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Registered number: 02287410
















ROADFORM CIVIL ENGINEERING COMPANY LIMITED




ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2023


































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ROADFORM CIVIL ENGINEERING COMPANY LIMITED

 
COMPANY INFORMATION


DIRECTORS
Oliver Mitchell (appointed 15 November 2022)
Samantha Wood (appointed 1 February 2023)
E N Potter (resigned 24 May 2023)
A M Tanton (appointed 10 July 2024)
C C O'Malley (appointed 10 July 2024)




REGISTERED NUMBER
02287410



REGISTERED OFFICE
Roadform House
Milber Trading Estate

Newton Abbot

Devon

TQ12 4SG




INDEPENDENT AUDITORS
Bishop Fleming LLP
Chartered Accountants & Statutory Auditors

2nd Floor Stratus House

Emperor Way

Exeter Business Park

Exeter

EX1 3QS






ROADFORM CIVIL ENGINEERING COMPANY LIMITED


CONTENTS



Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditors' report
6 - 9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12 - 13
Notes to the financial statements
14 - 30



ROADFORM CIVIL ENGINEERING COMPANY LIMITED

 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023

COMPANY OVERVIEW
 
Roadform (the Company) operates within the Civil Engineering and Construction Industry providing services including groundworks, road construction and surfacing, building substructures, and drainage, principally for the new housing and Commercial Civils market. The majority of our customers are tier one main contractors and blue-chip plc national housebuilders operating in the South West of England.

BUSINESS REVIEW
 
Sales in 2023 were 11.0% lower than 2022 at £27.9 million. Net Income however in 2023 was a profit of £2.4 million, compared to a loss of £1.3 million in 2022, resulting in a £3.7 million turnaround.
A prior year adjustment of £463k was required to correct the audited accounts of 2022 to reflect the full recording of retentions. In previous years the Company had been unable to track and fully record retentions. With a process now in place the Company will be able to recover retentions when due, usually after 12 months, and improve cash flow.
Sandbanks Holdings acquired the Company in November 2022.  
During the year all supplier payments were met. In 2024 the Company has been able to further increase its credit limits with major suppliers.
Several significant loss-making contracts were ended in 2023 and therefore no longer have a negative impact on the business.
In early 2023 the Directors implemented a new sales process with a forward-thinking focus on client facing business development and ‘best-in-class’ quality assurance. This has resulted in several new projects being awarded in late 2023 and early 2024, In the last 8 months, the Company has received orders in excess of £30 million. Delays in starting these projects has led to some of that new revenue expected in 2024 being delayed until 2025.
New markets beyond the housebuilding sector have successfully been opened. The Company fully expects a substantial growth in turnover and profitability in the year to October 2025. Projections indicate revenue to increase to £41 million with gross profit increasing by a further 6% points. Of the £41 million revenue projected for 2025, 62% is made up of either confirmed or recurring projects. The Company has responded to tenders in excess of £100 million of projects. 
For 2024 revenue should exceed £29 million with 88% of the second half covered by orders and recurring revenue. This will result in gross margins double what was achieved in 2023.
The Company invested £1,374k in improved plant and equipment in 2023.
The Company remains free of bank debt at the year end.
The Company has revalued its head office adding £694k to its Balance Sheet value.
In total the Company has increased the Balance Sheet net worth by £2.9 million to £7.4 million as at October 2023.
The Company’s enhanced operational performance, strengthened customer relationships and rigorous cost management have laid a solid foundation for sustainable growth and profitability in the years ahead. The management team have a strong vision and 10-year plan to be the leading Civil Engineering firm in the South West.
The turnaround, driven by increased customer projects, improved customer relationships, and a tighter cost management will show fully in the Company’s financial results in 2025.

