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REGISTERED NUMBER: 03316572 (England and Wales)















STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023

FOR

TRENCHCO LIMITED

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 March 2023










Page

Company Information 1

Strategic Report 2

Report of the Directors 4

Report of the Independent Auditors 5

Income Statement 7

Other Comprehensive Income 8

Balance Sheet 9

Statement of Changes in Equity 10

Cash Flow Statement 11

Notes to the Cash Flow Statement 12

Notes to the Financial Statements 13


TRENCHCO LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 March 2023







DIRECTORS: R Byrne
W Kelly





REGISTERED OFFICE: 17 Clewer Crescent
Harrow Weald
Middlesex
HA3 5QA





REGISTERED NUMBER: 03316572 (England and Wales)





AUDITORS: Mantax Lynton
Chartered Accountants
Statutory Auditor
Suite 207
Equitable House
7 General Gordon Square
London
SE18 6FH

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 March 2023


The directors present their strategic report for the year ended 31 March 2023.

REVIEW OF BUSINESS
The results for the year and financial position of the company are shown in the annexed financial statements.

The directors are pleased with the result for the financial year ending 31 March 2023. Sales have increased from £19.2M to £19.7M, combined with operating profit of £188K (2022: £287K) are good results, particularly when you consider the competitive and difficult market conditions that prevailed, with the pressure on margins which led to a relatively low operating profit.

Monitoring sales and margin is a key measure for the business in view of the continuing investment in plant and our people. The forward order book is also closely monitored.

We enter the new financial year with a good order book, but we anticipate minimal growth in 2024/25. Uncertainty surrounds the future impact of both the economy and rising interest rates, meaning that the short and medium outlook for the UK construction industry also remains uncertain. However, we consider that we are well placed to react to prevailing market conditions given our strong client relationships, adaptable business model and financial position.

PRINCIPAL RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties which could impact the company's performance and these are considered by the board on a regular basis. The board of directors and the relevant management teams consider the risks of all significant business decisions and changes in the external environment and in the company's operations. The key risks affecting the business are as follows :

Operating Risk

The company's reputation and continued success depends on its ability to provide services which are valued by its customers. The company regularly reviews the quality of its services both internally and through client feedback and evaluation.

Market Risk

The company operates in a specialised market and seeks to maintain a competitive advantage by offering a high level of customer service from professional and dedicated staff. The company keeps abreast of developments in the market through maintaining strong relationships with its clients and monitoring the wider economic environment.

Personnel Risk

The company is a privately owned business and places great emphasis on recruiting and training high quality staff. The directors consider staff resourcing on a regular basis. Health, safety and environmental issues remain a high priority in all aspects of the company's affairs.

Financial Risk

The company is principally funded from retained profits and is reliant on converting these profits to cash. Financial monitoring and planning are continuous processes and emphasis is placed on balancing maintenance of growth of profit margin against investment in resources to maintain delivery of a high quality of service to customers.

Given the straight forward nature of the business, the company's directors are of the opinion that analysis using key performance indicators is not necessary for an understanding of the development, performance or position of the business.

HEALTH AND SAFETY
The company considers health and safety to be a priority issue. We have a positive and professional attitude to the subject, which is taken into our business by the directors and senior management. To achieve high standards, we make sure we have competent, trained people and modern well maintained plant and equipment. Our internal resources are audited and supported by external industry experts, with 'prevention', 'learning from experience' and continuous improvement' being the underlying themes.


TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 March 2023

The balance sheet on page 9 of the financial statements show that the company's financial position is strong, in both net assets and liquidity terms.

ON BEHALF OF THE BOARD:





R Byrne - Director


19 December 2023

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 March 2023


The directors present their report with the financial statements of the company for the year ended 31 March 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of groundwork, building contractors and ancillary services.

DIVIDENDS
The total distribution of dividends for the year ended 31 March 2023 will be £217,000 (2022: £107,000).

FUTURE DEVELOPMENTS
We expect 2023/24 to be another challenging year, but are confident that we can maintain the growth and profitability we have shown in recent years.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

R Byrne
W Kelly

DONATIONS
Non political donations totalling £2,341 (2022 - £2,950) were made in the year.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
The auditors, Mantax Lynton, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





R Byrne - Director


19 December 2023

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
TRENCHCO LIMITED


Opinion
We have audited the financial statements of Trenchco Limited (the 'company') for the year ended 31 March 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, 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).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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

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

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

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors 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 Report of the Directors.

We have nothing to report in respect of the following matters where 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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
TRENCHCO LIMITED


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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.

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

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 and relevant taxation legislation.

