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Registered number: 13957723










GATESTOCK EAST MIDLANDS LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 APRIL 2023

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
COMPANY INFORMATION


Directors
M N T Nannery (appointed 4 May 2022)
K Bowman (appointed 4 May 2022)
S P Tate (appointed 5 March 2022)




Company secretary
M N T Nannery



Registered number
13957723



Registered office
Enterprise Road
Raunds

Wellingborough

Northamptonshire

NN9 6JE




Independent auditor
MHA
Chartered Accountants & Statutory Auditor

Century House

The Lakes

Northampton

NN4 7HD




Bankers
National Westminster Bank Plc
High Street

Rushden

Northamptonshire

NN10 0FB





 
GATESTOCK EAST MIDLANDS LIMITED
 

CONTENTS



Page
Group Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditor's Report
 
5 - 8
Consolidated Statement of Income and Retained Earnings
 
9
Consolidated Balance Sheet
 
10 - 11
Company Balance Sheet
 
12
Consolidated Statement of Cash Flows
 
13 - 14
Consolidated Analysis of Net Debt
 
14
Notes to the Financial Statements
 
15 - 34


 
GATESTOCK EAST MIDLANDS LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 30 APRIL 2023

Introduction
 
The Directors are pleased to present their Strategic Report for Gatestock East Midlands Limited.

Business review
 
holding company. Its direct investments comprise of one primary active trading subsidiary, Maypine Construction Limited, which is principally engaged in the construction of groundworks and infrastructure for housing developments and has a client base of major house builders and developers, and Gatestock Holdings Limited, which is involved in plant and machinery hire and maintenance. The Groups profit mainly derives from the operations of Maypine Construction Limited.

Principal risks and uncertainties

Interest rate risk
The Company’s exposure to market risk for the changes in interest rates relates primarily to the Company’s overdraft facility. The Company’s policy is to manage its interest cost by the use of floating facilities, which will fluctuate according to levels of working capital required.
Liquidity risk
The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs. Company policy has been to have sufficient facilities available to maintain short term flexibility.
Credit risk
The Company’s principal financial assets are cash and trade debtors. Risks associated with cash are limited as the bank has high credit ratings assigned by international credit rating agencies. 
The principal risk lies with trade debtors. In order to manage credit risk the directors set limits for customers based on payment history. Credit limits are reviewed on a regular basis in conjunction with ageing and collection history.

Financial key performance indicators
 
The key performance indicators of the subsidiaries are as follows:
Maypine Construction Limited
Overall profit is a key indicator of the company’s performance. The profit before tax for the year was £8,887 (2022 - £173,101).
Company EBITDA was £62,983 (2022: £192,715), a decrease of £129,732 in the year.
Working capital management is seen as an important target for the business. At the year end, the net current asset level was £1,212,080 with the working capital ratio of 1.38 (2022 - £1,781,074 ratio 1.31).
Gatestock Holdings Limited
Overall profit is a key indicator of the company’s performance. The profit before tax for the year was £263,208 (2022 - £246,756).
Company EBITDA was £904,454 (2022: £857,081), an increase of £47,373 in the year.

Page 1

 
GATESTOCK EAST MIDLANDS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023

Future developments
 
The subsidiary companies retain healthy workbooks, and we anticipate the turnover to remain steady although we expect to see a recessional slowdown in 2024.
We continue to invest in our health and safety programmes and training working towards ISO 45001 accreditation committing to our staff and labour for a safe working environment
We continue to work closely with housing developers in the region and to maintain our reputation of excellent performance and project delivery. In doing so we will be well placed to grow as house builders and undertake larger and more ambitious projects.
Continued development of our IT systems, together with significant investment in capital expenditure and the continued investment training programme to our workforce will allow us to cement our place as a valued and trusted partner to our customers.


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



................................................
S P Tate
Director

Date: 1 March 2024

Page 2

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 APRIL 2023

The Directors present their report and the financial statements for the period ended 30 April 2023.

