors' Report (continued)
For the year ended 30 September 2023

Research and development activities

The company continues to carry out research and development into construction related processes and methodologies. 

Disclosure of information to auditors

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and

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

Post balance sheet events

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

Auditors

The auditorsHurst Accountants Limitedwill 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.
 





R Forshaw
Director

Date: 30 January 2024

Page 3

 
Manchester and Cheshire Construction Company Limited
 
 
 
Independent Auditors' Report to the Members of Manchester and Cheshire Construction Company Limited
 

Opinion


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 policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the company's affairs as at 30 September 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


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


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


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


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our auditors' report thereon.  The directors are responsible for the other information contained within the Annual 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.


Page 4

 
Manchester and Cheshire Construction Company Limited
 
 
 
Independent Auditors' Report to the Members of Manchester and Cheshire Construction Company Limited (continued)


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the 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.


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 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 2, 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.


Page 5

 
Manchester and Cheshire Construction Company Limited
 
 
 
Independent Auditors' Report to the Members of Manchester and Cheshire Construction Company Limited (continued)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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.
Page 6

 
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.


Use of our report
 

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Chris Stewardson (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
Cheshire
SK1 1TD

30 January 2024
Page 7

 
Manchester and Cheshire Construction Company Limited
 
 
Statement of Comprehensive Income
For the year ended 30 September 2023

2023
2022
Note
£
£

  

Turnover
 4 
19,711,888
15,190,076

Cost of sales
  
(15,779,678)
(12,108,539)

Gross profit
  
3,932,210
3,081,537

Administrative expenses
  
(2,444,525)
(2,257,495)

Other operating income
 5 
11,946
12,186

Operating profit
 6 
1,499,631
836,228

Interest receivable and similar income
 10 
309,946
86,814

Interest payable and similar expenses
 11 
(14,491)
(25,698)

Profit before tax
  
1,795,086
897,344

Tax on profit
 12 
(174,151)
(159,464)

Profit for the financial year
  
1,620,935
737,880

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 14 to 28 form part of these financial statements.

Page 8

 
Manchester and Cheshire Construction Company Limited
Registered number: 01021959

Statement of Financial Position
As at 30 September 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 14 
507,723
504,042

Current assets
  

Debtors: amounts falling due after more than one year
 15 
2,855,252
2,533,219

Debtors: amounts falling due within one year
 15 
4,047,115
3,669,769

Cash at bank and in hand
 16 
5,669,116
2,711,329

  
12,571,483
8,914,317

Creditors: amounts falling due within one year
 17 
(7,053,872)
(4,585,486)

Net current assets
  
 
 
5,517,611
 
 
4,328,831

Total assets less current liabilities
  
6,025,334
4,832,873

Creditors: amounts falling due after more than one year
 18 
(59,102)
(154,530)

Provisions for liabilities
  

Deferred tax
 20 
(10,335)
(7,881)

Other provisions
 21 
(536,013)
(508,513)

Net assets
  
5,419,884
4,161,949


Capital and reserves
  

Called up share capital 
 22 
75
75

Capital redemption reserve
 23 
25
25

Profit and loss account
 23 
5,419,784
4,161,849

  
5,419,884
4,161,949


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




R Forshaw
Director

Date: 30 January 2024

The notes on pages 14 to 28 form part of these financial statements.

Page 9

 
Manchester and Cheshire Construction Company Limited
 

Statement of Changes in Equity
For the year ended 30 September 2023


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£

At 1 October 2022
75
25
4,161,849
4,161,949


Comprehensive income for the year

Profit for the year
-
-
1,620,935
1,620,935
Total comprehensive income for the year
-
-
1,620,935
1,620,935


Contributions by and distributions to owners

Dividends: Equity capital
-
-
(363,000)
(363,000)


Total transactions with owners
-
-
(363,000)
(363,000)


At 30 September 2023
75
25
5,419,784
5,419,884



Statement of Changes in Equity
For the year ended 30 September 2022


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£

At 1 October 2021
100
-
4,104,969
4,105,069


Comprehensive income for the year

Profit for the year
-
-
737,880
737,880
Total comprehensive income for the year
-
-
737,880
737,880


Contributions by and distributions to owners

Dividends: Equity capital
-
-
(131,000)
(131,000)

Purchase of own shares
(25)
25
(550,000)
(550,000)


Total transactions with owners
(25)
25
(681,000)
(681,000)


At 30 September 2022
75
25
4,161,849
4,161,949


Page 10

 
Manchester and Cheshire Construction Company Limited
 

Statement of Cash Flows
For the year ended 30 September 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,620,935
737,880