Page 1


ROADFORM CIVIL ENGINEERING COMPANY LIMITED


STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023

OPERATIONAL ACHIEVEMENTS

Since the installation of the new management team, the Company has experienced a notable increase in customer projects and strengthened customer relationships. This growth is a testament to the team's strategic direction and ability to deliver value to clients, thereby driving customer confidence and the company's overall business expansion. The Company has increased its client-base, to include more well known national and international brands within the Construction, Commercial, Retail, Renewables and Utility sectors. 
In May 2024 the Company obtained ISO 14001 and 45001 status adding to the already obtained ISO 9001, becoming one of the only groundworks/civil engineering companies in the South West to have this accreditation.
The Company has successfully tightened control over its plant hire, fuel costs, and labour expenses. This proactive approach has resulted in improved operational efficiency and cost savings. The implementation of a new time recording software, fuel cards and site fuel management processes in late 2023 will continue to have significant impact in 2024.

PRINCIPAL RISKS AND UNCERTAINTIES
 
Increased mortgage interest rates were expected to slow demand for new houses and as a result housebuilders would delay development of existing projects. However, this does not appear to have happened with our client-base. The change of government is likely to increase house building and consequently demand for the Company’s services.
Agreed contract revenue could be delayed if housebuilders decide to slow the release of new build houses on to the market.
Applications for payment can be delayed by customers tying up large amounts of working capital while being obliged to pay for related supplies and labour more rapidly.
Contracts may not be delivered as cost effectively as envisaged in the original tenders. The Company has now implemented monthly detailed Cost Valuation Report reviews to ensure that the loss-making contracts like those that occurred in 2022 and 2021 are not repeated.
Errors can be made in tender pricing leading to loss making contracts. The company has used AI-derived technology and software, resulting in considerably reducing that risk. For example the Company is implementing a bespoke software platform designed to seamlessly transition from initial tender estimating through to the complete commercial aspects of a project and finally onto the Company’s accounting systems.
The growth in revenue may result in difficulties in obtaining the necessary skilled labour.
The Company does not carry any bank debt, it is therefore not exposed to higher market interest rate risk. In addition, HP finnace represents just 49% of plant and machinery NBV.
The Company is reliant on maintaining good credit ratings to obtain materials from suppliers.

FINANCIAL KEY PERFORMANCE INDICATORS
 
The Directors monitor the Company’s progress against its strategic objectives and the financial performance of the Company’s operations on a regular basis, producing monthly management accounts. 
For the year ended 31 October 2023, turnover was £27,889k (2022 - £31,400k), this represents a 11.1% decrease on the previous year. This decrease was primarily due to a number of projects completing, whilst the Company’s key focus for 2023 was to increase efficiencies post takeover and in readiness for increased turnover and profit for 2024 and beyond. 
Gross profit % for the year ended 31 October 2023 was 6.4% (2022 – 6.5%).  The Company forecasts an improvement of 4% points in the year to 2024 as a result of the Operational Achievements noted above.
The proportion of applications outstanding from previous months was 70% at the end of October 2022. This had been reduced to 64% at the end of October 2023. As at Q2 2024, this has reduced to 24% whilst our target is to
Page 2


ROADFORM CIVIL ENGINEERING COMPANY LIMITED


STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023

reduce and maintain this to 20% by the end of 2024.
The Company is forecasting a turnover of £29 million in 2024 and gross profit of 10%, with a considerable growth of 41% to £41 million for the year ended 31 October 2025. The Company exited a number of loss-making contracts in 2023 and relaunched the sales and marketing process which has added over £20 million of further new contracts.