The Company was incorporated on 05 March 2022.
On 4 May 2022, Gatestock East Midlands Limited acquired 100% of the issued share capital of Gatestock Group Limited, the 100% shareholder directly or indirectly of: Gatestock Enterprises Limited, Gatestock Holdings Limited, Maypine Construction Limited.

Principal activity

The Group is principally engaged in civil engineering and groundworks.

Results and dividends

The profit for the period, after taxation, amounted to £193,232.

Dividends of £114,919 were declared and paid during the period.

Directors

The Directors who served during the period were:

M N T Nannery (appointed 4 May 2022)
K Bowman (appointed 4 May 2022)
S P Tate (appointed 5 March 2022)

Directors' responsibilities statement

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 judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 2006They 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.

Page 3

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023

Future developments

Future developments are addressed within the Group Strategic Report.

Disclosure of information to auditor

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 auditor is 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 auditor is aware of that information.

Post balance sheet events

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

Auditor

Following a rebranding exercise on 15 May 2023 the trading name of the Company's independent auditor changed from MHA MacIntyre Hudson to MHA. A resolution to reappoint MHA as independent auditor, in accordance with section 485 of the Companies Act 2006, will be proposed at the next Annual General Meeting. 

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





................................................
S P Tate
Director

Date: 1 March 2024

Page 4

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GATESTOCK EAST MIDLANDS LIMITED
 

Opinion


We have audited the financial statements of Gatestock East Midlands Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 30 April 2023, which comprise the Group Statement of Income and Retained Earnings, the Group and Company Balance Sheets, the Group Statement of Cash Flows 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 Group's and of the parent Company's affairs as at 30 April 2023 and of the Group's profit for the period 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 Auditor's 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.


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 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.


Page 5

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GATESTOCK EAST MIDLANDS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditor's Report thereon.  The Directors are responsible for the other information contained within the Annual Report.  Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.  If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves.  If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


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 Group Strategic Report and the Directors' Report for the financial period 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.


Matters on which we are required to report by exception
 

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.


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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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.


Page 6

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GATESTOCK EAST MIDLANDS LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Auditor's responsibilities for the audit of the financial statements
 

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

• Enquiry of management and those charged with governance around actual and potential litigation and                         claims;
• Performing audit work over the risk of management override of controls, including testing of journal entries                            and other adjustments for appropriateness, evaluating the business rationale of significant  transactions                                 outside the normal course of business and reviewing accounting estimates for bias;
• Reviewing financial statement disclosures and testing to supporting documentation to access compliance          with applicable laws and regulations.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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 Auditor's Report.


Page 7

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GATESTOCK EAST MIDLANDS LIMITED (CONTINUED)


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 Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Martin Herron BA (Hons) ACA (Senior Statutory Auditor)
for and on behalf of
MHA
Chartered Accountants
Statutory Auditor
Northampton, United Kingdom

1 March 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
Page 8

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 30 APRIL 2023

2023
Note
£

  

Turnover
 4 
29,740,493

Cost of sales
  
(26,992,365)

Gross profit
  
2,748,128

Administrative expenses
  
(2,392,915)

Operating profit
  
355,213

Income from participating interests
  
7,294

Interest payable and similar expenses
 9 
(107,466)

Profit before tax
  
255,041

Tax on profit
 10 
(61,809)

Profit after tax
  
193,232

  

  

Profit for the period attributable to the owners of the parent
  
193,232

Dividends declared and paid
  
(114,919)

Retained earnings at the end of the period
  
78,313

There were no recognised gains and losses for 2023 other than those included in the consolidated statement of income and retained earnings.

The notes on pages 15 to 34 form part of these financial statements.

