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COMPANY REGISTRATION NUMBER: 01712405
D Brown (Building Contractors) Limited
Financial Statements
For the year ended
31 May 2023
D Brown (Building Contractors) Limited
Financial Statements
Year ended 31 May 2023
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
4
Independent auditor's report to the member
6
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
13
Notes to the financial statements
14
D Brown (Building Contractors) Limited
Officers and Professional Advisers
The board of directors
D Ford
D Wild
S Worboys
A Mayer
Registered office
Seas End Road
Moulton Loosegate
Spalding
Lincs
PE12 6JX
Auditor
Streets Audit LLP
Chartered Accountants & statutory auditor
Enterprise House
38 Tyndall Court
Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
PE2 6LR
Bankers
Royal Bank of Scotland
14/15 Hereward Cross
Peterborough
Cambridgeshire
PE1 1TB
D Brown (Building Contractors) Limited
Strategic Report
Year ended 31 May 2023
We aim to present a balanced and comprehensive review of the development and performance of the company during the year and its position at the year end. Our review is consistent with the size and non-complex nature of the business and is written in the context of the risks and uncertainties we face. The company's core operations are that of residential property development under contract or speculative sale . Operation Performance and Key Performance Indicators The directors consider the key performance indicators (KPI's) of the company to be turnover, gross margin and net profit. The company reported turnover in the year of £23.5m (2022 - £21.7m) and a gross margin of 6.8% (2022 - 11.8%) resulting in a loss before tax of £243k (2022 - profit of £400k). As noted in 2022, the group received a fine of £300,000 relating to a Health & Safety breach that occurred in 2018 which was included as a provision in 2022 and has now been recognised as a liability. Principal Risks and Uncertainties The company's principal financial instruments comprise cash, bank borrowings and various items, such as trade debtors and trade creditors, which arise directly from its operations. The main purpose of these financial instruments is to provide finance for the group's operations. The existence of these financial instruments exposes the group to a number of financial risks. The main risks arising from the group's financial risks are credit risk, liquidity risk and interest rate risk. The directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years. Credit risk The company seeks to manage its credit risk by dealing with established customers or otherwise checking the credit-worthiness of new customers, establishing clear contractual relationships with those customers and by identifying and addressing any credit issues arising in a timely manner. Liquidity risk The company seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Short term flexibility is achieved by overdraft facilities. The main functional currency of the business is Sterling and the group does not have material exposure to foreign-denominated currency. Interest rate risk The company's exposure to market risk for the changes in interest rates relates primarily to its bank borrowings. The company seeks to manage this risk by keeping bank borrowings to a minimum. Health & safety risk The company is exposed to health & safety risk owing to the nature of the business and sector it operates in. The company seeks to manage this risk through internal expertise and external consultants where deemed necessary. Outlook The company continues to seek to grow across all core operations. The directors will continue to react to market conditions and other external economic conditions whilst managing the risks noted above. The UK economy and construction sector continues to be challenging however the directors believe they are well placed to deal with this and are managing cashflows closely to trade through this period.
This report was approved by the board of directors on 6 March 2024 and signed on behalf of the board by:
D Ford
Director
Registered office:
Seas End Road
Moulton Loosegate
Spalding
Lincs
PE12 6JX
D Brown (Building Contractors) Limited
Directors' Report
Year ended 31 May 2023
The directors present their report and the financial statements of the company for the year ended 31 May 2023 .
Directors
The directors who served the company during the year were as follows:
D Ford
A Mayer
D Wild
(Appointed 1 December 2022)
S Worboys
(Appointed 1 December 2022)
Dividends
Particulars of recommended dividends are detailed in note 13 to the financial statements.
Disclosure of information in the strategic report
The company has chosen to set out in the strategic report information about the results for the year, principal risks and uncertainties and the future developments of the company.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 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 judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 6 March 2024 and signed on behalf of the board by:
D Ford
Director
Registered office:
Seas End Road
Moulton Loosegate
Spalding
Lincs
PE12 6JX
D Brown (Building Contractors) Limited
Independent Auditor's Report to the Member of D Brown (Building Contractors) Limited
Year ended 31 May 2023
Opinion
We have audited the financial statements of D Brown (Building Contractors) Limited (the 'company') for the year ended 31 May 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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 prior year financial statements were not subject to a statutory audit.
