Company registration number 02031962 (England and Wales)
W.D. CLOSE & SONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
W.D. CLOSE & SONS LIMITED
COMPANY INFORMATION
Directors
A H Close
C P Close
W D Close
K Scott
Secretary
A H Close
Company number
02031962
Registered office
Carville Works
Hadrian Road
Wallsend
England
NE28 6HF
Auditor
Sumer Auditco Limited
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
W.D. CLOSE & SONS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
W.D. CLOSE & SONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

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

Review of the business

The principal activity of the company continued to be that of sheet metal fabricators.

 

Turnover has remained relatively consistent, achieving an increase of 1.6% to £12.4m (2022 - £12.2m). The company has been able to increase turnover by continuing to win large, high profile contracts. Despite this, profit after tax has fallen to £490k from £524k in 2022, reflecting the wider economic climate and rising prices.

 

The results for the year and the financial position at the year end were considered to be satisfactory by the directors.

Principal risks and uncertainties

The management of the business and the execution of the company's strategy are subject to a number of risks. The board reviews these risks and puts in place policies to mitigate them.

 

The key business and financial risks are:

 

Price risk

The principal risk to the business is price risk through the fluctuation of oil prices, since companies in the gas and oil sector make up a large portion of the business. The directors manage price risk on an ongoing basis to ensure they remain competitive within the market.

 

Employees

The supply of skilled labour is a risk for the company as demand can fluctuate depending on the number of contracts. The directors are closely involved with the staff which helps to manage this risk, with increased investment in staff development and apprenticeships.

 

Environment, health and safety incidents

Appropriate measures are implemented to ensure the risk of any environmental and health and safety issues are minimised.

 

Liquidity risk

The directors regularly monitors the financial information to ensure that any risks in this area are considered on a timely basis ensuring the company has sufficient working capital.

 

Credit risk

The directors regularly monitors debtors to ensure that any risks of bad and doubtful debts are provided for on a timely basis.

Development and performance

The directors have confidence in the business going forward with a positive outlook due to a strong order book with a healthy stream of jobs in the pipeline. A number of large contracts have been awarded to the company going forward as a result of the market remaining resilient and demand from customers high. The company has performed well in the year and there is a strong position at the balance sheet date with net assets of £5.17m (2022 - £9.8m) and a healthy cash balance of £1.41m (2022 - £5.4m).

W.D. CLOSE & SONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Key performance indicators

The directors consider the key performance indicators ("KPIs") to be turnover, profit before tax and the cash position, which based on continuing operations are the most effective measures of progress towards achieving the company's objectives.

 

 

2023

2022

Turnover

£12.4m

£12.2m

Profit before tax

£358k

£604k

Cash

£1.41m

£5.36m

 

Cash has fallen in the year primarily due to a dividend payment to the parent company; overall group cash reserves remain strong. The directors are confident that trading into 2024 and beyond will continue to achieve good performance in these three KPIs.

On behalf of the board

A H Close
Director
19 March 2024
W.D. CLOSE & SONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2023.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £4,789,248. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

A H Close
C P Close
W D Close
K Scott
Auditor

Sumer Auditco Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of directors' responsibilities

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:

 

 

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.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

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.

W.D. CLOSE & SONS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
On behalf of the board
A H Close
Director
19 March 2024
W.D. CLOSE & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF W.D. CLOSE & SONS LIMITED
- 5 -
Opinion

We have audited the financial statements of W.D. Close & Sons Limited (the 'company') for the year ended 31 March 2023 which comprise the profit and loss account, 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

W.D. CLOSE & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF W.D. CLOSE & SONS LIMITED
- 6 -
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:

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.

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

W.D. CLOSE & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF W.D. CLOSE & SONS LIMITED
- 7 -
Capability of the audit in detecting irregularities, including fraud

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

 

The following laws and regulations were identified as being of significance to the entity:

 

 

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of legal costs incurred; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

 

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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.

Stephen Slater
Senior Statutory Auditor
For and on behalf of Sumer Auditco Limited
Statutory Auditor
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
19 March 2024
W.D. CLOSE & SONS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
12,418,565
12,195,489
Cost of sales
(9,766,839)
(9,453,908)
Gross profit
2,651,726
2,741,581
Administrative expenses
(2,569,434)
(2,285,386)
Other operating income
255,451
147,641
Operating profit
4
337,743
603,836
Interest receivable and similar income
20,558
283
Profit before taxation
358,301
604,119
Tax on profit
7
131,620
(80,529)
Profit for the financial year
489,921
523,590

The profit and loss account has been prepared on the basis that all operations are continuing operations.

