Company Registration No. SC087805 (Scotland)
DJ Laing (Contracts) Limited
Annual report and financial statements
for the year ended 31 May 2023
DJ Laing (Contracts) Limited
Company information
Directors
DJ Laing
DSW Laing
KA Nicoll
Secretary
DSW Laing
Company number
SC087805
Registered office
Laing House
Panmure Industrial Estate
Carnoustie
Angus
DD7 7NP
Auditor
Henderson Loggie LLP
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Bankers
The Royal Bank of Scotland plc
288 Brook Street
Broughty Ferry
DD5 2AP
Solicitors
Lindsays
Seabraes House
18 Greenmarket
Dundee
DD1 4QB
DJ Laing (Contracts) Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
DJ Laing (Contracts) Limited
Strategic Report
for the year ended 31 May 2023
- 1 -
The directors present the strategic report for the year ended 31 May 2023.
Fair review of the business
The directors are delighted to report a profit before tax of £162k (2022 - £150k).
The profits delivered in the year have strengthened the balance sheet with net assets increasing to £3.57m (2022 - £3.43m).
The Construction Sector continues to be resilient with demand remaining strong for the company.
The company has continued to face a lot of uncertainty in the year, particularly around the supply chain and the widely publicised energy prices and cost of living environment affecting the price of raw materials. This in turn has applied pressure to margins and has been combatted through effective financial and cost controls.
The results for 2023 reflect a very positive return and one which the directors are pleased with.
Demand varied across the year but reflected the broader market and remained healthy despite the concerns over rising interest & mortgage rates & the associated effects relating to the cost of living environment.
The current House Build Development at Castle View, Dundee undertaken by the group is nearing completion & we look forward to starting on our next Housing Development at Malt Loan in Summer 2023.
The works at Victoria Green Business Park are progressing well & will further the activities undertaken by the group. The Initial Phase comprising of 16 Starter Units is anticipated to be complete in Spring 2024.
In line with recent years, the group has continued to reinvest in its fleet of plant and machinery and vehicles to ensure both staff and customers have modern and efficient equipment operating on site with £204k (2022 - £358k) being spent in the year.
The directors remain optimistic for the future and are fully aware of the external pressures the group is facing on margins, overheads and staffing. The directors continue to engage pro-actively with customers and wider stakeholders to help ensure the recent success can be maintained.
The director’s would also like to place on record their thanks to their team and partners for their hard work and support during 2023.
Principal risks and uncertainties
There are several risks to the business which can impact each group company to varying degrees.
Economic – The construction sector continues to be a difficult industry to operate in. Whilst there is still a demand for new private housing, there are still questions over the sustainability of this demand, particularly in view of high mortgage interest rates. There continues to be downward pressures on margins which the director’s monitor closely and only enter into contracts which will deliver a profit.
Despite these risks, the directors remain optimistic for the future and continue to ensure these risks are mitigated wherever possible.
DJ Laing (Contracts) Limited
Strategic Report (continued)
for the year ended 31 May 2023
- 2 -
Development and performance
Key areas of strategic development and performance of the group include:
Employees - further development of employees continues to be undertaken in relation to training and development requirements, to better equip them in delivering modern, effective and efficient operations and service support.
Health, Safety and Environmental - the directors continue to ensure the company's compliance with health, safety and environmental regulations. Risk management measures, including consultation with insurers are implemented. The company continues to seek ways of ensuring that a safe and healthy working environment is progressively improved through regular health, safety and environmental review meetings.
KPI's
Key financial performance indicators include the monitoring of the management of profitability and working capital.
2023 2022 Measure
Gross profit margin 26.0% 23.0% Gross profit / turnover
Return on capital 4.5% 4.4% Profit before tax / net assets
Current ratio 2.5:1 2.0:1 Current assets : current liabilities
In addition to the financial KPIs above the Directors also review other non-financial metrics on a regular basis.
KA Nicoll
Director
12 February 2024
DJ Laing (Contracts) Limited
Directors' report
for the year ended 31 May 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 May 2023.
Principal activities
The company continues to operate as a civil engineering contractor.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
DJ Laing
DSW Laing
KA Nicoll
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
KA Nicoll
Director
12 February 2024
DJ Laing (Contracts) Limited
Directors' responsibilities statement
for the year ended 31 May 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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; and
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.
