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COMPANY REGISTRATION NUMBER: SC071884
Hutcheon Services Limited
Financial Statements
30 November 2023
Hutcheon Services Limited
Financial Statements
Year ended 30 November 2023
Contents
PAGE
Officers and professional advisers
1
Strategic report
2
Directors' report
4
Directors' responsibilities statement
6
Independent auditor's report to the members
7
Statement of income and retained earnings
12
Statement of financial position
13
Notes to the financial statements
14
Hutcheon Services Limited
Officers and Professional Advisers
The board of directors
Gregor A Robb
Graeme P Farquhar
Garry Shand
Donald H Galloway
Gary D Campbell
Martin Leiper
Company secretary
Stronach Secretaries Limited
Registered office
28 Albyn Place
Aberdeen
AB10 1YL
Auditor
FourM Limited
Chartered Accountants & Statutory Auditor
Stannergate House
41 Dundee Road West
Broughty Ferry
Dundee
DD5 1NB
Bankers
The Royal Bank of Scotland plc
78 Union Street
Aberdeen
AB10 1HH
Solicitors
Stronachs
28 Albyn Place
Aberdeen
AB10 1YL
Hutcheon Services Limited
Strategic Report
Year ended 30 November 2023
Principal activities and review of the business The principal activities of the company are that of general electrical, mechanical and plumbing contractors and sheet metal fabricators. Principal risk and uncertainties Market and economic risk The majority of the company's trade occurs locally in the UK. As a result, the company has limited exposure to exchange rate and associated risks. Economic Factors affecting the Industry During the past year, the construction industry like most other sectors has been affected both by upward inflationary pressures and increasing borrowing costs which have had an impact on capital project expenditure within the UK. However, this has been more than compensated by the fact that the company entered the year with a healthy order book of projects which had been built up post-Covid-19. The company has also felt the negative economic impact of factors such as Brexit and the crisis in Ukraine on its construction industry business which have led to an increase in material costs and longer delivery lead times, as well as increasing labour costs and skills shortages. However, the company has adapted and has developed various strategies to minimise the negative impacts. Funding and Liquidity Risk The company is not materially affected by any funding or liquidity risks and the impact of increased borrowing costs will be minimal due to the positive liquidity position of the company and the low level of borrowing. Financial Risk The company's principal financial assets are cash balances and trade receivables. Our customers are subject to credit checks and credit limits. The trade debtors' figure is stated net of any bad debt provision, which we do not consider to be material. The company strives to ensure that it maintains a broad client base and undertakes a diverse range of commercial, industrial and private sector works. In addition, the fact that the company provides a multi-service facility ensures that it is less exposed to fluctuations in one specific market area. Results for the year Turnover for the year to 30 November 2023 has increased from the 2022 level of £20.4m to around £21.6m. This was to be expected given the volume of projects in the pipeline prior to the start of the current year. The company has increased profitability in the year to November 2023 due to increased turnover, effective control of overheads and efficiencies being made in its tendering, buying and operational processes. Development and performance of the company's business over the year The company continued with its principal activities based around the construction industry. The directors are aware that the company needs to continually review its core business activities in light of the ever-changing marketplace. As a result, the client base was widened, operational efficiency savings were implemented, and investment was made in training to ensure that its services meet the current requirements of the marketplace in which it operates.
Position at the year end The company performed above expectations in the year both in terms of turnover and profitability. This was due to a combination of increased turnover and to achieving higher trading margins within our core divisions and focusing upon efficiencies within all aspects of the business. Key performance indicators The company used several appropriate key performance measures to monitor the performance of the business during the year to 30 November 2023. The directors review management accounts for all the operating divisions each month with particular reference to turnover, labour costs and project profitability. These results are reviewed in conjunction with projections of future works accepted for and those yet to be awarded. Future developments The company intends to continue to focus on its core activities in the construction industry over the next 12 months. Although the company will continue to be impacted to some degree by economic factors affecting the industry in general, the company anticipates that its trading results will not be significantly adversely affected during the year to November 2024 as strategies have been implemented to mitigate against any such future impact.
This report was approved by the board of directors on 19 September 2024 and signed on behalf of the board by:
Gregor A Robb
Director
Trading address:
Bourtree House
Minto Drive
Altens Industrial Estate
Aberdeen
AB12 3LW
Hutcheon Services Limited
Directors' Report
Year ended 30 November 2023
The directors present their report and the financial statements of the company for the year ended 30 November 2023 .
Directors
The directors who served the company during the year were as follows:
Gregor A Robb
Graeme P Farquhar
Garry Shand
Donald H Galloway
Gary D Campbell
Martin Leiper
Dividends
Particulars of recommended dividends are detailed in note 12 to the financial statements.
