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Company registration number: 02092684
Hantall Developments Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Hantall Developments Limited
Contents
Directors and other information
Strategic report
Directors report
Independent auditor's report to the member
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Hantall Developments Limited
Directors and other information
Directors Mr S T Gregory
Mr P Smith
Mrs L Williams
Secretary Mr S T Gregory
Company number 02092684
Registered office Kingston House
Kingston Mills
Hyde
SK14 2BZ
Independent Auditors Downham Morris & Co
45/49 Greek Street
Stockport
Cheshire
SK3 8AX
Hantall Developments Limited
Strategic report
Year ended 31 December 2023
Review of the business
The directors present their strategic report on the company for the year ended 31 December 2023.
Principal activities
The principal activity of the company is that of industrial and commercial construction.
Results and performance
During the year, the company continued to perform well in an increasingly competitive market. The company saw a slight increase in activities which saw turnover rise by 1% to £16M (2022: £15.8M). Gross profit increased by 11% to £1.35M (2022: £1.2M) and operating profit was 5% of turnover at £0.9M (2022: £0.8M). Both gross profit and operating profit percentages remained reasonably consistent with the previous year. The directors are satisfied with the performance levels achieved.
The company has maintained a good level of profitability and this is a testament to the strength of the management and staff team.
The company will continue to focus on maintaining strong relationships with its core client base and suppliers.
Final dividends of £81,000 (2022: £42,000) were declared.
The company exceeded previous levels of trading activity in the year and the directors look forward to further controlled growth in 2024 and beyond.
Going concern
The company continues to trade at levels exceeding those achieved prior to the coronavirus outbreak though there are other global factors that cause to adversely affect the UK economy, not least inflationary pressures as well as increases in interest rates, power and utility costs.
The directors assessment of going concern is based on the latest available financial and non-financial information. Stress testing has been conducted and considered, taking into account any potential business disruptions and reductions in revenue or increased costs that may occur as a result of the uncertain economic outlook.
The directors consider that the company is well placed to manage it's business risks that the company has substantial liquid reserves which may be utilised against further funding to remain solvent through any further periods of turbulence.
Based on the above, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Key performance indicators
The directors consider the key performance indicators of the company to be measured by both turnover and profit before tax as described above.
The directors do not believe that there are any non-financial key performance indicators that are relevant.
Principal risks and uncertanties
The company's objective of financial risk management is to reduce the impact of price fluctuations and other factors of uncertainty in financial markets on earnings, cash flows and balance sheet, as well as to ensure sufficient liquidity.
The risks facing the company are assessed on an ongoing basis by the directors. They evaluate the likelihood and potential impact of each risk and ensure appropriate action is taken to mitigate them.
The company monitors credit risk closely and considers that its current policies of credit checks meets its objectives of managing exposure to credit risk.
The company manages liquidity risk by having sufficient amounts of cash available and by having minimal long-term debt.
The company has a strong control framework in respect of fraud or other dishonest behaviour which is reviewed regularly.
Future outlook
The company's orderbook of construction works for 2024 is very good and the directors expect that the company will achieve a turnover exceeding the level achieved in 2023. The directors look forward to the forthcoming financial year with a continuing level of confidence.
This report was approved by the board of directors on ....................... and signed on behalf of the board by:
Mr S T Gregory
Director
Hantall Developments Limited
Directors report
Year ended 31 December 2023
The directors present their report and the financial statements of the company for the year ended 31 December 2023.
Directors
The directors who served the company during the year were as follows:
Mr S T Gregory
Mr P Smith
Mrs L Williams
Dividends
Particulars of recommended dividends are detailed in note 13 to the financial statements.
Future developments
The company seeks to maintain its commitment to high standards and timely completion of any projects undertaken as well as maximising operating efficiencies and the directors look forward to the forthcoming financial year with a continuing level of confidence.
Financial instruments
Financial instruments that are debt based instruments measured at amortised cost comprise of trade debtors, intercompany loans and cash at bank and in hand.
Financial liabilities measured at amortised cost consist of trade creditors, obligations under finance leases and directors' loans.
