Company registration number 00474292 (England and Wales)
CON MECH GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CON MECH GROUP LIMITED
COMPANY INFORMATION
Directors
Mr R H S Dilley
Mr D Neil
Dr J C Dilley
Mrs T L Heathcote
Mrs H M Dilley
Mr R J Dilley
Secretary
Mr R J Dilley
Company number
00474292
Registered office
Henry Williams Group Limited
Dodsworth Street
Darlington
DL1 2NJ
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
CON MECH GROUP LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 22
CON MECH GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
The financial statements comprise the results for the 52 week period to 31 December 2023.
Review of the business
Con Mech Group Limited is an intermediate parent of a medium group, but is exempt from preparing group accounts.
The income stream from Con Mech Engineers Limited, the company's subsidiary, is agreed in advance year by year and is therefore predictable. 2023 income was kept relatively similar to the prior year and overheads fell on the prior year, resulting in an operating profit of £5k (2022 - loss of £78k).
At the year end, the company had shareholder's funds of £1.42m (2022: £1.42m). The directors consider this keeps the company in a strong position in case of any future uncertainties.
Principal risks and uncertainties
The only uncertainties are over costs which can vary depending on what outside advice is required for various projects. The vast majority of income is from Con Mech Engineers Limited and is predictable. All transactions are in sterling so there is no currency risk.
The company does not actively use financial instruments as part of its financial risk management.
Key performance indicators
The company’s key performance indicators are sales and operating profit which have been fairly close to those set by the directors in the original budget. The nature of the business means a more in-depth analysis is not considered necessary.
Future developments
Con Mech Group Limited is planning to carry on as usual and not attempt any major developments in 2024.
Mr R J Dilley
Director
29 August 2024
CON MECH GROUP 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.
The financial statements for the year to 31 December 2023 comprise the results for the 52 week period to 29 December 2023.
Principal activities
The principal activity continues to be that of a holding company, in which properties are held for use by other group companies and the provision of management and administrative support to group and related companies.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £180,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr R H S Dilley
Mr D Neil
Dr J C Dilley
Mrs T L Heathcote
Mrs C Ames
(Resigned 31 August 2023)
Mrs H M Dilley
Mr R J Dilley
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr R J Dilley
Director
29 August 2024
CON MECH GROUP 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.
CON MECH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CON MECH GROUP LIMITED
- 4 -
Opinion
We have audited the financial statements of Con Mech Group Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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.
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.
CON MECH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CON MECH GROUP LIMITED
- 5 -
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 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.
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.
CON MECH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CON MECH GROUP LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Alan Sidebottom
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
29 August 2024
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
CON MECH GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
502,442
526,391
Administrative expenses
(497,874)
(583,935)
Exceptional item
4
(20,665)
Operating profit/(loss)
5
4,568
(78,209)
Interest receivable and similar income
7
191,307
351,002
Interest payable and similar expenses
8
(8,115)
(24,375)
Profit before taxation
187,760
248,418
Tax on profit
9
(6,811)
70,830
Profit for the financial year
180,949
319,248
Other comprehensive income
Revaluation of tangible fixed assets
811,723
Total comprehensive income for the year
180,949
1,130,971
CON MECH GROUP LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,514,495
1,519,000
Investments
12
500,000
500,000
2,014,495
2,019,000
Current assets
Debtors
13
185,020
99,536
Creditors: amounts falling due within one year
15
(755,756)
(612,519)
Net current liabilities
(570,736)
(512,983)
Total assets less current liabilities
1,443,759
1,506,017
Creditors: amounts falling due after more than one year
16
(63,207)
Provisions for liabilities
Deferred tax liability
17
25,000
25,000
(25,000)
(25,000)
Net assets
1,418,759
1,417,810
Capital and reserves
Called up share capital
19
158,400
158,400
Revaluation reserve
1,100,829
1,100,829
Capital redemption reserve
37,765
37,765
Profit and loss reserves
121,765
120,816
Total equity
1,418,759
1,417,810
The financial statements were approved by the board of directors and authorised for issue on 29 August 2024 and are signed on its behalf by:
Mr R H S Dilley
Director
Company Registration No. 00474292
CON MECH GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
158,400
552,890
37,765
1,175,698
1,924,753
Year ended 31 December 2022:
Profit for the year
-
-
-
319,248
319,248
Other comprehensive income:
Revaluation of tangible fixed assets
-
811,723
-
-
811,723
Total comprehensive income for the year
-
811,723
-
319,248
1,130,971
Dividends
10
-
-
-
(1,637,914)
(1,637,914)
Transfers
-
(263,784)
-
263,784
-
Balance at 31 December 2022
158,400
1,100,829
37,765
120,816
1,417,810
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
180,949
180,949
Dividends
10
-
-
-
(180,000)
(180,000)
Balance at 31 December 2023
158,400
1,100,829
37,765
121,765
1,418,759
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
Con Mech Group Limited is a private limited company domiciled and incorporated in England and Wales with company reference number 00474292. The registered office is Henry Williams Group Limited, Dodsworth Street, Darlington, DL1 2NJ.
