Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-312023-12-31falsetrue2023-01-01138No description of principal activity119false 01460044 2023-01-01 2023-12-31 01460044 2022-01-01 2022-12-31 01460044 2023-12-31 01460044 2022-12-31 01460044 2022-01-01 01460044 1 2023-01-01 2023-12-31 01460044 1 2022-01-01 2022-12-31 01460044 5 2023-01-01 2023-12-31 01460044 5 2022-01-01 2022-12-31 01460044 d:CompanySecretary1 2023-01-01 2023-12-31 01460044 d:Director1 2023-01-01 2023-12-31 01460044 d:Director2 2023-01-01 2023-12-31 01460044 d:Director3 2023-01-01 2023-12-31 01460044 d:Director3 2023-12-31 01460044 d:Director4 2023-01-01 2023-12-31 01460044 d:Director5 2023-01-01 2023-12-31 01460044 d:Director6 2023-01-01 2023-12-31 01460044 d:RegisteredOffice 2023-01-01 2023-12-31 01460044 e:Buildings 2023-01-01 2023-12-31 01460044 e:Buildings 2023-12-31 01460044 e:Buildings 2022-12-31 01460044 e:Buildings e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 01460044 e:Buildings e:LongLeaseholdAssets 2023-01-01 2023-12-31 01460044 e:Buildings e:LongLeaseholdAssets 2023-12-31 01460044 e:Buildings e:LongLeaseholdAssets 2022-12-31 01460044 e:MotorVehicles 2023-01-01 2023-12-31 01460044 e:MotorVehicles 2023-12-31 01460044 e:MotorVehicles 2022-12-31 01460044 e:MotorVehicles e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 01460044 e:FurnitureFittings 2023-01-01 2023-12-31 01460044 e:FurnitureFittings 2023-12-31 01460044 e:FurnitureFittings 2022-12-31 01460044 e:FurnitureFittings e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 01460044 e:ComputerEquipment 2023-01-01 2023-12-31 01460044 e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 01460044 e:CurrentFinancialInstruments 2023-12-31 01460044 e:CurrentFinancialInstruments 2022-12-31 01460044 e:Non-currentFinancialInstruments 2023-12-31 01460044 e:Non-currentFinancialInstruments 2022-12-31 01460044 e:CurrentFinancialInstruments e:WithinOneYear 2023-12-31 01460044 e:CurrentFinancialInstruments e:WithinOneYear 2022-12-31 01460044 e:Non-currentFinancialInstruments e:AfterOneYear 2023-12-31 01460044 e:Non-currentFinancialInstruments e:AfterOneYear 2022-12-31 01460044 e:ReportableOperatingSegment1 2023-01-01 2023-12-31 01460044 e:ReportableOperatingSegment1 2022-01-01 2022-12-31 01460044 f:UnitedKingdom 2023-01-01 2023-12-31 01460044 f:UnitedKingdom 2022-01-01 2022-12-31 01460044 e:UKTax 2023-01-01 2023-12-31 01460044 e:UKTax 2022-01-01 2022-12-31 01460044 e:ShareCapital 2023-12-31 01460044 e:ShareCapital 2022-12-31 01460044 e:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 01460044 e:RetainedEarningsAccumulatedLosses 2023-12-31 01460044 e:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 01460044 e:RetainedEarningsAccumulatedLosses 2022-12-31 01460044 e:RetainedEarningsAccumulatedLosses 2022-01-01 01460044 e:AcceleratedTaxDepreciationDeferredTax 2023-12-31 01460044 e:AcceleratedTaxDepreciationDeferredTax 2022-12-31 01460044 d:OrdinaryShareClass1 2023-01-01 2023-12-31 01460044 d:OrdinaryShareClass1 2023-12-31 01460044 d:OrdinaryShareClass1 2022-12-31 01460044 d:OrdinaryShareClass2 2023-01-01 2023-12-31 01460044 d:OrdinaryShareClass2 2023-12-31 01460044 d:OrdinaryShareClass2 2022-12-31 01460044 d:FRS102 2023-01-01 2023-12-31 01460044 d:Audited 2023-01-01 2023-12-31 01460044 d:FullAccounts 2023-01-01 2023-12-31 01460044 d:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 01460044 e:WithinOneYear 2023-12-31 01460044 e:WithinOneYear 2022-12-31 01460044 e:BetweenOneFiveYears 2023-12-31 01460044 e:BetweenOneFiveYears 2022-12-31 01460044 e:MoreThanFiveYears 2023-12-31 01460044 e:MoreThanFiveYears 2022-12-31 iso4217:GBP xbrli:shares xbrli:pure
Company registration number: 01460044







ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023


DRUMGRANGE LIMITED






































img0bd0.png                        

 


DRUMGRANGE LIMITED
 


 
COMPANY INFORMATION


Directors
G Howe 
B Howe 
S Abraham 
P Hardman 
P Abraham 




Company secretary
G Howe



Registered number
01460044



Registered office
Unit A The Forum
Hanworth Lane

Chertsey

Surrey

KT16 9JX




Independent auditors
Menzies LLP
Chartered Accountants & Statutory Auditor

Magna House

18-32 London Road

Staines-Upon-Thames

TW18 4BP





 


DRUMGRANGE LIMITED
 



CONTENTS



Page
Strategic Report
1 - 3
Directors' Report
4 - 5
Independent Auditors' Report
6 - 9
Statement of Income and Retained Earnings
10
Statement of Financial Position
11
Statement of Cash Flows
12
Analysis of Net Debt
13
Notes to the Financial Statements
14 - 24

 


DRUMGRANGE LIMITED
 


 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their Strategic Report for the year ended 31 December 2023.

Principal activity and business review
 
The company executes defence contracts in both the Maritime and Land domains. These contracts can be performed either direct with the Ministry of Defence or as sub-contracts into the large tier one Primes. Drumgrange Operates from its two sites in Chertsey, and Portland.
The company is typically engaged in the design, development, integration and qualification of designated projects in the areas of Sonar, Communications and Signature Management. As part of the project delivery the highly qualified and experienced teams will be asked to deliver innovative solutions. Revenue is also generated from on-going support contracts which provides some stability for future years.
The company takes advantage of the Research and Development tax credit scheme, not only for qualifying designated projects, but also for private venture work (effectively the team will search for targeted innovative solutions, which may result in future marketable products).
During the year the company benefited from several major contracts resulting in higher revenue levels and a healthy pipeline of work.
As shown in the company's statement of income and retained earnings on page 10, the company's turnover increased by 47.7% (2022 – 18.8%) compared to the previous year which has resulted in a profit before tax of £2,246,692 (2022 – profit before tax of £570,301). The directors anticipate continued profitability in the foreseeable future as the company continues to retain a healthy pipeline of work, with future orders in excess of £20m already secured.
The statement of financial position on page 11 of the financial statements shows an increase in net assets due to excess profits over dividends in the year to a value of £8,145,257 and the balance sheet remains healthy and solvent.
In response to the company’s recent growth trend, the company has introduced a more appropriate senior team structure over the last couple of years. This included recent appointments to the management board, which hold regular strategic sessions, as well as the hire of a new head of engineering.
The company has also invested in upgrading its core systems, which has resulted in improved connectivity and financial outputs.


Principal risks and uncertainties
 
The company's revenue is largely from the undertaking of naval and military defence contracts, it remains exposed to increased risk that defence spending may reduce or delayed. However, given the increase global uncertainty and the recognition by government of the need to retain higher deference spend, this risk has reduced.
The company operates in a niche industry, with several larger competitors and competition remains challenging.
Staff risks
The key barrier to further growth remains retaining and recruiting experienced and qualified staff in a competitive market.
The company continues to engage with the market, offering targeted internship programs through strategic alliances, as well as the development of a competency framework to ensure that staff remain both engaged and appropriate for the role.
There continues to be a disparity between wage inflation expectations and building in higher inflationary increases into existing and future contracts.



 
Page 1

 


DRUMGRANGE LIMITED
 



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

Interest rate risk 

The company finances its operations through cash held from retained profits. It does have borrowings in respect of its Portland site. The company currently borrows at a fixed rate of interest above the Bank of England base rate which in the director's opinion is sustainable for the next 12 months however they actively monitor the market in conjunction with the bank to manage the company's exposure to interest rate fluctuations.

Liquidity and cash flow risk

The company manages its liquidity risk by structuring their borrowings to ensure repayments are made over a suitable period. Cash flow risk is managed through daily monitoring of working capital requirements.