The main risks arising from these financial instruments are credit risk and liquidity risk. The risks facing the company are assessed on an ongoing basis by the directors and appropriate action is taken to mitigate them.
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 company and the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and accounting estimates that are reasonable and prudent; and
- 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 company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 25 September 2024 and signed on behalf of the board by:
..............................
Mr S T Gregory
Director
Hantall Developments Limited
Independent auditor's report to the member of
Hantall Developments Limited
Year ended 31 December 2023
Opinion
We have audited the financial statements of Hantall Developments Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements: - give a true and fair view of the state of the company's affairs as at 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 auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other Information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report has 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 where 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 the returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Extent to which the audit was capable of detecting irregularities, including fraud 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: Non-compliance with laws and regulations Based on our understanding and accumulated knowledge of the company and the sector in which it operates, we considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud and whether such actions or non-compliance might have a material effect on the financial statements. These included but were not limited to those that relate to the form and content of the financial statements, such as the company accounting policies, the financial reporting framework and the UK Companies Act 2006. All team members were briefed to ensure they were aware of any relevant regulations in relation to their work.We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates as well as inappropriate revenue cut-off. Our audit procedures included, but were not limited to: - Agreement of the financial statement disclosures to underlying supporting documentation; - Identifying and testing journal entries, with a focus on journals indicating large or unusual transactions based on our understanding of the business; - Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud; - Obtaining an understanding of the control environment in monitoring compliance with laws and regulations. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. 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.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. we also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
- Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Use of our report
This report is made solely to the company's member, 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 member those matters we are required to state to him 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 member as a body, for our audit work, for this report, or for the opinions we have formed.
Ian Gwynfor Morris FCCA (Senior Statutory Auditor)
For and on behalf of
Downham Morris & Co
Chartered Certified Accountants and Registered Auditors
45/49 Greek Street
Stockport
Cheshire
SK3 8AX
25 September 2024
Date ..........................
Hantall Developments Limited
Statement of comprehensive income
Year ended 31 December 2023
2023 2022
Note £ £
Turnover 5 15,965,997 15,811,103
Cost of sales ( 14,614,029) ( 14,594,337)
_______ _______
Gross profit 1,351,968 1,216,766
Administrative expenses ( 485,289) ( 422,285)
Other operating income 6 18,156 22,504
_______ _______
Operating profit 7 884,835 816,985
Other interest receivable and similar income 10 36,365 3,316
Interest payable and similar expenses 11 ( 3,320) ( 7,005)
_______ _______
Profit before taxation 917,880 813,296
Tax on profit 12 ( 229,186) ( 156,859)
_______ _______
Profit for the financial year and total comprehensive income 688,694 656,437
_______ _______
All the activities of the company are from continuing operations.
The company received no other comprehensive income during the year (2022: £nil).
Hantall Developments Limited
Statement of financial position
31 December 2023
2023 2022
Note £ £ £ £
Fixed assets
Tangible assets 14 361,856 319,243
_______ _______
361,856 319,243
Current assets
Stocks 15 58,500 7,500
Debtors 16 1,902,731 1,983,661
Cash at bank and in hand 5,800,782 3,981,284
_______ _______
7,762,013 5,972,445
Creditors: amounts falling due
within one year 17 ( 3,646,017) ( 2,440,183)
_______ _______
Net current assets 4,115,996 3,532,262
_______ _______
Total assets less current liabilities 4,477,852 3,851,505
Creditors: amounts falling due
after more than one year 18 - ( 1,100)
Provisions for liabilities 20 ( 19,753) -
_______ _______
Net assets 4,458,099 3,850,405
_______ _______
Capital and reserves
Called up share capital 23 50 50
Capital redemption reserve 24 50 50
Profit and loss account 24 4,457,999 3,850,305
_______ _______
Shareholder funds 4,458,099 3,850,405
_______ _______
These financial statements were approved by the board of directors and authorised for issue on 25 September 2024 , and are signed on behalf of the board by:
..............................