GOING CONCERN

The Directors are confident that the return to profitability will be continued into 2024 and 2025 and the business is on a substantial growth curve. This is clearly indicated in the detailed revenue forecast for 2024 and 2025. 
The directors prepare both budgets and revenue forecasts for a minimum of 12 months from approval of these financial statements and they are satisfied that those forecasts provide a reasonable and realistic expectation that the Company can continue for the foreseeable future. As such, the directors have concluded that the Company is a going concern and the financial statements have been prepared on this basis. This assumes that the Company will be able to realise its assets and discharge its liabilities in the normal course of business.
The forecasts prepared take account of current market conditions including the impact of interest rates and inflation, post year end trading performance, secured revenue, confirmed and recurring contracts as well as tendered projects with a carefully calculated estimate of success.
The directors have also considered the amount by which turnover is required to fall such that the business may not be able to meet its liabilities as they fall due. Based on post year end trading to date, the current order book and market expectations, it is considered that the chance of such a significant fall in turnover to be remote. The Company regularly reviews credit terms offered to customers and outstanding balances are updated monthly with strict credit control processes in place.
When making this assessment, the directors have also considered the existence of a contingent liability to HMRC for incorrect IR35 and Employment Status treatment of workers that occurred prior to 2023 (see Note 21). Since April 2024 the Demibourne principle has legislated for IR35 as well as Employment Status liabilities to be netted against what has already been paid by the worker. The net liability, the difference between the maximum liability and the amount already paid by the workers via their CIS filings with HMRC cannot be accurately determined. The Company has taken advice in this respect and has notified HMRC. It is expected that given the time taken to agree with HMRC, probably over 12 months, and the likelihood of extended payment terms, this liability will not need to be fully settled within the next 24 months.
The result of these reviews is that the directors are satisfied that the Company can meet its liabilities as they fall due for a period of at least 12 months from approval of the financial statements and therefore it is appropriate to prepare the financial statements on a going concern basis. 


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



Oliver Mitchell
Director

Date: 25 July 2024

Page 3


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023

The Directors present their report and the financial statements for the year ended 31 October 2023.

DIRECTORS' RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing the Strategic report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and 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 for the Company's financial statements 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

RESULTS AND DIVIDENDS

The profit for the year, after taxation, amounted to £2,358,798 (2022: loss £1,276,372).

No dividends were paid during the year (2022: £Nil)

DIRECTORS

The Directors who served during the year were:

Oliver Mitchell (appointed 15 November 2022)
Samantha Wood (appointed 1 February 2023)
E N Potter (resigned 24 May 2023)

FUTURE DEVELOPMENTS

Future developments are detailed within the Strategic Report.

DISCLOSURE OF INFORMATION TO AUDITORS

Each of the persons who are Directors at the time when this Directors' report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Page 4


ROADFORM CIVIL ENGINEERING COMPANY LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
AUDITORS

The auditorsBishop Fleming LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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






Oliver Mitchell
Director

Date: 25 July 2024

Roadform House
Milber Trading Estate
Newton Abbot
Devon
TQ12 4SG

Page 5


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROADFORM CIVIL ENGINEERING COMPANY LIMITED
OPINION


We have audited the financial statements of Roadform Civil Engineering Company Limited (the 'Company') for the year ended 31 October 2023, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 October 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


BASIS FOR OPINION


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


CONCLUSIONS RELATING TO GOING CONCERN


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


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 Auditors' report thereon. The Directors are responsible for the other information contained within the Annual ReportOur 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.


Page 6


ROADFORM CIVIL ENGINEERING COMPANY LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROADFORM CIVIL ENGINEERING COMPANY LIMITED (CONTINUED)

OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
 

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


the information given in the 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 set out on page 4, 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.


Page 7


ROADFORM CIVIL ENGINEERING COMPANY LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROADFORM CIVIL ENGINEERING COMPANY LIMITED (CONTINUED)

AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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:

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
 
the nature of the sector, control environment and the company’s performance;
results of our enquiries of management and the Directors, about their own identification and assessment of the risks of irregularities;
any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non compliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; the internal controls established to mitigate risks of fraud or non compliance with laws and regulations; and
the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
 
As a result of these procedures, we have considered the opportunities and incentives that may exist within the organisation for fraud and identified the highest area of risk to be in relation to revenue recognition, with a particular risk in relation to year end cut off and long term contract accounting.  In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We identified and obtained an understanding of the laws and regulations that are of significance to the company by discussions with directors and by updating our understanding of the sector in which the company operated in. Laws and regulations that are of direct significance to the company, and of which non compliance could result in material misstatement, are considered to be the UK Companies Act, FRS 102 and UK tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These included data protection, health and safety, employment legislation, contract law, building regulations.
Our procedures to respond to risks identified included the following:
 
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
reviewing the financial statement disclosures and testing to supporting documentation to assess the recognition of revenue;
Considering the valuation of accruals and work in progress and testing to supporting documentation.
Challenging assumptions and judgements made by management in their significant accounting estimates.
enquiring of Directors and management concerning actual and potential litigation and claims;
performing procedures to confirm material compliance with the requirements of the above regulations; 
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
Page 8


ROADFORM CIVIL ENGINEERING COMPANY LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROADFORM CIVIL ENGINEERING COMPANY LIMITED (CONTINUED)

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; and assessing whether the judgements made in making accounting estimates are indicative of a potential bias.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from an error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' 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.