We identified the greatest risks of material impact on the financial statements from irregularities, including fraud, to be override of controls by management, inappropriate revenue recognition, carrying value of intangibles and going concern. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, reviewing accounting estimates for biases, corroborating revenue recognised by the company through agreements to supporting documentation and ensuring accounting policies are appropriate under United Kingdom Generally Accepted Accounting Practice and applicable law.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing noncompliance and cannot be expected to detect non-compliance with all laws and regulations.

These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.

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 Report of the Auditors.

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 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 a Report of the Auditors 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.




Janak Raj Pokhrel (Senior Statutory Auditor)
for and on behalf of Mantax Lynton
Chartered Accountants
Statutory Auditor
Suite 207
Equitable House
7 General Gordon Square
London
SE18 6FH

19 December 2023

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

INCOME STATEMENT
FOR THE YEAR ENDED 31 March 2023

2023 2022
Notes £    £   

TURNOVER 3 19,781,184 19,240,127

Cost of sales (18,432,830 ) (17,834,717 )
GROSS PROFIT 1,348,354 1,405,410

Administrative expenses (1,164,028 ) (1,123,079 )
184,326 282,331

Other operating income 4,000 4,924
OPERATING PROFIT 5 188,326 287,255


Interest payable and similar expenses 6 (35,202 ) (17,696 )
PROFIT BEFORE TAXATION 153,124 269,559

Tax on profit 7 126,458 182,655
PROFIT FOR THE FINANCIAL YEAR 279,582 452,214

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 March 2023

2023 2022
Notes £    £   

PROFIT FOR THE YEAR 279,582 452,214


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

279,582

452,214

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

BALANCE SHEET
31 March 2023

2023 2022
Notes £    £   
FIXED ASSETS
Tangible assets 9 1,354,167 1,410,310

CURRENT ASSETS
Stocks 10 85,500 83,000
Debtors 11 5,262,555 5,608,516
Cash at bank and in hand 85,879 52,634
5,433,934 5,744,150
CREDITORS
Amounts falling due within one year 12 (2,147,102 ) (2,631,162 )
NET CURRENT ASSETS 3,286,832 3,112,988
TOTAL ASSETS LESS CURRENT
LIABILITIES

4,640,999

4,523,298

CREDITORS
Amounts falling due after more than one
year

13

(193,181

)

(160,526

)

PROVISIONS FOR LIABILITIES 16 (175,528 ) (153,064 )
NET ASSETS 4,272,290 4,209,708

CAPITAL AND RESERVES
Called up share capital 17 4 4
Share premium 18 20,000 20,000
Retained earnings 18 4,252,286 4,189,704
SHAREHOLDERS' FUNDS 4,272,290 4,209,708

The financial statements were approved by the Board of Directors and authorised for issue on 19 December 2023 and were signed on its behalf by:




R Byrne - Director



W Kelly - Director


TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 March 2023

Called up
share Retained Share Total
capital earnings premium equity
£    £    £    £   
Balance at 1 April 2021 4 3,844,490 20,000 3,864,494

Changes in equity
Dividends - (107,000 ) - (107,000 )
Total comprehensive income - 452,214 - 452,214
Balance at 31 March 2022 4 4,189,704 20,000 4,209,708

Changes in equity
Dividends - (217,000 ) - (217,000 )
Total comprehensive income - 279,582 - 279,582
Balance at 31 March 2023 4 4,252,286 20,000 4,272,290

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 March 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 274,557 267,008
Interest paid (2,870 ) (7,982 )
Interest element of hire purchase payments
paid

(32,332

)

(9,714

)
Tax paid (15,547 ) (25,611 )
R&D tax credit 148,922 216,570
Net cash from operating activities 372,730 440,271

Cash flows from investing activities
Purchase of tangible fixed assets (401,420 ) (359,481 )
Sale of tangible fixed assets 179,625 46,875
Net cash from investing activities (221,795 ) (312,606 )

Cash flows from financing activities
Movement on HP loan 93,840 158,963
Equity dividends paid (217,000 ) (107,000 )
Net cash from financing activities (123,160 ) 51,963

Increase in cash and cash equivalents 27,775 179,628
Cash and cash equivalents at beginning
of year

2

(83,610

)

(263,238

)

Cash and cash equivalents at end of year 2 (55,835 ) (83,610 )

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 March 2023


1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2023 2022
£    £   
Profit before taxation 153,124 269,559
Depreciation charges 352,855 360,858
Profit on disposal of fixed assets (74,917 ) (10,882 )
Finance costs 35,202 17,696
466,264 637,231
Increase in stocks (2,500 ) (2,000 )
Decrease/(increase) in trade and other debtors 345,961 (573,103 )
(Decrease)/increase in trade and other creditors (535,168 ) 204,880
Cash generated from operations 274,557 267,008

