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COMPANY REGISTRATION NUMBER: 00437756
Road Maintenance Services (Holdings) Limited
Financial Statements
31 December 2023
Road Maintenance Services (Holdings) Limited
Financial Statements
Year ended 31 December 2023
Contents
Pages
Officers and professional advisers
1
Strategic report
2 to 3
Directors' report
4 to 5
Independent auditor's report to the members
6 to 9
Consolidated statement of comprehensive income
10
Consolidated statement of financial position
11
Company statement of financial position
12
Consolidated statement of changes in equity
13 to 14
Company statement of changes in equity
15 to 16
Consolidated statement of cash flows
17
Notes to the financial statements
18 to 31
Road Maintenance Services (Holdings) Limited
Officers and Professional Advisers
The board of directors
Stephen J Barlow
Gregory W Barlow
Andrew P Holland
Company secretary
Stephen J Barlow
Registered office
Mowpen Brow
High Legh
Knutsford
Cheshire
WA16 6PB
Auditor
W R Partners
Chartered Accountants & Statutory Auditor
Drake House
Gadbroke Park
Northwich
Cheshire
CW9 7RA
Bankers
Lloyds TSB Bank plc
53 King Street
Manchester
M2 4LQ
Road Maintenance Services (Holdings) Limited
Strategic Report
Year ended 31 December 2023
Road Maintenance Services (Holdings) Limited is a family-owned business, managed and operated by a highly experienced and professional leadership team. Business review The group's core activity is providing Low Carbon preventative maintenance solutions for highways and airfields. Operating within competitive sectors, the group faces both trading and environmental risks, detailed below. For the year the group achieved turnover of £29.61m (2022: £35.38m), with an operating profit of £1.62m (2022: £4.82m). The directors consider these key financial performance indicators to be significant. People are the foundation of our business. We strive to be an employer of choice for both current and prospective employees. As a family business, we deeply value our staff; everyone contributes to our collective success. The professional management of HSQE and legal compliance remains a central focus. The group continues to invest in skilled professionals and advisors to ensure our performance not only meets but exceeds the high standards we have already achieved. We are committed to making a positive environmental impact through the management of our operations and the promotion of innovative, proprietary processes aimed at reducing carbon emissions. The group's core values include:- - High Standards of HSQE - Legal Compliance - Professionalism - Efficiency 2023 was a challenging year, marked by reduced spending from Local Authority clients and unfavourable weather conditions during the summer, which affected production efficiency. Despite these setbacks, the board is pleased with the management team's ability to navigate these challenges and the financial results achieved. Risks and uncertainties While we view the prospects for the year ending 31 December 2024 as positive, all businesses face risks and uncertainties that could materially impact performance, causing results to deviate from expectations or historical trends. Our processes are sensitive to fluctuations in oil prices, requiring vigilant cost management. Additionally, adverse weather conditions remain a significant risk to productivity and may necessitate remedial work. The seasonal nature of our operations - primarily from March to October - requires careful cash flow management. This seasonality also dictates a blend of full-time and temporary staff, making the retention of skilled workers a key challenge. RMS has always taken a careful and strategic approach to remedial provisioning, using a well-tested system for monitoring and analysis. This robust methodology remains unchanged and is reflected in our 2023 accounts. The group maintains strong working capital levels to mitigate unexpected trading and market risks. Prudent business and financial management should ensure that our future prospects remain solid. Outlook for 2024 In 2024, RMS will initiate a comprehensive internal efficiency review, focusing on operational improvements aligned with our core values. This initiative, part of a three-year improvement plan, aims to enhance efficiency across all areas of the business. We remain confident in the outlook for the coming year, thanks to the innovative and adaptive leadership of our management team. We expect the financial outlook for 2024 to be positive, with reasonable prospects for the year ahead.
This report was approved by the board of directors on 20 September 2024 and signed on behalf of the board by:
Andrew P Holland
Director
Road Maintenance Services (Holdings) Limited
Directors' Report
Year ended 31 December 2023
The directors present their report and the financial statements of the group for the year ended 31 December 2023 .
Directors
The directors who served the company during the year were as follows:
Stephen J Barlow
Gregory W Barlow
Andrew P Holland
Jonathan Chorlton
(Died 23 August 2023)
Results and dividends
The results for the year are set out on page 10. Particulars of recommended dividends are detailed in note 13 to the financial statements.
