Company registration number 03035681 (England and Wales)
D & G BUILDERS AND JOINERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
D & G BUILDERS AND JOINERS LIMITED
COMPANY INFORMATION
Directors
Mr D F Ormerod
Mr A T Ormerod
Mrs E Turner
Mr R Eaves
Secretary
Mr D F Ormerod
Company number
03035681
Registered office
Quarry Road
Chorley
PR6 0LR
Auditor
MHA
Richard House
9 Winckley Square
Preston
PR1 3HP
D & G BUILDERS AND JOINERS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of income and retained earnings
7
Balance sheet
8
Notes to the financial statements
9 - 21
D & G BUILDERS AND JOINERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The company specialises in construction services to the Health, Education and Commercial Sectors. We take pride in maintaining enduring relationships with our clients, underpinned by our commitment to delivering exceptional service. Emphasising social value, we are dedicated to empowering young people by collaborating with local educational institutions and voluntary organisations.
The reported financial result for the year ended 31 December 2023 was pleasing in delivering a consistent level of turnover, which was planned, so the directors could ensure that quality and efficiency of delivery were prioritised throughout operations. The overhead base was closely managed, which meant the additional gross contribution generated, translated down to increased operating profits.
Principal risks and uncertainties
While our risk landscape remains largely stable given the principal sectors in which we operate, we remain vigilant amidst prevailing economic uncertainties and potential shifts in government policies. To mitigate risks, we have diversified our client base, reducing exposure to any single client. We do not service private clients, which significantly reduces our credit risk. Additionally, we remain proactive in staying abreast of legislative changes, particularly pertaining to the Building Safety Act, and their potential impacts on our projects and industry. Together with ensuring suitable capacity exists before we commit to contracts, this mitigates the risk that substandard quality outcomes would project on to the business.
Development and performance
Looking ahead, we are optimistic, with a robust pipeline of secured projects extending into Q4 of 2024. The company is trading profitably during the first half of 2024 and we have expanded our capacity to deliver work.
Our recent inclusion in a university framework underscores our commitment to fostering strong relationships within the higher education sector. Strengthening our operational, administrative, and managerial capacities ensures that we maintain our reputation for delivering exceptional service and meeting or exceeding customer expectations.
Key performance indicators
In addition to financial metrics, we place considerable importance on our rate of repeat business, indicative of our unwavering commitment to superior customer service. Our relentless pursuit of quality and excellence has not only fostered enduring relationships with existing clients but also facilitated the establishment of new partnerships.
Mrs E Turner
Director
4 July 2024
D & G BUILDERS AND JOINERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company during the year was that of building and construction services.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £800,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr D F Ormerod
Mr A T Ormerod
Mrs E Turner
Mr R Eaves
Auditor
MHA Moore and Smalley were appointed as auditor to the group during the year. Following the merger of MHA Moore & Smalley with MHA, the group's independent auditor has now become MHA. The auditor, MHA, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the principal risks and uncertainties and financial risk management.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mrs E Turner
Director
4 July 2024
D & G BUILDERS AND JOINERS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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.
D & G BUILDERS AND JOINERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF D & G BUILDERS AND JOINERS LIMITED
- 4 -
Opinion
We have audited the financial statements of D & G Builders and Joiners Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
D & G BUILDERS AND JOINERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF D & G BUILDERS AND JOINERS LIMITED (CONTINUED)
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
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.
Matters on which we are required to report by exception
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 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, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
D & G BUILDERS AND JOINERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF D & G BUILDERS AND JOINERS LIMITED (CONTINUED)
- 6 -
Enquiries with management, including directors, about any known or suspected instances of non-compliance with laws and regulations and fraud;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to profit recognition in respect of long term contracts, which give rise to amounts recoverable on contracts and deferred income balances;
Auditing the risk of fraud in revenue, including through the testing of the cut off of income at the year end and sales transaction testing to ensure revenue is complete in the financial statements and recognised in the correct accounting period;
Review of purchase occurrence and checks that costs have been allocated to the correct contracts;
Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries;and
Auditing the risk of fraud in management override of controls, including the testing of journal entries and other adjustments for appropriateness through the use of audit data analytics; and reviewing estimates for any evidence of management bias.
