Company registration number 02889523 (England and Wales)
MODEBEST BUILDERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
MODEBEST BUILDERS LIMITED
COMPANY INFORMATION
Directors
M Lennox
S Kelly
J Murphy
Company number
02889523
Registered office
Moy House
69 Belvue Road
Northolt
Middlesex
UB5 5XS
Auditor
Evans Mockler Limited
5 Beauchamp Court
Victors Way
Barnet
London
EN5 5TZ
Business address
Moy House
69 Belvue Road
Northolt
Middlesex
UB5 5XS
MODEBEST BUILDERS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
MODEBEST BUILDERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -

The directors present the strategic report for the year ended 31 January 2024.

Fair review of the business
Modebest Builders Limited is a well-established UK construction company specialising in groundworks and reinforced concrete frames. The company, located in Northolt, has traded for 30 years, servicing contractors in and around London and the South of England.
The company's key financial performance indicators are as follows:
2024
2023
£
£
Turnover
77,463,509
100,041,931
Gross profit
4,022,612
4,118,122
GP%
5.2%
4.1%
Profit before tax
1,363,440
2,266,972
The net assets at the end of the period totalled £19,462,709 (2023: £17,995,740).
The industry as a whole faced challenges during the period surrounding the second staircase ruling being introduced, tighter building regulations, delays in planning as well as the rise in interest rates and inflation leading to the start of some projects being delayed. This coupled with the directors continuing to be more selective with the projects that they undertake to mitigate the company's exposure has led to a reduction on turnover year on year, albeit the GP margin has increased.
Future developments
Despite the current climate, the directors are continually securing work with well-established developers. The company has already secured repeat business with Tier 1 contractors as well as introducing new clients to the business, thus widening the client base, helping to reduce overall exposure. The directors are satisfied that the secured work scheduled for 2025 will provide a good base for the company to continue to develop and move towards improved margins and overall profitability.
Principal risks and uncertainties
Market risk
The business sector in which the company operates is heavily dependent upon the level of construction projects by both private and public concerns. The prevailing economic climate will influence the availability of suitable contracts.
Commercial risk
The company targets high-quality, well-established clients and spreads its commercial risk by working with a client base spread across different sectors in London and the South of England. The company strives to offer a specialised product, tailored to the clients' needs and endeavours to forge long lasting business relationships to encourage regular, repeat business.
Liquidity risk
The company closely monitors its cash flow and contractual obligations to manage liquidity risk. New clients are financially assessed by directors prior to entering into new contracts and the directors obtain regular reports from credit monitoring agencies to monitor any potential exposure over the course of a contract.
Taxation risk
The company is exposed to financial risks from increases in tax rates and changes to the basis of taxation. The company engages experienced professional advisors to regularly monitor any legislative proposals and advise on the impact of any changes.
MODEBEST BUILDERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
Our stakeholders
The directors have always paid due regard to the effect of their actions on various stakeholders who have an interest in the business. Section 172 of the Companies Act now requires us to report each year on the steps taken to fulfil these obligations towards our stakeholders. There are a great many parties who may be affected by the decisions made by the Board of directors in the day-today running of the business. It is the responsibility of the Board to balance these interests in order to deliver the best possible outcome for all concerned.
Clients
The quality of both our product and our client is of paramount importance. Our company offers a professional service and construction solution within our specialised field of operation, delivered by competent, skilled, experienced, safety-conscious personnel in order to fulfil our contractual obligations and to exceed our client's expectations at a price that represents value. We aim to deliver the promise that we offer and construct a better, low carbon sustainable product and become our client's contractor of choice.
Subcontractors and suppliers
We actively engage with our subcontractors and suppliers who form an integral part of our operations and are considered to be key strategic partners. We encourage regular communication and try to create long standing relationships as we recognise the importance of their contribution towards our delivery of a high quality product and service.
Local community
We have a non-adversarial approach to business; we are friendly, approachable, courteous and respectful, in particular when it comes to the communities in which we work. We are always mindful of the environmental and health and safety impacts our presence may have in local areas and seek to reduce this as much as possible.
Our people
We want to maintain and further enhance our reputation by being the best in our specialised field and by making a difference through our people.
We are committed to increasing capability in our workforce and creating a safer industry. We are committed to a process of continuous measurable training for the development of our personnel as we recognise that the most important and valuable resource is our people. We invest in the training of our people in order to ensure that they possess the skills, qualifications and experience to deliver a better product to match our client's needs.
We actively encourage a work-life balance for all our people and we want to be a company that our people will be proud to work for. We are committed to equal opportunity, we offer apprenticeships and we sponsor graduates. We value our people and we take great pride in assisting them to reach their full career potential.
Equal opportunities
We are committed to equal opportunity in all facets of our business. We embrace diversity and we promote equality of opportunity; these are embedded in our day to day working practices. We recognise the great benefits in having a diverse workforce with different backgrounds, solely based on ability.
Other performance indicators
Health, safety and environmental policies
The company is dedicated to continually improving the performance of Health, Safety, Environmental and Quality standards and outcomes. This is demonstrated by the implementation of Modebest Minimum Standards across all of our sites and driving home the importance of behaviour safety culture through the in-house initiative SAFEMODE.
The company maintains Management Systems that are certified to ISO 45001:2018, ISO 14001:2015 and ISO 9001: 2015 as well as the Safety Schemes in Procurement (SSIP) Achilles' BuildingConfidence, CHAS and SMAS, demonstrating the companies capacity to manage health and safety for the activities we carry out.
MODEBEST BUILDERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -
The company is committed to promote a safe working culture, safeguarding the health, safety and wellbeing of all involved in company works. The company has strong accident / incident reporting procedures and is continually striving to reduce the possibility of any dangerous working by providing an educated, trained and competent workforce.
The company's continued commitment to reducing its carbon footprint and overall environmental impact is shown by achieving ISO 50001 this year. This was a large undertaking but one the company is very much committed to.
Quality control
The company has a Quality Management system which is Accredited to ISO 9001. We pride ourselves in delivering a quality product to our clients taking into consideration their need for health & safety, the environment and sustainability. As such the company also has accreditations for ISO 14001, 45001 and OHAS 18001. The management system is under constant review with processes being updated, changes and new technology to the industry being implemented.
We have recently implemented a fully accredited ISO 50001 Energy Management system which we are using to reduce our carbon emissions and energy use.
The sustainable approach is an integral part of our business model, which includes procurement, managing waste and resources, our core principle is to Build Once, Build Right. This ensures a quality product is provided to all our clients.
The company has various other accreditations and memberships, IFC is our Fire protection Installers Accreditation which ensures all fire stopping products which are installed are installed correctly and recorded. Others are SafeContractor, SMAS, Building confidence, CHSG, Builders Profile, Acclaim, Constructionline Gold, FORS Silver, CLOCS champion, CPA and membership to the Concrete Society.
Research and development
The company views research and development activity a vital part of sustaining competitive advantage and to this end will continue to invest by challenging traditional construction techniques wherever possible.
During the year, the company undertook several research and development (R&D) projects that sought to achieve advancements in technology. These advancements extended the overall knowledge or capability in the field of construction, specifically groundworks and reinforced concrete frames.