Mark Munro FCA (Senior statutory auditor)
for and on behalf of
Bishop Fleming LLP
Chartered Accountants
Statutory Auditors
2nd Floor Stratus House
Emperor Way
Exeter Business Park
Exeter
EX1 3QS

29 July 2024
Page 9


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023

As restated
2023
2022
Note
£
£

  

Turnover
 4 
27,888,827
31,400,322

Cost of sales
  
(26,099,667)
(29,361,575)

Gross profit
  
1,789,160
2,038,747

Administrative expenses
  
237,176
(3,765,586)

Other operating income
 5 
6,516
-

Operating profit/(loss)
 6 
2,032,852
(1,726,839)

Interest payable and similar expenses
 10 
(42,456)
(11,260)

Profit/(loss) before tax
  
1,990,396
(1,738,099)

Tax on profit/(loss)
 11 
368,402
461,727

Profit/(loss) for the financial year
  
2,358,798
(1,276,372)

Other comprehensive income for the year
  

Unrealised surplus on revaluation of tangible fixed assets
  
694,594
-

Movement of deferred tax relating to revaluation
  
(133,152)
-

Other comprehensive income for the year
  
561,442
-

Total comprehensive income for the year
  
2,920,240
(1,276,372)

The notes on pages 14 to 30 form part of these financial statements.

Page 10


ROADFORM CIVIL ENGINEERING COMPANY LIMITED
REGISTERED NUMBER:02287410

STATEMENT OF FINANCIAL POSITION
AS AT 31 OCTOBER 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 12 
3,168,052
1,890,373

  
3,168,052
1,890,373

Current assets
  

Stocks
 13 
314,536
293,650

Debtors: amounts falling due within one year
 14 
9,289,883
7,135,125

Cash at bank and in hand
 15 
642,005
1,552,874

  
10,246,424
8,981,649

Creditors: amounts falling due within one year
 16 
(5,165,050)
(3,793,648)

Net current assets
  
 
 
5,081,374
 
 
5,188,001

Total assets less current liabilities
  
8,249,426
7,078,374

Creditors: amounts falling due after more than one year
 17 
(652,862)
(120,537)

Provisions for liabilities
  

Other provisions
 20 
(197,309)
(2,478,822)

  
 
 
(197,309)
 
 
(2,478,822)

Net assets
  
7,399,255
4,479,015


Capital and reserves
  

Called up share capital 
 22 
1
1

Revaluation reserve
 23 
561,442
-

Capital redemption reserve
 23 
1
1

Profit and loss account
 23 
6,837,811
4,479,013

  
7,399,255
4,479,015


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





Oliver Mitchell
Director

Date: 25 July 2024

The notes on pages 14 to 30 form part of these financial statements.

Page 11


ROADFORM CIVIL ENGINEERING COMPANY LIMITED


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


Called up share capital
Capital redemption reserve
Revaluation reserve
Profit and loss account
Total equity

£
£
£
£
£

At 1 November 2022 (as previously stated)
1
1
-
4,016,216
4,016,218

Prior year adjustment - correction of error
-
-
-
462,797
462,797

At 1 November 2022 (as restated)
1
1
-
4,479,013
4,479,015


Comprehensive income for the year

Profit for the year
-
-
-
2,358,798
2,358,798

Surplus on revaluation of freehold property
-
-
561,442
-
561,442
Total comprehensive income for the year
-
-
561,442
2,358,798
2,920,240


At 31 October 2023
1
1
561,442
6,837,811
7,399,255


The notes on pages 14 to 30 form part of these financial statements.