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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Other matters which we are required to address
The comparative balances were not audited as the company was exempt from the requirement to have a statutory audit of the financial statements for the year ended 31 December 2022.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Joe Sullivan FCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Preston, United Kingdom
12 July 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
D & G BUILDERS AND JOINERS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
14,320,612
14,558,613
Cost of sales
(11,745,362)
(12,310,896)
Gross profit
2,575,250
2,247,717
Administrative expenses
(1,135,226)
(947,547)
Other operating income
752
Operating profit
4
1,440,024
1,300,922
Interest receivable and similar income
7
62,091
15,545
Interest payable and similar expenses
8
(7,999)
(15,889)
Profit before taxation
1,494,116
1,300,578
Tax on profit
9
(355,558)
(268,559)
Profit for the financial year
1,138,558
1,032,019
Retained earnings brought forward
3,041,309
2,809,290
Dividends
10
(800,000)
(800,000)
Retained earnings carried forward
3,379,867
3,041,309
The profit and loss account has been prepared on the basis that all operations are continuing operations.
D & G BUILDERS AND JOINERS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
404,345
416,714
Current assets
Stocks
12
13,405
15,181
Debtors
13
2,584,268
1,980,705
Cash at bank and in hand
2,877,129
2,399,144
5,474,802
4,395,030
Creditors: amounts falling due within one year
14
(2,375,960)
(1,630,225)
Net current assets
3,098,842
2,764,805
Total assets less current liabilities
3,503,187
3,181,519
Creditors: amounts falling due after more than one year
15
(28,306)
(56,086)
Provisions for liabilities
Deferred tax liability
17
94,014
83,124
(94,014)
(83,124)
Net assets
3,380,867
3,042,309
Capital and reserves
Called up share capital
19
1,000
1,000
Profit and loss reserves
3,379,867
3,041,309
Total equity
3,380,867
3,042,309
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 4 July 2024 and are signed on its behalf by:
Mr A T Ormerod
Mrs E Turner
Director
Director
Company registration number 03035681 (England and Wales)
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
1
Accounting policies
Company information
D & G Builders and Joiners Limited is a private company limited by shares incorporated in England and Wales. The registered office is Quarry Road, Chorley, PR6 0LR.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of E & A Holdings 2020 Limited. These consolidated financial statements are available from its registered office Quarry Road, Chorley, PR6 0LR.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
At the time of approving the financial statements, the company is trading profitably with significant levels of future works secured. Other than low level asset finance, the company is entirely self funded, with significant free cash balances available for use. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 10 -
1.3
Turnover
Turnover comprises the value of work performed, goods sold and services provided excluding Value Added Tax. Amounts in respect of contracts included in turnover, net of payments received on account, are shown in debtors as amounts recoverable on contracts. Cash received in excess of the value of work done is shown in creditors as payments on account.
An appropriate proportion of the anticipated contract profit is recognised in the profit and loss account based on the stage of completion of the work and the expected end of life outcome. Provision is made for anticipated contract losses.
Pre-contract costs incurred before it is virtually certain that a contract will be awarded are charged to the profit and loss account. Once virtually certain of contract award, costs are held as amounts recoverable on contracts and form part of the accounting for the contract as a whole.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and machinery
15% per annum reducing balance
Fixtures, fittings & equipment
15% per annum reducing balance
Motor vehicles
25% per annum reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets including cash in hand and deposits held at call with banks.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
The company does not have any financial assets which are not classified as basic financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
The company does not have any financial liabilities which are not basic financial instruments.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions:
Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Valuation and recoverability of amounts recoverable on contracts
The value of amounts recoverable on contracts is derived on the basis of estimates and assumptions regarding the costs recorded to jobs at the year end in comparison to sales invoiced at year end. The valuation involves significant judgement and affects the amount of revenue recognised. The valuation is based on an estimate of the amount expected to be recoverable from clients on items not yet invoiced based on such factors as labour and subcontractor costs. The finance department review historical trends to ensure that the method for accounting for the amounts recoverable on contracts is the most accurate for each job.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Building and construction services
14,320,612
14,558,613
2023
2022
£
£
Other revenue
Interest income
62,091
15,545
Grants received
-
752
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(752)
