Company registration number 06824088 (England and Wales)
CIVIC ENGINEERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2024
Tree Accountancy Limited
Chartered Certified Accountants & Registered Auditors
3rd Floor
Eastgate
Castle Street
Castlefield
Manchester
M3 4LZ
CIVIC ENGINEERS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 21
CIVIC ENGINEERS LIMITED
COMPANY INFORMATION
Directors
Mr S O'Malley
Mr J Broster
Mr J Bruce
Mr G Atkinson
Mr P Morris
Mrs L Stuart
Mr R Wescott
Ms I Jackson
Company number
06824088
Registered office
Carvers Warehouse
77 Dale Street
Manchester
Greater Manchester
M1 2HG
Auditor
Tree Accountancy Limited
Chartered Certified Accountants & Registered Auditors
3rd Floor, Eastgate
Castle Street
Castlefield
M3 4LZ
CIVIC ENGINEERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 1 -
The directors present the strategic report for the year ended 28 February 2024.
Business performance
For the year ending 28th February 2024, Civic Engineers Limited achieved 6% revenue growth over the previous year. The profit margin was 10.7% in the first half, dropping to 5.1% in the second half due to variable market conditions, including a significant number of projects being put on hold or slowed.
UK bank interest rates over this period have stayed relatively high, dampening availability of affordable funding to property developers, as well as demand for new housing development.
Despite these challenges, budget controls enabled improved year end performance, with total equity exceeding £2.4 million. KPIs include; annual fee per technical head: £103,094 (above industry average); average debtor days at 83 (aligning with industry average), bidding success rate of 43% with 426 successful bids worth £16.96 million and a bid capture rate of 32%.
Strategic management
In the year to 29th February 2024 the Civic group of companies, led by the parent company Civic Plus Limited, expanded by incorporating two new subsidiaries that complement Civic Engineers. These additions enhance the group's value and resilience. Civic Earth Limited began operations in July 2023 and is a specialised ground engineering consultancy. It is led by experienced director Dan Matthews and collaborates with Civic Engineers on various projects for mutual clients. Civic Engineers also established as a limited company based in Dublin, fully owned by Civic Plus Limited. It offers the same core engineering disciplines as its UK counterpart: civil, structural, and transport engineering, serving projects in the Republic of Ireland.
The group's strategic objective, under the rebranded name CIVIC, is to embrace market opportunities in the built environment sector, especially those driven by ESG considerations amid the global climate emergency and the regeneration of towns and cities in the UK and Ireland. Our core disciplines remain focussed on structural, civil, and transport engineering services, while we expand consultancy services in environmental sustainability and ground engineering, particularly in the Republic of Ireland. In the UK, we have grown teams of professionals in Edinburgh and Liverpool to support our core studios in Glasgow, London and Manchester, leveraging market opportunities and local engineering talent.
We are in the second year of our five-year plan to create a group with an EBITDA of circa £5 Million. Last year, group fee income increased by 9% and profit margins improved to 8%, with further improvement opportunities expected next year.
Growth over the next financial year will be delivered through a combination of organic revenue growth as Civic Engineers and Civic Earth expand their market share, along with strategic acquisitions and the incorporation a new complimentary sustainability consultancy. This last year has seen investment in our business processes and systems, and we have introduced a staff bonus scheme to incentivise all of our teams to reach for greater commercial success.
Business environment
External market conditions continued to remain sluggish in the year to February 2024 due to sustained high interest rates and persistent inflation in the UK. Interest rates are expected to remain relatively high, potentially continuing the trend of reduced investment in commercial and residential properties. However, given the recent change in government we expect to see positive shifts in market sentiment, impacting our work pipeline.
Our group's work pipeline is strong, but we remain cautious and are tightly controlling business costs. The most significant risk is a slowdown in the pipeline due to external market conditions, such as project instructions being put on hold. Nevertheless, we maintain good control over our talent pipeline, with a stable, experienced team and low employee turnover.