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 £1.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties at fair value. The principal accounting policies adopted are set out below.
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’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; 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 company has applied section 33.1A of FRS 102 permitting it to not disclose related party transactions with wholly owned group companies.
The financial statements of the company are consolidated in the financial statements of Con Mech Holdings Limited. These consolidated financial statements are available from its registered office at Dodsworth Street, Darlington, DL1 2NJ.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
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. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for management services and rental income, net of VAT, and is recognised according to the date the service is provided or the property is made available.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold buildings
2% straight line basis
Computer equipment
20% straight line basis
Land is not depreciated.
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
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
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 is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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 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 in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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.
Fair value measurement of financial instruments
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
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
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
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.
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
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
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.
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:
Freehold land and buildings
Freehold land and buildings are within the accounts at fair value based on third party valuations. It is judged by the directors that the valuations obtained are not materially different to the values utilised in the accounts at the reporting date. The integrity of these figures is evidenced by the use of independent valuation specialists.
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Rental income
180,180
163,800
Management services
322,262
362,591
502,442
526,391
2023
2022
£
£
Other revenue
Interest income
11,307
1,002
Dividends received
180,000
350,000
4
Exceptional item
2023
2022
£
£
Expenditure
Legal fees
-
20,665
5
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
3,300
3,100
Depreciation of owned tangible fixed assets
5,128
571
Operating lease charges
13,595
7,482
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
7
7
Administrative and support
2
2
Total
9
9
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
306,553
340,458
Social security costs
39,108
46,745
Pension costs
73,957
135,128
419,618
522,331
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
11,307
1,002
Income from fixed asset investments
Income from shares in group undertakings
180,000
350,000
Total income
191,307
351,002
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
8,115
24,375
9
Taxation
2023
2022
£
£
Current tax
Group tax relief
(64,019)
Deferred tax
Origination and reversal of timing differences
70,830
(70,830)
Total tax charge/(credit)
6,811
(70,830)
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 17 -
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
187,760
248,418
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
44,161
47,199
Tax effect of expenses that are not deductible in determining taxable profit
50
3,938
Tax effect of income not taxable in determining taxable profit
(42,336)
(66,500)
Gains not taxable
(25,000)
Unutilised tax losses carried forward
18,159
Depreciation on assets not qualifying for tax allowances
91
Deferred tax adjustments in respect of prior years
(45,830)
Other tax adjustments
4,936
(2,887)
Taxation charge/(credit) for the year
6,811
(70,830)
10
Dividends
2023
2022
£
£
Interim paid
180,000
1,637,914
11
Tangible fixed assets
Freehold buildings
Computer equipment
Total
£
£
£
Cost or valuation
At 1 January 2023
1,519,000
1,519,000
Additions
623
623
At 31 December 2023
1,519,000
623
1,519,623
Depreciation and impairment
At 1 January 2023
Depreciation charged in the year
5,128
5,128
At 31 December 2023
5,128
5,128
Carrying amount
At 31 December 2023
1,513,872
623
1,514,495
At 31 December 2022
1,519,000
1,519,000
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Tangible fixed assets
(Continued)
- 18 -
Included within the carrying value of the company's freehold land and buildings is land with an approximate value of £969,000 (2022 - £969,000) which is not depreciated.