Page 9

 
GATESTOCK EAST MIDLANDS LIMITED
REGISTERED NUMBER: 13957723

CONSOLIDATED BALANCE SHEET
AS AT 30 APRIL 2023

2023
2023
Note
£
£

Fixed assets
  

Intangible assets
 12 
96,889

Tangible assets
 13 
2,205,568

Investments
 14 
43,690

  
2,346,147

Current assets
  

Stocks
 15 
13,500

Debtors: amounts falling due after more than one year
 16 
254,460

Debtors: amounts falling due within one year
 16 
3,491,464

Cash at bank and in hand
 17 
646,998

  
4,406,422

Creditors: amounts falling due within one year
 18 
(3,743,472)

Net current assets
  
 
 
662,950

Total assets less current liabilities
  
3,009,097

Creditors: amounts falling due after more than one year
 19 
(867,185)

Provisions for liabilities
  

Deferred taxation
 22 
(521,593)

Net assets
  
1,620,319


Capital and reserves
  

Called up share capital 
 23 
190

Merger relief reserve
 24 
1,541,816

Profit and loss account
 24 
78,313

  
1,620,319


Page 10

 
GATESTOCK EAST MIDLANDS LIMITED
REGISTERED NUMBER: 13957723
    
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 30 APRIL 2023

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




................................................
S P Tate
Director

Date: 1 March 2024

The notes on pages 15 to 34 form part of these financial statements.

Page 11

 
GATESTOCK EAST MIDLANDS LIMITED
REGISTERED NUMBER: 13957723

COMPANY BALANCE SHEET
AS AT 30 APRIL 2023

2023
2023
Note
£
£

Fixed assets
  

Investments
 14 
1,939,316

Current assets
  

Debtors: amounts falling due within one year
 16 
190

Cash at bank and in hand
 17 
2,489

  
2,679

Creditors: amounts falling due within one year
 18 
(150,000)

Net current (liabilities)/assets
  
 
 
(147,321)

Total assets less current liabilities
  
1,791,995

  

  

Net assets
  
1,791,995


Capital and reserves
  

Called up share capital 
 23 
190

Merger relief reserve
 24 
1,541,816

Profit for the period
  
364,908

Dividends

 11 

(114,919)

Profit and loss account carried forward
  
249,989

  
1,791,995


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


................................................
S P Tate
Director

Date: 1 March 2024

The notes on pages 15 to 34 form part of these financial statements.

Page 12

 
GATESTOCK EAST MIDLANDS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 APRIL 2023

2023
£

Cash flows from operating activities

Profit for the financial period
193,232

Adjustments for:

Amortisation of intangible assets
24,222

Depreciation of tangible assets
587,876

Loss on disposal of tangible assets
(77,044)

Interest paid
107,466

Investment income
(7,294)

Taxation charge
61,809

Decrease in debtors
2,757,717

(Decrease)/increase in creditors
(2,812,340)

Corporation tax (paid)/received
(34,895)

Share of associates profit
9,940

Net cash generated from operating activities

810,689


Cash flows from investing activities

Purchase of tangible fixed assets
(51,940)

Sale of tangible fixed assets
496,745

HP interest paid
(53,370)

Income from investments in related companies
7,294

Net cash acquired on business combinations
621,216

Net cash from investing activities

1,019,945

Cash flows from financing activities

Repayment of loans
(200,000)

Repayment of/new finance leases
(814,621)

Dividends paid
(114,919)

Interest paid
(54,096)

Net cash used in financing activities
(1,183,636)

Net increase in cash and cash equivalents
646,998
Page 13

 
GATESTOCK EAST MIDLANDS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023


2023

£



Cash and cash equivalents at the end of period
646,998


Cash and cash equivalents at the end of period comprise:

Cash at bank and in hand
646,998



CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 30 APRIL 2023





Cash flows
Acquisition of subsidiaries
New finance leases
At 30 April 2023
£

£

£

£

Cash at bank and in hand

25,782

621,216

-

646,998

Debt due after 1 year

200,000

(700,000)

-

(500,000)

Debt due within 1 year

-

(200,000)

-

(200,000)

HP and finance leases

814,621

(940,656)

(763,209)

(889,244)


1,040,403
(1,219,440)
(763,209)
(942,246)

The notes on pages 15 to 34 form part of these financial statements.