DJ Laing (Contracts) Limited
Independent auditor's report
to the members of DJ Laing (Contracts) Limited
- 5 -
Opinion
We have audited the financial statements of DJ Laing (Contracts) Limited (the 'company') for the year ended 31 May 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 May 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.
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 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.
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.
DJ Laing (Contracts) Limited
Independent auditor's report (continued)
to the members of DJ Laing (Contracts) Limited
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. Management informed us that there were no instances of known, suspected or alleged fraud;
We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: Health and Safety; Building Regulations; employment law; and compliance with the UK Companies Act;
We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetrated, and tailored our risk assessment accordingly; and
DJ Laing (Contracts) Limited
Independent auditor's report (continued)
to the members of DJ Laing (Contracts) Limited
- 7 -
Using our knowledge of the company, together with the discussions held with management at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Enquiry of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing minutes of meetings of the board of directors;
Reviewing external consultant's inspection reports;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to the carrying value of tangible fixed assets, stock and work in progress, provisions in relation to stock and bad debts, and the application of accruals; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an 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.
Blair Davidson (Senior Statutory Auditor)
For and on behalf of Henderson Loggie LLP
13 February 2024
Chartered Accountants
Statutory Auditor
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
DJ Laing (Contracts) Limited
Statement of comprehensive income
for the year ended 31 May 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
5,796,275
7,375,685
Cost of sales
(4,287,432)
(5,678,670)
Gross profit
1,508,843
1,697,015
Administrative expenses
(1,541,602)
(1,871,456)
Other operating income
190,136
210,344
Intercompany loan provision reversed
4
125,000
Operating profit
5
157,377
160,903
Interest receivable and similar income
8
17,547
763
Interest payable and similar expenses
9
(12,552)
(11,620)
Profit before taxation
162,372
150,046
Tax on profit
10
(22,901)
14,424
Profit for the financial year
139,471
164,470
The profit and loss account has been prepared on the basis that all operations are continuing operations.
DJ Laing (Contracts) Limited
Balance sheet
as at 31 May 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
726,172
906,714
Current assets
Stocks
13
1,054,075
442,829
Debtors falling due after more than one year
14
1,058,183
1,091,788
Debtors falling due within one year
14
755,475
718,821
Cash at bank and in hand
2,223,479
3,538,996
5,091,212
5,792,434
Creditors: amounts falling due within one year
15
(2,068,518)
(2,969,613)
Net current assets
3,022,694
2,822,821
Total assets less current liabilities
3,748,866
3,729,535
Creditors: amounts falling due after more than one year
16
(8,625)
(84,711)
Provisions for liabilities
Deferred tax liability
18
(166,230)
(210,284)
(166,230)
(210,284)
Net assets
3,574,011
3,434,540
Capital and reserves
Called up share capital
20
10,000
10,000
Profit and loss reserves
21
3,564,011
3,424,540
Total equity
3,574,011
3,434,540
The financial statements were approved by the board of directors and authorised for issue on 12 February 2024 and are signed on its behalf by:
KA Nicoll
Director
Company Registration No. SC087805
DJ Laing (Contracts) Limited
Statement of changes in equity
for the year ended 31 May 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 June 2021
10,000
3,260,070
3,270,070
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
164,470
164,470
Balance at 31 May 2022
10,000
3,424,540
3,434,540
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
139,471
139,471
Balance at 31 May 2023
10,000
3,564,011
3,574,011
DJ Laing (Contracts) Limited
Notes to the financial statements
for the year ended 31 May 2023
- 11 -
1
Accounting policies
Company information
DJ Laing (Contracts) Limited is a private company limited by shares incorporated in Scotland. The registered office is Laing House, Panmure Industrial Estate, Carnoustie, Angus, DD7 7NP.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 33 ‘Related Party Disclosures’ – Disclosures of transactions entered into between two or more members of the group, and compensation for key management personnel; and
The requirements of Section 7 Statement of Cash Flows and paragraph 3.17(d).
The financial statements of the company are consolidated in the financial statements of DJ Laing Group Limited. These consolidated financial statements are available from its registered office, Laing House, Panmure Industrial Estate, Carnoustie, DD7 7NP.