Disclosure of information in the strategic report
In accordance with section 414C(11) of the Companies Act 2006, the company has set out its strategic report at page two of these accounts.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 19 September 2024 and signed on behalf of the board by:
Gregor A Robb
Director
Trading address:
Bourtree House
Minto Drive
Altens Industrial Estate
Aberdeen
AB12 3LW
Hutcheon Services Limited
Directors' Responsibilities Statement
Year ended 30 November 2023
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 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 judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
Hutcheon Services Limited
Independent Auditor's Report to the Members of Hutcheon Services Limited
Year ended 30 November 2023
Opinion
We have audited the financial statements of Hutcheon Services Limited (the 'company') for the year ended 30 November 2023 which comprise the statement of income and retained earnings, statement of financial position and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 30 November 2023 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 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, 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: In identifying and assessing the risk of material misstatement due to non-compliance with laws and regulations we have carried out the following: - Ensured that the engagement team have the appropriate competence, capabilities and skills to identify or recognise non-compliance with laws and regulations; - Identified at planning the specific laws and regulations applicable to the entity through discussions with directors and management and through our own knowledge of the sector; - Focused on the laws and regulations we consider may have a direct effect on the financial statements, including FRS 102, the Companies Act 2006, employment regulation and tax compliance legislation; - Reviewed the financial statement disclosures and tested these to supporting documentation to assess compliance with applicable laws and regulations; - Made enquiries of management; and - Ensured the engagement team remained alert to instances of non-compliance throughout the audit. In identifying and assessing the risk of material misstatement due to irregularities including fraud, the potential for management bias and the override of controls we have: - Obtained an understanding at planning of the entity's operations, including the nature of its sources of revenue to understand the types of transactions, account balances, financial disclosures and business risks that may result in risk of material misstatement; - Made enquiries of management at planning as to where they consider there was a susceptibility to fraud in the business, and their knowledge of any actual, suspected or alleged fraud; - Vouched balances and reconciling items in key control account reconciliations to supporting documentation; - Carried out detailed testing, on a sample basis, to verify the completeness, existence and accuracy of transactions and balances, in particular completeness of revenue; - Challenged assumptions and judgements made by management in their significant accounting estimates; - Performed analytical procedures to identify any significant or unusual transactions; and - Investigated the business rationale behind any significant or unusual transactions, in particular journal entries. We did not identify any matters relating to non-compliance with laws and regulations, or relating to fraud. 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. The risk of not detecting a material misstatement due to fraud is inherently more difficult than detecting those that result from error as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. In addition, the further removed any non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - 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. 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. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Iain McBride MA CA
(Senior Statutory Auditor)
For and on behalf of
FourM Limited
Chartered Accountants & Statutory Auditor
Stannergate House
41 Dundee Road West
Broughty Ferry
Dundee
DD5 1NB
19 September 2024
Hutcheon Services Limited
Statement of Income and Retained Earnings
Year ended 30 November 2023
2023
2022
Note
£
£
Turnover
4
21,603,311
20,431,836
Cost of sales
( 17,892,318)
( 17,446,023)
-------------
-------------
Gross profit
3,710,993
2,985,813
Administrative expenses
( 2,593,983)
( 2,685,411)
Other operating income
334,843
263,953
------------
------------
Operating profit
5
1,451,853
564,355
Other interest receivable and similar income
9
30,324
2,297
Interest payable and similar expenses
10
( 10,009)
( 17,926)
------------
------------
Profit before taxation
1,472,168
548,726
Tax on profit
11
( 341,034)
( 101,719)
------------
---------
Profit for the financial year and total comprehensive income
1,131,134
447,007
------------
---------
Dividends paid and payable
12
( 2,250,000)
( 150,300)
Retained earnings at the start of the year
3,313,313
3,016,606
------------
------------
Retained earnings at the end of the year
2,194,447
3,313,313
------------
------------
All the activities of the company are from continuing operations.
Hutcheon Services Limited
Statement of Financial Position
30 November 2023
2023
2022
Note
£
£
£
Fixed assets
Tangible assets
13
718,336
840,654
Investments
14
100,000
100,000
---------
---------
818,336
940,654
Current assets
Stocks
15
1,131,103
1,071,529
Debtors
16
3,952,210
5,875,368
Cash at bank and in hand
2,529,820
680,684
------------
------------
7,613,133
7,627,581
Creditors: amounts falling due within one year
17
5,953,301
4,855,909
------------
------------
Net current assets
1,659,832
2,771,672
------------
------------
Total assets less current liabilities
2,478,168
3,712,326
Creditors: amounts falling due after more than one year
18
41,395
124,341
Provisions for liabilities
Deferred tax
20
110,530
142,876
------------
------------
Net assets
2,326,243
3,445,109
------------
------------
Capital and reserves
Called up share capital
23
33,400
33,400
Share premium account
24
98,396
98,396
Profit and loss account
24
2,194,447
3,313,313
------------
------------
Shareholders funds
2,326,243
3,445,109
------------
------------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 19 September 2024 , and are signed on behalf of the board by:
Graeme P Farquhar
Director
Company registration number: SC071884
Hutcheon Services Limited
Notes to the Financial Statements
Year ended 30 November 2023
1. General information
The company is a private company limited by shares, registered in Scotland. The address of the registered office is 28 Albyn Place, Aberdeen, AB10 1YL.
