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Registered number: 06000685









Medlock FRB Limited









Annual Report and Financial Statements

For the year ended 31 December 2023

 
Medlock FRB Limited
 
 
Company Information


Directors
C Drury 
A Dunster 
M Peden 
N Corfield 
J Harrison (appointed 3 January 2023)
C Thornborrow-Jones (appointed 1 January 2024)
D McGuire (appointed 1 February 2024)
N Newton (appointed 1 April 2024)




Registered number
06000685



Registered office
Medlock FRB Limited
Greengate Street

Oldham

OL4 1DG




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

3 Stockport Exchange

Stockport

Cheshire

SK1 3GG




Solicitors
Gateley LLP
98 King Street

Manchester

M2 4WU





 
Medlock FRB Limited
 

Contents



Page
Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 8
Statement of Comprehensive Income
9
Statement of Financial Position
10
Statement of Changes in Equity
11
Statement of Cash Flows
12
Analysis of Net Debt
13
Notes to the Financial Statements
14 - 29


 
Medlock FRB Limited
 
 
Strategic Report
For the year ended 31 December 2023

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

Business review
 
The principal activity of the business continues to be that of a leading Specialist Fit Out Contractor operating within the Leisure and Hospitality Sector and we are proud to be Employee Owned.
We are pleased to report a robust set of results despite significant headwinds in terms of increased costs and labour shortages due to an influx of work throughout the industry. In this financial year turnover increased, gross profitability increased and operating profit increased, further strengthening the balance sheet. 
Whilst the Leisure and Hospitality sector has been relatively buoyant, we continue to take a prudent approach as the sector can be significantly impacted by low foot fall due to less disposable income, increased home running costs, landlord rents outstripping inflation and poor weather potentially affecting our customer capital expenditure plans. For this reason, we have broadened our customer base, still aligned with our skill set, and have been successful in the Education and Student Accommodation fit-out sectors. We are perfectly placed to deliver these projects as we remain agile and can mobilise and deliver schemes quickly and to an enhanced level of quality.
During the year we strengthened our Operational and Commercial structure with major appointments in line with our Business and Strategic Planning process and we have invested heavily for the future, this investment is recognised in our 2023 numbers. 
Our projects must be delivered Safely, On Time, to Budget and to the Highest Quality. This drives our vision of “The best projects by the best people.”
As we strive towards our Vision, Training and Development budgets will be increased in 2024 and we will introduce our “Customer First” initiative whereby everyone in the business will receive bespoke training in putting our customers first.
As stated, we will continue to invest in our greatest asset, our people, Medlock is a low churn business and it is the Board’s responsibility to foster and cultivate a culture of Continuing Professional Development where Employees can achieve their maximum potential and enjoy their career. 
The outlook for the next financial year is promising, whilst we expect turnover to increase, we will not get ahead of ourselves and controlled growth remains the aim of the business aligned with prudent profit realisation and accurate and timely cash management, consequently, we look to the future with much optimism. 
The Board of Directors wish to extend their gratitude to everyone in the Company staff, advisors and supply chain without which we could not achieve our objectives.
We continue to work in a collaborative manner to ensure the best possible outcome for our customers and their magnificent effort is sincerely appreciated and it is vitally important that we have a bit of fun along the way as well! 

Page 1

 
Medlock FRB Limited
 

Strategic Report (continued)
For the year ended 31 December 2023

Principal risks and uncertainties
 
Failure to deliver projects in line with customer’s expectations and required specifications, on time and on budget and to minimise the risk of increased costs and delay related damages. The risk is mitigated with continual assessment and development of key staff within our Pre-Construction, Project Delivery and Commercial teams and our Leadership.
Supply Chain Partners fail to meet our operational and Commercial expectations and requirements in relation to capacity, competency, quality, financial stability, safety, environmental, social and ethical values. The company has undertaken significant work to identify and understand who its key supply chain partners are and have reduced the number whilst initiating a core partnership. In addition to this we have introduced KPI’s across all partnerships.
In addition, the directors also consider that market risk is a key risk to the business.