1.2
Going concern
The financial statements have been prepared on a going concern basis. The directors have considered relevant information, including the financial projections, forecast future cash flows and the impact of subsequent events in making their assessment. The directors have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios. This analysis also considers the effectiveness of available measures to assist in mitigating the impact. true
Based on these assessments and having regard to the resources available to the company, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from long-term contracts is recognised by reference to the stage of completion. Further details on the accounting for these long-term contracts is contained in note 1.7 below.
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 12 -
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
12.5% - 25% straight line
Fixtures, fittings, & equipment
15% - 20% straight line and reducing balance
Computer equipment
25% straight line
Motor vehicles
15% - 25% straight line and reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 13 -
1.7
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.8
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 16 -
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Grants in respect of capital expenditure are credited to the profit and loss account over the estimated useful life of the assets to which they relate. Grants received in respect of revenue expenditure are matched against related costs in the period in which these costs occur.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Useful lives of tangible assets
As part of the year end process the management have made an assessment as to the fair value of investments properties. Whilst no formal valuations have been carried out in the year, the valuations are based on the directors' knowledge of the local markets, their known rental yields and a review of the sales price of similar properties. Although there is some degree of estimation involved in arriving at the fair values, management are content that any potential differences are immaterial.
Work in progress
As part of the year end process management are required to assess the ongoing performance of construction contracts. This assessment results in the recognition of profits, losses and provisions against ongoing recovery depending on how that contract is performing at that given time and its degree of completion. These judgements are made using managements extensive experience as well as a detailed working knowledge of each project and in conjunction with advice from the company's own team of surveyors and experts.
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
2
Judgements and key sources of estimation uncertainty (continued)
- 17 -
Trade debtor recovery
Credit control is an important function within the group which requires management to assess on an ongoing basis the recoverability of amounts due from trade debtors. Where recovery is in doubt management will adequately provide against this debt and will arrive at such conclusions based on internal and external knowledge of that customers performance and "ability to pay". Management adopt a prudent approach to credit control.
Accruals
Management estimate requirements for accruals using post year end information and information available from detailed budgets. This identifies costs and income that are expected to be incurred or received for goods/services provided by and to other parties. Accruals are only released when there is a reasonable expectation that these costs will not be invoiced in the future.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Civil engineering
5,724,426
7,361,319
Miscellaneous
71,848
14,366
5,796,275
7,375,685
Analysis per statutory database
5,796,274
7,375,685
Statutory database analysis does not agree to the trial balance by:
1
-
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
5,796,274
7,375,685
Analysis per statutory database
5,796,274
7,375,685
Statutory database analysis does not agree to the trial balance by:
1
-
2023
2022
£
£
Other significant revenue
Interest income
17,547
763
Grants received
-
288
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 18 -
4
Exceptional item
2023
2022
£
£
Expenditure
Intercompany loan provision reversed
-
(125,000)
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(288)
Fees payable to the company's auditor for the audit of the company's financial statements
11,500
8,250
Depreciation of owned tangible fixed assets
139,411
157,862
Depreciation of tangible fixed assets held under finance leases
233,572
189,003
Profit on disposal of tangible fixed assets
(45,225)
(7,775)
Impairment of stocks recognised or reversed
419,128
Operating lease charges
40,000
40,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Operations
43
51
Management and administration
21
21
Total
64
72
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,305,522
2,874,677
Social security costs
250,710
281,053
Pension costs
90,359
65,107
2,646,591
3,220,837
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 19 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
298,866
459,454
Company pension contributions to defined contribution schemes
7,316
6,859
306,182
466,313
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
115,758
201,131
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
17,547
763
9
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
12,552
11,620
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
33,807
(7,911)
Adjustments in respect of prior periods
(457)
Total current tax
33,350
(7,911)
Deferred tax
Origination and reversal of timing differences
(10,449)
(6,513)
Total tax charge/(credit)
22,901
(14,424)
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
10
Taxation (continued)
- 20 -
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
162,372
150,046
Expected tax charge based on the standard rate of corporation tax in the UK of 20% (2022: 19%)
32,475
28,509
Tax effect of expenses that are not deductible in determining taxable profit
267
690
Adjustments in respect of prior years
(457)
Difference between corporation and deferred tax rates
(2,090)
(1,563)
Intercompany loan provision reversed
(23,750)
Super-deduction
(7,294)
(18,310)
Taxation charge/(credit) for the year
22,901
(14,424)
On 3 March 2021, the UK Budget 2021 announcements included measures to support economic recovery as a result of the COVID-19 pandemic. These included an increase to the UK’s main corporation tax rate to 25%, which became effective from 1 April 2023. The 25% rate was granted Royal Assent on 10 June 2021 and so was substantively enacted at the balance sheet date. As a result the closing deferred tax balances as at 31 May 2023 are recognised at 25% (2022 - 25%) and the corporation tax rate effective in the period has been apportioned between the previous rate of 19% and the new rate of 25% at 20% (2022 - 19%).