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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the company and sector in which it operates; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, employment, environmental and health and safety legislation; - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and - considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures to identify any unusual or unexpected relationships; - tested journal entries to identify unusual transactions; - assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 3 were indicative of potential bias; and - investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; - reading the minutes of meetings of those charged with governance; - enquiring of management as to actual and potential litigation and claims; and - reviewing correspondence with HMRC, relevant regulators and the company's legal advisors. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's member, 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 member 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 member as a body, for our audit work, for this report, or for the opinions we have formed.
Jonathan Day
(Senior Statutory Auditor)
For and on behalf of
Streets Audit LLP
Chartered Accountants & statutory auditor
Enterprise House
38 Tyndall Court
Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
PE2 6LR
7 March 2024
D Brown (Building Contractors) Limited
Statement of Comprehensive Income
Year ended 31 May 2023
2023
2022
(restated)
Note
£
£
Turnover
4
23,519,529
21,681,836
Cost of sales
21,931,439
19,121,623
-------------
-------------
Gross profit
1,588,090
2,560,213
Administrative expenses
1,939,710
1,775,734
Other operating income
5
162,775
22,765
Material operating profit item
300,000
------------
------------
Operating (loss)/profit
6
( 188,845)
507,244
Interest payable and similar expenses
11
54,205
106,952
------------
------------
(Loss)/profit before taxation
( 243,050)
400,292
Tax on (loss)/profit
12
( 120,386)
211,488
---------
---------
(Loss)/profit for the financial year
( 122,664)
188,804
---------
---------
Revaluation of tangible assets
116,371
---------
---------
Total comprehensive income for the year
( 6,293)
188,804
---------
---------
All the activities of the company are from continuing operations.
D Brown (Building Contractors) Limited
Statement of Financial Position
31 May 2023
2023
2022
(restated)
Note
£
£
£
Fixed assets
Tangible assets
14
1,420,180
1,220,427
Current assets
Stock and work in progress
15
806,813
1,201,299
Debtors
16
5,415,554
4,540,832
Cash at bank and in hand
67,835
373,777
------------
------------
6,290,202
6,115,908
Creditors: amounts falling due within one year
17
5,286,760
4,394,789
------------
------------
Net current assets
1,003,442
1,721,119
------------
------------
Total assets less current liabilities
2,423,622
2,941,546
Creditors: amounts falling due after more than one year
18
1,212,496
1,102,718
Provisions
Taxation including deferred tax
20
186,598
259,586
Other provisions
20
300,000
---------
---------
186,598
559,586
------------
------------
Net assets
1,024,528
1,279,242
------------
------------
D Brown (Building Contractors) Limited
Statement of Financial Position (continued)
31 May 2023
2023
2022
(restated)
Note
£
£
£
Capital and reserves
Called up share capital
24
760
760
Revaluation reserve
25
189,939
73,568
Capital redemption reserve
25
6,840
6,840
Profit and loss account
25
826,989
1,198,074
------------
------------
Shareholder funds
1,024,528
1,279,242
------------
------------
These financial statements were approved by the board of directors and authorised for issue on 6 March 2024 , and are signed on behalf of the board by:
D Ford
Director
Company registration number: 01712405
D Brown (Building Contractors) Limited
Statement of Changes in Equity
Year ended 31 May 2023
Called up share capital
Revaluation reserve
Capital redemption reserve
Profit and loss account
Total
£
£
£
£
£
At 1 June 2021
760
73,568
6,840
1,123,481
1,204,649
Profit for the year
188,804
188,804
----
--------
-------
------------
------------
Total comprehensive income for the year
188,804
188,804
Dividends paid and payable
13
( 114,211)
( 114,211)
----
--------
-------
------------
------------
Total investments by and distributions to owners
( 114,211)
( 114,211)
At 31 May 2022
760
73,568
6,840
1,198,074
1,279,242
Loss for the year
( 122,664)
( 122,664)
Other comprehensive income for the year:
Revaluation of tangible assets
14
116,371
116,371
----
---------
-------
------------
------------
Total comprehensive income for the year
116,371
( 122,664)
( 6,293)
Dividends paid and payable
13
( 248,421)
( 248,421)
----
----
----
---------
---------
Total investments by and distributions to owners
( 248,421)
( 248,421)
----
---------
-------
---------
------------
At 31 May 2023
760
189,939
6,840
826,989
1,024,528
----
---------
-------
---------
------------
D Brown (Building Contractors) Limited
Notes to the Financial Statements
