Company Registration Number
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CUBBY CONSTRUCTION LIMITED
COMPANY INFORMATION
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CUBBY CONSTRUCTION LIMITED
CONTENTS
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CUBBY CONSTRUCTION LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
The directors present their strategic report for the year ended 31 May 2023.
The principal activities of the group continued to be that of a civil engineering and construction throughout the period.
The aim of this statement is to give clarity on how the team at Cubby Construction through constant improvement are continuing to deliver on the objectives set out in last year. With a long-term vision and a consistent approach, our core values and focus are becoming embedded. Cubby Construction were able to post pre-tax profits of £582K, a £1.21m turnaround in twelve months.
In the short to medium term our primary focus remains on continued significant internal improvement through accountability, informed data driven decisions, simplified process followed by all, a whole company approach to highlighting issues preventing progress and dealing with them in a robust prioritised manner. From these accounts it can been seen this strategy allowed our gross margin to increase from 10% to 15% in the period. While a challenge, a further increase of 2% is not unrealistic and would see our net profit double. While this journey commenced in 2020 we believe the momentum created will continue to build in the forthcoming year in spite of the obstacles faced by the construction industry. Cubby Construction are well placed to understand and respond to challenges faced through internal data and the ability to model and forecast the effects of current and future challenges be they regional, national, or international. The responsive yet focused one team company approach has allowed us concentrate on the right client and project for the business which has in turn created the strongest order book value to date both current and future. But most significant is, it is the right type of work allowing the company to deliver quality and value in a mutually beneficial manner to our clients. Alongside this the future opportunities from both our existing clients and new continue to grow. With a focused order book and through the disposal of non-core business assets (post year-end) we have reduced core debt, increased working capital whilst still being able to invest in new equipment and, most essentially, in our greatest asset: our people. This has and continues through considered recruitment, calculated core team up skilling, and significant improvement in our apprenticeship and graduate programs, to ensure we have the right people in the right seats to deliver the needs of modern construction business and our projects both short and long term. To conclude, despite the challenges historic, current, and future, Cubby Constructions intends through the alignment of values, focus, embedded vision, great people, data, opportunity and energy to continue on our journey of “Building our Future.”
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CUBBY CONSTRUCTION LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
The directors consider the principal risks and uncertainties faced by the group to be those in relation to contracting, the economic environment including the effects of Brexit and Covid-19, cash flow, and credit risk.
Contracting Given that contracting involves forecasting future costs in order to agree a price for works that is often fixed to an extent, there is inherently a risk involved, in that the profitability of those contracts cannot be known at the point at which the contract is entered into. The directors manage this risk by ensuring that the estimating department is well-resourced and expertly trained through the ongoing monitoring of contract performance, agreeing escalator clauses in contracts where possible, and ensuring that margins on contracts are robust. Economic environment including Brexit, Covid-19 and inflation The current economic environment presents challenges. Supply of some inputs, particularly labour and raw materials, is tight and this is leading to both inflation in the prices of those inputs and shortages of those inputs in places. Since the emergence from the pandemic, demand for the services of the group has been robust. However, it is unclear what impact the inflationary environment will have on demand in future. The directors monitor the economic environment and particularly input prices and the market for contracts closely, so that they can respond appropriately to changes in the environment. Cash flow Contracting requires significant investments in working capital, and is to an extent seasonal with lower activity levels at certain times of year. This presents a cash flow risk. The directors manage the cash flow risk through ongoing cash flow forecasting, monitoring the adequacy of facilities against anticipated requirements, seeking to reduce working capital requirements where possible via utilising stock and closely managing debtors, and controlling costs. Credit The group is exposed to credit losses from its customers. The directors manage this risk by applying strict credit checks, ensuring that stage payments are included in contracts, and closely managing debtors.
This report was approved by the board and signed on its behalf.
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CUBBY CONSTRUCTION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
The directors present their report and the financial statements for the year ended 31 May 2023.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group 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 the Group 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 £1,035,849 (2022 - loss £408,885).
The directors who served during the year were:
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CUBBY CONSTRUCTION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
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 and the Group'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 and the Group's auditors are aware of that information.
The company is undergoing a process to refinance its borrowing with a new banking partner. This is further discussed in the going concern accounting policy, note 2.3.
The auditors, Armstrong Watson Audit 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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CUBBY CONSTRUCTION LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBBY CONSTRUCTION LIMITED
We have audited the financial statements of Cubby Construction Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 May 2023, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company 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 Group 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 Group's or the parent 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.
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CUBBY CONSTRUCTION LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBBY CONSTRUCTION LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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CUBBY CONSTRUCTION LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBBY CONSTRUCTION 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 Group 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:
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 directors and other management; • we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; 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. 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 as a risk assessment tool to identify any unusual or unexpected relationships; • tested journal entries to identify unusual transactions; • tested the operating effectiveness of key controls over purchase cycles on a sample basis; and • reviewed the application of accounting policies. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: • agreeing financial statement disclosures to underlying supporting documentation; and • enquiring of management as to actual and potential litigation and claims.
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.
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CUBBY CONSTRUCTION LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBBY CONSTRUCTION LIMITED (CONTINUED)
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
Carlisle
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CUBBY CONSTRUCTION LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
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CUBBY CONSTRUCTION LIMITED
REGISTERED NUMBER: 02641120
CONSOLIDATED BALANCE SHEET
AS AT 31 MAY 2023
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CUBBY CONSTRUCTION LIMITED
REGISTERED NUMBER: 02641120
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 9 January 2024.
