Company registration number 04590759 (England and Wales)
DEME BUILDING MATERIALS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
DEME BUILDING MATERIALS LIMITED
COMPANY INFORMATION
Directors
T K Janssens
S Verlinden
A U De Wispelaere
(Appointed 12 April 2024)
Company number
04590759
Registered office
Ibex House
Baker Street
Weybridge
Surrey
KT13 8AH
Auditor
MGI Midgley Snelling LLP
Ibex House
Baker Street
Weybridge
Surrey
KT13 8AH
DEME BUILDING MATERIALS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 20
DEME BUILDING MATERIALS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report and audited financial statements for the year ended 31 December 2023.

 

The company is a subsidiary of DEME Building Materials N.V.

Review of the business

At the end of 2007 the company was granted a 15 year licence to dredge an area of the English Channel. Preliminary dredging commenced in June 2008 and the licence was fully operational in June 2009 when full scale dredging was able to commence. Meanwhile, the license has been extended for another 15 years until 2039, enabling a continuation of dredging in this area. In 2016 the company started to dredge on one of the two permitted sites in the Humber Region. In 2018 the second concession in the Humber Region was opened and began dredging in the second quarter of 2018.

 

The results for the company show a loss before tax of £101,277 (2022: £299,343 profit before tax) and sales in the year of £2,580,187 (2022: £2,873,859).

 

Going concern

The company has net current assets of £1,123,572 (2022: £1,114,146).

 

The directors have considered its forecasts for at least 12 months from the date of approval of these financial statements and the uncertainties attached to new contracts being awarded to this entity, the level of creditors at the balance sheet date and the nature of the company's relationship with the rest of the DEME group. The cash flow forecasts are positive cumulatively over the next twelve months and the directors are of the opinion that the company is a going concern.

 

Future outlook

The dredging activities in the East English Channel are fully operational and the dredged sand and gravel is delivered to the Netherlands, Belgium, the United Kingdom and France on a continuing basis.

 

At the start of 2022, the company was granted a 15 year license to dredge another area in the English Channel. Preliminary dredging was expected to commence during the current year but was delayed and has now started in the first half of 2023. Staff costs recharged from the group to complete this work have continued to be included in cost of sales in the current year.

Principal risks and uncertainties

The management of the business and the execution of the company's strategy are subject to a number of key risks and uncertainties.

 

Liquidity Risk

The company's financial instruments comprise cash and liquid resources, balances with group undertakings and various items such as trade debtors and trade creditors that arise directly from its operations.  The main purpose of these financial instruments is to maintain finance for the company's operations along with the normal working capital balances that arise from day to day trading.  The main risks arising from the company's financial instruments are credit risk and foreign currency risk.  The directors review and agree policies for managing each of these risks and they are summarised below.

 

Credit risk

The company's objective is to reduce the risk of financial loss due to a counter party's failure to honour its obligations. The company adopts standard payment terms to customers and individual exposures are monitored with customers subject to credit limits to ensure that the company's exposure to bad debts is not significant.

 

Foreign currency risk

The company buys and sells goods and services denominated in currencies other than sterling. As a result the value of the company's non-sterling revenues, purchases, financial assets and liabilities and cash flows can be affected by movements in exchange rates in general.  Additionally, the company has intercompany borrowings denominated in currencies other than sterling.

DEME BUILDING MATERIALS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators

The company's directors are of the opinion that the KPIs necessary for measuring the development, performance and position of the business are gross profit margin 5.7% (2022: 16.3%), net loss before tax £101,277 (2022: £299,343 net profit before tax) and net assets position £1,833,835 (2022: £1,915,344).

 

The decrease in gross margin is attributable to the increase in the exploitation on sand concessions which is a lower margin than other concessions.

Promoting the success of the company

The board of directors of DEME Building Materials Limited consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole in the decisions taken during the year to 31 December 2023.


This S172 statement below explains how the requirements of S172 have been met.