Year ended 31 May 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Seas End Road, Moulton Loosegate, Spalding, Lincs, PE12 6JX.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through the statement of comprehensive income. The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The company has reported an operating loss of £189k for the year. The Directors have undertaken restructuring and cost saving measures to ensure the company is able to meet liabilities as they fall due. The directors remain committed to the protection of the business and cashflow is being closely monitored. Therefore, the financial statements have been prepared on a going concern basis.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Loosegate Holdings Limited which can be obtained from Companies House. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) Disclosures in respect of each class of share capital have not been presented. (b) No cash flow statement has been presented for the company. (c) Disclosures in respect of financial instruments have not been presented. (d) No disclosure has been given for the aggregate remuneration of key management personnel.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgements The significant judgements (apart from those involving estimations) are those that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statement are as follows:- 1) Recognition of turnover on on-going contracts at the year end Turnover is recognised when the outcome of a transaction involving the rendering of services can be reliably estimated. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period. When the outcome of a transaction involving the rendering of services cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable. 2) Work in progress The value of work in progress is calculated from valuations and stage of completion reports. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:- 1 Depreciation charge The annual depreciation charge for each class of tangible fixed asset is based on an estimate of the useful economic life of the respective assets. This is reviewed periodically by the directors to ensure that they reflect both the external and internal factors. 2 Revaluation of assets Any tangible assets carried at revalued amounts are recorded at the fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. 3 Retentions Retentions are held in respect of contracted works by sub contractors and payments are made when contracts have satisfactorily been completed and no further liabilities arise.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. In respect of long-term contracts and contracts for on-going services, turnover represents the value of work done in the year, including estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable.
Exceptional items
Exceptional items are disclosed separately in the financial statements in order to provide further understanding of the financial performance of the entity. They are material items of income or expense that have been shown separately because of their nature or amount.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all material timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in the profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Freehold property
-
2% straight line
Plant & Machinery
-
15% straight line
Fixtures & Fittings
-
15% straight line
Motor Vehicles
-
25% reducing balance
Equipment
-
33 % straight line
Stock and work in progress
Stocks and work in progress are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
Financial instruments
The company only holds basic financial instruments as defined in FRS 102. The financial assets and financial liabilities of the company and their measurement basis are as follows: Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at amortised cost. Financial liabilities - trade creditors, accruals and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
2023
2022
(restated)
£
£
Sale of goods
23,519,529
21,681,836
-------------
-------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
2023
2022
(restated)
£
£
Rental income
15,267
9,300
Management charges receivable
100,000
Other operating income
47,508
13,465
---------
--------
162,775
22,765
---------
--------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2023
2022
(restated)
£
£
Depreciation of tangible assets
219,231
108,944
Gains on disposal of tangible assets
( 12,016)
( 8,887)
---------
---------
7. Auditor's remuneration
2023
2022
(restated)
£
£
Fees payable for the audit of the financial statements
16,000
12,000
--------
--------
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023
2022
No.
No.
Production staff
55
55
Management staff
3
2
----
----
58
57
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
(restated)
£
£
Wages and salaries
2,414,709
2,210,740
Social security costs
257,154
250,728
Other pension costs
49,384
50,940
------------
------------
2,721,247
2,512,408
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
(restated)
£
£
Remuneration
218,007
115,756
Company contributions to defined contribution pension plans
1,399
204
---------
---------
219,406
115,960
---------
---------
The number of directors who accrued benefits under company pension plans was as follows:
2023
2022
(restated)
No.
No.
Defined contribution plans
4
2
----
----
Remuneration of the highest paid director in respect of qualifying services:
2023
2022
(restated)
£
£
Aggregate remuneration
129,167
95,000
---------
--------
10. Exceptional items
2023
2022
£
£
Exceptional costs
300,000
----
---------
During the previous year, the company was found guilty of a Health & Safety breach and the company was fined £300,000. This was provided for in full.
11. Interest payable and similar expenses
2023
2022
(restated)
£
£
Interest on banks loans and overdrafts
47,393
101,582
Interest on obligations under finance leases and hire purchase contracts
5,370
5,370
Other interest payable and similar charges
1,442
--------
---------
54,205
106,952
--------
---------
12. Tax on (loss)/profit
Major components of tax (income)/expense
2023
2022
(restated)
£
£
Current tax:
UK current tax (income)/expense
( 62,163)
25,543
Adjustments in respect of prior periods
14,765
--------
--------
Total current tax
( 47,398)
25,543
--------
--------
Deferred tax:
Origination and reversal of timing differences
( 72,988)
185,945
---------
---------
Tax on (loss)/profit
( 120,386)
211,488
---------
---------
Reconciliation of tax (income)/expense
The tax assessed on the (loss)/profit on ordinary activities for the year is lower than (2022: higher than) the standard rate of corporation tax in the UK of 19.90 % (2022: 19 %).