Financial key performance indicators
 
The key financial performance indicators for the past three years are as follows:


2023
2022
2021




Turnover £'000
40,911
34,805
43,222
Gross profit £'000
3,771
2,654
2,040
Gross profit %
9%
8%
5%
EBITDA £'000
523
141
(316)
Operating (loss)/profit £'000
468
80
(376)
Employee numbers
63
63
72
Turnover/employee £'000
649
552
600

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



C Drury
Director

Date: 17 August 2024

Page 2

 
Medlock FRB Limited
 
 
 
Directors' Report
For the year ended 31 December 2023

The directors present their report and the financial statements for the year ended 31 December 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 £540,849 (2022 -£598,989).

Dividends of £Nil (2022 - £Nil) were paid during the year. 
The directors do not recommend payment of a final dividend. 

Directors

The directors who served during the year were:

C Drury 
A Dunster 
M Peden 
C Addy (resigned 21 June 2024)
N Corfield 
J Harrison (appointed 3 January 2023)

Future developments

Future developments of the company have been discussed in the strategic report.

Research and development activities

The company continues to develop new systems and processes which are aimed at improving quality and efficiency. 

Page 3

 
Medlock FRB Limited
 
 
 
Directors' Report (continued)
For the year ended 31 December 2023

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.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsHurst Accountants Limitedwill 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.
 





C Drury
Director

Date: 17 August 2024

Page 4

 
Medlock FRB Limited
 
 
 
Independent Auditors' Report to the Members of Medlock FRB Limited
 

Opinion


We have audited the financial statements of Medlock FRB Limited (the 'Company') for the year ended 31 December 2023, which comprise the statement of comprehensive income, the statement of financial position, the statement of cash flows, 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 December 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 5

 
Medlock FRB Limited
 
 
 
Independent Auditors' Report to the Members of Medlock FRB 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 3, 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 6

 
Medlock FRB Limited
 
 
 
Independent Auditors' Report to the Members of Medlock FRB 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:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to irregularities
In identifying and assessing the 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 industry and sector in which the company operates; the control environment and business     performance including key drivers for directors' remuneration, bonus levels and performance targets.
The outcome of enquiries of management, including whether management was aware of any instances of non-   compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged   fraud. 
Supporting documentation relating to the Company's policies and procedures for:
   - Identifying, evaluating, and complying with laws and regulations
   - Detecting and responding to the risks of fraud
The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the    financial statements and any potential indicators of fraud.
The legal and regulatory framework in which the Company operates, particularly those laws and regulations which    have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or    which had a fundamental effect on the operations of the Company, including General Data Protection requirements,   and Anti-bribery and Corruption.
 
Audit response to risks identified
Our procedures to respond to the risks identified included the following:

Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with    the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
Discussions with management, including consideration of known or suspected instances of non-compliance with laws  and regulations and fraud.
Evaluation of management’s controls designed to prevent and detect irregularities.
Enquiring of management about any actual and potential litigation and claims.
Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of    material misstatement due to fraud.


 
Page 7

 
Medlock FRB Limited
 
 
 
Independent Auditors' Report to the Members of Medlock FRB Limited (continued)


We have also considered the risk of fraud through management override of controls by:

Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to 
identify accounting transactions which may pose a heightened risk of material misstatement, whether due to a fraud   or error.
Challenging assumptions made by management in their significant accounting estimates, and assessing whether the    judgements made in making accounting estimates are indicative of a potential bias; and
Evaluating the business rationale of significant transactions that are unusual or outside the normal course of business.

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.
There are inherent limitations in the audit procedures described above, 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.  Also, 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 or intentional misrepresentations, or through collusion.


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.





Chris Stewardson (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants
Statutory Auditors
3 Stockport Exchange
Stockport
Cheshire
SK1 3GG

19 August 2024
Page 8

 
Medlock FRB Limited
 
 
Statement of Comprehensive Income
For the year ended 31 December 2023

2023
2022
Note
£
£

  

Turnover
 4 
40,910,826
34,805,254

Cost of sales
  
(37,139,575)
(32,151,542)

Gross profit
  
3,771,251
2,653,712

Administrative expenses
  
(3,463,204)
(2,673,576)

Other operating income
 5 
160,000
100,000

Operating profit
 6 
468,047
80,136

Interest receivable and similar income
 10 
-
4,394

Interest payable and similar expenses
 11 
(40,087)
(5,416)

Profit before tax
  
427,960
79,114

Tax on profit
 12 
112,889
519,875

Profit for the financial year
  
540,849
598,989

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 14 to 29 form part of these financial statements.