 

The likely consequences of any decision in the long term.

The directors consider the likely consequences of any decision in the long-term. Each company within the Group is bound by Group policies consistent with the Group’s culture in all key areas including supplier management and outsourcing, customer conduct, human resources and the environment. Details of any decisions made regarding dividends can be found in the directors’ report.

Engaging with our group employees

The directors recognise that employees are fundamental and core to our business and delivery of our strategic ambitions. The success of our business depends on attracting, retaining and motivating employees. From ensuring that we remain a responsible employer, from pay and benefits to our health, safety and workplace environment, the directors factor the implications of decisions on employees and the wider workforce, where relevant and feasible.

 

Engaging with our suppliers and customers

Delivering our strategy requires strong relationships with suppliers and customers. Customer feedback is obtained and discussed at directors' meetings.

Community and the environment

The company's approach is to use our position of strength to create positive change for the people and communities which we interact with.

 

Maintaining a reputation for high standards of business conduct

The directors adopt positive business values for the company. The general business principles adopted help the company act in line with these values and comply with relevant laws and regulations.

 

The need to act fairly as between members of the company

Our intention is to behave responsibly towards our shareholders and treat them fairly, so they too benefit from the successful delivery of the company's plan.

 

Approved by the board and signed on its behalf by

T K Janssens
Director
12 September 2024
DEME BUILDING MATERIALS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the acquisition of licences to enable the extraction of gravel from the seabed.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid (2022: Nil). 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 signing the financial statements were as follows:

D P Boen
(Resigned 12 April 2024)
T K Janssens
S Verlinden
A U De Wispelaere
(Appointed 12 April 2024)
Research and development

Research in connection with the development of new concessions was carried out during the year. Research and development written-off to profit and loss during the year amounted to £75k (2022: £29k). These costs were incurred in relation to the assessment and preparation of sites for dredging activities.

Future developments

Details of future developments can be found in the Strategic report on Page 1.

Statement of directors' responsibilities

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:

 

 

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.

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.

DEME BUILDING MATERIALS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
T K Janssens
Director
12 September 2024
DEME BUILDING MATERIALS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DEME BUILDING MATERIALS LIMITED
- 5 -
Opinion

We have audited the financial statements of DEME Building Materials 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:

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 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:

DEME BUILDING MATERIALS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DEME BUILDING MATERIALS LIMITED
- 6 -
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:

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

In planning and designing our audit tests, we identify and assess the risks of material misstatements within the financial statements, whether due to fraud or error. Our assessment of these risks includes consideration of the nature of the industry and sector, the control environment and the business performance along with the results of our enquiries of management, about their own identification and assessment of the risks of irregularities. We are also required to perform specific procedures to respond to the risk of management override.

 

As a result of this assessment, we considered the opportunities and incentives that may exist within the company for fraud and identified that the greatest area of risk was in relation to management override and the valuation of intangible assets.

We have obtained an understanding of the legal and regulatory frameworks that the company operates in from discussions with the directors and our knowledge of the company and its industry sector. We have focused on the provisions of those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and local tax legislation.

DEME BUILDING MATERIALS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DEME BUILDING MATERIALS LIMITED
- 7 -

We performed the following audit procedures after consideration of the above risks which included the following:

The engagement partner has assessed that all engagement team members were made aware of the relevant laws and regulations and potential fraud risks and were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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 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.

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.