Page 14

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

1.


General information

Gatestock East Midlands Limited is a private company limited by shares, registered in England and Wales, registered number 13957723. 
The principal activity of the Company is that of a holding company. The Company was incorporated on 05 March 2022 and financial statements are made for the first period to 30 April 2023.
The Company's registered office and principal place of business is Enterprise Road, Raunds, Wellingborough, Northamptonshire, NN9 6JE.
On 4 May 2022, Gatestock East Midlands Limited acquired 100% of the issued share capital of Gatestock Group Limited, the 100% shareholder directly or indirectly of: Gatestock Enterprises Limited, Gatestock Holdings Limited, Maypine Construction Limited.

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 Group management to exercise judgement 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 Income and Retained Earnings in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

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 Income and Retained Earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 05 March 2022.

Therefore, the Group continues to recognise a merger reserve which arose on a past business combination that was accounted for as a merger in accordance with UK GAAP as applied at that time.

Page 15

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.3

Revenue

Revenue represents amounts invoiced in the year, excluding Value Added Tax, except in respect of contracting activities. For contracting activities, revenue represents the value of work carried out during the period, including amounts not yet invoiced.

  
2.4

Profit recognition on contracts

The amount of profit recognised ia a proportion of the total forecast profit on the contract by reference to the stage of completion at the balance sheet date, taking accounts of agreed claims.

 
2.5

Operating leases: the Group as lessee

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

 
2.6

Leased assets: the Group as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

 
2.7

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.8

Borrowing costs

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

 
2.9

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.

Page 16

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.10

Current and deferred taxation

The tax expense for the period 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 balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet 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;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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 balance sheet date.

 
2.11

Intangible assets

Goodwill
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 Income and Retained Earnings over its useful economic life, which has been assessed as a period of 5 years by the Directors.

 
2.12

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.

Page 17

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

2.Accounting policies (continued)


2.12
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.

Depreciation is provided on the following basis:

Plant and machinery
-
20%
reducing balance
Motor vehicles
-
25%
reducing balance
Fixtures and fittings
-
20%
reducing balance

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.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.14

Associates and joint ventures

An entity is treated as a joint venture where the Group is a party to a contractual agreement with one or more parties from outside the Group to undertake an economic activity that is subject to joint control.

An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions.
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated Statement of Income and Retained Earnings includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated Balance Sheet, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition.
Any premium on acquisition is dealt with in accordance with the goodwill policy.

 
2.15

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value after making due allowance for onsolete and slow-moving stocks.

Page 18

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group 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 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.

 
2.17

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet 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.

 
2.18

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 19

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 2, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readilt separated from other sources. 
The estimates and underlying assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are reviewed on an ongoing basis. Revisions to accounting estimates are recognided in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Judgements
There are no judgements (apart from those involving estimates) that have had a significant effect of amounts recognised in the Financial Statements.
Estimates
The critical accounting estimates or judgements relevant to the financial statements are embedded within the relevant notes to the financial statements.
Revenue and profit recognition on long term contracts
Profit recognition on long term contracts is deemed to be significant judgement open to uncertainty that would have a material impact on the financial statements. The amount recognised each year is a proportion of the total forecast profit by reference to the stage of completion at the balance sheet date.
Useful economic lives of tangible fixed assets
The useful economic lives used by the Group in respect of tangible fixed assets are set out in the accounting policies. These estimates are the best estimate based on past experience and expected performance and are regularly reviewed to ensure they remain appropriate. The net book value of tangible fixed assets as at 30 April 2023 was £2,205,568 after a depreciation charge of £587,876.
Useful economic life of goodwill
The useful economic life used by the Group in respect of Goodwill arising on business combinations is set out in the accounting policies. This estimate is the best estimate based on Directors experiences and has been benchmarked against the useful economic lives of the non-current assets acquired as part of the business combination. The net book value of intangible fixed assets as at 30 April 2023 was £96,889 after an amortisation charge of £24,222.