Financial risk management, objectives and policies

There are no matters concerning financial risk which are material for the assessment of the assets, liabilities, financial position and profit or loss of the company.

Financial key performance indicators
 
The directors will continue to review the operating performance of the company on a regular basis.

The main key performance indicators the directors used to monitor performance during 2023 were; 

Gross profit margin

The gross profit margin for the year was 22.44% (2022 – 20.54%), this was higher than last year, but consistent with historical levels.
Whilst the company is confident that gross margins will be maintained in the future, it continues to be challenged through a combination of higher wage inflation and pressures to cap inflationary increases in its contracts.

Cashflow

The company’s cash reserves had fallen to £1.9m at the year-end (2022: £4.2m), due to spend commitments immediately before the year end, however increased back to similar levels after the year-end, as receivables were collected. 
The company generates consistent cash inflows from operations and has liabilities that are known and are usually discharged without recourse to external funding.
The company regularly pays dividends but will only do so where adequate cash reserves are maintained. It was noted that no dividends (2022 - £533,050) were paid in the period.
The company operated throughout the period within the overall facilities provided by the bank.

Going concern

The business retains sufficient reserves and cash to manage periodic slow downs, and therefore the accounts should be prepared on a going concern basis.

Future Developments
 
The company continues to invest in Research and Development, and continues to win long term projects, as well as continuing to receive income from reoccurring support work.
The new management team are also now well established and continue to evolve the business to meet new technological and commercial challenges.

Page 2

 


DRUMGRANGE LIMITED
 



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


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



................................................
G Howe
Director

Date: 4 September 2024
Page 3

 


DRUMGRANGE 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

The directors who served during the year were:

G Howe 
B Howe 
R Howe (resigned 23 November 2023)
S Abraham 
P P Hardman
Subsequent to the year end P Abraham was appointed on 1 February 2024

Directors' Responsibilities Statement

The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements inaccordance 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 year.
In preparing these financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit/loss for the year, after taxation, amounted to £1,990,576 (2022 - £432,615).

Dividends paid in the year amounted to £nil (2022 - £533,050). 

Research and Development

Drumgrange provides Research and Development activities in a number of specialist areas.  These include Sonar signal processing, VLF communications and Training and Simulation.  Core to these activities is the provision of mathematical modelling and simulation services, Technical and Feasibility Studies, System Prototyping and Evaluation and the Provision of System Simulators and Stimulators.

Disclosure of information in the strategic report

The company has chosen in accordance with Section 414C(11) of the companies Act 2006 (Strategic Report and Directors' Report) regulations 2013 to set out within the company's Strategic Report, the Company's Strategic Report Information required by Schedule 7 of the large and Medium Sized Companies and Groups (Accounts and Report) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties and future developments.  

Page 4

 


DRUMGRANGE 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.

Each of the persons who are directors at the time when this Director's Report is approved has confirmed that:

Auditor

Under section 487(2) of the Companies Act 2006Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

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





................................................
G Howe
Director

Date: 4 September 2024
Page 5

 


DRUMGRANGE LIMITED
 

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DRUMGRANGE LIMITED

Opinion


We have audited the financial statements of Drumgrange Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position, the Statement of Cash Flows 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 6

 


DRUMGRANGE LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DRUMGRANGE 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 , the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 


DRUMGRANGE LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DRUMGRANGE 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:

The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including UK Companies Act, employment law and tax legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures and the company secretary.

The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.

We assessed the susceptibility of the Companys financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:

°Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;

°Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; and

°Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.

As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:

°Posting of unusual journals out of the normal course of business that may inflate revenue;

°Estimates used in calculating amounts recoverable on long term contracts in relation to final costs to complete.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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.


Page 8

 


DRUMGRANGE LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DRUMGRANGE LIMITED (CONTINUED)

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.