Mr S T Gregory
Director
Company registration number: 02092684
Hantall Developments Limited
Statement of changes in equity
Year ended 31 December 2023
Called up share capital Capital redemption reserve Profit and loss account Total
£ £ £ £
At 1 January 2022 50 50 3,235,868 3,235,968
Profit for the year 656,437 656,437
_______ _______ _______ _______
Total comprehensive income for the year - - 656,437 656,437
Dividends paid and payable ( 42,000) ( 42,000)
_______ _______ _______ _______
Total investments by and distributions to owners - - ( 42,000) ( 42,000)
_______ _______ _______ _______
At 31 December 2022 and 1 January 2023 50 50 3,850,305 3,850,405
Profit for the year 688,694 688,694
_______ _______ _______ _______
Total comprehensive income for the year - - 688,694 688,694
Dividends paid and payable ( 81,000) ( 81,000)
_______ _______ _______ _______
Total investments by and distributions to owners - - ( 81,000) ( 81,000)
_______ _______ _______ _______
At 31 December 2023 50 50 4,457,999 4,458,099
_______ _______ _______ _______
Hantall Developments Limited
Statement of cash flows
Year ended 31 December 2023
2023 2022
£ £
Cash flows from operating activities
Profit for the financial year 688,694 656,437
Adjustments for:
Depreciation of tangible assets 40,044 24,718
Other interest receivable and similar income ( 36,365) ( 3,316)
Interest payable and similar expenses 3,320 7,005
Gain/(loss) on disposal of tangible assets ( 16,693) -
Tax on profit 229,186 156,859
Accrued expenses/(income) ( 104,450) 16,000
Changes in:
Stocks ( 51,000) 50,500
Trade and other debtors 80,930 ( 763,758)
Trade and other creditors 1,311,879 709,838
_______ _______
Cash generated from operations 2,145,545 854,283
Interest paid ( 3,320) ( 7,005)
Interest received 36,365 3,316
Tax paid ( 197,420) ( 185,653)
_______ _______
Net cash from operating activities 1,981,170 664,941
_______ _______
Cash flows from investing activities
Purchase of tangible assets ( 139,191) ( 8,736)
Proceeds from sale of tangible assets 73,228 -
_______ _______
Net cash used in investing activities ( 65,963) ( 8,736)
_______ _______
Cash flows from financing activities
Proceeds from borrowings 50,243 (214)
Payment of finance lease liabilities ( 64,952) ( 12,283)
Equity dividends paid ( 81,000) ( 42,000)
_______ _______
Net cash used in financing activities ( 95,709) ( 54,497)
_______ _______
Net increase/(decrease) in cash and cash equivalents 1,819,498 601,708
Cash and cash equivalents at beginning of year 3,981,284 3,379,576
_______ _______
Cash and cash equivalents at end of year 5,800,782 3,981,284
_______ _______
Hantall Developments Limited
Notes to the financial statements
Year ended 31 December 2023
1. General information
The company is a private company limited by shares, registered in England & Wales. The address of the registered office is Kingston House, Kingston Mills, Hyde, SK14 2BZ.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The company continues to trade at levels exceeding those achieved prior to the coronavirus outbreak though there are other global factors that cause to adversely affect the UK economy, not least inflationary pressures as well as increases in interest rates, power and utility costs.The directors assessment of going concern is based on the latest available financial and non-financial information. Stress testing has been conducted and considered, taking into account any potential business disruptions and reductions in revenue or increased costs that may occur as a result of the uncertain economic outlook.The directors consider that the company is well placed to manage it's business risks that the company has substantial liquid reserves which may be utilised against further funding to remain solvent through any further periods of turbulence.Based on the above, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Turnover
Turnover represents consideration received or receivable, net of discounts and Value Added Tax.Turnover represents revenue received from construction work carried out in the year and includes an appropriate proportion of revenue receivable from construction contracts which are recognised by reference to the stage of completion at the year end date.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves. In this case, tax is recognised in other comprehensive income or directly in capital and reserves, 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.