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 March 2023
31/3/23 1/4/22
£    £   
Cash and cash equivalents 85,879 52,634
Bank overdrafts (141,714 ) (136,244 )
(55,835 ) (83,610 )
Year ended 31 March 2022
31/3/22 1/4/21
£    £   
Cash and cash equivalents 52,634 31,140
Bank overdrafts (136,244 ) (294,378 )
(83,610 ) (263,238 )


3. ANALYSIS OF CHANGES IN NET DEBT

At 1/4/22 Cash flow At 31/3/23
£    £    £   
Net cash
Cash at bank and in hand 52,634 33,245 85,879
Bank overdrafts (136,244 ) (5,470 ) (141,714 )
(83,610 ) 27,775 (55,835 )
Debt
Finance leases (334,531 ) (93,840 ) (428,371 )
(334,531 ) (93,840 ) (428,371 )
Total (418,141 ) (66,065 ) (484,206 )

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 March 2023


1. STATUTORY INFORMATION

Trenchco 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.

2. ACCOUNTING POLICIES

Compliance with accounting standards
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).

Significant judgements and estimates
In preparing the financial statements, management are required to make estimates and judgments which may materially affect reported income, expenses, assets, liabilities or disclosure of contingent assets and liabilities, and the valuation of investment properties, which were based on open market transactions. The estimates and assumptions are reviewed on an on-going basis and are based on historical experience and other factors that are considered to be relevant. Revision to accounting estimates are recognised in the period in which the estimate is revised.

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

Turnover and profits
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Sales are recognised on the basis of work measured, valued and certified at the year end.

Profit is recognised on long-term contracts, if the final outcome can be assessed with reasonable certainty, by including in the profit and loss account turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of contract value which costs to date bear to total expected costs for that contract.

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.

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 method
Fixtures and fittings - 25% Reducing balance method
Motor vehicles - Straight line over 4 years
Computer equipment - 20% Reducing balance method

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.

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.

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 March 2023


2. ACCOUNTING POLICIES - continued

Stocks
Work in progress is valued at the lower of cost and net realisable value. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads. Work in progress is reflected in the accounts on a contract by contract basis and represents the unbilled direct and indirect costs incurred as at the year end. Net realisable value represents the certified value of the measured work carried out in a particular period, invoiced subsequent to the year end.

Financial instruments
Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development
Expenditure on research and development is written off in the year in which it is incurred.

Research & Development tax credits are recognised in the profit or loss in the year in which the
amounts receiveable by the company can be measured reliably and are virtually certain.

Hire purchase and leasing commitments
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to profit and loss account

Rentals applicable to operating leases where substantially all the benefits and risks of ownership remain with the lessor are charged to the profit and loss account on a straight line basis.

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 March 2023


2. ACCOUNTING POLICIES - continued

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Long term contracts
Amounts recoverable on long term contracts, which are included in debtors, are stated at the net sales value of work done after provision for contingencies and anticipated future losses on contracts, less amounts received as progress payments on account. Excess progress payments are included in creditors as payments on account.

Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Going concern
The company has a strong balance sheet and is maintaining reasonable liquidity ratio to deal with the amount that will fall due within one year. After making the necessary enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Going concern is therefore considered appropriate.

3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

4. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 488,565 442,563
Social security costs 56,363 55,026
Other pension costs 2,201 3,176
547,129 500,765

The average number of employees during the year was as follows:
2023 2022

Number of employees 8 7

2023 2022
£    £   
Directors' remuneration 173,139 192,381

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2023 2022
£    £   
Professional Fees 206,107 281,543
Depreciation - owned assets 352,855 360,858
Profit on disposal of fixed assets (74,917 ) (10,882 )
Auditors' Renumeration 15,000 13,000

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 March 2023


6. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank and loan interest 2,066 2,243
Interest on late payment 804 5,739
Hire purchase Interest 32,332 9,714
35,202 17,696

7. TAXATION

Analysis of the tax credit
The tax credit on the profit for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax - 15,547
R&D tax credit (148,922 ) (216,570 )
Total current tax (148,922 ) (201,023 )

Deferred tax 22,464 18,368
Tax on profit (126,458 ) (182,655 )

Reconciliation of total tax credit included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
Profit before tax 153,124 269,559
Profit multiplied by the standard rate of corporation tax in the UK of 19%
(2022 - 19%)

29,094

51,216

Effects of:
Expenses not deductible for tax purposes 1,549 1,654
Capital allowances in excess of depreciation (37,452 ) (37,323 )
Utilisation of tax losses 6,809 -
R & D claim (148,922 ) (216,570 )
Deferred tax 22,464 18,368
Total tax credit (126,458 ) (182,655 )