Research and development
The group undertakes research and development activities in connection with its principal activity.
Disclosure of information in the strategic report
The directors have included the review of the group's business, future developments, key performance indicators and principal risk and uncertainties in the strategic report.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information. A resolution to reappoint W R Partners as auditors will be proposed at the forthcoming Annual General Meeting.
This report was approved by the board of directors on 20 September 2024 and signed on behalf of the board by:
Andrew P Holland
Director
Road Maintenance Services (Holdings) Limited
Independent Auditor's Report to the Members of Road Maintenance Services (Holdings) Limited
Year ended 31 December 2023
Qualified opinion
We have audited the financial statements of Road Maintenance Services (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, the financial statements: - give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2023 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
Included within creditors: amounts falling due within one year accruals is a provision against remedial works to be carried out totalling £3,597,077. We have not been able to gain sufficient audit evidence to confirm the value of this provision. 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 qualified 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 group's or the parent 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group's and the parent 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 group or the parent 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. The audit team obtained an understanding of the legal and regulatory frameworks that are applicable to the group and parent company and determined that the most significant are those that relate to the reporting framework (FRS102 and the Companies Act 2006}, the relevant tax compliance regulations, employment law, health and safety regulations and the general data protection regulations (GDPR). We understood how the group and parent company is complying with these frameworks by making enquiries of management and those responsible for legal and compliance procedures. We also reviewed relevant documentation and correspondence to identify any recorded instances of irregularity or non-compliance that might have a material impact on the financial statements. We assessed the susceptibility of the group and parent company's financial statements to material misstatement, including how fraud might occur by meeting with key management to understand where they considered there was susceptibility to fraud. Based on our understanding our procedures involved enquiries of management and those charged with governance, manual journal entry testing, cash book reviews for large and unusual items and the challenge of significant accounting estimates used in preparing the financial statements. 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 auditor’s report. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Fran Johnson BSc BFP FCA
(Senior Statutory Auditor)
For and on behalf of
W R Partners
Chartered Accountants & Statutory Auditor
Drake House
Gadbroke Park
Northwich
Cheshire
CW9 7RA
25 September 2024
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Comprehensive Income
Year ended 31 December 2023
2023
2022
Note
£
£
Turnover
4
29,614,887
35,376,898
Cost of sales
( 23,485,754)
( 26,499,496)
-------------
-------------
Gross profit
6,129,133
8,877,402
Administrative expenses
( 4,515,172)
( 4,062,528)
Other operating income
5
5,988
6,489
------------
------------
Operating profit
6
1,619,949
4,821,363
Other interest receivable and similar income
10
289,124
43,286
Interest payable and similar expenses
11
( 45,108)
( 31,245)
------------
------------
Profit before taxation
1,863,965
4,833,404
Tax on profit
12
( 416,741)
( 1,311,893)
------------
------------
Profit for the financial year
1,447,224
3,521,511
------------
------------
Revaluation of tangible assets
( 225,613)
1,395,935
Reclassification from revaluation reserve to profit and loss account
19,626
Tax relating to components of other comprehensive income
19,684
---------
------------
Other comprehensive income for the year
( 225,613)
1,435,245
------------
------------
Total comprehensive income for the year
1,221,611
4,956,756
------------
------------
All the activities of the group are from continuing operations.
