The directors present the strategic report for the year ended 31 December 2023.
2023 saw a return in demand for catalyst handling services and a focus effort from the directors on converting potential opportunities into secured projects, which saw revenues increase by 37%, from £8,820,411 in 2022 to £12,056,762. The directors also restructured both the USA and Singapore regions to reduce overhead burden and improve the efficiency to the group as a whole. These efforts have resulted in a return to profitability with EBITDA at £1,197,835 (2022 – loss of £396,724).
The group was able to ensure that all regions were able to service contractual obligations, maintain good relations with the customers, and maintain the company’s high standards of safety, achieving the strategic objectives set out in 2022.
Post year end, the volatility of the catalyst handling market is still prevalent and 2024 has seen a slower first half of the year. This was expected with secured projects heavily weighted to the end of quarter 3 and beginning of quarter 4, 2024. Currently, the secured weighted pipeline, remains on course to achieve positive results as in 2023, with promising opportunities for 2025 already being identified.
The bank overdraft facility was reviewed by the bank in April 2024 and the facility has been extended until March 2025. Cat Tech Europe Ltd’s invoice factoring facility was also renewed by the funders during July 2024 for another year
Safety is the primary topic in the business, and the group continues to use a range of well established and appropriate key performance indicators, to monitor both quantitative and qualitative perspectives, ensuring a safe working environment is maintained. Continued training and updating of procedures facilitate this and the need for safety is paramount in all that we do. The fully integrated systems ensure timely recording, analysis, and investigation of all matters in the field. The company also monitors the environmental impact of its activities and takes decisions to minimize these wherever possible.
The bespoke management system integrates the safety, financial and operational models, allowing management to monitor key performance indicators in a live and continually up-to-date basis. Management also uses tried and trusted key performance indicators to manage the financial affairs of the business. The principal financial KPIs being; gross margin by project which has increased by 1.5%; earnings before interest, depreciation, and amortization (EBITDA), achieving 9.93% for the year.
The main risk of the business is the dangerous environments and conditions in which services are carried out. Cat Tech regards the health and safety of its staff and contractors as a high priority and continues to assess these risks, update its procedures, and carry out training on a continuous basis. Fully integrated and bespoke systems developed for the business allow for continued monitoring, reporting, and communication of all activity in a timely manner to achieve these high standards and continue the proud safety record it has gained over its history.
Skilled employee recruitment, retention and manpower availability remain a risk to the company. Our investment in training, development and continued review of our pay and benefits policies ensures the company stays competitive. By utilizing our access to global manpower resources across all regions, this risk is further mitigated.
The Group’s activities expose it to a number of financial risks including credit risk, cash flow risk and liquidity risk. The Group’s policies, approved by the board, provide written principles on the management of these risks.
Credit Risk
The group’s principal financial assets are trade and other receivables, and the amounts presented in the balance sheet are net of allowances for doubtful receivables. The majority of our customers are international blue-chip companies limiting the credit risk to the receivables. Policies restrict terms for non-blue-chip companies to mitigate credit risk from our smaller customers.
Liquidity Risk
A mixture of long-term and short-term debt finance is utilized to maintain liquidity, and ensure there is sufficient working capital to service our customers in on-going operations, while providing a base to mobilise from, for future projects.
Cash flow risk
The group is exposed to foreign currency exchange rates, due to the group’s international footprint. The group uses foreign exchange forward contracts to hedge these exposures, where projects are contracted in a currency foreign to that region. As the group operates in multiple regions, the foreign currency exchange rate risk to the cost of overheads is mitigated as each region generates revenue and pays its cost in local currency. Group wide costs are principally incurred in GBP, reducing exposure to foreign currency exchange rates. There were no contracts in place at year end.
The directors have prepared a comprehensive forecasting model to review the different components of the Group up to December 2025. Consideration has been given to wider economic challenges, including the conflict in the Middle East, demand volatility and inflation. The nature of the business relies on being able to secure large, tendered projects, the timing of which can be difficult to predict, raising an arguable material uncertainty. The directors are satisfied that there is sufficient headroom in the existing facilities to respond to the various realistic downside sensitivities. The directors consider the possibility of more extensive downside scenarios to be remote and are therefore satisfied that it is appropriate to prepare the financial statements on a going concern basis.
Included in liabilities is a loan instrument from Cat Tech’s institutional shareholder, Maven Capital Partners UK LLP. Maven continues to support the company and its growth objectives, and agreed in January 2022, to extend the repayment date of the Secured Loan Note by five years to March 2027. Maven have further provided a letter of support, stating that there is no foreseen situation where the investors would seek to take action in relation to the loan agreement for a period of one year from the date of these statements.
The directors believe that the synergies and support between the regions are a major strength, along with the sharing of resources, including equipment, people and working capital. This gives the group a uniqueness, compared to the competition, and a strategic edge in the markets wherein the group operates.
The demand remains high at the time of these statements and is expected to continue to do so into 2025, with many substantial opportunities already being engaged.
A number of long term, 3 year plus, contracts with major customers were renewed and signed in 2023, in Asia Pacific, USA and Europe. Cat Tech, having maintained the skilled employment base, is very well positioned to convert much of this increased demand, into growth for the group.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Strategic Report
The company has chosen in accordance with Companies Act 2006, s.414C(11) to set out in the group's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Group (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of future developments and financial instruments.
The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Cat Tech International Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 group and parent 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.
Material uncertainty relating to going concern.