2. 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'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis . The financial statements are prepared in sterling, which is the functional currency of the entity. Going Concern The directors confirm that, after making appropriate enquiries, they have reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing these Financial Statements.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Hutcheon Investments Limited which can be obtained from the Registrar of Companies, Companies House, Crown Way, Cardiff, CF14 3UZ. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) No cash flow statement has been presented for the company. (b) No disclosure has been given for the aggregate remuneration of key management personnel.
Judgements 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 for assets and liabilities as at the Statement of Financial Position date and the amounts reported during the year for revenue and costs. However, the nature of estimation means that actual outcomes could differ from those estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The following judgements and estimates have had the most significant impact on amounts recognised in the financial statements. Significant judgements 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: Bad debt provision During the course of the year, and during the year end process, management are required to determine whether any debts should be regarded as bad debts. This process is based on their knowledge of the business coupled with post year end information identifying debts not recovered relating to the previous financial period. Useful economic lives of tangible assets The annual depreciation charge for tangible assets is sensitive to changes in the useful economic lives and residual values of the assets. Useful lives and residual values are reassessed annually. They are assessed where necessary to reflect current estimates based on economic utilisation and physical condition. Contingencies During the year end process, management use their extensive industry experience to estimate the cost of completion of remedial work.
Revenue recognition
The turnover shown in the profit and loss account represents the value of work done, including estimates of amounts not invoiced, based on the stage of completion of services provided during the year, exclusive of Value Added Tax. Revenue from the rendering of services is 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 it is probable the expenses recognised will be recovered.
Corporation tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Tenants improvements
-
20% reducing balance
Plant and machinery
-
15% reducing balance
Fixtures and fittings
-
15% reducing balance
Motor Vehicles
-
25% reducing balance
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Work in progress Work in progress is valued on the basis of direct costs plus attributable overheads based on normal level of activity, less amounts invoiced to account. Provision is made for any foreseeable losses where appropriate.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Basic financial instruments
A financial asset held as an equity instrument is recognised initially at the transaction price (including transaction costs). At the end of each reporting period, unlisted equity investments are recorded at fair value, where appropriate, or at cost less impairment if their fair value cannot be reliably measured. Objective evidence of the impairment of financial assets is assessed at each period end and any impairment loss recognised in the profit or loss immediately. Impairment loss is calculated as the difference between the carrying amount of the instrument and the best estimate of the cash flows expected to be derived from the asset (including sales proceeds if sold) at the balance sheet date. Investment income is recognised in the financial statements when the company becomes entitled to its share of profits from the financial instrument.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2023
2022
£
£
Rendering of services
21,603,311
20,431,836
-------------
-------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Operating profit
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Depreciation of tangible assets
196,249
189,087
Gains on disposal of tangible assets
( 2,478)
( 44,679)
Impairment of trade debtors
(7,181)
34,109
Operating lease expense
180,692
181,645
---------
---------
6. Auditor's remuneration
2023
2022
£
£
Fees payable for the audit of the financial statements
16,000
14,650
--------
--------
7. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023
2022
No.
No.
Production staff
169
170
Administrative staff
12
12
Management staff
2
----
----
181
184
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
9,388,089
7,815,169
Social security costs
641,764
684,497
Other pension costs
328,799
288,626
-------------
------------
10,358,652
8,788,292
-------------
------------
8. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
2,640
79,945
Company contributions to defined contribution pension plans
99,088
78,165
---------
---------
101,728
158,110
---------
---------
The number of directors who accrued benefits under company pension plans was as follows:
2023
2022
No.
No.
Defined contribution plans
6
6
----
----
9. Other interest receivable and similar income
2023
2022
£
£
Interest on cash and cash equivalents
30,324
2,297
--------
-------
10. Interest payable and similar expenses
2023
2022
£
£
Interest on banks loans and overdrafts
1,817
13,225
Interest on obligations under finance leases and hire purchase contracts
6,793
3,930
Other interest payable and similar charges
1,399
771
--------
--------
10,009
17,926
--------
--------
11. Tax on profit
Major components of tax expense
2023
2022
£
£
Current tax:
UK current tax expense
373,380
91,755
Deferred tax:
Origination and reversal of timing differences
( 32,346)
9,964
---------
---------
Tax on profit
341,034
101,719
---------
---------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 25 % (2022: 19 %).