CIVIC ENGINEERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 2 -
Mr J Broster
Director
23 September 2024
CIVIC ENGINEERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 3 -
The directors present their annual report and financial statements for the year ended 28 February 2024.
Principal activities
The principal activity of the company continued to be that of specialised ground engineering consultancy.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S O'Malley
Mr J Broster
Mr J Bruce
Mr G Atkinson
Mr P Morris
Mrs L Stuart
Mr R Wescott
Ms I Jackson
Auditor
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Tree Accountancy Limited as auditors of the company is to be proposed at the forthcoming Annual General Meeting.
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:
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.
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.
CIVIC ENGINEERS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 4 -
On behalf of the board
Mr J Broster
Director
23 September 2024
CIVIC ENGINEERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CIVIC ENGINEERS LIMITED
- 5 -
Opinion
We have audited the financial statements of Civic Engineers Limited (the 'company') for the year ended 28 February 2024 which comprise the profit and loss account, 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 28 February 2024 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.
CIVIC ENGINEERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CIVIC ENGINEERS 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors, and from our commercial knowledge and experience;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
CIVIC ENGINEERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CIVIC ENGINEERS LIMITED
- 7 -
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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 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 the members 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, for our audit work, for this report, or for the opinions we have formed.
Nicholas Hynes (Senior Statutory Auditor)
For and on behalf of Tree Accountancy Limited
24 September 2024
Chartered Certified Accountants & Registered Auditors
3rd Floor, Eastgate
Castle Street
Castlefield
M3 4LZ
CIVIC ENGINEERS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
2
12,352,229
11,626,405
Cost of sales
(9,787,856)
(7,952,910)
Gross profit
2,564,373
3,673,495
Administrative expenses
(2,163,266)
(3,356,674)
Other operating income
34,805
Operating profit
5
435,912
316,821
Interest payable and similar expenses
7
(26,442)
(25,445)
Profit before taxation
409,470
291,376
Tax on profit
21,017
132,505
Profit for the financial year
430,487
423,881
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CIVIC ENGINEERS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 9 -
2024
2023
£
£
Profit for the year
430,487
423,881
Other comprehensive income
-
-
Total comprehensive income for the year
430,487
423,881
CIVIC ENGINEERS LIMITED
BALANCE SHEET
AS AT
28 FEBRUARY 2024
28 February 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
9
12,500
Tangible assets
10
279,681
385,453
Investments
11
80
80
279,761
398,033
Current assets
Stocks
12
154,898
210,256
Debtors
13
3,416,289
3,341,251
Cash at bank and in hand
1,213,174
971,935
4,784,361
4,523,442
Creditors: amounts falling due within one year
14
(2,031,887)
(2,688,630)
Net current assets
2,752,474
1,834,812
Total assets less current liabilities
3,032,235
2,232,845
Creditors: amounts falling due after more than one year
15
(499,354)
(109,434)
Provisions for liabilities
Deferred tax liability
53,140
74,157
(53,140)
(74,157)
Net assets
2,479,741
2,049,254
Capital and reserves
Called up share capital
17
102
102
Share premium account
49,998
49,998
Profit and loss reserves
2,429,641
1,999,154
Total equity
2,479,741
2,049,254
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 23 September 2024 and are signed on its behalf by:
Mr J Broster
Director
Company registration number 06824088 (England and Wales)
CIVIC ENGINEERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 March 2022
22
49,998
1,825,353
1,875,373
Year ended 28 February 2023:
Profit and total comprehensive income
-
-
423,881
423,881
Bonus issue of shares
17
80
(80)
Dividends
8
-
-
(250,000)
(250,000)
Balance at 28 February 2023
102
49,998
1,999,154
2,049,254
Year ended 28 February 2024:
Profit and total comprehensive income
-
-
430,487
430,487
Balance at 28 February 2024
102
49,998
2,429,641
2,479,741
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 12 -
1
Accounting policies
Company information
Civic Engineers Limited is a private company limited by shares incorporated in England and Wales. The registered office is Carvers Warehouse, 77 Dale Street, Manchester, Greater Manchester, M1 2HG.