8. DIVIDENDS
2023 2022
£    £   
Final 217,000 107,000

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 March 2023


9. TANGIBLE FIXED ASSETS
Fixtures
Plant and and Motor Computer
machinery fittings vehicles equipment Totals
£    £    £    £    £   
COST
At 1 April 2022 5,465,848 10,006 212,955 10,616 5,699,425
Additions 266,090 210 135,120 - 401,420
Disposals (358,846 ) - (104,055 ) - (462,901 )
At 31 March 2023 5,373,092 10,216 244,020 10,616 5,637,944
DEPRECIATION
At 1 April 2022 4,088,576 5,480 186,868 8,191 4,289,115
Charge for year 307,731 1,184 43,455 485 352,855
Eliminated on disposal (254,138 ) - (104,055 ) - (358,193 )
At 31 March 2023 4,142,169 6,664 126,268 8,676 4,283,777
NET BOOK VALUE
At 31 March 2023 1,230,923 3,552 117,752 1,940 1,354,167
At 31 March 2022 1,377,272 4,526 26,087 2,425 1,410,310

There is a fixed and floating charge against all assets in favour of Handlesbanken to the value of £200,000.

The net book value of Tangible Fixed Assets held during the year under hire purchase lease agreements is £479,651 (2022 : £393,744)

10. STOCKS
2023 2022
£    £   
Raw materials 85,500 83,000

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade debtors 2,635,998 1,569,915
Owed by companies under common control 842,199 844,160
Amounts recoverable on contract 1,329,547 2,770,595
Other debtors 50,612 26,515
VAT 192,608 247,041
Prepayments 211,591 150,290
5,262,555 5,608,516

The amounts owed by companies under common control are interest free, with no security and is repayable on demand.

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 March 2023


12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Bank loans and overdrafts (see note 14) 141,714 136,244
Hire purchase contracts (see note 15) 235,190 174,005
Trade creditors 1,529,105 2,038,842
Other creditors 10,472 88,375
Tax - 15,547
PAYE/NIC 19,132 45,631
Pension payable 379 237
Directors' loan accounts 4,083 45,661
Accrued expenses 207,027 86,620
2,147,102 2,631,162

13. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2023 2022
£    £   
Hire purchase contracts (see note 15) 193,181 160,526

The interest charged on HP contracts is at the prevailing market rate. Obligations under finance leases are secured on the assets concerned.

14. LOANS

An analysis of the maturity of loans is given below:

2023 2022
£    £   
Amounts falling due within one year or on demand:
Bank overdrafts 141,714 136,244

There is a fixed and floating charge over the company's assets.

R Byrne and W Kelly have also each provided a personal guarantee in the sum of £200,000 for the overdraft facility provided by Handelsbanken, supported by a 1st priority legal mortgage charge over freehold properties at 86 Brent Terrace, London, NW2 1BY and Flat 8, Welshside, London NW9 7RU.

15. LEASING AGREEMENTS

Minimum lease payments under hire purchase fall due as follows:

2023 2022
£    £   
Net obligations repayable:
Within one year 235,190 174,005
Between one and five years 193,181 160,526
428,371 334,531

16. PROVISIONS FOR LIABILITIES
2023 2022
£    £   
Deferred tax
Accelerated capital allowances 175,528 153,064

TRENCHCO LIMITED (REGISTERED NUMBER: 03316572)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 March 2023


16. PROVISIONS FOR LIABILITIES - continued

Deferred
tax
£   
Balance at 1 April 2022 153,064
Provided during year 22,464
Balance at 31 March 2023 175,528

17. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
4 Ordinary Shares £1 4 4

18. RESERVES
Retained Share
earnings premium Totals
£    £    £   

At 1 April 2022 4,189,704 20,000 4,209,704
Profit for the year 279,582 279,582
Dividends (217,000 ) (217,000 )
At 31 March 2023 4,252,286 20,000 4,272,286

19. 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 £2,201 (2022 - £3,176) .

Contributions totalling £379 (2022: £237) were outstanding at year end

20. ULTIMATE CONTROLLING PARTY

The company is controlled by R Byrne and W Kelly.

21. RELATED PARTY DISCLOSURES

During the year, total dividends of £217,000 (2022 - £107,000) were paid to the directors .

During the year, in the course of normal operations, the company paid rent £83,000 (2022- £83,000) to Trencho Holdings Limited, a company under common control.

The company also charged Trencho Holdings Limited a management fee of £4,000 (2022- £4,800).

As at 31 March 2023, Trencho Holdings Limited owed £842,199 (2022- £844,160). The amount owing is interest free, with no security and is repayable on demand.