On behalf of the board

M Lennox
Director
5 August 2024
MODEBEST BUILDERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 4 -

The directors present their annual report and financial statements for the year ended 31 January 2024.

Principal activities

The principal activities and operation of the company has continued to be that of construction services for residential as well as commercial buildings including groundworks and RC frames.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

M Lennox
S Kelly
J Murphy
Financial instruments

 

Treasury operations and financial instruments

 

Objectives and policies

The company's principal financial instruments comprise bank balances, trade creditors, trade debtors, work in progress and loans to its parent company and loans to and from companies under common control. The main purpose of these instruments is to raise funds for and to finance the company's operations. The company's approach to managing other risks applicable to the financial instruments concerned are shown below.

Liquidity' risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

Internal rate risk

The company's operations have been subject to the risk of interest rate fluctuations, as it primarily affects interest earning operations. In respect of loans to parent and loans to and from companies under common control, these are interest-free and repayable on demand.

Credit risk

The company's principal financial assets are trade debtors, amounts receivable on contracts, sales retentions and cash. The credit risk is mitigated by regular application for, and certification of, works completed under contractual agreements. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Auditor

Evans Mockler 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.

MODEBEST BUILDERS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 5 -
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.

On behalf of the board
M Lennox
Director
5 August 2024
MODEBEST BUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MODEBEST BUILDERS LIMITED
- 6 -
Opinion

We have audited the financial statements of Modebest Builders Limited (the 'company') for the year ended 31 January 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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:

MODEBEST BUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MODEBEST BUILDERS LIMITED (CONTINUED)
- 7 -
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.