Page 12


ROADFORM CIVIL ENGINEERING COMPANY LIMITED


STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£

At 1 November 2021 (as previously stated)
1
1
10,104,654
10,104,656

Prior year adjustment - correction of error
-
-
(4,349,269)
(4,349,269)

At 1 November 2021 (as restated)
1
1
5,755,385
5,755,387


Comprehensive income for the year

Loss for the year
-
-
(1,276,372)
(1,276,372)
Total comprehensive income for the year
-
-
(1,276,372)
(1,276,372)


At 31 October 2022
1
1
4,479,013
4,479,015


The notes on pages 14 to 30 form part of these financial statements.

Page 13


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

1.


GENERAL INFORMATION

Roadform Civil Engineering Company Limited (company registration number 022787410) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is Roadform House, Milber Trading Estate, Newton Abbot, Devon, TQ12 4SG.

2.ACCOUNTING POLICIES

 
2.1

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

FINANCIAL REPORTING STANDARD 102 - REDUCED DISCLOSURE EXEMPTIONS

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Sandbanks Group Holdings Limited as at 31 October 2023 and these financial statements may be obtained from 1 Old Rydon Lane, Exeter, England, EX2 7RR.

Page 14


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

2.ACCOUNTING POLICIES (continued)

 
2.3

GOING CONCERN

The Directors are confident that the return to profitability will be continued into 2024 and 2025 and the business is on a substantial growth curve. This is clearly indicated in the detailed revenue forecast for 2024 and 2025. 
The directors prepare both budgets and revenue forecasts for a minimum of 12 months from approval of these financial statements and they are satisfied that those forecasts provide a reasonable and realistic expectation that the Company can continue for the foreseeable future. As such, the directors have concluded that the Company is a going concern and the financial statements have been prepared on this basis. This assumes that the Company will be able to realise its assets and discharge its liabilities in the normal course of business.
The forecasts prepared take account of current market conditions including the impact of interest rates and inflation, post year end trading performance, secured revenue, confirmed and recurring contracts as well as tendered projects with a carefully calculated estimate of success.
The directors have also considered the amount by which turnover is required to fall such that the business may not be able to meet its liabilities as they fall due. Based on post year end trading to date, the current order book and market expectations, it is considered that the chance of such a significant fall in turnover to be remote. The Company regularly reviews credit terms offered to customers and outstanding balances are updated monthly with strict credit control processes in place.
When making this assessment, the directors have also considered the existence of a contingent liability to HMRC for incorrect IR35 and Employment Status treatment of workers that occurred prior to 2023 (see Note X21). Since April 2024 the Demibourne principle has legislated for IR35 as well as Employment Status liabilities to be netted against what has already been paid by the worker. The net liability, the difference between the maximum liability and the amount already paid by the workers via their CIS filings with HMRC cannot be accurately determined. The Company has taken advice in this respect and has notified HMRC. It is expected that given the time taken to agree with HMRC, probably over 12 months, and the likelihood of extended payment terms, this liability will not need to be fully settled within the next 24 months.
The result of these reviews is that the directors are satisfied that the Company can meet its liabilities as they fall due for a period of at least 12 months from approval of the financial statements and therefore it is appropriate to prepare the financial statements on a going concern basis.

Page 15


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

2.ACCOUNTING POLICIES (continued)

 
2.4

TURNOVER

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Contract turnover recognition

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Where it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediatley. Where the outcome of a contract cannot be measured reliably, contract costs are recognised as an expense in the period in which they are incurred. Contrac revenue is recognised to the extent of the contract costs incurred where it is probable that they are recoverable. Where amounts have not been invoices at the balance sheet date, the estimate of revenue is accrued, and provided for within amounts recoverable on long term contracts within debtors. Amounts invoiced in advance of work being completed are deferred and included within creditors. 
 
 
2.5

LEASED ASSETS: THE COMPANY AS LESSEE

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

 
2.6

FINANCE COSTS

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

 
2.7

BORROWING COSTS

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

Page 16


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

2.ACCOUNTING POLICIES (continued)

 
2.8

PENSIONS

DEFINED CONTRIBUTION PENSION PLAN

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.9

CURRENT AND DEFERRED TAXATION

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.10

TANGIBLE FIXED ASSETS

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 17


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

2.ACCOUNTING POLICIES (continued)


2.10
TANGIBLE FIXED ASSETS (CONTINUED)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives .

Depreciation is provided on the following basis:

Plant and machinery
-
15% - 25% on Reducing balance
Motor vehicles
-
25% on Reducing balance

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

In the prior period freehold property was held at cost less impairment. In 2023 the company moved to a revaluation policy for freehold property and as such at the balance sheet date it is held at fair value.