Page 9

 
Medlock FRB Limited
Registered number: 06000685

Statement of Financial Position
As at 31 December 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 13 
979,941
932,508

Current assets
  

Debtors: amounts falling due within one year
 14 
7,751,609
8,032,187

Cash at bank and in hand
 15 
1,923,643
540,126

  
9,675,252
8,572,313

Creditors: amounts falling due within one year
 16 
(8,063,856)
(7,108,335)

Net current assets
  
 
 
1,611,396
 
 
1,463,978

Total assets less current liabilities
  
2,591,337
2,396,486

Creditors: amounts falling due after more than one year
 17 
(322,185)
(460,800)

Provisions for liabilities
  

Deferred tax
 20 
(23,578)
(5,961)

Net assets
  
2,245,574
1,929,725


Capital and reserves
  

Called up share capital 
 21 
22,225
22,225

Revaluation reserve
 22 
504,000
514,000

Other reserves
 22 
(1,965,000)
(1,740,000)

Profit and loss account
 22 
3,684,349
3,133,500

  
2,245,574
1,929,725


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




C Drury
Director

Date: 17 August 2024

The notes on pages 14 to 29 form part of these financial statements.

Page 10

 
Medlock FRB Limited
 

Statement of Changes in Equity
For the year ended 31 December 2023


Called up share capital
Revaluation reserve
Other reserves
Profit and loss account
Total equity

£
£
£
£
£

At 1 January 2023
22,225
514,000
(1,740,000)
3,133,500
1,929,725


Comprehensive income for the year

Profit for the year
-
-
-
540,849
540,849
Total comprehensive income for the year
-
-
-
540,849
540,849


Contributions by and distributions to owners

Transfer from revaluation reserve
-
-
-
10,000
10,000

Transfer to profit and loss account
-
(10,000)
-
-
(10,000)

Contribution to employee ownership trust
-
-
(225,000)
-
(225,000)


Total transactions with owners
-
(10,000)
(225,000)
10,000
(225,000)


At 31 December 2023
22,225
504,000
(1,965,000)
3,684,349
2,245,574



Statement of Changes in Equity
For the year ended 31 December 2022


Called up share capital
Revaluation reserve
Other reserves
Profit and loss account
Total equity

£
£
£
£
£

At 1 January 2022
22,225
524,000
(1,650,000)
2,524,511
1,420,736


Comprehensive income for the year

Profit for the year
-
-
-
598,989
598,989
Total comprehensive income for the year
-
-
-
598,989
598,989


Contributions by and distributions to owners

Transfer from revaluation reserve
-
-
-
10,000
10,000

Transfer to profit and loss account
-
(10,000)
-
-
(10,000)

Contribution to employee ownership trust
-
-
(90,000)
-
(90,000)


Total transactions with owners
-
(10,000)
(90,000)
10,000
(90,000)


At 31 December 2022
22,225
514,000
(1,740,000)
3,133,500
1,929,725


The notes on pages 14 to 29 form part of these financial statements.

Page 11

 
Medlock FRB Limited
 

Statement of Cash Flows
For the year ended 31 December 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
540,849
598,989

Adjustments for:

Depreciation of tangible assets
54,648
60,565

Interest paid
40,087
5,416

Interest received
-
(4,394)

Taxation charge
(112,889)
(519,875)

(Increase)/decrease in debtors
(162,241)
2,790,425

(Increase) in amounts owed by related parties
(100,911)
(44,096)

Increase/(decrease) in creditors
725,155
(5,723,671)

Corporation tax received
755,077
64,311

Net cash generated from operating activities

1,739,775
(2,772,330)


Cash flows from investing activities

Purchase of tangible fixed assets
(52,081)
(19,319)