The company's registration number is: 06824088.
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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments 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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Civic Plus Limited. These consolidated financial statements are available from its registered office, Carver's Warehouse, 77 Dale Street, Manchester, United Kingdom, M1 2HG.
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 is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 13 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
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.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 2 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
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.
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:
Fixtures and fittings
20% straight line
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.
1.7
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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 14 -
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, 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 (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, 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.
1.9
Work in progress
Stocks and work in progress are stated at their estimated selling price less costs to complete. Costs comprises direct materials and the relevant proportion of direct labour costs and overheads that have been incurred up to the appropriate stage of completion.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
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.
1.11
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.
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 15 -
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.
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.
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, 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.
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.
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
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.
1.12
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.
1.13
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.
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.
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 17 -
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
2
Turnover
2024
2023
£
£
Turnover analysed by class of business
Sales
12,352,229
11,626,405
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom & Ireland
12,352,229
11,626,405
3
Exceptional item
2024
2023
£
£
Expenditure
Exceptional item - Admin costs (incl in Admin range)
135,317
-
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
139
151
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
4
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
6,958,137
7,140,494
Pension costs
522,906
591,730
7,481,043
7,732,224
5
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
113
Fees payable to the company's auditor for the audit of the company's financial statements
18,000
10,500
Depreciation of owned tangible fixed assets
144,516
129,424
Amortisation of intangible assets
12,500
12,500
Operating lease charges
546,759
476,011
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
988,640
801,324
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
143,486
134,337
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
26,442
25,445
8
Dividends
2024
2023
£
£
Interim paid
250,000
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 19 -
9
Intangible fixed assets
Goodwill
£
Cost
At 1 March 2023 and 28 February 2024
25,000
Amortisation and impairment
At 1 March 2023
12,500
Amortisation charged for the year
12,500
At 28 February 2024
25,000
Carrying amount
At 28 February 2024
At 28 February 2023
12,500
10
Tangible fixed assets
Fixtures and fittings
£
Cost
At 1 March 2023
731,198
Additions
83,906
Disposals
(175,925)
At 28 February 2024
639,179
Depreciation and impairment
At 1 March 2023
345,745
Depreciation charged in the year
144,516
Eliminated in respect of disposals
(130,763)
At 28 February 2024
359,498
Carrying amount
At 28 February 2024
279,681
At 28 February 2023
385,453
11
Fixed asset investments
2024
2023
£
£
Unlisted investments
80
80
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 20 -
12
Stocks
2024
2023
£
£
Work in progress
154,898
210,256
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,742,408
2,824,802
Corporation tax recoverable
38,616
44,037
Amounts owed by group undertakings
94,730
Other debtors
235,091
119,114
Prepayments and accrued income
305,444
353,298
3,416,289
3,341,251
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
133,913
50,000
Other borrowings
73,582
36,676
Trade creditors
282,566
528,045
Taxation and social security
730,271
1,151,351
Other creditors
381,325
474,006
Accruals and deferred income
430,230
448,552
2,031,887
2,688,630
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
499,354
109,434
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
522,906
591,730
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.
CIVIC ENGINEERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 21 -
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of 0.1p each
102,000
102,000
102
102
18
Operating lease commitments
Lessee
The amount of non-cancellable operating lease payments recognised as an expense during the year was £450,278 (2023 - £450,278)
19
Related party transactions
Included in debtors is an amount of £94,730 (2023 - £48,820) due from related parties included within the group.
Included in creditors is an amount of £50,000 (2023 - £50,000) that is a group loan held in the name of a related party.
20
Ultimate controlling party
The company's ultimate controlling party is Civic Plus Limited.
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