 
2.11

REVALUATION OF TANGIBLE FIXED ASSETS

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 
2.12

STOCKS

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.13

DEBTORS

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

Page 18


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

2.ACCOUNTING POLICIES (continued)

 
2.14

CASH AND CASH EQUIVALENTS

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

 
2.15

CREDITORS

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

 
2.16

PROVISIONS FOR LIABILITIES

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.17

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.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Statement of financial position when the Company becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the
Page 19


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

2.ACCOUNTING POLICIES (continued)


2.17
FINANCIAL INSTRUMENTS (CONTINUED)

impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

Page 20


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

3.



JUDGMENTS IN APPLYING ACCOUNTING POLICIES 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. The estimates and assumptions which have signicficant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Impairment of stocks
The management calculates impairments by conisdering the nature and condition of the inventory and applies assumptions around anticipated saleability of finished goods and future usage of raw materials, overaheads and labour. 
Impairment of trade debtors-recoverable on contract
On a monthly basis, mangement makes an estimation of the recoverability of trade debtors and sums recoverable on contracts. Management makes such estimations based on the credit rating of debtors, the ageing profile, and historical experience. 
Long term contract accounting
Revenue for long term contracts is recognised based on the stage of completion of the contract. The stage of completion is calculated based on costs incurred as a proportion of estimated total costs and as such includes an element of estimation and uncertainty.
IR 35 Liabilities
The Company is subject to liabilities in respect of historic incorrect treatment of subcontractors. Since the value of these balances cannot be reliably estimated until such time as HMRC makes a determination of the final amounts due, the Directors consider the value of the total potential liability to be uncertain and as such it has been treated as a contingent liability, see note 21.


4.


TURNOVER

An analysis of turnover by class of business is as follows:


As restated
2023
2022
£
£

Civil Engineering
27,888,827
31,400,322

27,888,827
31,400,322


All turnover arose within the United Kingdom.

Page 21


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

5.


OTHER OPERATING INCOME

2023
2022
£
£

Other operating income
308
-

Insurance claims receivable
6,208
-

6,516
-



6.


OPERATING PROFIT/(LOSS)

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

2023
2022
£
£

Depreciation
376,798
392,290

(Profit)/Loss on disposal of tangible fixed assets
112,122
146,500

Defined contribution pension costs
97,348
145,997


7.


AUDITORS' REMUNERATION

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
27,250
20,750

Fees payable to the Company's auditors in respect of:

Taxation compliance services
4,500
3,150

All non-audit services not included above
-
35,175

Page 22


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

8.


EMPLOYEES

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


2023
2022
£
£

Wages and salaries
6,379,840
6,268,785

Social security costs
706,788
712,645

Cost of defined contribution scheme
97,348
145,997

7,183,976
7,127,427


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


        2023
        2022
            No.
            No.







Employees
155
166


9.


DIRECTORS' REMUNERATION

2023
2022
£
£

Directors' emoluments
165,297
45,151

Company contributions to defined contribution pension schemes
40,000
-

205,297
45,151


During the year retirement benefits were accruing to no Directors (2022: NIL) in respect of defined contribution pension schemes.

The key management personnel are the directors. Remuneration paid to key management personnel in the year was £207,407 (2022: £49,590).


10.


INTEREST PAYABLE AND SIMILAR EXPENSES

2023
2022
£
£


Finance leases and hire purchase contracts
42,456
11,260

42,456
11,260

Page 23


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

11.