Tangible assets
tangible assets are initially recorded at cost, and are 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 capital and reserves, 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 capital and reserves in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in capital and reserves 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:
Plant and machinery - 15 % reducing balance
Fittings fixtures and equipment - 15 % reducing balance
Motor vehicles - 25 % reducing balance
Computer equipment - 33 % straight line
If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of tangible assets, the depreciation is revised prospectively to reflect the new estimates.
Impairment
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. When it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
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 stocks to their present location and condition.
Hire purchase and finance leases
Assets held under finance leases are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event; it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised in finance costs in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets or either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised in finance costs in profit or loss in the period in which it arises.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
4. Critical Accounting Policies
In the application of the company's accounting policies, which are described in note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the company's accounting policies
The directors do not consider that the amounts recognised in the current or prior financial period's financial statements have been significantly affected by any critical judgements made in the process of applying the company's accounting policies.
Key sources of estimation uncertainty
Provision against bad and doubtful debts receivable
Customer and other debtors are reviewed on a line-by-line basis at each financial period end. Provision against bad debts, which is netted against the debtors to which it relates, is made when notification is received from the administrators. As at the period end the directors have no material concerns over the recoverability of the company's debtors.
Future profitability of long term contracts
Long term contracts are reviewed on a contract by contract basis in order to recognise the appropriate stage of completion and profit as the project progresses. The directors employ chartered surveyors who work closely on the projects to critically assess the current and expected positions of each contract.
5. Turnover
Turnover arises from:
2023 2022
£ £
Construction contracts 15,965,997 15,811,103
_______ _______
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
6. Other operating income
2023 2022
£ £
Rental income 18,156 18,156
Other operating income - 4,348
_______ _______
18,156 22,504
_______ _______
7. Operating profit
Operating profit is stated after charging/(crediting):
2023 2022
£ £
Depreciation of tangible assets 40,044 24,718
(Gain)/loss on disposal of tangible assets ( 16,693) -
Fees payable for the audit of the financial statements 13,500 -
_______ _______
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023 2022
Directors 3 3
Production and technical 5 4
Administrative 5 4
_______ _______
13 11
_______ _______
The aggregate payroll costs incurred during the year were:
2023 2022
£ £
Wages and salaries 361,627 338,429
Social security costs 30,418 35,272
Other pension costs 4,715 4,947
_______ _______
396,760 378,648
_______ _______
9. Directors remuneration
The directors aggregate remuneration in respect of qualifying services was:
2023 2022
£ £
Remuneration 90,599 111,602
_______ _______
10. Other interest receivable and similar income
2023 2022
£ £
Bank deposits 36,365 3,316
_______ _______
11. Interest payable and similar expenses
2023 2022
£ £
Other loans made to the company:
Finance leases and hire purchase contracts 2,086 4,336
Other interest payable and similar expenses 1,234 2,669
_______ _______
3,320 7,005
_______ _______
12. Tax on profit
Major components of tax expense
2023 2022
£ £
Current tax:
UK current tax expense 209,433 156,859
_______ _______
Deferred tax:
Origination and reversal of timing differences 19,753 -
_______ _______
Tax on profit 229,186 156,859
_______ _______
Reconciliation of tax expense
The tax assessed on the profit for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 23.52 % (2022: 19.00%).
2023 2022
£ £
Profit before taxation 917,880 813,296
_______ _______
Profit multiplied by rate of tax 215,885 154,526
Effect of expenses not deductible for tax purposes 300 160
Effect of capital allowances and depreciation 13,001 2,173
_______ _______
Tax on profit 229,186 156,859
_______ _______
13. Dividends
Equity dividends
2023 2022
£ £
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year) 81,000 42,000
_______ _______
14. Tangible assets
Freehold property Plant and machinery Fixtures, fittings and equipment Motor vehicles Computer equipment Total
£ £ £ £ £ £
Cost
At 1 January 2023 248,339 15,448 13,797 158,655 25,792 462,031
Additions - - - 139,191 - 139,191
Disposals - - - ( 125,315) - ( 125,315)
_______ _______ _______ _______ _______ _______
At 31 December 2023 248,339 15,448 13,797 172,531 25,792 475,907
_______ _______ _______ _______ _______ _______
Depreciation
At 1 January 2023 - 15,263 12,722 94,999 19,802 142,786
Charge for the year - 28 161 36,578 3,277 40,044
Disposals - - - ( 68,779) - ( 68,779)
_______ _______ _______ _______ _______ _______
At 31 December 2023 - 15,291 12,883 62,798 23,079 114,051
_______ _______ _______ _______ _______ _______
Carrying amount
At 31 December 2023 248,339 157 914 109,733 2,713 361,856
_______ _______ _______ _______ _______ _______
At 31 December 2022 248,339 185 1,075 63,656 5,990 319,245
_______ _______ _______ _______ _______ _______
Tangible assets held at valuation
The directors have valued the freehold property at 31 December 2023 at its original cost value of £248,339.