Extent to which the audit was capable of detecting irregularities, including fraud

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our 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 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 are to become aware of it.

MODEBEST BUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MODEBEST BUILDERS LIMITED (CONTINUED)
- 8 -

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Councils website at: 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.

Simon Toghill
Senior Statutory Auditor
For and on behalf of Evans Mockler Limited
5 August 2024
Chartered Certified Accountants
Statutory Auditor
5 Beauchamp Court
Victors Way
Barnet
London
EN5 5TZ
MODEBEST BUILDERS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
77,463,509
100,041,931
Cost of sales
(73,440,897)
(95,923,809)
Gross profit
4,022,612
4,118,122
Administrative expenses
(2,679,760)
(1,848,704)
Other operating income
44,184
-
0
Operating profit
4
1,387,036
2,269,418
Interest receivable and similar income
8
-
0
1,267
Interest payable and similar expenses
9
(23,596)
(3,713)
Profit before taxation
1,363,440
2,266,972
Tax on profit
10
103,529
71,634
Profit for the financial year
1,466,969
2,338,606

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

MODEBEST BUILDERS LIMITED
BALANCE SHEET
AS AT 31 JANUARY 2024
31 January 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
502,641
640,770
Current assets
Debtors
12
28,577,341
42,860,019
Cash at bank and in hand
3,931,204
1,623,633
32,508,545
44,483,652
Creditors: amounts falling due within one year
13
(13,312,031)
(26,901,083)
Net current assets
19,196,514
17,582,569
Total assets less current liabilities
19,699,155
18,223,339
Creditors: amounts falling due after more than one year
14
(138,287)
(100,944)
Provisions for liabilities
Deferred tax liability
15
98,159
126,655
(98,159)
(126,655)
Net assets
19,462,709
17,995,740
Capital and reserves
Called up share capital
17
4
4
Profit and loss reserves
19,462,705
17,995,736
Total equity
19,462,709
17,995,740
The financial statements were approved by the board of directors and authorised for issue on 5 August 2024 and are signed on its behalf by:
M Lennox
Director
Company registration number 02889523 (England and Wales)
MODEBEST BUILDERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 February 2022
4
15,657,130
15,657,134
Year ended 31 January 2023:
Profit and total comprehensive income
-
2,338,606
2,338,606
Balance at 31 January 2023
4
17,995,736
17,995,740
Year ended 31 January 2024:
Profit and total comprehensive income
-
1,466,969
1,466,969
Balance at 31 January 2024
4
19,462,705
19,462,709
MODEBEST BUILDERS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
21
2,961,690
(1,357,417)
Interest paid
(23,596)
(3,713)
Income taxes paid
(455,674)
(577,437)
Net cash inflow/(outflow) from operating activities
2,482,420
(1,938,567)
Investing activities
Purchase of tangible fixed assets
(47,948)
(138,636)
Proceeds from disposal of tangible fixed assets
-
0
25,705
Interest received
-
0
1,267
Net cash used in investing activities
(47,948)
(111,664)
Financing activities
Payment of hire purchase obligations
(126,901)
(74,895)
Net cash used in financing activities
(126,901)
(74,895)
Net increase/(decrease) in cash and cash equivalents
2,307,571
(2,125,126)
Cash and cash equivalents at beginning of year
1,623,633
3,748,759
Cash and cash equivalents at end of year
3,931,204
1,623,633
MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 13 -
1
Accounting policies
Company information

Modebest Builders Limited is a private company limited by shares incorporated in England and Wales. The registered office is Moy House, 69 Belvue Road, Northolt, Middlesex, UB5 5XS.

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 the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

The market is still facing challenges with continued market volatility, inflationary pressures and interest rate hikes. The directors are working closely with both clients and the supply chain to best mitigate the impact of these and believe that they have sufficient cash reserves to cover any temporary shortfall.true

 

After reviewing the company’s forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue to trade as a going concern for the foreseeable future, and therefore they continue to adopt the going concern basis in preparing the company financial statements.