Land and buildings with a carrying amount of £1,519,000 were revalued on 28 January 2022 by George F. White, independent chartered surveyors, not connected with the company, on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. The condition of the property at the date of valuation was equal to that at the year end. As such, it is reasonable that this valuation is reflected in the accounts at 31 December 2023.
Land and buildings are carried at valuation. If they were measured using the historical cost model, the carrying amount would have been approximately £272,406 (2022 - £280,259), being cost of £555,109 (2022 - £555,109) less accumulated depreciation of £282,703 (2022 - £274,850).
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
24
500,000
500,000
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
6,203
14,304
Amounts owed by group undertakings
162,229
8,873
Other debtors
8,607
Prepayments and accrued income
7,981
5,529
185,020
28,706
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 17)
70,830
Total debtors
185,020
99,536
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
14
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
551,675
391,096
Other loans
195,191
551,675
586,287
Payable within one year
551,675
523,080
Payable after one year
63,207
The loan is secured by fixed charges over one of the Group's properties, plus an unlimited cross-company guarantee with certain members of the Group.
Interest is payable at a current rate of 6.69%, with final repayments expected in 2024.
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
551,675
391,096
Other borrowings
14
131,984
Trade creditors
11,332
719
Amounts owed to group undertakings
1,675
1,675
Taxation and social security
8,114
19,416
Other creditors
110,982
3,718
Accruals and deferred income
71,978
63,911
755,756
612,519
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Other borrowings
14
63,207
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Losses
-
-
-
70,830
Freehold property fair value uplift
25,000
25,000
-
-
25,000
25,000
-
70,830
2023
Movements in the year:
£
Asset at 1 January 2023
(45,830)
Charge to profit or loss
70,830
Liability at 31 December 2023
25,000
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
73,957
135,128
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.
As at the year end, other creditors includes an amount of £2,465 (2022 - £3,718) which is accrued for payment to the scheme.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
158,400
158,400
158,400
158,400
Each ordinary share is entitled to one vote, and carries rights to any discretionary dividend payments but no rights to fixed income. Each share carries equal rights to any capital distributions made.
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
20
Financial commitments, guarantees and contingent liabilities
The company is party to a group guarantee over any bank overdrafts which may from time to time arise. At the year end, bank overdrafts of relevant group companies totalled £677,173 (2022 - £670,454), although at the year end the group as a whole had net cash at bank.
As at the date of approval of the financial statements, no default has occurred which would trigger the above liability, nor is one anticipated. As such, the directors consider that the fair value of this obligation is £nil, and as such there is no recognition of a liability on the balance sheet.
21
Operating lease commitments
Lessee
The company leases a number of motor vehicles as the directors consider this represents the best option to manage the company's working capital and risks.
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
6,954
Between two and five years
11,010
17,964
22
Related party transactions
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Entities under common control
108,517
-
23
Ultimate controlling party
The immediate and ultimate parent company is Con Mech Holdings Limited. Con Mech Holdings Limited is the smallest and largest group into which these financial statements are consolidated, and these group accounts can be obtained from its registered office Dodsworth Street, Darlington, County Durham, DL1 2NJ.
24
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
Con Mech Engineers Limited (1)
England & Wales
Ordinary
100.00
CON MECH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Subsidiaries
(Continued)
- 22 -
Registered office addresses:
1
Hare Law Industrial Estate, Stanley, County Durham, DH9 8UR
25
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
309,621
308,335
Company pension contributions to defined contribution schemes
72,136
128,394
381,757
436,729
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
132,143
82,167
Company pension contributions to defined contribution schemes
-
69,161
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