Obligations under finance leases
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Motor vehicles
£
At 31 December 2023 4,386
_______
At 31 December 2022 5,848
_______
15. Stocks
2023 2022
£ £
Raw materials and consumables 7,500 4,500
Work in progress 48,000 -
Finished goods and goods for resale 3,000 3,000
_______ _______
58,500 7,500
_______ _______
16. Debtors
2023 2022
£ £
Trade debtors 1,126,857 1,084,755
Prepayments and accrued income 24,831 14,291
Other debtors 751,043 884,615
_______ _______
1,902,731 1,983,661
_______ _______
Provision for impairment of trade debtors as at 31 December 2023 was £Nil (2022: £Nil).
17. Creditors: amounts falling due within one year
2023 2022
£ £
Trade creditors 2,493,943 1,448,256
Accruals and deferred income 13,500 117,950
Corporation tax 209,433 197,420
Social security and other taxes 869,857 603,664
Obligations under finance leases 1,100 64,952
Director loan accounts 50,843 600
Other creditors 7,341 7,341
_______ _______
3,646,017 2,440,183
_______ _______
Finance lease liabilities are secured on the relevant assets to which they relate.
18. Creditors: amounts falling due after more than one year
2023 2022
£ £
Obligations under finance leases - 1,100
_______ _______
19. Obligations under finance leases
Company lessee
The total future minimum lease payments under finance lease agreements are as follows:
2023 2022
£ £
Not later than 1 year 1,100 64,952
Later than 1 year and not later than 5 years - 1,100
_______ _______
1,100 66,052
_______ _______
Present value of minimum lease payments 1,100 66,052
_______ _______
20. Provisions
Deferred tax (note 21) Total
£ £
At 1 January 2023 - -
Charges against provisions 19,753 19,753
_______ _______
At 31 December 2023 19,753 19,753
_______ _______
21. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023 2022
£ £
Included in provisions (note 20) 19,753 -
_______ _______
The deferred tax account consists of the tax effect of timing differences in respect of:
2023 2022
£ £
Accelerated capital allowances 19,753 -
_______ _______
22. Employee benefits
The amount recognised in profit or loss in relation to defined contribution plans was £ 4,715 (2022: £ 4,947 ).
23. Called up share capital
Issued, called up and fully paid
2023 2022
No £ No £
Ordinary shares shares of £ 1.00 each 50 50 50 50
_______ _______ _______ _______
24. Reserves
The profit and loss account reserve records retained earnings and accumulated losses.
25. Directors advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company:
2023
Balance brought forward Advances /(credits) to the directors Balance o/standing
£ £ £
Mr S T Gregory ( 600) ( 50,243) ( 50,843)
_______ _______ _______
2022
Balance brought forward Advances /(credits) to the directors Balance o/standing
£ £ £
Mr S T Gregory ( 815) 215 ( 600)
_______ _______ _______
No interest is charged by the company on loans to directors and the loans are repayable on demand.
26. Related party transactions
During the year the company entered into the following transactions with related parties:
Transaction value Balance owed by/(owed to)
2023 2022 2023 2022
£ £ £ £
Loans to associated companies ( 156,631) ( 123,058) 724,484 881,115
_______ _______ _______ _______
During the year the directors of the company received dividends totalling £81,000 (2022: £42,000).
27. Controlling party
The company considers Mr S Gregory, a director of the company, to be the ultimate controlling party.