W.D. CLOSE & SONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
£
£
Profit for the year
489,921
523,590
Other comprehensive income
-
-
Total comprehensive income for the year
489,921
523,590
W.D. CLOSE & SONS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
1,585,407
3,571,914
Investment property
10
-
0
735,000
1,585,407
4,306,914
Current assets
Stocks
11
61,318
43,254
Debtors
12
4,506,015
4,442,870
Cash at bank and in hand
1,406,894
5,364,224
5,974,227
9,850,348
Creditors: amounts falling due within one year
13
(2,127,518)
(3,799,695)
Net current assets
3,846,709
6,050,653
Total assets less current liabilities
5,432,116
10,357,567
Creditors: amounts falling due after more than one year
14
(202,012)
(339,922)
Provisions for liabilities
Deferred tax liability
15
59,582
231,235
(59,582)
(231,235)
Net assets
5,170,522
9,786,410
Capital and reserves
Called up share capital
18
10,000
10,000
Profit and loss reserves
5,160,522
9,776,410
Total equity
5,170,522
9,786,410
The financial statements were approved by the board of directors and authorised for issue on 19 March 2024 and are signed on its behalf by:
W D Close
Director
Company registration number 02031962 (England and Wales)
W.D. CLOSE & SONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2021
10,000
9,252,820
9,262,820
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
523,590
523,590
Balance at 31 March 2022
10,000
9,776,410
9,786,410
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
489,921
489,921
Dividends
8
-
(4,789,248)
(4,789,248)
Transfers
19
-
(316,561)
(316,561)
Balance at 31 March 2023
10,000
5,160,522
5,170,522
W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Company information

W.D. Close & Sons Limited is a private company limited by shares incorporated in England and Wales. The registered office is Carville Works, Hadrian Road, Wallsend, England, NE28 6HF.

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, modified to include investment properties at fair value. 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:

 

 

The financial statements of the company are consolidated in the financial statements of Shelford Holdings Limited. These consolidated financial statements are available from its registered office, Carville Works, Hadrian Road, Wallsend, England, NE28 6HF.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover represents the sales value of work done net of VAT and trade discounts. Long-term contract revenue is calculated as the fair value of the contract works completed at the balance sheet date, as outlined in note 1.9. Profit recognised is based on the stage of completion of a contract. Provision is made in full for anticipated losses on uncompleted contracts. Where turnover differs from amounts invoiced, the balance is included in amounts recoverable on long term contracts or payments on account as appropriate.

1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.5
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.

W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -

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:

Leasehold land and buildings
Straight line over the term of the lease
Plant and equipment
25% Reducing balance
Fixtures and fittings
25% Reducing balance
Motor vehicles
25% 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.

1.6
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

1.7
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).

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials 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.

1.9
Long-term contract revenue

Where the outcome of a 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.

 

Where the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.

 

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

1.10
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ 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.

W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
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.

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 company 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, loans from fellow group companies and preference shares that are classified as debt, 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.11
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.

1.12
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.

1.13
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, if considered material to the financial statements.

 

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.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
1.16
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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.

Revenue recognition

The company's revenue recognition policy for amounts recoverable on contracts is set out in accounting policies and is central to how the company values work performed in each financial period. Project managers provide the estimates required, which are overseen by the Directors who have substantial experience in the field.

W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Residual values and useful economic lives of tangible fixed assets

The company depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.

 

Judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the company would currently obtain for disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices. The carrying amount of tangible fixed assets at the reporting end date was £1,585,407 (2022 - £3,571,914).

Revenue recognition in respect of long term contracts

The company uses the percentage of completion method to recognise project revenue for long term contracts. The method requires the directors to estimate the future profits and losses expected for each contract. The method also requires the directors to estimate the level of completion at which profits and losses can reliably forecast and hence recognised. Variations to estimates could result in the over or under recognition of revenue.

 

Amounts recoverable on long term contracts ("AROC"), which are included in debtors, are stated at the net sales value of work done after provision for contingencies and anticipated future losses on contracts, less amounts received as progress payments on account. The carrying amount of AROC at the reporting end date was £1,872,800 (2022 - £2,391,351).

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Contract revenue
12,418,565
12,195,489
2023
2022
£
£
Other revenue
Interest income
20,558
283
Grants received
57,919
60,451
Rental income arising from investment properties
78,883
66,250
Insurance proceeds receivable
104,449
-
Sundry income
1,750
-
Rental income arising from non-investment properties
12,450
12,450

All the company's turnover arises in the UK.

 

Grant income includes £21,881 (2022 - £31,743) received in relation to the UK Government Kickstart Scheme.