11
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2023
2022
Notes
£
£
In respect of:
Stocks
13
419,128
Recognised in:
Cost of sales
-
419,128
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 21 -
12
Tangible fixed assets
Plant and machinery
Fixtures, fittings, & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 June 2022
4,100,679
117,722
53,625
460,188
4,732,214
Additions
184,095
2,995
3,031
14,295
204,416
Disposals
(1,023,418)
(43,735)
(28,709)
(15,080)
(1,110,942)
At 31 May 2023
3,261,356
76,982
27,947
459,403
3,825,688
Depreciation and impairment
At 1 June 2022
3,458,619
93,846
40,129
232,906
3,825,500
Depreciation charged in the year
271,732
4,976
6,384
89,891
372,983
Eliminated in respect of disposals
(1,014,043)
(42,831)
(28,709)
(13,384)
(1,098,967)
At 31 May 2023
2,716,308
55,991
17,804
309,413
3,099,516
Carrying amount
At 31 May 2023
545,048
20,991
10,143
149,990
726,172
At 31 May 2022
642,060
23,876
13,496
227,282
906,714
The net carrying value of tangible fixed assets includes the following in respect of assets held under hire purchase contracts.
2023
2022
£
£
Plant and machinery
431,013
492,992
Motor vehicles
98,082
164,052
529,095
657,044
13
Stocks
2023
2022
£
£
Raw materials and consumables
59,229
67,302
Work in progress
994,846
375,527
1,054,075
442,829
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 22 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
195,701
165,638
Gross amounts owed by contract customers
285,912
352,892
Corporation tax recoverable
7,911
Amounts owed by group undertakings
207,829
56,928
Other debtors
50,735
130,654
Prepayments and accrued income
15,298
4,798
755,475
718,821
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
1,058,183
1,058,183
Deferred tax asset (note 18)
33,605
1,058,183
1,091,788
Total debtors
1,813,658
1,810,609
Within other debtors is an amount of £36,000 (2022 - £36,000) relating to shared equity agreements on house sales entered into by a fellow subsidiary, DJ Laing Homes Limited. The terms of these agreements are such that these debts can effectively be repaid at any point within a 10 year period, or later if subject to a hardship clause, which consequently makes the quantification of any amounts due in more than one year difficult. On this basis amounts outstanding are deemed to be due within one year.
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
17
136,462
301,802
Trade creditors
408,739
663,951
Amounts owed to group undertakings
141,415
Corporation tax
33,681
Other taxation and social security
44,612
52,951
Accruals and deferred income
1,445,024
1,809,494
2,068,518
2,969,613
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 23 -
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
8,625
84,711
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
136,462
301,802
In two to five years
8,625
84,711
145,087
386,513
Finance lease obligations represent rentals payable by the company for certain items of plant and machinery. No restrictions are placed on the use of these assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The liabilities from finance leases are secured over the assets concerned.
18
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
167,012
210,284
-
-
Tax losses
-
-
-
32,924
Retirement benefit obligations
(782)
-
-
681
166,230
210,284
-
33,605
2023
Movements in the year:
£
Liability at 1 June 2022
176,679
Credit to profit or loss
(10,449)
Liability at 31 May 2023
166,230
DJ Laing (Contracts) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 24 -
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
90,359
65,107
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
Each ordinary share carries one vote and is entitled to participate pari passu with other ordinary shares in any dividend or capital distribution.
21
Profit and loss reserves
Profit and loss reserves include all current and prior period retained profits and losses.