1.3
Turnover

Turnover represents amounts receivable for work completed net of VAT and trade discounts. Sales are recognised on the basis of work measured, valued and certified at the year end. Further details of the revenue recognition criteria applied by the company can be found at "1.5 Construction Contracts" within these financial statements.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Plant and equipment
10% straight line method
Fixtures, fittings and equipment
25% straight line method
Motor vehicles
25% reducing balance method

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.

MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 14 -
1.5
Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

 

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

 

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks.

 

1.7
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.

 

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.

MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 15 -
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.

1.8
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.

MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 16 -
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.

1.9
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.10
Retirement benefits

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

1.11
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.12
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.13

Hire purchase contracts

Assets obtained under hire purchase contracts are capitalised as tangible fixed assets and depreciated over their useful lives. 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 the Statement of comprehensive income so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

1.14

Research and development

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.

MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 17 -
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 - Long term Contracts

Revenue recognition is a key area of judgement especially in companies operating in the construction industry. Recognition of turnover and profit on long term contracts requires management judgement regarding the anticipated final outcome of individual contracts and of the proportion of works completed at the balance sheet date. Management undertakes detailed reviews on a monthly basis in order to exercise judgement over the outcome of each contract and the associated risks and opportunities.

 

The value of work completed at the balance sheet date is assessed by undertaking surveys and completing internal valuations on each element of works and in progress. Regular management reviews of contract work in progress are undertaken.

 

The age, nature and recoverability of all debtors and amounts recoverable on long term contracts are reviewed regularly by management and provisions made where appropriate.

 

The directors have ensured that generally accepted industry practices and methodologies are followed by all relevant personnel and that accounting and quality management systems are regularly evaluated. Consistent procedures and management tools are in place to ensure that estimates are applied and results determined on a consistent basis.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Construction contract income
77,463,509
100,041,931
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
77,463,509
100,041,931
MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 18 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
11,026
(19,282)
Depreciation of owned tangible fixed assets
186,077
160,049
Profit on disposal of tangible fixed assets
-
(4,775)
Operating lease charges
-
(417,418)

Relating to operating lease charges, during the year and in the prior year, the company received and made provision for rent credit receivable.

5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
24,000
25,000
For other services
All other non-audit services
10,000
10,750
6
Employees

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

2024
2023
Number
Number
Directors
3
3
Administration and management
4
-
Operatives and engineers
3
-
Total
10
3

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
734,209
-
0
Social security costs
84,560
-
Pension costs
11,647
-
0
830,416
-
0

The company previously outsourced its payroll and payroll costs were recharged from a related company. During the year the company commenced the in-house operation of its payroll. £106,636 (2023 - £nil) of the above costs were recharged to other members of the Modebest and Heathrow Group Holdings Ltd group.

MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 19 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
18,658
-
0
Company pension contributions to defined contribution schemes
191
-
Sums paid to third parties for directors' services
37,500
45,000
56,349
45,000

The company previously outsourced its payroll and payroll costs were recharged from a related company. During the year the company commenced the in-house operation of its payroll.

8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
-
0
1,267
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
-
0
1,267
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
51
18
Other finance costs:
Interest on hire purchase contracts
10,876
3,695
Other interest
12,669
-
0
23,596
3,713
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(80,604)
425,237
Adjustments in respect of prior periods
5,571
(559,195)
Total current tax
(75,033)
(133,958)
MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
10
Taxation
2024
2023
£
£
(Continued)
- 20 -
Deferred tax
Origination and reversal of timing differences
(28,496)
62,324
Total tax credit
(103,529)
(71,634)

The rate of corporation tax increased during the year from 19% to 25%.

The actual credit for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
1,363,440
2,266,972
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
340,860
430,725
Tax effect of expenses that are not deductible in determining taxable profit
41,890
38,267
Adjustments in respect of prior years
5,571
(559,195)
Group relief
(891)
-
0
Permanent capital allowances in excess of depreciation
28,455
(43,755)
Research and development tax credit
(475,000)
-
0
Deferred tax
(28,496)
62,324
Effect of change in corporation tax rate
(15,918)
-
0
Taxation credit for the year
(103,529)
(71,634)
MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 21 -
11
Tangible fixed assets
Plant and equipment
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 February 2023
311,755
624,384
249,262
1,185,401
Additions
-
0
47,948
-
0
47,948
At 31 January 2024
311,755
672,332
249,262
1,233,349
Depreciation and impairment
At 1 February 2023
34,168
409,805
100,658
544,631
Depreciation charged in the year
31,176
117,750
37,151
186,077
At 31 January 2024
65,344
527,555
137,809
730,708
Carrying amount
At 31 January 2024
246,411
144,777
111,453
502,641
At 31 January 2023
277,587
214,579
148,604
640,770