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Financial Position
31 December 2023
2023
2022
Note
£
£
Fixed assets
Tangible assets
15
9,475,472
9,358,367
Investments
16
37,744
43,292
------------
------------
9,513,216
9,401,659
Current assets
Stocks
18
1,599,892
1,493,890
Debtors
19
1,432,698
2,110,089
Cash at bank and in hand
17,834,459
17,350,700
-------------
-------------
20,867,049
20,954,679
Creditors: amounts falling due within one year
20
6,864,035
7,618,286
-------------
-------------
Net current assets
14,003,014
13,336,393
-------------
-------------
Total assets less current liabilities
23,516,230
22,738,052
Creditors: amounts falling due after more than one year
21
487,503
492,708
Provisions
Taxation including deferred tax
23
1,526,584
1,577,632
-------------
-------------
Net assets
21,502,143
20,667,712
-------------
-------------
Capital and reserves
Called up share capital
27
4,302
4,302
Share premium account
28
1,200
1,200
Revaluation reserve
28
4,582,792
4,816,020
Capital redemption reserve
28
1,497
1,497
Profit and loss account
28
16,912,352
15,844,693
-------------
-------------
Shareholders funds
21,502,143
20,667,712
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 20 September 2024 , and are signed on behalf of the board by:
Andrew P Holland
Director
Company registration number: 00437756
Road Maintenance Services (Holdings) Limited
Company Statement of Financial Position
31 December 2023
2023
2022
Note
£
£
Fixed assets
Tangible assets
15
9,475,472
9,358,367
Investments
16
200
200
------------
------------
9,475,672
9,358,567
Current assets
Debtors
19
1,496,383
1,290,923
Cash at bank and in hand
10,506,631
10,661,716
-------------
-------------
12,003,014
11,952,639
Creditors: amounts falling due within one year
20
10,100,542
10,816,483
-------------
-------------
Net current assets
1,902,472
1,136,156
-------------
-------------
Total assets less current liabilities
11,378,144
10,494,723
Creditors: amounts falling due after more than one year
21
487,503
492,708
Provisions
Taxation including deferred tax
23
1,520,223
1,575,107
-------------
-------------
Net assets
9,370,418
8,426,908
-------------
-------------
Capital and reserves
Called up share capital
27
4,302
4,302
Share premium account
28
1,200
1,200
Revaluation reserve
28
4,557,012
4,785,524
Capital redemption reserve
28
1,497
1,497
Profit and loss account
28
4,806,407
3,634,385
------------
------------
Shareholders funds
9,370,418
8,426,908
------------
------------
The profit for the financial year of the parent company was £ 1,556,303 (2022: £ 233,511 ).
These financial statements were approved by the board of directors and authorised for issue on 20 September 2024 , and are signed on behalf of the board by:
Andrew P Holland
Director
Company registration number: 00437756
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Changes in Equity
Year ended 31 December 2023
Called up share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss account
Total
Note
£
£
£
£
£
£
At 1 January 2022
4,302
1,200
3,372,443
1,497
12,847,754
16,227,196
Profit for the year
3,521,511
3,521,511
Other comprehensive income for the year:
Revaluation of tangible assets
15
1,395,935
1,395,935
Reclassification from revaluation reserve to profit and loss account
27,958
( 8,332)
19,626
Tax relating to components of other comprehensive income
12
19,684
19,684
-------
-------
------------
-------
-------------
-------------
Total comprehensive income for the year
1,443,577
3,513,179
4,956,756
Dividends paid and payable
13
( 516,240)
( 516,240)
-------
-------
------------
-------
-------------
-------------
Total investments by and distributions to owners
( 516,240)
( 516,240)
At 31 December 2022
4,302
1,200
4,816,020
1,497
15,844,693
20,667,712
Profit for the year
1,447,224
1,447,224
Other comprehensive income for the year:
Revaluation of tangible assets
15
( 225,613)
( 225,613)
Reclassification from revaluation reserve to profit and loss account
( 7,615)
7,615
-------
-------
------------
-------
-------------
-------------
Total comprehensive income for the year
( 233,228)
1,454,839
1,221,611
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Changes in Equity (continued)
Year ended 31 December 2023
Called up share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss account
Total
Note
£
£
£
£
£
£
Dividends paid and payable
13
( 387,180)
( 387,180)
----
----
----
----
---------
---------
Total investments by and distributions to owners
( 387,180)
( 387,180)
-------
-------
------------
-------
-------------
-------------
At 31 December 2023
4,302
1,200
4,582,792
1,497
16,912,352
21,502,143
-------
-------
------------
-------
-------------
-------------
Road Maintenance Services (Holdings) Limited
Company Statement of Changes in Equity
Year ended 31 December 2023
Called up share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss account
Total
Note
£
£
£
£
£
£
At 1 January 2022
4,302
1,200
3,333,211
1,497
3,934,182
7,274,392
Profit for the year
233,511
233,511
Other comprehensive income for the year:
Revaluation of tangible assets
15
1,395,935
1,395,935
Reclassification from revaluation reserve to profit and loss account
36,694
( 17,068)
19,626
Tax relating to components of other comprehensive income
12
19,684
19,684
