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DALES ENGINEERING SERVICES LIMITED






DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 

 

 
DALES ENGINEERING SERVICES LIMITED
 

COMPANY INFORMATION


Directors
G Mackie 
W Duncan 
K Thomson 
N Mackie 
J B Duncan 




Company secretary
Masson Glennie LLP



Registered number
SC107948



Registered office
Broad House
Broad Street

Peterhead

AB42 1HY




Independent auditors
Anderson Anderson & Brown Audit LLP
Statutory Auditor

Kingshill View

Kingswells

Aberdeen

AB15 8PU





 
DALES ENGINEERING SERVICES LIMITED
 

CONTENTS



Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditors' report
4 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23


 
DALES ENGINEERING SERVICES LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The principal activities of the Company are that of structural fabrication, pipework, machining, vessel support and onshore site services.  

Business review
 
Turnover decreased in the year to £15,890,643 (2022 - £20,886,175) due to a fall in market activity in the period. Despite this, the Company still supported several significant onshore and offshore projects. The Company continues to build on its extensive track record and diversify the industries served including Oil & Gas, Offshore Renewables, Hydro Renewables, Utilities and the Food Processing Industry.
The Company continued to achieve an excellent health & safety record and maintain its extensive list of accreditations.  It also continues to invest in an award-winning apprenticeship programme as well as the operational facilities and IT infrastructure.

Principal risks and uncertainties
 
The directors have considered the principal risks and uncertainties to be associated with the global oil and gas market where changes in political and operational landscapes could impact favourably or otherwise upon business and as such are continually monitoring new opportunities.

Financial key performance indicators
 
The directors consider turnover and gross profit to be key performance indicators and monitor these on an ongoing basis.


This report was approved by the board and signed on its behalf.





G Mackie
Director

Date: 16 September 2024

Page 1
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Results and dividends

The profit for the year, after taxation, amounted to £253,204 (2022 - £1,197,717).

No dividends were paid in the year (2022 - £nil).

Directors

The directors who served during the year were:

G Mackie 
W Duncan 
K Thomson 
N Mackie 
J B Duncan 

Future developments

The Company continues to invest in its people and infrastructure to support future growth and success.  The Directors are optimistic about the prospects of the Company due to ongoing projects and the wide variety of opportunities to support to our customers in the transition to alternative energy sectors in the future.

Engagement with employees

The company’s policy is to consult and discuss with employees, through unions and staff meetings, matters likely to affect employees’ interests.
Information on matters of concern to employees is given through staff update bulletins which seek to increase employee awareness on the factors affecting the performance of the company.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
as far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditors

The auditorsAnderson Anderson & Brown Audit LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





G Mackie
Director

Date: 16 September 2024

Page 2
 

 
DALES ENGINEERING SERVICES LIMITED
 

DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors are responsible for preparing the Strategic report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Page 3
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DALES ENGINEERING SERVICES LIMITED
 

Opinion


We have audited the financial statements of Dales Engineering Services 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 the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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 Auditors' 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.


Page 4
 

 
DALES ENGINEERING SERVICES LIMITED
 

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DALES ENGINEERING SERVICES LIMITED (CONTINUED)

Opinion 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 set out on page 3, 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.


Page 5
 

 
DALES ENGINEERING SERVICES LIMITED
 

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DALES ENGINEERING SERVICES LIMITED (CONTINUED)

Auditors' 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 Auditors' 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:

We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements.
The laws and regulations we considered in this context were the Companies Act 2006 and Taxation legislation.
We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be:
 
Management override of controls to manipulate the company’s key performance indicators to meet targets
Timing and completeness of revenue recognition
Management judgement applied in calculating provisions
Compliance with relevant laws and regulations which directly impact the financial statements and those that the company needs to comply with for the purpose of trading

Our audit procedures to respond to these risks included:

Testing of journal entries and other adjustments for appropriateness
Evaluating the business rationale of significant transactions outside the normal course of business
Reviewing judgments made by management in their calculation of accounting estimates for potential management bias
Enquiries of management about litigation and claims and inspection of relevant correspondence
Reviewing legal and professional fees to identify indications of actual or potential litigation, claims and any non-compliance with laws and regulations

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. 


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.


Page 6
 

 
DALES ENGINEERING SERVICES LIMITED
 

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DALES ENGINEERING SERVICES LIMITED (CONTINUED)

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 2006Our 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 Auditors' 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.





Graeme Penman (Senior statutory auditor)
  
for and on behalf of
Anderson Anderson & Brown Audit LLP
 
Statutory Auditor
  
Kingshill View
Kingswells
Aberdeen
AB15 8PU

19 September 2024
Page 7
 

 
DALES ENGINEERING SERVICES LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
15,890,643
20,886,175

Cost of sales
  
(12,087,733)
(15,893,353)

GROSS PROFIT
  
3,802,910
4,992,822

Administrative expenses
  
(3,540,749)
(3,516,180)

OPERATING PROFIT
 5 
262,161
1,476,642

Interest receivable and similar income
 9 
74,877
1,045

PROFIT BEFORE TAX
  
337,038
1,477,687

Tax on profit
 10 
(83,834)
(279,970)

PROFIT FOR THE FINANCIAL YEAR
  
253,204
1,197,717

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 11 to 23 form part of these financial statements.