Adjustments for:

Depreciation of tangible assets
27,974
38,372

Profit on disposal of tangible assets
(5,750)
(10,188)

Interest paid
14,491
25,698

Interest received
(309,946)
(86,814)

Taxation charge
174,151
159,464

(Increase) in debtors
(381,600)
(1,113,148)

(Increase) in amounts owed by associates
(317,779)
(153,534)

Increase/(decrease) in creditors
2,205,222
(1,501,255)

Increase in provisions
27,500
298,315

Corporation tax received
229,252
-

Corporation tax paid
(143,260)
(72,631)

Net cash generated / (used in) from operating activities

3,141,190
(1,677,841)


Cash flows from investing activities

Purchase of tangible fixed assets
(31,655)
(18,911)

Sale of tangible fixed assets
5,750
11,778

Interest received
156,593
19,610

Associates interest received
153,353
67,204

Net cash from investing activities

284,041
79,681
Page 11

 
Manchester and Cheshire Construction Company Limited
 

Statement of Cash Flows (continued)
For the year ended 30 September 2023


2023
2022

£
£



Cash flows from financing activities

Repayment of loans
(89,953)
(85,058)

Dividends paid
(363,000)
(131,000)

Interest paid
(14,491)
(25,698)

Repurchase of own shares
-
(550,000)

Net cash used in financing activities
(467,444)
(791,756)

Net increase/(decrease) in cash and cash equivalents
2,957,787
(2,389,916)

Cash and cash equivalents at beginning of year
2,711,329
5,101,245

Cash and cash equivalents at the end of year
5,669,116
2,711,329


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
5,669,116
2,711,329


Page 12

 
Manchester and Cheshire Construction Company Limited
 

Analysis of Net Debt
For the year ended 30 September 2023




At 1 October 2022
Cash flows
At 30 September 2023
£

£

£

Cash at bank and in hand

2,711,329

2,957,787

5,669,116

Debt due after 1 year

(154,530)

95,428

(59,102)

Debt due within 1 year

(90,305)

(5,475)

(95,780)


2,466,494
3,047,740
5,514,234

Page 13

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

1.


General information

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

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires 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

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

2.Accounting policies (continued)

 
2.2

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Construction contracts
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

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

2.Accounting policies (continued)

 
2.3

Operating leases: the company as lessee

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

 
2.4

Research and development

Research and development costs are expensed in the period they are incurred. 

 
2.5

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.6

Pensions

Defined contribution pension plan

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

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

 
2.7

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Page 16

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

2.Accounting policies (continued)

 
2.8

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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:

Freehold property
-
2% straight line
Motor vehicles
-
20% straight line
Fixtures, fittings and equipment
-
20% / 33% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.9

Provisions for liabilities

Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the 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.

 
2.10

Financial instruments

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

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

2.Accounting policies (continued)


2.10
Financial instruments (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.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates that affect amounts recognised for assets and liabilities at the reporting date and the amounts of revenue and expenses incurred during the reporting period.  Actual outcomes may differ from these judgements, estimates and assumptions.  The judgements, estimates and assumptions that have the most significant effect on the carrying value of assets and liabilities of the company are discussed below. 
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

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

4.


Turnover

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


2023
2022
£
£

Contract revenue
19,287,836
14,685,408

Facilities management
424,052
504,668

19,711,888
15,190,076


All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£

Other operating income
6,196
1,998

Profit on disposal of tangible assets
5,750
10,188

11,946
12,186



6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation of tangible fixed assets
27,974
38,372

Other operating lease rentals
14,000
20,617


7.


Auditors' remuneration

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


2023
2022
£
£

Fees payable to the company's auditors for the audit of the company's financial statements
11,300
11,300

Fees payable to the company's auditors for taxation compliance services
1,850
1,850
Page 19

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

8.


Employees

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


2023
2022
£
£

Wages and salaries
2,736,233
2,281,105

Social security costs
286,161
257,203

Cost of defined contribution scheme
108,187
296,092

3,130,581
2,834,400


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


        2023
        2022
            No.
            No.







Construction and administration
57
57


9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
678,867
288,664

Company contributions to defined contribution pension schemes
22,502
241,124

Compensation for loss of office
-
10,227

701,369
540,015


During the year retirement benefits were accruing to 5 directors (2022 -4) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £180,226 (2022 -£63,929).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £6,565 (2022 -£95,821).

Page 20

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

10.