-------
-------
------------
-------
------------
------------
Total comprehensive income for the year
1,452,313
216,443
1,668,756
Dividends paid and payable
13
( 516,240)
( 516,240)
-------
-------
------------
-------
------------
------------
Total investments by and distributions to owners
( 516,240)
( 516,240)
At 31 December 2022
4,302
1,200
4,785,524
1,497
3,634,385
8,426,908
Profit for the year
1,556,303
1,556,303
Other comprehensive income for the year:
Revaluation of tangible assets
15
( 225,613)
( 225,613)
Reclassification from revaluation reserve to profit and loss account
( 2,899)
2,899
-------
-------
------------
-------
------------
------------
Total comprehensive income for the year
( 228,512)
1,559,202
1,330,690
Road Maintenance Services (Holdings) Limited
Company Statement of Changes in Equity (continued)
Year ended 31 December 2023
Called up share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss account
Total
Note
£
£
£
£
£
£
Dividends paid and payable
13
( 387,180)
( 387,180)
----
----
----
----
---------
---------
Total investments by and distributions to owners
( 387,180)
( 387,180)
-------
-------
------------
-------
------------
------------
At 31 December 2023
4,302
1,200
4,557,012
1,497
4,806,407
9,370,418
-------
-------
------------
-------
------------
------------
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Cash Flows
Year ended 31 December 2023
2023
2022
£
£
Cash flows from operating activities
Profit for the financial year
1,447,224
3,521,511
Adjustments for:
Depreciation of tangible assets
1,122,388
993,882
Government grant income
( 501)
Unrealised gain/(loss) on financial assets and investments at fair value through profit or loss
8,447
(4,679)
Other interest receivable and similar income
( 289,124)
( 43,286)
Interest payable and similar expenses
45,108
31,245
(Gains)/loss on disposal of tangible assets
( 222,598)
13,815
Tax on profit
416,741
1,311,893
Accrued (income)/expenses
( 453,920)
218,628
Changes in:
Stocks
( 106,002)
( 689,091)
Trade and other debtors
677,391
( 1,006,507)
Trade and other creditors
254,484
( 603,656)
------------
------------
Cash generated from operations
2,900,139
3,743,254
Interest paid
( 45,108)
( 31,245)
Interest received
289,124
43,286
Tax paid
( 939,109)
( 647,144)
------------
------------
Net cash from operating activities
2,205,046
3,108,151
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 1,487,901)
( 856,343)
Proceeds from sale of tangible assets
225,106
25,870
------------
------------
Net cash used in investing activities
( 1,262,795)
( 830,473)
------------
------------
Cash flows from financing activities
Government grant income
501
Payments of finance lease liabilities
( 68,413)
( 148,212)
Dividends paid
( 387,180)
( 516,240)
Revaluation of cash equivalents
( 2,899)
17,067
------------
------------
Net cash used in financing activities
( 458,492)
( 646,884)
------------
------------
Net increase in cash and cash equivalents
483,759
1,630,794
Cash and cash equivalents at beginning of year
17,350,700
15,719,906
-------------
-------------
Cash and cash equivalents at end of year
17,834,459
17,350,700
-------------
-------------
Road Maintenance Services (Holdings) Limited
Notes to the Financial Statements
Year ended 31 December 2023
1. General information
Road Maintenance Services (Holdings) Limited ("the company") is a private company limited by shares, registered in England and Wales. The address of the registered office is Mowpen Brow, High Legh, Knutsford, Cheshire, WA16 6PB. The group consists of Road Maintenance Services (Holdings) Limited and all of its subsidiaries.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006.
3. Accounting policies
Basis of preparation
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain fixed assets and by the revaluation of certain financial assets and liabilities measured at fair value through profit or loss. The financial statements are prepared in sterling, which is the functional currency of the entity. Monetary amounts in these financial statements are rounded to the nearest £.
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group and 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.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102: (a) Disclosures in respect of each class of share capital have not been presented. (b) No cash flow statement has been presented for the company. (c) Disclosures in respect of financial instruments have not been presented.
Consolidation
The group's consolidated financial statements consolidate the financial statements of the parent company and all its group subsidiaries as at 31 December 2023. All subsidiaries have a reporting date of 31 December. All transactions and balances between group companies are eliminated on consolidation, including unrealised gains and losses on transactions between group companies. Amounts reported in the financial statements of subsidiaries have been adjusted, where necessary, to ensure consistency with the accounting policies adopted by the group. As a consolidated group statement of comprehensive income is published, a separate statement of comprehensive income for the parent company is omitted from the group financial statements by virtue of section 408 of the Companies Act 2006.