Sophie Said FCA (Senior Statutory Auditor)
  
for and on behalf of
Menzies LLP
 
Chartered Accountants
Statutory Auditor
  
Magna House
18-32 London Road
Staines-Upon-Thames
TW18 4BP

4 September 2024
Page 9

 


DRUMGRANGE LIMITED
 


 
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 5 
21,770,193
14,742,623

Cost of sales
  
(16,883,936)
(11,714,420)

Gross profit
  
4,886,257
3,028,203

Administrative expenses
  
(3,451,182)
(3,048,633)

Other operating income
 6 
816,920
597,011

Operating profit
 7 
2,251,995
576,581

Interest receivable and similar income
  
12,835
2,800

Interest payable and similar expenses
 10 
(18,138)
(9,080)

Profit before tax
  
2,246,692
570,301

Tax on profit
 11 
(256,116)
(137,686)

Profit after tax
  
1,990,576
432,615

  

  

Retained earnings at the beginning of the year
  
6,154,581
6,255,016

  
6,154,581
6,255,016

Profit for the year
  
1,990,576
432,615

Dividends declared and paid
  
-
(533,050)

Retained earnings at the end of the year
  
8,145,157
6,154,581
The notes on pages 14 to 24 form part of these financial statements.

Page 10

 


DRUMGRANGE LIMITED
REGISTERED NUMBER:01460044



STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 12 
2,327,384
1,865,259

  
2,327,384
1,865,259

Current assets
  

Stocks
 13 
207,165
133,038

Debtors: amounts falling due within one year
 14 
7,664,811
2,574,177

Cash at bank and in hand
  
1,890,558
4,170,433

  
9,762,534
6,877,648

Creditors: amounts falling due within one year
 15 
(3,578,332)
(2,258,465)

Net current assets
  
 
 
6,184,202
 
 
4,619,183

Total assets less current liabilities
  
8,511,586
6,484,442

Creditors: amounts falling due after more than one year
 16 
(262,084)
(289,488)

Provisions for liabilities
  

Deferred tax
 17 
(104,245)
(40,273)

  
 
 
(104,245)
 
 
(40,273)

Net assets
  
8,145,257
6,154,681


Capital and reserves
  

Called up share capital 
 18 
100
100

Profit and loss account
 19 
8,145,157
6,154,581

  
8,145,257
6,154,681


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




................................................
G Howe
Director

Date: 4 September 2024

The notes on pages 14 to 24 form part of these financial statements.
Page 11

 


DRUMGRANGE LIMITED
 



STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,990,576
432,615

Adjustments for:

Depreciation of tangible assets
242,148
212,353

Loss on disposal of tangible assets
752
-

Interest paid
18,138
9,080

Interest received
(12,835)
(2,800)

Taxation charge
256,116
137,686

(Increase) in stocks
(74,127)
(7,769)

(Increase)/decrease in debtors
(4,949,437)
258,977

Increase/(decrease) in creditors
1,323,606
(1,003,079)

Corporation tax received
483,579
828,156

Accrued (income)/expenses
(816,920)
(597,011)

Net cash generated from operating activities

(1,538,404)
268,208


Cash flows from investing activities

Purchase of tangible fixed assets
(708,541)
(72,530)

Sale of tangible fixed assets
3,516
-

Interest received
12,835
2,800

Net cash from investing activities

(692,190)
(69,730)

Cash flows from financing activities

Repayment of loans
(31,143)
(30,464)

Dividends paid
-
(533,050)

Interest paid
(18,138)
(9,080)

Net cash used in financing activities
(49,281)
(572,594)

Net (decrease) in cash and cash equivalents
(2,279,875)
(374,116)

Cash and cash equivalents at beginning of year
4,170,433
4,544,549

Cash and cash equivalents at the end of year
1,890,558
4,170,433


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,890,558
4,170,433

1,890,558
4,170,433


The notes on pages 14 to 24 form part of these financial statements.

Page 12

 


DRUMGRANGE LIMITED
 



ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

4,170,433

(2,279,875)

1,890,558

Debt due after 1 year

(289,488)

27,404

(262,084)

Debt due within 1 year

(27,238)

3,739

(23,499)


3,853,707
(2,248,732)
1,604,975

The notes on pages 14 to 24 form part of these financial statements.
Page 13

 


DRUMGRANGE LIMITED
 


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

1.


Statement of compliance

These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard
applicable in the UK and the Republic of Ireland.


2.


Company information

Drumgrange Limited is a private company limited by shares, incorporated and domiciled in England and Wales. The
address of its registered office which is it's principal place of business, is disclosed on the company information
page.

3.Accounting policies

 
3.1

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.