Tracey Wickens
Senior Statutory Auditor
For and on behalf of MGI Midgley Snelling LLP
23 September 2024
Chartered Accountants
Statutory Auditor
Ibex House
Baker Street
Weybridge
Surrey
KT13 8AH
DEME BUILDING MATERIALS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
2,580,187
2,873,859
Cost of sales
(2,434,336)
(2,406,267)
Gross profit
145,851
467,592
Administrative expenses
(261,542)
(163,328)
Operating (loss)/profit
6
(115,691)
304,264
Interest receivable and similar income
7
15,363
-
0
Interest payable and similar expenses
8
(949)
(4,921)
(Loss)/profit before taxation
(101,277)
299,343
Tax on (loss)/profit
9
19,768
(56,875)
(Loss)/profit for the financial year
(81,509)
242,468

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

DEME BUILDING MATERIALS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
710,263
801,198
Current assets
Debtors
11
2,147,391
2,741,330
Creditors: amounts falling due within one year
12
(1,023,819)
(1,627,184)
Net current assets
1,123,572
1,114,146
Net assets
1,833,835
1,915,344
Capital and reserves
Called up share capital
13
1,250,000
1,250,000
Profit and loss reserves
583,835
665,344
Total equity
1,833,835
1,915,344

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 12 September 2024 and are signed on its behalf by:
T K Janssens
Director
Company registration number 04590759 (England and Wales)
DEME BUILDING MATERIALS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1,250,000
422,876
1,672,876
Year ended 31 December 2022:
Profit and total comprehensive income
-
242,468
242,468
Balance at 31 December 2022
1,250,000
665,344
1,915,344
Year ended 31 December 2023:
Loss and total comprehensive income
-
(81,509)
(81,509)
Balance at 31 December 2023
1,250,000
583,835
1,833,835
DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

DEME Building Materials Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ibex House, Baker Street, Weybridge, Surrey, KT13 8AH and the place of business is Tavistock House, Tavistock Place, London, WC1H 9HR.

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. 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:

 

 

The financial statements of the company are consolidated in the financial statements of DEME N.V. These consolidated financial statements are available from its registered office, see note 16.

1.2
Going concern

The directors have considered the uncertainties attached to new contracts being awarded to this entity, the level of creditors at the balance sheet date and the nature of the company's relationship with the rest of the DEME group. This review has incorporated the period up to at least 12 months from the date of the financial statements being approved. Large costs are forecasted with new contracts that are expected to start in 2024 however net assets put the company in a strong position to cover these costs until the contracts start to generate turnover.true

 

The directors therefore consider it appropriate for the company to adopt the going concern basis.

1.3
Turnover

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation 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:

Development costs
Over the term of the dredging licence (15 years)
1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its intangible 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.

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.

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

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.

DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Loans and receivables

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. 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.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.

Other financial liabilities

Other financial liabilities, are initially measured at fair value, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

 

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the net carrying amount on initial recognition.

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.

DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.

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
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Recoverability of intangible assets

Intangible assets (eg concessions) are valued at the cost incurred in surveying and other associated expenditure, for each concession area.  The company will consider the carrying value of each concession and judge whether an adjustment for impairment is required based on the estimated cash flows that will arise from each concession.

DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 15 -
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.

Recoverability of intangible assets

Determining the recoverability of intangible assets requires an estimation of the expected tonnage to be dredged based on the evidence of surveys and on past amounts dredged. Consideration is also taken with reference to the amounts allowed to be dredged for each concession and the amounts charged for each tonne dredged to assess the future estimated cashflows.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Turnover generated from activities
115,265
134,427
Royalties
2,464,922
2,697,065
Intercompany recharges
-
42,367
2,580,187
2,873,859
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
115,265
134,427
Europe
2,464,922
2,739,432
2,580,187
2,873,859
2023
2022
£
£
Other revenue
Interest income
15,363
-
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
9,450
9,000
For other services
All other non-audit services
3,000
3,190
DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Directors
3
3
6
Profit/(loss) before tax
2023
2022
Profit/(loss) before tax for the year is stated after charging:
£
£
Exchange losses/(gains)
31,654
(86,731)
Research and development costs
74,820
28,740
Amortisation of intangible assets
90,935
123,123
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
15,363
-
0
8
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
949
4,921
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
56,875
Adjustments in respect of prior periods
(19,768)
-
0
Total current tax
(19,768)
56,875

The effective tax rate for the 3 months up to 31 March 2023 was 19.00%. From 1 April 2023, the corporation tax rate changed from 19.00% to 25.00%, which covered the remainder of the period, being 9 months.