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2024
2023
£
£
Plant and equipment
138,667
154,667
Motor vehicles
62,236
82,981
200,903
237,648
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
7,890,616
12,250,739
Gross amounts owed by contract customers
15,389,899
11,149,957
Corporation tax recoverable
761,530
230,823
Amounts owed by group undertakings
3,968,276
13,272,756
Other debtors
160,256
5,592,797
Prepayments and accrued income
406,764
362,947
28,577,341
42,860,019

The amounts owed by group undertakings are unsecured, interest-free and repayable on demand.

MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 22 -
13
Creditors: amounts falling due within one year
2024
2023
£
£
Obligations under hire purchase agreements
148,562
86,006
Trade creditors
7,755,311
6,504,416
Gross amounts owed to contract customers
1,182,047
839,907
Amounts owed to group undertakings
1,136,605
16,471,294
Taxation and social security
145,368
47,864
Other creditors
36,511
1,176
Accruals and deferred income
2,907,627
2,950,420
13,312,031
26,901,083

Obligations under hire purchase contracts are secured by a fixed charge over the specific assets of the company.

The amounts owed to group undertakings are unsecured, interest-free and repayable on demand.

14
Creditors: amounts falling due after more than one year
2024
2023
£
£
Obligations under hire purchase agreements
138,287
100,944

Obligations under hire purchase contracts are secured by a fixed charge over the specific assets of the company.

15
Deferred taxation

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

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
98,159
126,655
2024
Movements in the year:
£
Liability at 1 February 2023
126,655
Credit to profit or loss
(28,496)
Liability at 31 January 2024
98,159
MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 23 -
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
11,647
-

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.

17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4
4
4
4

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

 

18
Financial commitments, guarantees and contingent liabilities

The company has provided security, by way of fixed and floating charges over the company's assets, in respect of a loan facility totalling £29,918,554 utilised by the company's parent company Modebest and Heathrow Group Holdings Ltd.

19
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2024
2023
£
£
Aggregate compensation
300,581
57,500
Transactions with related parties

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

Purchases
2024
2023
£
£
Entities under common control
6,751,125
36,614,254
6,751,125
36,614,254

The company is exempt from disclosing other related party transactions as they are with other members of the Modebest and Heathrow Group Holdings Ltd group, with any subsidiary company party to the transactions being wholly owned within the group.

MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
19
Related party transactions
(Continued)
- 24 -
In addition to the amounts owed by/to group undetakings disclosed above, the following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Entities under common control
-
5,592,797
20
Ultimate controlling party

The ultimate parent company of Modebest Builders Limited is Modebest and Heathrow Group Holdings Limited. The registered office address of Modebest and Heathrow Group Holdings Limited, is Moy House, 69 Belvue Road, Northolt UB5 5XS.

 

There is no ultimate controlling party, as there is no majority shareholder in the ultimate parent company, Modebest and Heathrow Group Holdings Limited.

 

The largest group financial statements that consolidate this company is Modebest and Heathrow Group Holdings Limited. Copies of the group accounts are available to the public from the company at Moy House, 69 Belvue Road, Northolt, Middlesex, UB5 5XS.

21
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit for the year after tax
1,466,969
2,338,606
Adjustments for:
Taxation credited
(103,529)
(71,634)
Finance costs
23,596
3,713
Investment income
-
0
(1,267)
Gain on disposal of tangible fixed assets
-
(4,775)
Depreciation and impairment of tangible fixed assets
186,077
160,049
Movements in working capital:
Decrease/(increase) in debtors
14,813,385
(5,992,373)
(Decrease)/increase in creditors
(13,424,808)
2,210,264
Cash generated from/(absorbed by) operations
2,961,690
(1,357,417)
MODEBEST BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 25 -
22
Analysis of changes in net funds
1 February 2023
Cash flows
New hire purchase agreements
31 January 2024
£
£
£
£
Cash at bank and in hand
1,623,633
2,307,571
-
3,931,204
Obligations under hire purchase
(186,950)
126,901
(226,800)
(286,849)
1,436,683
2,434,472
(226,800)
3,644,355
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