4.


Turnover

The whole of the turnover is attributable to civil engineering, being the Group's sole business activity.

All turnover arose within the United Kingdom.

Page 20

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

5.


Operating profit

The operating profit is stated after charging:

2023
£

Operating lease rentals
228,500


6.


Auditor's remuneration

During the period, the Group obtained the following services from the Company's auditor:


2023
£

Fees payable to the Company's auditor for the audit of the consolidated and parent Company's financial statements
39,203

Taxation compliance services
4,290

All other services
6,740


7.


Employees

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

Group
2023
        £

Wages and salaries

2,574,519

Social security costs

296,669

Cost of defined contribution scheme

127,370


2,998,558


The average monthly number of employees, including the Directors, during the period was as follows:

Group
2023
Company
2023
       No.
       No.

Employees

56

3


Page 21

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

8.


Directors' remuneration

2023
£

Directors' emoluments
411,112

Group contributions to defined contribution pension schemes
50,000

461,112


During the period retirement benefits were accruing to 3 Directors in respect of defined contribution pension schemes.

The Directors are considered to be the key management personnel.


9.


Interest payable and similar expenses

2023
£


Bank interest payable
54,096

Finance leases and hire purchase contracts
53,370

107,466


10.


Taxation


2023
£

Corporation tax


Current tax on profits for the period
55,748

Adjustments in respect of previous periods
1,924


Total current tax
57,672

Deferred tax


Origination and reversal of timing differences
4,137

Total deferred tax
4,137


Tax on profit
61,809
Page 22

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
 
10.Taxation (continued)


Factors affecting tax charge for the period

The tax assessed for the period is higher than the standard rate of corporation tax in the UK of 19.5%. The differences are explained below:

2023
£


Profit on ordinary activities before tax
255,041


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19.5%
49,716

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
19,234

Capital allowances for the period in excess of depreciation
(306)

Utilisation of tax losses
18

Adjustments to tax charge in respect of prior periods
(4,096)

Non-taxable income
(3,359)

Changes in provisions leading to an increase in the tax charge
141

Other differences leading to an increase in the tax charge
461

Total tax charge for the period
61,809


Factors that may affect future tax charges

On 24 May 2021, the UK Government substantively enacted the increase in the Corporation Tax rate from
19% to 25% with effect from 1 April 2023.


11.


Dividends

2023
£


Dividends paid on ordinary shares
114,919

Page 23

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

12.


Intangible assets

Group and Company




Goodwill

£



Cost


Additions
121,111



At 30 April 2023

121,111



Amortisation


Charge for the period on owned assets
24,222



At 30 April 2023

24,222



Net book value



At 30 April 2023
96,889



Page 24

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

13.


Tangible fixed assets

Group






Plant and machinery
Motor vehicles
Fixtures and fittings
Total

£
£
£
£



Cost


Additions
615,380
199,769
-
815,149


Acquisition of subsidiary
3,383,117
1,327,625
44,751
4,755,493


Disposals
(1,021,359)
(150,758)
-
(1,172,117)



At 30 April 2023

2,977,138
1,376,636
44,751
4,398,525



Depreciation


Charge for the period on owned assets
94,166
50,454
1,129
145,749


Charge for the period on financed assets
339,849
102,278
-
442,127


Transfers intra group
1,494,823
823,566
39,108
2,357,497


Disposals
(617,607)
(134,809)
-
(752,416)



At 30 April 2023

1,311,231
841,489
40,237
2,192,957



Net book value



At 30 April 2023
1,665,907
535,147
4,514
2,205,568

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2023
£



Plant and machinery
1,482,697

Motor vehicles
375,557

1,858,254

Page 25

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

14.