Page 8
 

 
DALES ENGINEERING SERVICES LIMITED
REGISTERED NUMBER:SC107948

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

FIXED ASSETS
  

Tangible assets
 11 
768,361
604,519

  
768,361
604,519

CURRENT ASSETS
  

Stocks
 12 
1,350,273
1,103,671

Debtors: amounts falling due after more than one year
 13 
100,000
250,000

Debtors: amounts falling due within one year
 13 
5,746,983
5,630,255

Cash at bank and in hand
 14 
5,826,794
5,822,038

  
13,024,050
12,805,964

Creditors: amounts falling due within one year
 15 
(2,038,437)
(1,956,565)

NET CURRENT ASSETS
  
 
 
10,985,613
 
 
10,849,399

TOTAL ASSETS LESS CURRENT LIABILITIES
  
11,753,974
11,453,918

PROVISIONS FOR LIABILITIES
  

Deferred tax
 17 
(189,209)
(142,357)

  
 
 
(189,209)
 
 
(142,357)

NET ASSETS
  
11,564,765
11,311,561


CAPITAL AND RESERVES
  

Called up share capital 
 18 
50,400
50,400

Share premium account
  
2,100
2,100

Profit and loss account
  
11,512,265
11,259,061

  
11,564,765
11,311,561


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




G Mackie
Director

Date: 16 September 2024

The notes on pages 11 to 23 form part of these financial statements.

Page 9
 

 
DALES ENGINEERING SERVICES LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 January 2022
50,400
2,100
10,061,344
10,113,844


Comprehensive income for the year

Profit for the year
-
-
1,197,717
1,197,717



At 1 January 2023
50,400
2,100
11,259,061
11,311,561


Comprehensive income for the year

Profit for the year
-
-
253,204
253,204


At 31 December 2023
50,400
2,100
11,512,265
11,564,765


The notes on pages 11 to 23 form part of these financial statements.

Page 10
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Dales Engineering Services Limited is incorporated in Scotland. The registered office is Broad House, Broad Street, Peterhead, AB42 1HY. The principal activity is the fabrication of materials and the provision of engineering services to the energy industry. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The company, being a subsidiary undertaking where 90% or more of the voting rights are controlled within the group whose consolidated financial statements are publicly available, is exempt from the requirement to draw up a cash flow statement in accordance with FRS 102.

The following principal accounting policies have been applied:

 
2.2

Going concern

The directors, having made due and careful enquiry, are of the opinion that the company has adequate working capital to execute its operations over the next 12 months. The directors, therefore, have made an informed judgement, at the time of approving the financial statements, that there is a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
As a result, the directors have continued to adopt the going concern basis of accounting in preparing the annual financial statements.

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Page 11
 

 
DALES ENGINEERING SERVICES LIMITED
 

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Operating leases

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.5

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

Pensions

Defined contribution pension plan
The Company contributes to a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payments obligations.
The contributions are recognised as an expense in the statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

Page 12
 

 
DALES ENGINEERING SERVICES LIMITED
 

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 13
 

 
DALES ENGINEERING SERVICES LIMITED
 

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Plant & machinery
-
15% reducing balance
Motor vehicles
-
20-25% reducing balance
Office equipment
-
15% straight line

 
2.10

Stocks and work in progress

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
Work in progress is valued at cost less progress payments and any foreseeable losses.  A prudent estimate of the profit attributable to work completed is recognised on contracts once the outcome of the contract can be assessed with reasonable certainty.
At each statement of financial position date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in statement of comprehensive income.

  
2.11

Profit recognition on long term contracts

Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer or there is a reasonable degree of certainty that they will be accepted. Full provision is made for losses on all contracts in the year in which they are first foreseen.
Amounts recoverable on contracts are included in debtors and represent turnover recognised in excess of payments on account. The excess of payments on accounts over the value of the work done on individual contracts is included in creditors.

 
2.12

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Debtors due after more than one year are measured at the present value of future payments discounted at a market rate of interest.

Page 14
 

 
DALES ENGINEERING SERVICES LIMITED
 

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.14

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.15

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the statement of financial position.

 
2.16

Financial instruments

The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors and loans from group companies. These are measured at amortised cost and are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of 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.
Profit recognition on long term contracts
In assessing the profit on long term contracts that span the period end, an estimate is required for the stage of completion on individual contracts (where the outcome can be assessed with reasonable certainty. The estimate is determined by management making use of all information available at the time, in order to make a reasonable judgement on the stage of completion and the forecast profitability of the overall contract.  

Page 15
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

All turnover arose within the United Kingdom.

Turnover represents net invoiced supply of services, excluding value added tax. 
Turnover relates to the rendering of services. 


5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation of tangible fixed assets
130,983
110,802

Operating lease payments


- plant and machinery
21,870
21,420

- land and buildings

67,464
67,464


6.