2023
2022
£
£
Profit on ordinary activities before taxation
1,472,168
548,726
------------
---------
Profit on ordinary activities by rate of tax
368,042
104,258
Effect of capital allowances and depreciation
( 32,491)
( 9,558)
Increase in tax rate used
2,388
Effect of expenses not deductible for tax purposes
5,461
4,631
Other tax adjustments
22
------------
---------
Tax on profit
341,034
101,719
------------
---------
12. Dividends
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year):
2023
2022
£
£
Equity dividends on ordinary shares
2,250,000
150,300
------------
---------
13. Tangible assets
Tenants improvements
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 December 2022
482,255
479,384
374,892
1,066,129
2,402,660
Additions
8,943
2,393
66,312
77,648
Disposals
( 18,000)
( 18,000)
---------
---------
---------
------------
------------
At 30 November 2023
482,255
488,327
377,285
1,114,441
2,462,308
---------
---------
---------
------------
------------
Depreciation
At 1 December 2022
475,662
371,328
320,594
394,422
1,562,006
Charge for the year
1,204
15,778
7,608
171,659
196,249
Disposals
( 14,283)
( 14,283)
---------
---------
---------
------------
------------
At 30 November 2023
476,866
387,106
328,202
551,798
1,743,972
---------
---------
---------
------------
------------
Carrying amount
At 30 November 2023
5,389
101,221
49,083
562,643
718,336
---------
---------
---------
------------
------------
At 30 November 2022
6,593
108,056
54,298
671,707
840,654
---------
---------
---------
------------
------------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Motor vehicles
£
At 30 November 2023
119,858
---------
At 30 November 2022
327,793
---------
14. Investments
Equity instruments
£
Cost
At 1 December 2022 and 30 November 2023
100,000
---------
Impairment
At 1 December 2022 and 30 November 2023
---------
Carrying amount
At 30 November 2023
100,000
---------
At 30 November 2022
100,000
---------
15. Stocks
2023
2022
£
£
Raw materials and consumables
30,004
64,803
Work in progress
1,101,099
1,006,726
------------
------------
1,131,103
1,071,529
------------
------------
16. Debtors
2023
2022
£
£
Trade debtors
1,563,733
2,336,305
Amounts owed by group undertakings
2,065,225
3,239,447
Prepayments and accrued income
83,352
21,984
Other debtors
239,900
277,632
------------
------------
3,952,210
5,875,368
------------
------------
17. Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
125,000
Trade creditors
1,883,015
1,992,690
Accruals and deferred income
2,575,932
1,938,103
Corporation tax
373,380
167,201
Social security and other taxes
215,766
203,157
Obligations under finance leases and hire purchase contracts
80,595
88,237
Other creditors
824,613
341,521
------------
------------
5,953,301
4,855,909
------------
------------
Bank borrowings are secured by a bond and floating charge over the whole assets of the company.
18. Creditors: amounts falling due after more than one year
2023
2022
£
£
Obligations under finance leases and hire purchase contracts
41,395
124,341
--------
---------
19. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2023
2022
£
£
Not later than 1 year
80,595
88,237
Later than 1 year and not later than 5 years
41,395
124,341
---------
---------
121,990
212,578
---------
---------
20. Provisions for liabilities
Deferred tax (note 21)
£
At 1 December 2022
142,876
Charge against provision
( 32,346)
---------
At 30 November 2023
110,530
---------
21. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
£
£
Included in provisions for liabilities (note 20)
110,530
142,876
---------
---------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
£
£
Accelerated capital allowances
125,778
157,765
Provisions for liabilities
( 4,000)
( 4,000)
Pension plan obligations
( 11,248)
( 10,889)
---------
---------
110,530
142,876
---------
---------
22. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 229,711 (2022: £ 210,460 ).
These costs exclude directors pension contributions.
23. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
33,400
33,400
33,400
33,400
--------
--------
--------
--------
24. Reserves
Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs. Profit and loss account - This reserve records retained earnings and accumulated losses.
25. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2023
2022
£
£
Not later than 1 year
180,692
181,645
Later than 1 year and not later than 5 years
702,302
707,742
Later than 5 years
920,073
1,095,325
------------
------------
1,803,067
1,984,712
------------
------------
26. Contingencies
The company has provided an inter-company guarantee in relation to bank borrowings of its immediate parent company, HSB Holdings Limited. The amount due by HSB Holdings Limited at 30 November 2023 was £702,149 (2022 - £709,137).
27. Related party transactions
At the year end company was under the control of its directors. At the year end, the balance due by members of the Hutcheon Investments Limited group of companies was £2,065,225 (2022 - £3,239,477), amounts due are repayable on demand and do not attract interest.
28. Controlling party
Hutcheon Investments Limited, a company registered in Scotland, is the ultimate controlling party.