Fixed asset investments

Group





Investments in associates

£



Cost


On acquisition of subsidiaries
53,630


Share of profit/(loss)
(9,940)



At 30 April 2023
43,690




Company





Investments in subsidiary companies

£



Cost


Additions
1,939,316



At 30 April 2023
1,939,316





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Gatestock Enterprises Limited
Ordinary
100%
Gatestock Group Limited
Ordinary
100%
Gatestock Holdings Limited*
Ordinary
100%
Maypine Construction Limited*
Ordinary
100%

* Both Gatestock Holdings Limited and Maypine Construction Limited are 100% subsidiaries of Gatestock Enterprises Limited.
The registered office of all subsidiaries is Enterprise Road, Raunds, Wellingborough, Northamptonshire, NN9 6JE.

Page 26

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
Subsidiary undertakings (continued)

The aggregate of the share capital and reserves as at 30 April 2023 and the profit or loss for the period ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£
£

Gatestock Enterprises Limited
1,620,628
382,200

Gatestock Group Limited
2,051,095
365,000

Gatestock Holdings Limited*
1,354,437
214,280

Maypine Construction Limited*
712,080
(3,994)


Associates


The following were associates of the Company:


Name

Class of shares

Holding

Wedotools Limited
Ordinary
34.62%
Wedohire Limited *
Ordinary
34.62%
Wedoplant Limited *
Ordinary
34.62%

Wedotools Limited is 34.62% owned by Gatestock Enterprises Limited, which is itself a 100% subsidiary of Gatestock East Midlands Limited.
* Wedohire Limited is directly 100% owned by Wedotools Limited. Wedoplant Limited is directly 100% owned by Wedohire Limited.


15.


Stocks

Group
2023
£

Work in progress
10,000

Goods for resale
3,500

13,500


Page 27

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

16.


Debtors

Group
Company
2023
2023
£
£

Due after more than one year

Other debtors
254,460
-


Group
Company
2023
2023
£
£

Due within one year

Trade debtors
3,036,145
-

Other debtors
216,712
-

Called up share capital not paid
190
190

Prepayments and accrued income
145,000
-

Amounts recoverable on long-term contracts
93,417
-

3,491,464
190



17.


Cash and cash equivalents

Group
Company
2023
2023
£
£

Cash at bank and in hand
646,998
2,489


Page 28

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

18.


Creditors: Amounts falling due within one year

Group
Company
2023
2023
£
£

Bank loans
200,000
-

Payments received on account
507,500
-

Trade creditors
2,191,110
-

Amounts owed to group undertakings
-
150,000

Corporation tax
55,748
-

Other taxation and social security
94,787
-

Obligations under finance lease and hire purchase contracts
522,059
-

Other creditors
21,768
-

Accruals and deferred income
150,500
-

3,743,472
150,000


The obligation under hire purchase contracts are secured against the assets to which they relate.


19.


Creditors: Amounts falling due after more than one year

Group
2023
£

Bank loans
500,000

Obligations under finance leases and hire purchase contracts
367,185

867,185


The obligation under hire purchase contracts are secured against the assets to which they relate.

Bank loans of £500,000 (2022: £700,000) are government-backed as a result of the COVID-19 pandemic. This loan accrues interest at a rate of 3.32% over the Bank of England Base Rate. This loan is secured by debenture across the whole Gatestock Group Limited group.

Page 29

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

20.


Loans


Analysis of the maturity of loans is given below:


Group
2023
£

Amounts falling due within one year

Bank loans
200,000

Amounts falling due 1-2 years

Bank loans
500,000



700,000



21.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
2023
£

Within one year
522,059

Between 1-5 years
367,185

889,244


22.