Interest received
-
4,394

HP interest paid
(652)
-

Net cash from investing activities

(52,733)
(14,925)

Cash flows from financing activities

New secured loans
-
337,000

Repayment of loans
(31,840)
(27,740)

Repayment of/new finance leases
(7,250)
-

Interest paid
(39,435)
(5,416)

Contributions to employee ownership trust
(225,000)
(90,000)

Net cash used in financing activities
(303,525)
213,844

Net increase/(decrease) in cash and cash equivalents
1,383,517
(2,573,411)

Cash and cash equivalents at beginning of year
540,126
3,113,537

Cash and cash equivalents at the end of year
1,923,643
540,126


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,923,643
540,126


The notes on pages 14 to 29 form part of these financial statements.

Page 12

 
Medlock FRB Limited
 

Analysis of Net Debt
For the year ended 31 December 2023






At 1 January 2023
Cash flows
New finance leases
Other non-cash changes
At 31 December 2023
£

£

£

£

£

Cash at bank and in hand

540,126

1,383,517

-

-

1,923,643

Debt due after 1 year

(460,800)

-

-

173,952

(286,848)

Debt due within 1 year

(24,221)

31,840

-

(173,952)

(166,333)

Finance leases

-

7,250

(50,000)

-

(42,750)


55,105
1,422,607
(50,000)
-
1,427,712

The notes on pages 14 to 29 form part of these financial statements.

Page 13

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

1.


General information

Medlock FRB Limited is a private company limited by shares and incorporated in England and Wales. The address of the registered office and principal place of business is Greengate Street, Oldham, Lancashire, OL4 1DG. The company's registered number is 06000685. 
The nature of the company's operations and its principal activity is that of construction and refurbishment contracts. 

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 company is currently trading profitability and has a strong order book going forward in line with its business plan. The directors have considered the working capital requirements of the company and concluded that the company can realise its assets and discharge its liabilities in the normal course of business, for a period of at least 12 months from the date of the approval of the financial statements. The financial statements have therefore been prepared on a going concern basis.

The following principal accounting policies have been applied:

 
2.2

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue 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 revenue is recognised:

Construction contracts
Revenue from a contract to provide construction 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 revenue 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.
Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Revenue is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Full provision is made for losses on all contracts in the year in which they are first foreseen.
Amounts recoverable on contracts are included in current assets and represent revenue recognised in excess of payments on account.

Page 14

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.3

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.4

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.5

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.

 
2.6

Borrowing costs

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

 
2.7

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.

Page 15

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.8

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.

 
2.9

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.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
50 years
Fixtures, plant and equipment
-
5 - 10 years

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.

Page 16

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.10

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.

 
2.11

Debtors

Short-term debtors are measured at transaction price, less any impairment.

 
2.12

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.
In the statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management. 

 
2.13

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.

 
2.14

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.

Page 17

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.15

Financial instruments

Financial instruments are recognised in the Company's statement of financial position 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 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 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.

Page 18

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)


2.15
Financial instruments (continued)

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.

 
2.16

Employee Ownership Trust

Investments in the company's own shares which are held for the benefit of the beneficiaries of the Medlock FRB Employee Ownership Trust are shown as a deduction from shareholder's funds in a separate reserve.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Management discussed with the directors the development, selection and disclosure of the company's critical accounting policies and estimates and the application of these policies and estimates. The key sources of estimation, uncertainty and critical accounting judgements in applying the company's policies are discussed below.
The company's revenue recognition and margin recognition policies, which are set out in note 2.2, are central to how the company values the work it has carried out in each financial year. These policies require forecasts to be made of the outcomes of long-term construction contracts. Amounts recoverable on long term contracts included in debtors totalled £5,523,484 
(2022 - £5,800,505).


4.


Turnover

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


2023
2022
£
£

Contract fit out, refurbishment, build and manufactured joinery
40,910,826
34,805,254


All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£

Central service fees receivable
160,000
100,000


Page 19

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Operating lease rentals - land and building
28,000
28,000

Operating lease rentals - other
35,292
34,025

Depreciation of tangible fixed assets
54,648
60,565


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
14,025
14,025

Fees payable to the Company's auditors for taxation compliance services
1,200
1,210

Fees payable to the Company's auditors for all other services
3,425
3,100

8.