The notes on pages 21 to 40 form part of these financial statements.
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CUBBY CONSTRUCTION LIMITED
REGISTERED NUMBER: 02641120
COMPANY BALANCE SHEET
AS AT 31 MAY 2023
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CUBBY CONSTRUCTION LIMITED
REGISTERED NUMBER: 02641120
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 21 to 40 form part of these financial statements.
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CUBBY CONSTRUCTION LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
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CUBBY CONSTRUCTION LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2022
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CUBBY CONSTRUCTION LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
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CUBBY CONSTRUCTION LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2022
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CUBBY CONSTRUCTION LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
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CUBBY CONSTRUCTION LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
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CUBBY CONSTRUCTION LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MAY 2023
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CUBBY CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Cubby Construction Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.
The principal activity of the company and group is that of a construction contractor.
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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The group had net assets of £3,736,279 and net current liabilities of £692,193 at the balance sheet date, following a consolidated profit of £996,022.
The group has traded through a difficult past couple of years which was impacted by Covid-19. The has returned to profitability in the year. The directors have reviewed cash flow forecasts prepared for the coming year, which show headroom against current and anticipated future facilities. The pipeline for future work remains robust. The group is pursuing a new banking partner. The directors forecast that financing at the requisite desired levels will be achieved. The current banking partner has indicated its willingness to continue to lend to the company until such time as new finance is secured. The directors are also pursuing the sale of two properties in order to improve the net debt position. Given the above, the directors have prepared the accounts on the going concern basis.
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CUBBY CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
Revenue from long-term contracts is recognised according to the stage of completion of that contract, with reference to the proportion of work done (output method). Profit is recognised on only where the outcome of the contract can be measured reliably. Amounts receivable on contracts, included in debtors, is stated at the valuation of work performed, including profit where applicable, to the extent that it is probable that these amounts will be recovered, less any stage payments received. Where contracts are anticipated to be loss making, the expected loss is recognised in full as soon as that loss is foreseen. Revenue from the provision of services, where these do not constitute long-term contractual arrangements, are recognised in accordance with the stage of completion of those services. Revenue from the provision of goods is recognised on dispatch. Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
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CUBBY CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses.
Goodwill is amortised on a straight line basis to the Consolidated Statement of Comprehensive Income over its useful economic life. The useful economic life of goodwill was determined to be one year in a previous period, and as such this value has now been fully amortised.
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CUBBY CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, as detailed below.
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.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
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CUBBY CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet 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 Balance Sheet.
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CUBBY CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Provision for bad or doubtful debts Management provide for bad or doubtful debts when there is evidence that the asset will not be recoverable. Debts are reviewed individually, with no standard policy being applied, owing to the relatively low level of bad debts historically. Estimates Land and building revaluation (including investment property) Property valuations have been undertaken by external valuers, with reference to the sale prices of similar properties in the locality of the properties being valued. The price a property would attract is inherently unknowable unless that property is sold, and therefore there is a degree of estimation involved, particularly as a result of changes in the market since the reference property sales, and differences between the comparator properties and those being valued. Contracts Revenue is recognised in line with the estimated stage of completion of the contract. The stage of completion is calculated with reference to progress on the specified works within the contract (also known as the Output Method). Where available, internal and external valuations and certifications by Quantity Surveyors are used to determine the stage of completion. Where these are not available or are not coterminous with the reporting date, management estimate the stage of completion using knowledge of the contract considering, amongst other factors, the days on which work was performed, time elapsed between valuations, key milestones within contracts, and the anticipated final margin on the contract. The stage of completion of contracts is inherently uncertain and requires estimation. Where contracts are anticipated to be loss-making after the reporting date, the loss is recognised in full as a provision. Determining whether a contract will be loss-making involves estimating future costs, which is inherently uncertain. Stock provision Stock is held at the lower of cost and net realisable value. Where the net realisable value is considered to be lower than the cost, a provision is made against the cost of the stock. The amount of this provision is assessed with reference to factors such as the volume of usage of the stock line and estimated scrap or direct sales value. Calculating this provision involves predicting future events, and as a result there is inherent uncertainty in this estimate.
The whole of the turnover is attributable to the principal activity of the group, which is that of a construction contractor. All turnover arose in the United Kingdom.
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CUBBY CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
In May 2021 the UK Parliament substantively enacted an increase in the rate of Corporation Tax to 25% which will apply from 1 April 2023. This rate has been applied to the deferred tax liability.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
14.Tangible fixed assets (continued)
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CUBBY CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
The 2023 valuations were made by Walton Goodland Chartered Surveyors in 2022, on an open market value for existing use basis.
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FOR THE YEAR ENDED 31 MAY 2023
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FOR THE YEAR ENDED 31 MAY 2023
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FOR THE YEAR ENDED 31 MAY 2023
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FOR THE YEAR ENDED 31 MAY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Revaluation reserve
Profit and loss account
The group contributes to defined contribution pension schemes. The assets of the schemes are held
separately from those of the company in funds administered by Trustees. The Schemes provide money purchase benefits for certain employees based on the accumulated contribution paid on behalf of each member. The group had outstanding contributions under pension schemes at 31st May 2023 of £
The company is controlled by the
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