Judgements and key sources of estimation uncertainty
Remedial provision In preparing these financial statements, the directors have made significant judgements in estimating the remedials provision required for ongoing and completed contracts. This provision is calculated by management for each contract based on their assessment of the total area, measured in square metres, that is expected to require remedial work. The estimated cost per square metre for such treatment is then applied to determine the total estimated remedial cost. This assessment involves a detailed review of the contracts, considering historical experience, current project conditions, and any specific contractual obligations. Given the inherent uncertainties in estimating the extent of remedial work and the associated costs, the actual outcomes may differ from these estimates. The remedials provision is reviewed regularly and adjusted where necessary to reflect the most current information available. The remedial provision at 31 December 2023 was £3,597,077. Asset revaluations The directors reassessed the carrying values of all tangible fixed assets based on capital value. As a result the values of plant and machinery was adjusted and the net uplift in values taken to revaluation reserve. The directors also assessed the depreciation rates applicable to tangible fixed assets and amended them as appropriate. The directors will consider the valuations of assets annually and make adjustments thereto as appropriate. The carrying value of the revalued plant and machinery at 31 December 2023 was £7,376,633 (2022: £7,408,681). Further details are included in note 15.
Revenue recognition
Turnover is measured 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. Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract. The stage of completion of the contract is determined by reference to the square metres worked as a proportion of total contract meterage to be worked at the reporting date. Dividend income from investments is recognised when the shareholder's right to receive payment has been established. Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
10% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Freehold land and buildings
-
straight line over fifty years
Plant and machinery
-
10% - 25% reducing balance
Fixtures, fittings and equipment
-
25% straight line
Motor vehicles
-
20% reducing balance
Freehold improvements - straight line over 4 years
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes being recognised initially in the profit and loss account and then transferred to the revaluation reserve as the change in fair value is not distributable until realised.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
2023
2022
£
£
Road resurfacing services
29,614,887
35,376,898
-------------
-------------
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
5. Other operating income
2023
2022
£
£
Government grant income
501
Other operating income
5,988
5,988
-------
-------
5,988
6,489
-------
-------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Depreciation of tangible assets
1,122,388
993,882
(Gains)/loss on disposal of tangible assets
( 222,598)
13,815
Fair value adjustments to investments
5,548
12,389
Revaluation of cash equivalents
2,899
17,068
------------
---------
Included in the depreciation charge above, the amount that relates to assets held under finance lease and hire purchase is £237,108, (2022: £212,640).
7. Auditor's remuneration
2023
2022
£
£
Fees payable for the audit of the financial statements
20,000
7,000
--------
-------
8. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2023
2022
No.
No.
Administrative staff
41
44
Management staff
7
7
Contracting staff
79
103
----
----
127
154
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
7,377,055
7,169,963
Social security costs
843,209
864,075
Other pension costs
242,853
416,667
------------
------------
8,463,117
8,450,705
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
625,408
389,408
Company contributions to defined contribution pension plans
8,333
10,000
---------
---------
633,741
399,408
---------
---------
The number of directors who accrued benefits under company pension plans was as follows:
2023
2022
No.
No.
Defined contribution plans
2
2
----
----
Remuneration of the highest paid director in respect of qualifying services:
2023
2022
£
£
Aggregate remuneration
361,602
211,102
Company contributions to defined contribution pension plans
5,000
5,000
---------
---------
366,602
216,102
---------
---------
10. Other interest receivable and similar income
2023
2022
£
£
Interest on cash and cash equivalents
289,124
43,286
---------
--------
11. Interest payable and similar expenses
2023
2022
£
£
Interest on obligations under finance leases and hire purchase contracts
36,143
28,812
Other interest payable and similar charges
8,965
2,433
--------
--------
45,108
31,245
--------
--------
12. Tax on profit
Major components of tax expense
2023
2022
£
£
Current tax:
UK current tax expense
447,502
845,768
Adjustments in respect of prior periods
14,590
---------
---------
Total current tax
447,502
860,358
---------
---------
Deferred tax:
Origination and reversal of timing differences
( 30,761)
451,535
---------
------------
Tax on profit
416,741
1,311,893
---------
------------
Tax recognised as other comprehensive income or equity
The aggregate current and deferred tax relating to items recognised as other comprehensive income or equity for the year was £Nil (2022: £( 19,684 )).