Employees

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


2023
2022
£
£

Wages and salaries
3,020,428
2,985,130

Social security costs
368,077
336,355

Cost of defined contribution scheme
101,804
109,818

3,490,309
3,431,303


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


        2023
        2022
            No.
            No.







Sales, administrative and operations
63
63

Page 20

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
550,969
540,506

Company contributions to defined contribution pension schemes
51,773
29,139

602,742
569,645


During the year retirement benefits were accruing to 3 directors (2022 -4) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £157,924 (2022 -£107,921).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £17,110 (2022 -£10,688).


10.


Interest receivable

2023
2022
£
£


Other interest receivable
-
4,394


11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
39,435
5,416

Finance leases and hire purchase contracts
652
-

40,087
5,416

Page 21

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

12.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
102,643
21,802

Adjustments in respect of previous periods
(233,149)
(603,646)


Total current tax
(130,506)
(581,844)

Deferred tax


Origination and reversal of timing differences
17,617
61,969

Total deferred tax
17,617
61,969


Taxation on loss on ordinary activities
(112,889)
(519,875)

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 -lower than) the standard rate of corporation tax in the UK of 23.5% (2022 -19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
427,960
79,114


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 -19%)
100,571
15,032

Effects of:


Expenses not deductible for tax purposes
14,456
1,786

Other timing differences leading to an increase (decrease) in taxation
5,233
2,642

Adjustment in research and development tax credit in respect of prior periods leading to a decrease in the tax charge
(233,149)
(539,335)

Total tax charge for the year
(112,889)
(519,875)


Factors that may affect future tax charges

From 1 April 2023 the main rate of corporation tax increased to 25%. The 23.5% rate used above reflects 9 months
of the new rate and 3 months of the previous rate of 19%.

Page 22

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

13.


Tangible fixed assets





Freehold property
Plant and machinery
Total

£
£
£



Cost or valuation


At 1 January 2023
900,000
327,925
1,227,925


Additions
-
102,081
102,081



At 31 December 2023

900,000
430,006
1,330,006



Depreciation


At 1 January 2023
18,000
277,417
295,417


Charge for the year
18,000
36,648
54,648



At 31 December 2023

36,000
314,065
350,065



Net book value



At 31 December 2023
864,000
115,941
979,941



At 31 December 2022
882,000
50,508
932,508

Cost or valuation at 31 December 2023 is as follows:

Freehold property
£


At cost
377,201
At valuation:

Market value for current use - 16 June 2022
522,799



900,000

The freehold property was valued on 16 June 2022 by Longden & Cook Real Estate, Chartered Surveyors at £900,000 which is considered its fair value. 

If the freehold property had not been included at valuation they would have been included under the historical cost convention as follows:

2023
2022
£
£



Cost
377,201
377,201

Accumulated depreciation
(124,804)
(117,210)

Net book value
252,397
259,991

Page 23

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

14.


Debtors

2023
2022
£
£


Trade debtors
1,956,381
1,496,958

Amounts owed by related parties
183,839
82,928

Other debtors
-
108

Prepayments and accrued income
87,905
107,958

Amounts recoverable on long-term contracts
5,523,484
5,800,505

Tax recoverable
-
543,730

7,751,609
8,032,187



15.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
1,923,643
540,126


Page 24

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

16.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank loans
166,333
24,221

Trade creditors
5,092,653
4,953,786

Corporation tax
102,643
21,802

Other taxation and social security
1,226,256
1,330,261

Obligations under finance lease and hire purchase contracts
7,413
-

Other creditors
18,936
33,932

Accruals and deferred income
1,449,622
744,333

8,063,856
7,108,335


Obligations under hire purchase contracts
Obligations under hire purchase contracts are secured against the assets to which they relate.
Bank loans  
Bank loans are secured by a legal charge over the company's property and by way of a debenture over all assets of the company.
Bank loan 1
Facility: £209,000 drawn down in March 2019
Repayment terms: 59 monthly payments and lump sum due in Feb-24
Interest: 2% per annum above Bank of England base rate
Bank loan 2
Facility: £337,000 drawn down in August 2022
Repayment terms: 119 monthly payments and lump sum due in Aug-32
Interest: 3% per annum above Bank of England base rate
 