 

Therefore the effective corporation tax charge based on 3 months at 19.00%, and 9 months at 25.00% will be 23.50% for the financial reporting period.

DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 17 -

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(101,277)
299,343
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(23,800)
56,875
Tax effect of utilisation of tax losses not previously recognised
19,768
-
0
Adjustments in respect of prior years
(19,768)
-
0
Effect of change in corporation tax rate
4,032
-
0
Taxation (credit)/charge for the year
(19,768)
56,875
10
Intangible fixed assets
Development costs
£
Cost
At 1 January 2023 and 31 December 2023
1,854,368
Amortisation and impairment
At 1 January 2023
1,053,170
Amortisation charged for the year
90,935
At 31 December 2023
1,144,105
Carrying amount
At 31 December 2023
710,263
At 31 December 2022
801,198
DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Intangible fixed assets
(Continued)
- 18 -

The development costs capitalised as intangible fixed assets comprise expenditure incurred with the aim of acquiring licences for the extraction of gravel from one area of the seabed.

 

Area:                  £

Humber             710,263

 

Total NBV             710,263

 

Humber Region

The company commenced to dredge on one of the sites in the Humber Region in 2016. This intangible asset is being amortised over 15 years, which is equal to the term of the dredging licence.

 

The company commenced to dredge the second site in the Humber Region in 2018. The intangible asset is being amortised over 15 years, which is equal to the term of the dredging licence.

 

Amortisation cost is included within Administrative expenses within the Profit and Loss account.

 

Following detailed surveys the company believes the economic value of the future income from the sites will exceed the costs and no impairment is required.

11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
52,988
46,580
Corporation tax recoverable
19,768
-
0
Amounts owed by group undertakings
1,300,243
1,728,010
Amounts owed by parent undertakings
-
31,751
Other debtors
15,057
4,497
Prepayments and accrued income
759,335
930,492
2,147,391
2,741,330

Trade debtors disclosed above are measured at amortised cost.

Amounts owed by parent/group undertakings include amounts that:

- have payment terms of 60 days after the invoice has been raised. There is no interest due on these

balances.

- are held on behalf of the company.

- are unsecured.

- are repayable within one year if demanded.

DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
735,535
945,904
Amounts owed to group undertakings
1,477
2,907
Amounts owed to parent undertakings
48,359
-
Corporation tax
-
0
56,875
Accruals and deferred income
238,448
621,498
1,023,819
1,627,184

Amounts owed to group/parent undertakings include amounts that:

- have payment terms of 60 days after the invoice has been raised. There is no interest due on these

balances.

- are loaned to the company.

- are unsecured.

- are repayable within one year if demanded.

13
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,250,000
1,250,000
1,250,000
1,250,000

The company has one class of ordinary shares which carry no right to fixed income.

14
Financial commitments, guarantees and contingent liabilities

The minimum due to royalties which the company is estimated to pay in 2024 is £1,878,025 (2023: £1,731,777).

15
Related party transactions

The company has taken advantage of the exemption in FRS102.33.1A not to disclose transactions with the other group companies as it is wholly owned within the group. Details of where consolidated Financial statements can be obtained are included in note 16.

DEME BUILDING MATERIALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
16
Ultimate controlling party

DEME N.V. (incorporated in Belgium) is regarded by the directors as being the company's ultimate parent company and which heads the largest group and the smallest group for which consolidated Financial statements are prepared that include the company.

 

The immediate parent company is DEME Building Materials N.V. (incorporated in Belgium).

 

Copies of the consolidated Financial statements of DEME N.V. are available from the company's registered office in Belgium:

 

Haven 1025

Scheldedijk 30

B 2070 Zwijndrecht

Belgium

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