2023
2022
(restated)
£
£
(Loss)/profit on ordinary activities before taxation
( 243,050)
400,292
---------
---------
(Loss)/profit on ordinary activities by rate of tax
( 46,180)
76,055
Effect of expenses not deductible for tax purposes
3,000
57,000
Effect of capital allowances and depreciation
( 77,206)
83,275
Utilisation of tax losses
( 4,842)
---------
---------
Tax on (loss)/profit
( 120,386)
211,488
---------
---------
13. Dividends
2023
2022
(restated)
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
248,421
114,211
---------
---------
14. Tangible assets
Land and buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Equipment
Total
£
£
£
£
£
£
Cost or valuation
At 1 Jun 2022 (as restated)
517,305
136,202
37,188
1,017,948
73,421
1,782,064
Additions
141,388
3,695
176
159,809
11,529
316,597
Disposals
( 120,725)
( 120,725)
Revaluations
66,307
66,307
---------
---------
--------
------------
--------
------------
At 31 May 2023
725,000
139,897
37,364
1,057,032
84,950
2,044,243
---------
---------
--------
------------
--------
------------
Depreciation
At 1 Jun 2022
50,064
80,288
23,645
348,697
58,943
561,637
Charge for the year
14,583
13,737
3,198
174,932
12,781
219,231
Disposals
( 106,741)
( 106,741)
Revaluations
( 50,064)
( 50,064)
---------
---------
--------
------------
--------
------------
At 31 May 2023
14,583
94,025
26,843
416,888
71,724
624,063
---------
---------
--------
------------
--------
------------
Carrying amount
At 31 May 2023
710,417
45,872
10,521
640,144
13,226
1,420,180
---------
---------
--------
------------
--------
------------
At 31 May 2022
467,241
55,914
13,543
669,251
14,478
1,220,427
---------
---------
--------
------------
--------
------------
Tangible assets held at valuation
The Land and buildings were revalued by an independent valuer, Longstaffs, Chartered Surveyors, on an open market value for existing use basis on 19 August 2022 to £725,000. The Directors consider this to be the fair value of the property at the statement of financial position date. Land has been valued at £200,000 (2022 £67,393) and is not depreciated.
In respect of tangible assets held at valuation, the aggregate cost, depreciation and comparable carrying amount that would have been recognised if the assets had been carried under the historical cost model are as follows:
Freehold property
£
At 31 May 2023
Aggregate cost
341,683
Aggregate depreciation
(95,690)
---------
Carrying value
245,993
---------
At 31 May 2022
Aggregate cost
341,683
Aggregate depreciation
(90,077)
---------
Carrying value
251,606
---------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Motor vehicles
£
At 31 May 2023
630,520
---------
At 31 May 2022
654,254
---------
15. Stock and work in progress
2023
2022
(restated)
£
£
Raw materials and consumables
52,512
48,664
Work in progress
754,301
1,152,635
---------
------------
806,813
1,201,299
---------
------------
16. Debtors
2023
2022
(restated)
£
£
Trade debtors
2,048,775
1,247,355
Amounts owed by group undertakings
1,759,349
1,299,336
Prepayments and accrued income
901,726
900,790
Directors loan account
19,000
462,204
Other debtors
686,704
631,147
------------
------------
5,415,554
4,540,832
------------
------------
17. Creditors: amounts falling due within one year
2023
2022
(restated)
£
£
Bank loans and overdrafts
170,887
170,476
Trade creditors
2,518,704
2,323,255
Amounts owed to group undertakings
1,471
Accruals and deferred income
2,277,252
1,639,505
Corporation tax
32,479
32,479
Social security and other taxes
81,463
81,867
Obligations under finance leases and hire purchase contracts
156,882
142,824
Other creditors
49,093
2,912
------------
------------
5,286,760
4,394,789
------------
------------
The Royal Bank of Scotland plc holds security over land and buildings owned by the company dated 17 August 2015. The bank also holds a fixed and floating charge over all assets of the company dated 12 January 2015.
Hire purchase agreements are secured against assets to which they relate.
18. Creditors: amounts falling due after more than one year
2023
2022
(restated)
£
£
Bank loans and overdrafts
426,968
594,451
Obligations under finance leases and hire purchase contracts
485,528
508,267
Other creditors
300,000
------------
------------
1,212,496
1,102,718
------------
------------
The Royal Bank of Scotland plc holds security over land and buildings owned by the company dated 17 August 2015. The bank also holds a fixed and floating charge over all assets of the company dated 12 January 2015.