Deferred taxation


Group



2023


£






Charged to profit or loss
(4,137)


Arising on business combinations
517,456



At end of period
521,593

Page 30

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
 
22.Deferred taxation (continued)

The deferred taxation balance is made up as follows:

Group
2023
£

Accelerated capital allowances
537,887

Tax losses carried forward
(15,441)

Pension timing differences
(10,484)

Deferred tax asset not recognised
9,631

521,593


23.


Share capital

2023
£
Allotted, called up and fully paid


190 Ordinary shares of £1.00 each
190


The Company was incorporated on 5 March 2022 through the issuance of 1 Ordinary Share of £1.00. 
On 4 May 2022, 189 Ordinary Shares of £1.00 were issued as part of a share for share exchange, and remain unpaid at the period end.


24.


Reserves

Merger Relief Reserve

This reserve represents the difference between the fair value and the nominal value of any shares issued in a share for share exchange.

Profit and loss account

The profit and loss account reserve represents all retained profits and losses after dividends.

Page 31

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

25.
 

Business combinations

On 4 May 2022, Gatestock East Midlands Limited acquired 100% of the issued share capital of Gatestock Group Limited, the 100% shareholder directly or indirectly of: Gatestock Enterprises Limited, Gatestock Holdings Limited, Maypine Construction Limited.

Acquisition of Gatestock Group Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value adjustments
Fair value
£
£
£

Fixed Assets

Tangible
2,397,996
-
2,397,996

Intangible
227,602
(173,972)
53,630

2,625,598
(173,972)
2,451,626

Current Assets

Stocks
13,500
-
13,500

Debtors
6,503,451
-
6,503,451

Cash at bank and in hand
1,018,716
-
1,018,716

Total Assets
10,161,265
(173,972)
9,987,293

Creditors

Due within one year
(6,513,284)
-
(6,513,284)

Due after more than one year
(1,138,348)
-
(1,138,348)

Deferred taxation
(517,456)
-
(517,456)

Total Identifiable net assets
1,992,177
(173,972)
1,818,205


Goodwill
121,111

Total purchase consideration
1,939,316

Consideration

£


Cash
397,500

Equity instruments issued
1,541,816

Total purchase consideration
1,939,316

Page 32

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

25.Business combinations (continued)

Cash outflow on acquisition

£


Purchase consideration settled in cash
397,500

Less: Cash and cash equivalents acquired
(1,018,716)

Net cash inflow on acquisition
(621,216)

The goodwill arising on acquisition is attributable to the fair value excees between amounts paid per share and business valuation per share. Goodwill arising on business combinations is considered to have a useful economic life of 5 years.

The results of Gatestock Group Limited since acquisition are as follows:

Current period since acquisition
£

Turnover
29,740,493

Profit for the period since acquisition
193,324


26.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group  in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £127,370. Contributions totalling £8,890 were payable to the fund at the balance sheet date and are included in creditors.


27.


Commitments under operating leases

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


Group
2023
£

Not later than 1 year
182,156

Later than 1 year and not later than 5 years
193,500

375,656

The Company had no commitments under non-cancellable operating leases at the balance sheet date.

Page 33

 
GATESTOCK EAST MIDLANDS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

28.


Related party transactions

The Group has taken advantage of the exemption in Financial Reporting Standard 102 from disclosing transactions between two or more members of a group, as the parties to the transactions are wholly owned subsidiaries.
During the period the Group was charged rent of £32,000 by a pension scheme in which some of the Directors are trustees.
During the period the Group made purchases of £613,369 from Wedoplant Limited, a company not wholly owned by the Group. At the period end there was £109,722 payable to Wedoplant Limited, this amount is included within trade creditors.
During the period the Group advanced an amount of £254,460 to a member of key management personnel. An amount of £254,460 was owed to the Group at the period end. There is no interest accruing on this balance.


29.


Controlling party

In the opinion of the directors the ultimate controlling party is S Tate by virtue of his controlling interest in the ordinary shares of the Company.

 
Page 34