W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
13,000
12,500
Depreciation of owned tangible fixed assets
197,500
274,652
Profit on disposal of tangible fixed assets
(425)
(10,463)
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Directors
4
4
Direct staff
100
75
Office staff
22
17
Total
126
96

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,764,986
2,955,054
Social security costs
320,492
245,922
Pension costs
110,719
58,405
4,125,197
3,259,381
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
225,692
371,665
Company pension contributions to defined contribution schemes
34,920
2,140
260,612
373,805

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
6
Directors' remuneration
(Continued)
- 19 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
71,488
68,925
Company pension contributions to defined contribution schemes
32,361
599
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
91,539
84,021
Adjustments in respect of prior periods
(88,040)
(122,793)
Total current tax
3,499
(38,772)
Deferred tax
Origination and reversal of timing differences
(135,119)
119,301
Total tax (credit)/charge
(131,620)
80,529

The actual (credit)/charge 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
358,301
604,119
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
68,077
114,783
Tax effect of expenses that are not deductible in determining taxable profit
2,251
(60)
Tax effect of income not taxable in determining taxable profit
(6,847)
(5,455)
Adjustments in respect of prior years
-
0
(109)
Permanent capital allowances in excess of depreciation
28,058
(25,247)
Research and development tax credit
(88,040)
(122,684)
Other permanent differences
(135,119)
119,301
Taxation (credit)/charge for the year
(131,620)
80,529
W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
8
Dividends
2023
2022
£
£
Dividend in specie
2,189,940
-
0
Cash dividend
2,599,308
-
0
4,789,248
-

During the year a dividend in specie was declared to transfer fixed assets, as described in note 9 and 10, to the parent company.

9
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2022
3,557,799
2,383,221
209,180
296,783
6,446,983
Additions
51,495
21,539
7,876
12,000
92,910
Disposals
-
0
-
0
-
0
(1,000)
(1,000)
Transfers to parent company
(1,776,627)
(2,404,760)
(217,056)
(307,783)
(4,706,226)
At 31 March 2023
1,832,667
-
0
-
0
-
0
1,832,667
Depreciation and impairment
At 1 April 2022
591,333
1,882,450
148,528
252,758
2,875,069
Depreciation charged in the year
67,146
106,650
13,548
10,156
197,500
Eliminated in respect of disposals
-
0
-
0
-
0
(925)
(925)
Transfers to parent company
(411,219)
(1,989,100)
(162,076)
(261,989)
(2,824,384)
At 31 March 2023
247,260
-
0
-
0
-
0
247,260
Carrying amount
At 31 March 2023
1,585,407
-
0
-
0
-
0
1,585,407
At 31 March 2022
2,966,466
500,771
60,652
44,025
3,571,914

During the year there was a transfer of fixed assets to the parent company.

W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
10
Investment property
2023
£
Fair value
At 1 April 2022
735,000
Transfers to parent company
(735,000)
At 31 March 2023
-
0

Bradley Hall Chartered Surveyors valued the investment property in May 2018. The directors believe this

reflects the fair value as at the date of the asset transfer.

During the year there was a transfer of investment property to the parent company.

11
Stocks
2023
2022
£
£
Raw materials and consumables
61,318
43,254
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,354,943
1,664,083
Amounts recoverable on long term contracts
1,872,800
2,391,351
Corporation tax recoverable
-
0
38,663
Amounts owed by group undertakings
-
0
36,107
Other debtors
1,023
-
0
Prepayments and accrued income
277,249
312,666
4,506,015
4,442,870
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Trade creditors
750,287
2,633,884
Corporation tax
3,956
-
0
Other taxation and social security
311,704
148,203
Government grants
16
4,810
23,678
Other creditors
10,356
11,085
Accruals and deferred income
1,046,405
982,845
2,127,518
3,799,695
W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Government grants
16
202,012
339,922
15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
59,582
194,701
Investment property
-
36,534
59,582
231,235
2023
Movements in the year:
£
Liability at 1 April 2022
231,235
Credit to profit or loss
(135,119)
Transfers to parent company
(36,534)
Liability at 31 March 2023
59,582
16
Government grants
2023
2022
£
£
Arising from government grants
206,822
363,600
Included in the financial statements as follows:
Current liabilities
4,810
23,678
Non-current liabilities
202,012
339,922
206,822
363,600
W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
110,719
58,405

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.

18
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

The company has one class of ordinary shares which carry no right to fixed income.

19
Non-distributable profits reserve
2023
2022
£
£
At the beginning of the year
316,561
316,561
Transfers to parent company
(316,561)
-
At the end of the year
-
316,561

Non-distributable profits relate to upward revaluation of the investment property held. During the year, the investment property has been transferred to the parent company along with the non-distributable reserve.

20
Operating lease commitments
Lessor

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2023
2022
£
£
Within one year
87,000
87,000
Between two and five years
348,000
348,000
In over five years
-
0
79,750
435,000
514,750
W.D. CLOSE & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
21
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Purchases
Purchases
2023
2022
£
£
Other related parties
-
1,164,213
Rent and other income
2023
2022
£
£
Other related parties
87,000
66,250

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Other related parties
-
19,545
22
Ultimate controlling party

The parent company of W.D. Close & Sons Limited is Shelford Holdings Limited. The registered office of Shelford Holdings Limited is Carville Works, Hadrian Road, Wallsend, England, NE28 6HF.

The company is controlled by Mr WD Close and Mrs AH Close by virtue of their joint shareholding of 86% of the issued share capital of the parent company, Shelford Holdings Limited.

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