Interest receivable

2023
2022
£
£


Other interest receivable
153,353
67,204

Bank interest receivable
156,593
19,610

309,946
86,814


11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
12,709
17,605

Other loan interest payable
1,782
8,093

14,491
25,698


12.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
400,949
143,297

Adjustments in respect of previous periods
(229,252)
-


Deferred tax


Origination and reversal of timing differences
2,454
16,167


Taxation on profit on ordinary activities
174,151
159,464
Page 21

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 -lower than) the standard rate of corporation tax in the UK of 22% (2022 -19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,795,086
897,344


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 22% (2022 -19%)
394,919
170,495

Effects of:


Expenses not deductible for tax purposes
6,034
11,712

Utilisation of tax losses
-
(42,573)

Adjustments in respect of previous periods
(229,252)
-

Other differences leading to a decrease in the tax charge
2,450
19,830

Total tax charge for the year
174,151
159,464


13.


Dividends

2023
2022
£
£


Dividends paid
363,000
131,000

Page 22

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

14.


Tangible fixed assets





Freehold property
Fixtures, fittings and equipment
Motor vehicles
Total

£
£
£
£



Cost


At 1 October 2022
510,110
78,871
132,868
721,849


Additions
-
7,165
24,490
31,655


Disposals
-
-
(11,237)
(11,237)



At 30 September 2023

510,110
86,036
146,121
742,267



Depreciation


At 1 October 2022
51,010
66,848
99,949
217,807


Charge for the year
10,202
8,117
9,655
27,974


Disposals
-
-
(11,237)
(11,237)



At 30 September 2023

61,212
74,965
98,367
234,544



Net book value



At 30 September 2023
448,898
11,071
47,754
507,723



At 30 September 2022
459,100
12,023
32,919
504,042

Page 23

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

15.


Debtors

2023
2022
£
£

Due after more than one year

Due from related companies
2,845,142
2,527,363

Prepayments and accrued income
10,110
5,856

2,855,252
2,533,219


2023
2022
£
£

Due within one year

Trade debtors
4,012,199
3,619,373

Other debtors
11,133
26,348

Prepayments and accrued income
23,783
24,048

4,047,115
3,669,769



16.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
5,669,116
2,711,329



17.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank loans
95,780
90,305

Trade creditors
2,219,835
1,399,223

Corporation tax
400,949
145,303

Other taxation and social security
924,739
458,388

Other creditors
317,485
13,420

Accruals and deferred income
3,095,084
2,478,847

7,053,872
4,585,486


Bank loans are secured against the freehold property of the company. 

Page 24

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

18.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Bank loans
59,102
154,530


Bank loans are secured against the freehold property of the company. 


19.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
95,780
90,305

Amounts falling due 1-2 years

Bank loans
59,102
95,428

Amounts falling due 2-5 years

Bank loans
-
59,102


154,882
244,835


Bank loans are secured against the freehold property of the company.

Page 25

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

20.


Deferred taxation




2023
2022


£

£






Liability/(asset) at beginning of year
7,881
(8,286)


(Credited)/charged to profit or loss
2,454
16,167



Liability/(asset) at end of year
10,335
7,881

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
14,707
11,236

Other timing differences
(4,372)
(3,355)

10,335
7,881


21.


Provisions




Contract provisions

£





At 1 October 2022
508,513


Charged to profit or loss
27,500



At 30 September 2023
536,013

Contract provisions include defect, warranty and other provisions on construction contracts that are ongoing or have reached practical completion.

Page 26

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

22.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



40 (2022 -40) A shares of £1.00 each
40
40
25 (2022 - 25) D shares of £1.00 each
25
25
5 (2022 - 5) E shares of £1.00 each
5
5
5 (2022 - 5) F shares of £1.00 each
5
5

75

75

Each classs of share ranks pari passu in all respects.



23.


Reserves

Capital redemption reserve

Comprises the nominal value of own shares purchased by the company.

Profit and loss account

Comprises all current and prior period retained profits and losses.


24.


Pension commitments

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.


25.


Commitments under operating leases

At 30 September 2023 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
22,827
6,978

Later than 1 year and not later than 5 years
38,318
314

61,145
7,292

Page 27

 
Manchester and Cheshire Construction Company Limited
 
 
 
Notes to the Financial Statements
For the year ended 30 September 2023

26.


Transactions with directors

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).


27.


Related party transactions

Key management personnel compensation totalled £830,750 (2022 - £732,804)
Interest is charged on amounts due from related parties at 2% above base rate. The loans and any accrued interest are repayable on 31 July 2028.


2023
2022
£
£

Amounts due from related parties as at 1 October
2,527,363
2,373,829
Advances
147,500
76,000
Recharged costs
16,926
10,330
Interest
153,353
67,204
2,845,142
2,527,363

 
Page 28