We draw your attention to note 1.3 in the financial statements, which indicates that the group has net current liabilities of £1,066,395 and net liabilities of £2,862,018.
As stated in note 1.3 these events or conditions along with the other matters as set forth in note 1.3, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the directors' with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
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.
In the light of the knowledge and understanding of the group and the parent company and their 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.
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 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 parent company or to cease operations, or have no realistic alternative but to do so.
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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the Group through discussions with directors and other management, and from our commercial knowledge and experience of the trade;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Group;
we assessed the extent of compliance with the laws and regulations considered above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risks of fraud through management bias and override controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
discussions with senior management regarding relevant regulations and reviewing the group’s legal and professional fees.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director’s and other management and the inspection of regulatory and legal correspondence.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,881,393 (2022 - £9,016,847 loss).
Cat Tech International Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 1 South Park Road, South Park Industrial Estate, Scunthorpe, North Lincolnshire, DN17 2BY.
The group consists of Cat Tech International Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements incorporate those of Cat Tech International Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the group and company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cast doubt on the group and company's ability to continue as a going concern. The group has net current liabilities of £1,066,395 and net liabilities of £2,862,018 at the year end indicating that a material uncertainty exists relating to the availability of working capital that may cast significant doubt on the group and company's ability to continue as a going concern.
For the financial year ended 31 December 2023 the group generated total comprehensive income of £150,356 reducing the net liabilites position to £2,862,018 which represents an improvement of 5%. The directors have considered the financial, and cashflow forecasts for the 12 months from the date of these statements.
The forward order book and pipeline have been reviewed in detail on a project-by project basis using the weighted probability approach to assess income from future opportunities. Market intelligence on potential impacts on the pipeline and factors that may affect revenue realisation have also been considered in developing the forecasts. Sensitivities have been applied to give confidence to the outlook.
A group and company’s bank overdraft facility will be reviewed in March 2025 and the directors are confident the facilities will be renewed on the same terms.
All the above factors, along with the extension of the Secured Loan Note until 2027, have been considered in a full review up to the end of December 2025 for all regions, customers, and respective cost bases. These have been based on an overall set of prudent assumptions and consideration of the downside risk. The directors have a reasonable expectation that after considering all these factors, the liabilities of the group and company will be met.
Where the outcome of a contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date. This is normally measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Where contract losses are anticipated these are recognised in full at the time of identification in so far that they can be measured reliably.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Turnover is generated from contracts. The group recognises contract revenue and contract costs associated with each contract using the percentage of completion method.
The recognition of revenue and profit therefore rely on estimates in relation to the stage of completion and the forecast total costs of each contract.
Margin is presented for each contract as it is earned on the specific tasks undertaken in the period. A margin is used based on the job budget form completed at the outset, with variations requiring individual approval. Each project’s outturn is reforecast on a monthly basis, so any changes to expected final outturn are reflected in the accounts promptly. The profit to be recognised monthly is calculated on a cumulative basis so that the overall expected outturn is reflected in the cumulative position each month.
The method applied ensures that profit is recognised equally across the life of the project. The calculation of expected outturn is based on the following factors:
Variations to overall contract value (expected turnover) which have been agreed with the client
Costs incurred to date allocated to the project. These allocated costs are reviewed monthly by site managers and matched to site material lists and expected spend
Budgeted overall costs as calculated at the beginning of the project during the tender process which are used to calculate the expected costs to complete
An analysis of the group's turnover is as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 2).
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets in respect of assets held under finance leases or hire purchase contracts is £95,058 (2022: £140,887).
Plant and equipment with a cost of £226,503 was revalued at 31/12/2018 by Equify LLC, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar assets.
The assets are now fully depreciated as outlined below and have a NBV of £nil.
If revalued assets were stated on a historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
Details of joint ventures at 31 December 2023 are as follows:
Included within trade debtors are amounts £nil (2022: £66,664) due after one year relating to retentions on contracts.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Loan notes were repayable on 31 March 2022, however, they were deferred for a further 5 years. The loan notes bear interest at 14%. The loan notes are secured by a fixed charge over the assets of the group and its subsidiaries.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances for financial reporting purposes:
The deferred tax liability set out above is expected to reverse and relates to accelerated capital allowances.
Ordinary A and B shares have equal voting rights. However, if the company is in material default, a notice may be served on the company by the holders of more than 50% of the B shares so that the B shares shall have 90% of the total voting rights.
Dividends are payable on a non-cumulative basis to the holders of the A shares and the B shares as if they constituted one class.
Ordinary C shares have no voting rights. If dividends of £1,000,000 per share have been received in respect of A shares and B shares in one accounting period then further profits may be applied to the holders of C shares.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The comparative figures have been restated to correct the operating lease disclosure.
The company has taken exemption conferred by paragraph 33.1.A of FRS 102 not to disclose transactions with its wholly owned subsidiaries.
During the year rent of £64,900 has been paid to Catalyst Technicians Ltd, a company controlled by Mr K Thew (2022: £63,400).
During the year rent of £181,665 has been paid to Tri-Five (Holdings and Real Estate), a company controlled by Mr K Thew. £122,578 was also paid to Tri-Five (Holdings and Real Estate) in relation to other costs such as services and materials.
During the year, Cat Tech International invested £61,444 (2022: £28,292) in to Cat Tacer UK Limited, which is a 50% joint venture.
At 31 December 2023 the group owed £2,665,485 (2022: £2,551,371) to Maven Capital Partners (UK) LLP, a company which is related through common directorship.