 
3.2

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Income and Retained Earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

 
3.3

Revenue

The revenue shown in the profit and loss account represents amounts receivable for goods and services provided during the year in the normal course of business, net of trade discounts, VAT and other sales related taxes. 
In respect of long-term contracts and contracts for on-going services, revenue represents the value of work done in the year, including estimates of amounts not invoiced. Revenue from the rendering of these services are measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable based on costs incurred to date. 

Page 14

 


DRUMGRANGE LIMITED
 


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

3.Accounting policies (continued)

 
3.4

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.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on both a straight line and reducing balance basis.

Depreciation is provided on the following basis:

Freehold property
-
2% straight line on cost
Long-term leasehold property
-
over period of lease
Motor vehicles
-
25% reducing balance
Computer equipment
-
25% straight line

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.

 
3.5

Stocks

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

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

 
3.6

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

 
3.7

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.

 
3.8

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 15

 


DRUMGRANGE LIMITED
 


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

3.Accounting policies (continued)

 
3.9

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.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
3.10

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.

 
3.11

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.

  
3.12

Amounts recoverable on contracts

Amounts recoverable on contracts represent the excess of the value of work carried out to the balance sheet
date over cumulative payments on account.

  
3.13

Payments on account

Payments on account included in creditors represent the excess of payments on account received over the
value of work carried out to the balance sheet date.

Page 16

 


DRUMGRANGE LIMITED
 


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

3.Accounting policies (continued)

 
3.14

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.


4.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 
The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:

Estimates of the costs to complete in long term projects - the matching of revenue and costs on the long term projects is based on the total costs to complete estimated at the tender stage. Where additional costs are incurred due to customer variations on contracts, additional revenue is either agreed or any changes to the expected margin is recognised at the earliest stage. The estimate of overall costs to complete is one of the largest estimates affecting the amount of revenue recognised. 


5.


Turnover

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


2023
2022
£
£

Rendering services
21,770,193
14,742,623

21,770,193
14,742,623


2023
2022
£
£

United Kingdom
21,770,193
14,742,623

21,770,193
14,742,623


Page 17

 


DRUMGRANGE LIMITED
 


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

6.


Other operating income

2023
2022
£
£

Research & Development expenditure credit
816,920
597,011

816,920
597,011



7.


Profit before taxation

The profit before taxation is stated after charging:

2023
2022
£
£

Research & development charged as an expense
4,476,274
4,592,393

Depreciation of tangible fixed assets
246,797
212,353

Other operating lease rentals
125,000
131,749

Defined contribution costs
476,122
319,636

Fees payable for the audit of the financial statements
34,000
30,500


8.


Employees

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


2023
2022
£
£

Wages and salaries
8,103,931
6,673,830

Social security costs
962,076
828,485

Cost of defined contribution scheme
476,122
319,636

9,542,129
7,821,951


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


        2023
        2022
            No.
            No.







Production staff
125
106



Administrative staff
8
8



Directors
5
5

138
119

Page 18

 


DRUMGRANGE LIMITED
 


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

9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
590,599
571,514

Company contributions to defined contribution pension schemes
17,032
12,203

607,631
583,717


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

The highest paid director received remuneration of £160,000 (2022 - £160,000) and benefits in kind totalling £7,322 (2022 - £7,413). 


10.


Interest payable and similar expenses

2023
2022
£
£


Mortgage interest payable
18,138
9,080

18,138
9,080


11.


Taxation


As restated
2023
2022
£
£

Corporation tax


Current tax on profits for the year
438,714
139,131

Adjustments in respect of previous periods
-
15,773


438,714
154,904


Total current tax
438,714
154,904

Deferred tax


Origination and reversal of timing differences
(182,598)
(13,086)

Effect of change in UK tax rates
-
(4,132)

Total deferred tax
(182,598)
(17,218)


Taxation on profit on ordinary activities
256,116
137,686
Page 19

 


DRUMGRANGE LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - the same as) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
2,246,692
570,301


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
528,422
108,357

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
-
608

Capital allowances for year in excess of depreciation
2,639
5,690

Deferred tax not recognised
131,928
113,432

Research and development claim
(32,174)
(108,355)

Adjustments to tax charge in respect of prior periods
-
15,772

Effect of change in UK tax rates
3,798
(4,132)

R&D expenditure credits
-
6,314

Deferred tax not previously recognised
(378,497)
-

Total tax charge for the year
256,116
137,686

Page 20

 


DRUMGRANGE LIMITED
 


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

12.