TAXATION


2023
2022
£
£

CORPORATION TAX


Current tax on profits for the year
-
(149,640)


-
(149,640)


TOTAL CURRENT TAX
-
(149,640)

DEFERRED TAX


Origination and reversal of timing differences
(368,402)
(312,087)

TOTAL DEFERRED TAX
(368,402)
(312,087)


TAX ON PROFIT/(LOSS)
(368,402)
(461,727)


The tax assessed for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 22.52% (2022: 19%). The differences are explained below:

2023
2022
£
£


Profit/(loss) on ordinary activities before tax
1,990,396
(1,738,099)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 22.52% (2022: 19%)
448,237
(330,239)

EFFECTS OF:


Fixed asset differences
(54,247)
(24,120)

Adjustments to tax charge in respect of prior periods
-
(149,640)

Remeasurement of deferred tax for changes in tax rates
37,562
(111,949)

Movement in deferred tax not recognised
(717,693)
161,853

Chargeable gains/(losses)
-
(253)

Other differences leading to an increase (decrease) in the tax charge
(82,261)
(7,379)

TOTAL TAX CHARGE FOR THE YEAR
(368,402)
(461,727)


FACTORS THAT MAY AFFECT FUTURE TAX CHARGES

There were no factors that may affect future tax charges.

Page 24


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

12.


TANGIBLE FIXED ASSETS





Freehold property
Plant and machinery
Motor vehicles
Total

£
£
£
£



COST OR VALUATION


At 1 November 2022
138,017
2,776,869
1,093,959
4,008,845


Additions
-
1,374,281
47,924
1,422,205


Disposals
-
(1,020,202)
(66,178)
(1,086,380)


Revaluations
661,984
-
-
661,984



At 31 October 2023

800,001
3,130,948
1,075,705
5,006,654



DEPRECIATION


At 1 November 2022
31,278
1,345,829
741,365
2,118,472


Charge for the year on owned assets
1,332
287,744
87,722
376,798


Disposals
-
(607,513)
(16,545)
(624,058)


On revalued assets
(32,610)
-
-
(32,610)



At 31 October 2023

-
1,026,060
812,542
1,838,602



NET BOOK VALUE



At 31 October 2023
800,001
2,104,888
263,163
3,168,052



At 31 October 2022
106,739
1,431,040
352,594
1,890,373

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


2023
2022
£
£



Plant and machinery
1,685,308
1,412,208

1,685,308
1,412,208



Page 25


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
Cost or valuation at 31 October 2023 is as follows:

Land and buildings
£


AT COST
138,017
AT VALUATION:

Revaluation 2023
661,984



800,001

If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:

2023
2022
£
£



Cost
138,017
138,017

NET BOOK VALUE
138,017
138,017


13.


STOCKS

2023
2022
£
£

Raw materials and consumables
314,536
293,650

314,536
293,650



14.


DEBTORS

As restated
2023
2022
£
£


Trade debtors
1,502,593
1,676,720

Amounts owed by group undertakings
2,705,384
-

Other debtors
439,514
655,467

Prepayments and accrued income
59,224
14,941

Amounts recoverable on long-term contracts
4,198,278
4,638,357

Tax recoverable
149,640
149,640

Deferred taxation
235,250
-

9,289,883
7,135,125


Page 26


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

15.


CASH AND CASH EQUIVALENTS

2023
2022
£
£

Cash at bank and in hand
642,005
1,552,874

Less: bank overdrafts
(31,773)
-

610,232
1,552,874



16.


CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2023
2022
£
£

Bank overdrafts
31,773
-

Trade creditors
3,155,308
2,265,028

Other taxation and social security
229,334
369,833

Obligations under finance lease and hire purchase contracts
394,117
154,084

Other creditors
94,020
86,435

Accruals and deferred income
1,260,498
918,268

5,165,050
3,793,648



17.


CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2023
2022
£
£

Net obligations under finance leases and hire purchase contracts
652,862
120,537

652,862
120,537



18.


HIRE PURCHASE AND FINANCE LEASES


Minimum lease payments under hire purchase fall due as follows:

2023
2022
£
£


Within one year
393,998
154,084

Between 1-5 years
652,862
120,537

1,046,860
274,621

Page 27


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

19.