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is lower than (2022: higher than) the standard rate of corporation tax in the UK of 23.52 % (2022: 19 %).
2023
2022
£
£
Profit on ordinary activities before taxation
1,863,965
4,833,404
------------
------------
Profit on ordinary activities by rate of tax
438,405
918,347
Adjustment to tax charge in respect of prior periods
12,221
Effect of expenses not deductible for tax purposes
27,170
14,508
Effect of different UK tax rates on some earnings
10
Non taxable income
( 1,407)
( 4,381)
Effect of change in rate for deferred tax
( 1,771)
108,515
Unequalised movement on deferred tax
( 45,666)
262,683
------------
------------
Tax on profit
416,741
1,311,893
------------
------------
13. Results and dividends
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year):
2023
2022
£
£
Dividends on ordinary shares
387,180
516,240
---------
---------
14. Intangible assets
Group
Goodwill
Other intangible assets
£
£
Cost
At 1 January 2023 and 31 December 2023
35,000
--------
----
Amortisation
At 1 January 2023 and 31 December 2023
35,000
--------
----
Carrying amount
At 1 January 2023 and 31 December 2023
--------
----
At 31 December 2022
--------
----
The company has no intangible assets.
15. Tangible assets
Group and company
Land and buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2023
2,013,934
9,590,654
244,506
467,698
12,316,792
Additions
82,646
1,137,513
9,340
258,402
1,487,901
Disposals
( 337,162)
( 156,689)
( 493,851)
------------
-------------
---------
---------
-------------
At 31 December 2023
2,096,580
10,391,005
253,846
569,411
13,310,842
------------
-------------
---------
---------
-------------
Depreciation
At 1 January 2023
288,898
2,181,973
200,037
287,517
2,958,425
Charge for the year
81,149
956,926
15,712
68,601
1,122,388
Disposals
( 124,527)
( 120,916)
( 245,443)
------------
-------------
---------
---------
-------------
At 31 December 2023
370,047
3,014,372
215,749
235,202
3,835,370
------------
-------------
---------
---------
-------------
Carrying amount
At 31 December 2023
1,726,533
7,376,633
38,097
334,209
9,475,472
------------
-------------
---------
---------
-------------
At 31 December 2022
1,725,036
7,408,681
44,469
180,181
9,358,367
------------
-------------
---------
---------
-------------
Tangible assets held at valuation
Tangible fixed assets held at valuation. Included in the net book value of the plant and machinery is a revaluation surplus of £3,554,745. The revaluation of plant is undertaken by the directors by comparing existing plant items to the depreciated replacement cost of equivalent items based on their current market value. Included in the net book value of freehold property is a revaluation surplus of £861,801. The property was revalued on 30 March 2016 by Morgan Williams, Chartered Surveyors, based on open market value. Morgan Williams carried out a further valuation in August 2024 which showed the current market value was not materially different to the existing net book value. On this basis the directors have not adjusted the valuation in the accounts to 31 December 2023. During the year new finance lease assets with a cost of £339,590 were acquired. The closing net book value of these additions, as included in the note below, amounted to £312,132.
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Group and company
Plant and machinery
£
At 31 December 2023
1,157,819
------------
At 31 December 2022
1,226,934
------------
16. Investments
Group
Other investments other than loans
£
Cost
At 1 January 2023
43,292
Revaluations
( 5,548)
--------
At 31 December 2023
37,744
--------
Impairment
At 1 January 2023 and 31 December 2023
--------
Carrying amount
At 31 December 2023
37,744
--------
At 31 December 2022
43,292
--------
Company
Shares in group undertakings
£
Cost
At 1 January 2023 and 31 December 2023
200
----
Impairment
At 1 January 2023 and 31 December 2023
----
Carrying amount
At 1 January 2023 and 31 December 2023
200
----
At 31 December 2022
200
----
The market value of the listed investments at 31 December 2023 was £37,744 (2022 £43,292)
Subsidiaries, associates and other investments
Details of the investments in which the group and the parent company have an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Road Maintenance Services Limited
Ordinary
100
Road Maintenance Services (Preservations) Limited
Ordinary
100
17. Registered office address of subsidiaries
The registered office of the subsidiaries is the same as the holding company's disclosed in Note 1.
18. Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
1,599,892
1,493,890
------------
------------
----
----
19. Debtors
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade debtors
1,317,480
2,049,066
Amounts owed by group undertakings
1,414,900
1,229,900
Prepayments and accrued income
81,483
61,023
81,483
61,023
Other debtors
33,735
------------
------------
------------
------------
1,432,698
2,110,089
1,496,383
1,290,923
------------
------------
------------
------------
20. Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade creditors
1,447,001
758,620
23,330
137,909
Amounts owed to group undertakings
9,536,095
10,091,641
Accruals and deferred income
4,517,016
4,970,936
61,433
10,270
Corporation tax
342,347
833,954
142,148
81,227
Social security and other taxes
248,074
681,971
27,939
122,631
Obligations under finance leases and hire purchase contracts
309,597
372,805
309,597
372,805
------------
------------
-------------
-------------
6,864,035
7,618,286
10,100,542
10,816,483
------------
------------
-------------
-------------
21. Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Obligations under finance leases and hire purchase contracts
487,503
492,708
487,503
492,708
---------
---------
---------
---------
22. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Not later than 1 year
309,597
372,805
309,597
372,805
Later than 1 year and not later than 5 years
487,503
492,708
487,503
492,708
---------
---------
---------
---------
797,100
865,513
797,100
865,513
---------
---------
---------
---------
The hire purchase creditor represents vehicles, plant and machinery acquired under finance lease arrangements. Interest is payable as part of the monthly repayments at various rates between 0% and 3%. Finance lease and hire purchase creditors are secured on the assets to which the debt relates. Where the company also has the option to acquire these assets at the end of the respective lease terms it intends to exercise the option.
23. Provisions
Group
Deferred tax (note 24)
£
At 1 January 2023
1,577,632
Additions
( 51,048)
------------
At 31 December 2023
1,526,584
------------
Company
Deferred tax (note 24)
£
At 1 January 2023
1,575,107
Additions
( 54,884)
------------
At 31 December 2023
1,520,223
------------
24. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Included in provisions (note 23)
1,526,584
1,577,632
1,520,223
1,575,107
------------
------------
------------
------------
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2023
2022
2023
2022
£
£
£
£
Accelerated capital allowances
1,479,513
1,513,048
1,479,513
1,513,048
Revaluation of tangible assets
41,960
62,247
41,960
62,247
Other revaluations
6,965
7,796
Deferred tax - other timing differences
( 1,854)
( 5,459)
( 1,250)
( 188)
------------
------------
------------
------------
1,526,584
1,577,632
1,520,223
1,575,107
------------
------------
------------
------------
25. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 242,853 (2022: £ 416,667 ).
26. Government grants
The amounts recognised in the financial statements for government grants are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Recognised in other operating income:
Government grants recognised directly in income
501
----
----
----
----
The government grants derive from the Coronavirus Job Retention Scheme.
27. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
4,302
4,302
4,302
4,302
-------
-------
-------
-------
28. Reserves
Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs. Revaluation reserves - This reserve records the revaluation of tangible fixed assets recognised in other comprehensive income and accumulated in equity as well as the value of investment and cash equivalents revaluation movements on investments and cash equivalents recognised initially in the profit and loss account and then transferred to this non distributable reserve. Deferred tax is calculated on revaluation reserve movements. The movements on the reserve in the current year are set out below:
2023
£
Opening balance at 1 January 2023 4,816,020
Movement in year (254,347)
Deferred tax movement 21,119
------------
Closing balance at 31 December 2023 4,582,792
------------
Capital redemption reserve - This reserve records the nominal value of shares repurchased by the company. Profit and loss account - This reserve records retained earnings and accumulated losses.
29. Analysis of changes in net debt
At 1 Jan 2023
Cash flows
At 31 Dec 2023
£
£
£
Cash at bank and in hand
17,350,700
483,759
17,834,459
Debt due within one year
(372,805)
63,208
(309,597)
Debt due after one year
(492,708)
5,205
(487,503)
-------------
---------
-------------
16,485,187
552,172
17,037,359
-------------
---------
-------------
Road Maintenance Services (Holdings) Limited
Notes to the Financial Statements (continued)
Year ended 31 December 2023
30. Related party transactions
Company
Dividends totalling £ 387,180 were paid to the directors and close family members during the year (2022 - £516,240).