Hire purchase agreements are secured against assets to which they relate.
Included within creditors: amounts falling due after more than one year is an amount of £54,512 (2022: £70,846) in respect of liabilities payable or repayable by instalments which fall due for payment after more than five years from the reporting date.
19. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2023
2022
(restated)
£
£
Not later than 1 year
156,882
142,824
Later than 1 year and not later than 5 years
485,528
508,267
---------
---------
642,410
651,091
---------
---------
The hire purchase agreements are secured on the assets they relate to.
20. Provisions
Deferred tax (note 21)
Other provision
Total
£
£
£
At 1 June 2022 (as restated)
259,586
300,000
559,586
Additions
( 72,988)
( 300,000)
( 372,988)
---------
---------
---------
At 31 May 2023
186,598
186,598
---------
---------
---------
During the year, the company received a fine of £300,000 relating to a Health & Safety breach that occurred in 2018. This was provided for in the prior year.
21. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
(restated)
£
£
Included in provisions (note 20)
186,598
259,586
---------
---------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
(restated)
£
£
Accelerated capital allowances
157,505
172,070
Revaluation of tangible assets
29,093
87,516
---------
---------
186,598
259,586
---------
---------
Deferred tax has been provided for at 25% being the rate of tax which the liabilities are expected to be realised at.
22. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 49,384 (2022: £ 50,940 ).
23. Prior period adjustments
Adjustments have been made to the prior period to adjust the recognition of the revaluation of the freehold property. The revaluation reserve reduced by £350,064, fixed assets reduced by £257,759 and work in progress reduced by £92,305.
24. Called up share capital
Issued, called up and fully paid
2023
2022
(restated)
No.
£
No.
£
Ordinary shares shares of £ 1 each
760
760
760
760
----
----
----
----
25. Reserves
Revaluation reserve - This reserve records the value of asset revaluations and fair value movements on assets recognised in other comprehensive income. Capital redemption reserve - This reserve records the nominal value of shares repurchased by the company. Profit and loss account - This reserve records retained earnings and accumulated losses.
26. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2023
2022
(restated)
£
£
Not later than 1 year
29,027
46,011
Later than 1 year and not later than 5 years
23,593
32,683
--------
--------
52,620
78,694
--------
--------
27. Directors' advances, credits and guarantees
The company operated a loan account with the a Director. The balance brought forward was £462,204 owed to the company. The director repaid amounts totalling £443,204 and the balance outstanding at the year end was £19,000. No interest was charged and the loan is repayable on demand.
28. Related party transactions
Loosegate Developments Limited is a company with common directors and shareholders. During the year the company made sales of £3,729,250 (2022 - £3,918,722) and the balance outstanding at the year end was £668,114 (2022 - £24,129). Loosegate Developments (Long Sutton) Limited is a company with common directors and shareholders. During the year the company made sales of £3,267,975 (2022 - £440,532) and received a management charge of £100,000 (2022 - £Nil). The balance outstanding at the year end was £1,000,485 (2022 - £440,532). Keston Fields Limited is a company which the company and directors have an interest in. During the year the company made sales of £6,708,879 (2022 - £4,023,103) and the balance outstanding at the year end was £519,512 (2022 - £214,849). D Ford is a director of Tigers Bar & Social Club Limited. During the year, the company made sales of £5,265 (2022 - £Nil) and the balance outstanding at the year end was £6,320 (2022 - £Nil). D Ford is a director of Holbeach Tigers Social Club Ltd and Tigers Bar & Social Club Limited. During the year, the company made a donation of goods and services amounting to £Nil (2022 - £88,047) to these companies. D Ford is a director of Brunswick Fields Management Company Limited. The company made a loan of £350 during the previous year and this balance remained outstanding at the year end. Ford Construction Consultants Limited is a company in which the brother of D Ford is a director and shareholder. During the year the company made purchases of £209,105 (2022 - £104,179) and the balance outstanding at the year end was £11,340 (2022 - £11,397) The company has taken advantage of the exemption available under FRS 102 from disclosing transactions with group companies. The key management personnel remuneration was £247,528 (2022 £115,960).
29. Controlling party
The immediate and ultimate controlling party is Loosegate Holdings Limited, company registration number 11317173, a company registered in England and Wales. The financial statements of Loosegate Holdings Limited are available from the Registrar of Companies, Companies House, Crown Way, Cardiff, CF14 3UZ. The directors consider the ultimate controlling party is D Ford.