Fees payable to the company's auditor for the audit of the company's financial statements
17,000
Depreciation of owned tangible fixed assets
103,527
92,656
Loss on disposal of tangible fixed assets
6,552
1,193
Operating lease charges
14,400
14,429
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Site Operatives
30
30
Administration
10
8
Management
7
7
Total
47
45
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,864,616
1,575,511
Social security costs
43,592
32,128
Pension costs
36,560
27,931
1,944,768
1,635,570
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
191,212
96,834
Company pension contributions to defined contribution schemes
3,441
17,431
194,653
114,265
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
62,091
15,545
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
6,649
7,958
Other interest
1,350
7,931
7,999
15,889
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
344,668
239,353
Adjustments in respect of prior periods
19,764
Total current tax
344,668
259,117
Deferred tax
Origination and reversal of timing differences
10,890
9,442
Total tax charge
355,558
268,559
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,494,116
1,300,578
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
351,416
247,110
Tax effect of expenses that are not deductible in determining taxable profit
3,284
1,947
Permanent capital allowances in excess of depreciation
1,020
19,502
Super deduction
(162)
Taxation charge for the year
355,558
268,559
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
10
Dividends
2023
2022
£
£
Final paid
800,000
800,000
11
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
149,587
107,499
520,789
777,875
Additions
35,930
18,047
75,451
129,428
Disposals
(20,277)
(3,447)
(41,120)
(64,844)
At 31 December 2023
165,240
122,099
555,120
842,459
Depreciation and impairment
At 1 January 2023
62,689
58,472
240,000
361,161
Depreciation charged in the year
16,868
8,922
77,737
103,527
Eliminated in respect of disposals
(16,226)
(2,889)
(7,459)
(26,574)
At 31 December 2023
63,331
64,505
310,278
438,114
Carrying amount
At 31 December 2023
101,909
57,594
244,842
404,345
At 31 December 2022
86,898
49,027
280,789
416,714
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
13,405
15,181
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,996,818
1,192,847
Gross amounts owed by contract customers
583,332
528,511
Corporation tax recoverable
53,712
Amounts owed by group undertakings
196,918
Other debtors
2,250
Prepayments and accrued income
4,118
6,467
2,584,268
1,980,705
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
16
37,727
50,946
Trade creditors
1,680,924
1,236,180
Amounts owed to group undertakings
60,856
Corporation tax
194,668
102,353
Other taxation and social security
376,313
225,627
Accruals and deferred income
25,472
15,119
2,375,960
1,630,225
Other creditors totalling £37,727 (2022: £50,946) are secured over the assets to which they relate.
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
16
28,306
56,086
Other creditors totalling £28,306 (2022: £56,086) are secured over the assets to which they relate.
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
37,727
50,946
In two to five years
28,306
56,086
66,033
107,032
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Finance lease obligations
(Continued)
- 19 -
Finance lease payments represent rentals payable by the company for motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The lease terms are 3 - 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The finance lease is secured over the asset to which it relates.
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
94,014
83,124
2023
Movements in the year:
£
Liability at 1 January 2023
83,124
Charge to profit or loss
10,245
Effect of change in tax rate - profit or loss
645
Liability at 31 December 2023
94,014
The company has not finalised its capital expenditure programme for the next financial year and therefore an assessment as to the likely movement of timing differences cannot reasonably be made.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
36,560
27,931
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
950
450
950
450
B Ordinary shares of £1 each
50
400
50
400
C Ordinary shares of £1 each
-
75
-
75
D Ordinary shares of £1 each
-
75
-
75
1,000
1,000
1,000
1,000
During November 2023 the company effected a redesignation of its Ordinary share capital as shown above. The total share capital remained unchanged.
Each class of shares rank pari passu in all respects, other than differing rights to dividends.
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
45,395
39,267
Between two and five years
70,735
49,086
In over five years
2,070
116,130
90,423
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
216,334
109,626
Transactions with related parties
During the year the company entered into the following transactions with related parties:
D & G BUILDERS AND JOINERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Related party transactions
(Continued)
- 21 -
Purchases
Purchases
2023
2022
£
£
Other related parties
423,871
491,343
Dividends paid
2023
2022
£
£
Entities with control, joint control or significant influence over the company
800,000
-
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
60,856
-
Other related parties
11,198
25,477
Other information
The company has taken advantage of the exemption permitted under Section 33 'Related Party Disclosures' paragraph 33.1A from disclosing transactions with the parent company in the year ended 31 December 2022 as the company was wholly owned throughout this period.
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