22
Financial commitments, guarantees and contingent liabilities
The company has given an unlimited inter-company cross guarantee to The Royal Bank of Scotland plc which incorporates a right of set-off between DJ Laing Group Limited, DJ Laing (Contracts) Limited, DJ Laing Homes Limited and DJ Laing Recycling Solutions Limited.
At 31 May 2023 the guarantee amounted to £Nil (2022 - £Nil).
23
Ultimate controlling party
The ultimate holding company is DJ Laing Group Limited, a company incorporated in Great Britain and registered in Scotland. The company is owned and controlled by DJ Laing and DSW Laing.
2023-05-312022-06-01falseCCH SoftwareCCH Accounts Production 2023.300DJ LaingKA NicollKA NicollDSW LaingfalseSC0878052022-06-012023-05-31SC087805bus:Director12022-06-012023-05-31SC087805bus:CompanySecretaryDirector12022-06-012023-05-31SC087805bus:Director22022-06-012023-05-31SC087805bus:CompanySecretary12022-06-012023-05-31SC087805bus:Director32022-06-012023-05-31SC087805bus:RegisteredOffice2022-06-012023-05-31SC087805bus:Agent12022-06-012023-05-31SC0878052023-05-31SC0878052021-06-012022-05-31SC08780512022-06-012023-05-31SC08780512021-06-012022-05-31SC087805core:RetainedEarningsAccumulatedLosses2021-06-012022-05-31SC087805core:RetainedEarningsAccumulatedLosses2022-06-012023-05-31SC0878052022-05-31SC087805core:PlantMachinery2023-05-31SC087805core:FurnitureFittings2023-05-31SC087805core:ComputerEquipment2023-05-31SC087805core:MotorVehicles2023-05-31SC087805core:PlantMachinery2022-05-31SC087805core:FurnitureFittings2022-05-31SC087805core:ComputerEquipment2022-05-31SC087805core:MotorVehicles2022-05-31SC087805core:Non-currentFinancialInstrumentscore:AfterOneYear2023-05-31SC087805core:Non-currentFinancialInstrumentscore:AfterOneYear2022-05-31SC087805core:CurrentFinancialInstrumentscore:WithinOneYear2023-05-31SC087805core:CurrentFinancialInstrumentscore:WithinOneYear2022-05-31SC087805core:CurrentFinancialInstruments2023-05-31SC087805core:CurrentFinancialInstruments2022-05-31SC087805core:ShareCapital2023-05-31SC087805core:ShareCapital2022-05-31SC087805core:RetainedEarningsAccumulatedLosses2023-05-31SC087805core:RetainedEarningsAccumulatedLosses2022-05-31SC087805core:ShareCapital2021-05-31SC087805core:RetainedEarningsAccumulatedLosses2021-05-31SC0878052021-05-31SC087805core:PlantMachinery2022-06-012023-05-31SC087805core:FurnitureFittings2022-06-012023-05-31SC087805core:ComputerEquipment2022-06-012023-05-31SC087805core:MotorVehicles2022-06-012023-05-31SC087805core:UKTax2022-06-012023-05-31SC087805core:UKTax2021-06-012022-05-31SC08780522022-06-012023-05-31SC08780522021-06-012022-05-31SC08780532022-06-012023-05-31SC08780532021-06-012022-05-31SC087805core:PlantMachinery2022-05-31SC087805core:FurnitureFittings2022-05-31SC087805core:ComputerEquipment2022-05-31SC087805core:MotorVehicles2022-05-31SC0878052022-05-31SC087805core:AfterOneYear2023-05-31SC087805core:AfterOneYear2022-05-31SC087805core:Non-currentFinancialInstruments2023-05-31SC087805core:Non-currentFinancialInstruments2022-05-31SC087805core:WithinOneYear2023-05-31SC087805core:WithinOneYear2022-05-31SC087805core:BetweenTwoFiveYears2023-05-31SC087805core:BetweenTwoFiveYears2022-05-31SC087805bus:PrivateLimitedCompanyLtd2022-06-012023-05-31SC087805bus:FRS1022022-06-012023-05-31SC087805bus:Audited2022-06-012023-05-31SC087805bus:FullAccounts2022-06-012023-05-31xbrli:purexbrli:sharesiso4217:GBP