DEFERRED TAXATION




2023
2022


£

£






At beginning of year
-
(312,087)


Charged to profit or loss
235,250
312,087



AT END OF YEAR
235,250
-

The deferred tax asset is made up as follows:

2023
2022
£
£


Fixed asset timing differences
(568,561)
-

Short term timing differences
2,217
-

Capital gains/(losses)
(133,152)
-

Losses and other deductions
934,746
-

235,250
-


20.


PROVISIONS




HMRC IR35 provision
Loss making contract provision
Total

£
£
£





At 1 November 2022
1,587,466
891,356
2,478,822


Charged to profit or loss
(1,587,466)
173,471
(1,413,995)


Utilised in year
-
(867,518)
(867,518)



AT 31 OCTOBER 2023
-
197,309
197,309

Following the acquisition of the company by Sandbanks Group Holdings Limited, Directors identified that under previous management the Company had been incorrectly classifying workers as subcontractors under IR35 regulations. Brought forward provisions included an estimate of IR35 liabilities in respect of employee tax and national insurance due to HMRC as a result of this. The provision did not include potential deductions for CIS paid, or any benefit in kind that will arise when the company makes payment of the liabilities on behalf of deemed employees. Since the value of these balances cannot be reliably estimated until such time as HMRC makes a determination of the final amounts due, the Directors consider the value of the total potential liability to be uncertain and as such it has been treated as a contingent liability, see note 21.
Loss making contract provisions relate to long term contracts that are expected to be loss making and the full loss has been provided for.

Page 28


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

21.


CONTINGENT LIABILITIES

Following the acquisition of the company’s shares on 15th November 2022 the new owners had a review undertaken of the employment status of the workers and the application of the Off Payroll Working legislation. The result of that review is different to the previous owner’s original determination and it is believed that a number of workers should have been treated as employees, rather than self-employed, and that a number of limited companies fell within the Off Payroll Working legislation. The company has disclosed this to HMRC. Since this review, the relevant individuals and limited companies have been processed through payroll in which tax and national insurance has been deducted at source.
Where the workers have correctly submitted self assessment tax returns or corporation tax returns, any tax and national insurance paid by the worker can be offset against the liability due under the employment status and ff payroll working legislation.
 
The net liability to HMRC will therefore be the difference between the maximum liability if the worker was treated as an employee and the amount already paid by the workers via their self assessment or corporation tax filings. If the workers have correctly filed their tax returns, the liability could be close to zero. As it is currently unknown what the workers have declared, the exact liability cannot be reliably measured and it is thus considered contingent.
The maximum liability if no earnings have been declared by the worker is £425,463 for workers operating via personal service companies and £497,016 for self employed workers. 
 
It is expected that given the time taken to agree with HMRC, and the likelihood of extended payment terms, any liability will not need to be fully settled within the next 18 months.


22.


SHARE CAPITAL

2023
2022
£
£
ALLOTTED, CALLED UP AND FULLY PAID



1 (2022: 1) Ordinary share of £1.00
1
1



23.


RESERVES

Revaluation reserve

Revaluation reserve represents unrealised gains in respect of freehold property revaluation net of deferred taxes.

Capital redemption reserve

The capital redemption reserve results from the re-purchase of 1 ordinary share in the prior year.

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses.


24.


PRIOR YEAR ADJUSTMENT

A prior period adjustment has been recognised in respect of retentions due to the Company. This has resulted in an increase in debtors and income of £462,797 in the comparative period.

Page 29


ROADFORM CIVIL ENGINEERING COMPANY LIMITED

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

25.


PENSION COMMITMENTS

The Company operates a defined contributions pension scheme. The assets of the scheme are held
separately from those of the Company in an independently administered fund. The pension cost charge
represents contributions payable by the Company to the fund and amounted to £97,348 (2022: £145,997). Contributions toalling £8,868 (2022: £5,508) were payable at the reporting date and are included in creditors.


26.


RELATED PARTY TRANSACTIONS

During the year a close family member of a Director was employed by the company and received remuneration of £3,173 (2022: £25,521)
During the year a Director invoiced the company for consultancy services and was paid £16,962 in respect of this.


27.


CONTROLLING PARTY

At the balance sheet date the company was controlled by Sandbanks Group Holdings Limited which owned 100% of the allotted share capital of the company.

 
Page 30