Page 25

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

17.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Bank loans
286,848
460,800

Net obligations under finance leases and hire purchase contracts
35,337
-

322,185
460,800


The aggregate amount of liabilities repayable wholly or in part more than five years after the reporting date is:

2023
2022
£
£


Bank loans repayable by instalments
202,159
225,836

Obligations under hire purchase contracts are secured against the assets to which they relate.
Details regarding bank loans are disclosed in note 16.


18.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
166,333
24,221

Amounts falling due 1-2 years

Bank loans
18,643
173,529

Amounts falling due 2-5 years

Bank loans
66,046
61,435

Amounts falling due after more than 5 years

Bank loans
202,159
225,836

453,181
485,021


Details regarding bank loans are disclosed in note 16.

Page 26

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

19.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2023
2022
£
£


Within one year
11,608
-

Between 1-5 years
43,531
-

55,139
-


20.


Deferred taxation




2023
2022


£

£






Liability/(asset) at beginning of year
5,961
(56,008)


Charged/(credited) to profit or loss
17,617
61,969



Liability at end of year
23,578
5,961

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
28,312
11,806

Other timing differences
(4,734)
(5,845)

23,578
5,961

Page 27

 
Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



6,667 (2022 - 6,667) Ordinary A shares of £1.00 each
6,667
6,667
6,667 (2022- 6,667) Ordinary B shares of £1.00 each
6,667
6,667
6,667 (2022 - 6,667) Ordinary C shares of £1.00 each
6,667
6,667
1,112 (2022 - 1,112) Ordinary D shares of £1.00 each
1,112
1,112
1,112 (2022 - 1,112) Ordinary E shares of £1.00 each
1,112
1,112

22,225

22,225



22.


Reserves

Non-distributable reserves
A revaluation reserve arose on a revaluation of a property in accordance with UK GAAP.
Profit and loss account
The profit and loss account includes all current and prior period retained profit and losses net of dividends.
Other reserves
Other reserves include contributions made to the Medlock FRB Employee Ownership Trust. 


23.


Pension commitments

The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charged represents contributions payable by the company to the fund and amounted to £85,251 (2022 - £80,679). Contributions totalling £18,936 (2022 - £13,960) were payable to the fund at the balance sheet date.
During the year, the company made contributions of £16,553 
(2022 - £29,139) to the directors personal pension funds. Contributions totalling £NIL (2022 - £9,418) were payable to the fund at the balance sheet date.

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Medlock FRB Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

24.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£

Land and Buildings


Not later than 1 year
9,333
28,000

Later than 1 year and not later than 5 years
-
7,000

9,333
35,000

2023
2022

£
£

Other


Not later than 1 year
71,563
42,035

Later than 1 year and not later than 5 years
119,116
39,878

190,679
81,913


25.


Transactions with directors

Included within prepayments and accrued income brought forward was an amount due from a director of £8,050. Amounts repaid in the year totalled £2,758, leaving a balance of £5,292 outstanding as at 31 December 2023. The loan is interest free and repayable on demand.  


26.


Related party transactions

A company manages the individual SIPPs of two directors, which owns the property from which Medlock FRB Limited trades. The company charged Medlock FRB Limited £53,112 (2022 - £28,000).
At the year end, a company related to Medlock FRB Limited through common control charged £60,480 
(2022 - £10,094) to Medlock FRB Limited and was charged £348,660 (2022 - £275,676) by Medlock FRB Limited. The company owes £193,718 (2022 - £135,835) to Medlock FRB Limited in relation to recharged expenses at the balance sheet date.
Key management personnel remuneration totalled £602,742 
(2022 - £569,645). The directors consider there are no further key management in addition to the directors.


27.


Controlling party

The company is wholly owned by the Medlock FRB Employee Ownership Trust.

 
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