Auditors' remuneration

2023
2022
£
£
Fees payable to the Company's auditors for the audit of the Company's annual accounts

16,300

16,000
 

Page 16
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
5,064,167
5,099,871

Social security costs
564,516
595,349

Cost of defined contribution scheme
361,292
347,956

5,989,975
6,043,176


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Administration
27
25



Production
80
82

107
107


8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
137,415
140,193

Company contributions to defined contribution pension schemes
7,356
7,290

144,771
147,483


During the year retirement benefits were accruing to 1 director (2022 - 1) in respect of defined contribution pension schemes.

Page 17
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Interest receivable

2023
2022
£
£


Bank interest receivable
74,877
1,045

74,877
1,045


10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
37,450
256,493

Adjustments in respect of previous periods
(468)
-


Total current tax
36,982
256,493

Deferred tax


Origination and reversal of timing differences
46,237
23,477

Adjustments in respect of prior periods
615
-

Total deferred tax
46,852
23,477


Taxation on profit on ordinary activities
83,834
279,970

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
337,038
1,477,687


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
79,273
280,760

Effects of:


Expenses not deductible for tax purposes
1,683
1,882

Capital allowances for year in excess of depreciation
(6)
(8,307)

Adjustments to tax charge in respect of prior periods
(468)
-

Adjustments to tax charge in respect of previous periods - deferred tax
615
-

Remeasurement of deferred tax for changes in tax rates
2,737
5,635

Total tax charge for the year
83,834
279,970

Page 18
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Tangible fixed assets





Plant & machinery
Motor vehicles
Office equipment
Total

£
£
£
£



Cost or valuation


At 1 January 2023
1,674,153
243,010
172,773
2,089,936


Additions
259,618
63,200
449
323,267


Disposals
(270,564)
(36,320)
(27,483)
(334,367)



At 31 December 2023
1,663,207
269,890
145,739
2,078,836



Depreciation


At 1 January 2023
1,230,846
118,815
135,756
1,485,417


Charge for the year on owned assets
79,456
39,574
11,953
130,983


Disposals
(253,310)
(25,191)
(27,424)
(305,925)



At 31 December 2023
1,056,992
133,198
120,285
1,310,475



Net book value



At 31 December 2023
606,215
136,692
25,454
768,361



At 31 December 2022
443,307
124,195
37,017
604,519


12.


Stocks

2023
2022
£
£

Raw materials and consumables
568,359
597,175

Work in progress
781,914
506,496

1,350,273
1,103,671


Page 19
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Debtors

2023
2022
£
£

Due after more than one year

Other debtors
100,000
250,000


2023
2022
£
£

Due within one year

Trade debtors
2,521,160
3,092,444

Amounts owed by group undertakings
2,041,263
1,687,916

Prepayments and accrued income
1,184,560
849,895

5,746,983
5,630,255



14.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
5,826,794
5,822,038

5,826,794
5,822,038



15.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
1,411,398
1,059,222

Corporation tax
37,450
256,493

Taxation and social security
394,903
439,865

Accruals and deferred income
194,686
200,985

2,038,437
1,956,565


The bank holds a bond and floating charge over the assets of the company.
Cross guarantees exist with Dales 2002 Limited in respect of bank borrowings. 

Page 20
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets measured at fair value through profit or loss
5,826,794
5,822,038

Financial assets that are debt instruments measured at amortised cost
5,638,091
5,784,944

11,464,885
11,606,982


Financial liabilities


Financial liabilities measured at amortised cost
(1,501,841)
(1,260,207)


Financial assets measured at fair value through profit or loss comprise bank balances and long term debtors.


Financial assets that are debt instruments measured at amortised cost comprise trade debtors, amounts owed by group undertakings, other debtors and accrued income. 


Financial liabilities measured at amortised cost comprise bank overdrafts, trade creditors and accruals. 


17.


Deferred taxation




2023


£






At beginning of year
142,357


Charged to the profit or loss
46,852



At end of year
189,209

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Fixed asset timing differences
192,003
145,502

Short term timing differences
(2,794)
(3,145)

189,209
142,357

Page 21
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



50,000 (2022 - 50,000) Ordinary shares of £1.00 each
50,000
50,000
400 (2022 - 400) 'A' Ordinary shares of £1.00 each
400
400

50,400

50,400



19.


Capital commitments


At 31 December 2023 the Company had capital commitments as follows:

2023
2022
£
£


Contracted for but not provided in these financial statements
-
124,200

-
124,200


20.


Pension commitments

During the year the company made contributions to a defined contribution pension scheme of £361,292 (2022 - £347,956). Contributions payable at the year end totalled £nil (2022 - £nil).


21.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022

£
£



Not later than 1 year
7,940
9,315

Between 2 and 5 years
12,155
14,960

20,095
24,275

Page 22
 

 
DALES ENGINEERING SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Related party transactions

Control
Throughout the year the company was controlled by the directors.
Transactions
The company has taken advantage of the exemption conferred by Financial Reporting Standard 102
Section 33.1A "Related Party Disclosures" from the need to disclose transactions between group entities
which are wholly owned.


23.


Ultimate parent undertaking and controlling party

The ultimate parent company is Dales 2002 Limited, a company registered in Scotland. 
 
Page 23