Tangible fixed assets





Freehold property
Long-term leasehold property
Motor vehicles
Equipment
Total

£
£
£
£
£



Cost or valuation


At 1 January 2023
1,821,370
582,195
442,550
546,242
3,392,357


Additions
360,562
-
-
347,979
708,541


Disposals
-
-
(38,868)
-
(38,868)



At 31 December 2023

2,181,932
582,195
403,682
894,221
4,062,030



Depreciation


At 1 January 2023
341,217
453,637
333,957
398,287
1,527,098


Charge for the year on owned assets
32,873
18,365
26,075
164,835
242,148


Disposals
-
-
(34,600)
-
(34,600)



At 31 December 2023

374,090
472,002
325,432
563,122
1,734,646



Net book value



At 31 December 2023
1,807,842
110,193
78,250
331,099
2,327,384



At 31 December 2022
1,480,153
128,558
108,593
147,955
1,865,259
Page 21

 


DRUMGRANGE LIMITED
 


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

13.


Stocks

2023
2022
£
£

Raw materials and consumables
207,165
133,038

207,165
133,038


In the opinion of the directors, the replacement cost of stocks is not materially different from the values included in
the financial statements.


14.


Debtors

2023
2022
£
£


Trade debtors
4,265,077
676,397

Other debtors
-
3,150

Prepayments and accrued income
56,791
119,046

Amounts recoverable on long-term contracts
2,718,167
1,292,005

Tax recoverable
624,776
483,579

7,664,811
2,574,177



15.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank loans
23,499
27,238

Trade creditors
965,032
843,465

Other taxation and social security
995,636
610,292

Other creditors
31,220
1,087

Accruals and deferred income
1,562,945
776,383

3,578,332
2,258,465


There is a £500,000 overdraft facility and a £255,000 CLASS guarantee facility available to Drumgrange Limited
which is secured against the assets of the business. There are two additional guarantees of  £12,082 and £39,631
which are also held against the assets of the business. 
The bank loans are secured by a legal charge on the company's freehold properties, Units 1 & 2, The Forum,
Chertsey and Unit 15, South Way, Portland.

Page 22

 


DRUMGRANGE LIMITED
 


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

16.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Bank loans
262,084
289,488

262,084
289,488


The bank loans are secured by a legal charge on the company's freehold properties, Units 1 & 2, The Forum, Chertsey and Unit 15, South Way, Portland.
Included above within creditors is an amount of £154,951 (2022 amended - £160,593) in respect of liabilities payable or repayable by installments which fall due for payment after more than five years from the reporting date.
This amount is repayable at a rate of the Bank of England Base Rate + 2.5%.


17.


Deferred taxation




2023


£






At beginning of year
(40,273)


Charged to profit or loss
(63,972)



At end of year
(104,245)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(104,245)
(40,273)

(104,245)
(40,273)


18.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



210 (2022 - 210) Ordinary shares of £0.01 each shares of £0.01 each
2
2
9,790 (2022 - 9,790) Ordinary A shares of  £0.01 each shares of £0.01 each
98
98

100

100


Page 23

 


DRUMGRANGE LIMITED
 


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

19.


Reserves

Profit and loss account

This reserve records retained earnings and accumulated losses.


20.


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
£
£


Not later than 1 year
125,000
128,864

Later than 1 year and not later than 5 years
500,000
500,000

Later than 5 years
93,403
218,403

718,403
847,267


21.


Related party transactions

During the year dividends were paid to Mr G Howe totalling £nil (2022: £488,950), Mrs B Howe of £nil (2022: £38,500), Mrs S Abraham of £nil (2022: £1,680) and Mr P Hardman £nil (2022: £3,920).
The company rents premises from the Drumgrange Ltd Retirement Benefit Scheme, a pension scheme of which Mr 
G Howe and Mrs B Howe are trustees and beneficiaries, for an annual rental of £125,000. (2022: £129,250). At the year end the company owed £37,500 to the Drumgrange Retirement Benefit Scheme in respect of rent (2022: £37,500).
During the year services were provided by a company, owned by a close family member. Total transactions in the year equated to £32,424 with the year end balance due of £7,609 (2022: £7,889).


22.


Controlling party

The company is controlled by G. Howe, a director, by virtue of his majority interest in the issued ordinary share
capital of the company. 
 
Page 24