The directors present the strategic report for the year ended 31 December 2023.
The group’s principal business is the provision of general contracting and construction management services in the United Kingdom, Ireland and Holland. We are a full-service General Contractor that has the capability, people, experience, and financial strength to meet our client’s needs across a broad range of project types and sizes.
Our annual revenues are generated from our core sectors of Commercial Interiors, Building Refurbishment & Infrastructure, and Mission Critical. We are regarded by our client base as a leading main contractor in our core sectors in each of the markets we operate in.
Structure Tone International Group is backed by the worldwide construction services provider STO Building Group Inc. STOBG achieved group revenues in excess of $10billion and a net income of $124.4m.
2023 was another very successful year for the group generating revenue of €328m in year and a gross profit of €17m.
ST Dublin generated revenue of €168.3m in year exceeding its original plan of €140m and a PBT of €3.9m. The business continued to win significant contracts despite the Irish Domestic market facing challenges borne specifically from the slowdown in the US tech sector and resultant poor demand for office accommodation by US multinationals.
ST London finished 2023 on plan with Revenue of £134m and better than anticipated PBT at £1.3m. Having successfully delivered a number of high- profile projects during the year, the company has an impressive slate of completed projects with which to showcase its growing team’s talent. The business unit has also invested heavily in a young and upcoming team to deal with projects in the sub €5m category.
European expansion commenced at the end of 2023 with work commencing on the first mission critical project in Holland. 2024 will see continued growth in Holland and preparation for further expansion into a second European territory.
The group is poised for a transformative shift in 2024 towards sustainability with a strategic focus on embracing advanced technologies and sustainable practices which will fundamentally reshape the sector. We are committed to continual investment in the development of our environmental impact team putting sustainability as front and center of everything we do alongside health and safety,
The Directors are confident that the business is well placed to materialize its strategic plans over the next several years and the financial outlook for 2024 is currently on track to exceed Revenue of €380m.
In 2024 the STOBG family will remain focused on mitigating the impacts of a global recession with continued monitoring of market sectors and clients.
The company has enhanced its procedures around: -
The company’s clients and sub-contractors are reviewed for financial security to minimize credit and project risks. Throughout the duration of a project these factors are continually reviewed
Significant contracts spanning long timelines are being tendered with additional clauses to mitigate the high risks associated with volatile costs
Constant review of the economic outlook for the London and European markets
Targeted recruitment campaign and professional development to secure and retain the best employees for the individual sectors
The group's operations are currently all conducted in the UK and Europe. They are both self-funding. Surplus funds are invested in short-term deposits to ensure certainty of cash flows. The group has no external borrowing and has the support of its ultimate parent company to ensure sufficient funds are available for ongoing operations if required.
The group manages its financial risk through the implementation of strict project management processes. The activities are primarily construction management where cash flow and credit risk are minimised through the selection of known sub-contractors and the valuation processes. The group is exposed to price competition within the sector, but manages price risk through the Bidding Process and the establishment of minimum acceptable profit margins for new business. The group does not undertake projects with currency risk and has no hedging activity.
The operations in Europe are conducted in the euro. The group does not believe that there is significant risk associated with the contracts as there is no inter-currency trading. Similarly, the group does not believe that there is significant risk associated with the UK operations where contracts are conducted in sterling, as there is no inter-currency trading. Exchange risk exists relating to the UK investments, and this is hedged through an equivalent intercompany sterling current account.
Key Financial Indicators |
| 2023 | 2022 |
Gross Revenue Gross Profit |
| €328m €17m | €345m €15m |
Gross Profit % Estimated future Value of Contracts Awarded 31st Dec 2023 |
| 5.20% €243m | 4.40% €211m |
Total Value of Contracts (Including extensions) Awarded in Year |
| €293m | €185m |
Accident Frequency Rate AFR UK Accident Frequency Rate AFR Ireland |
| 0.30 0.65 | 0.23 0.27 |
The Board of Directors in the performance of their duties must act in accordance with the requirements of the Companies Act 2006 S172 as follows:
The STO Group Mission statement is the embodiment of S172.
MISSION STATEMENT
We solve our clients’ challenges and service our chosen markets by:
Fostering long-term relationships with our clients, employee’s and partners
Creating a culture of collaboration, integrity and transparency
Providing innovative construction solutions
Delivering project excellence and workplace safety
Executing sustainable organisational growth and financial strength
In pursuance of its Mission Statement, the STO group provides a comprehensive body of directives, supports and tools which each business unit utilises, in the pursuance of its own strategic vision and that of the parent. The key components of this framework are effectively the core constituents of S172.
Decision Making
A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole and in so doing have regard (amongst other matters) to.
The Directors of SIL conduct monthly Board meetings at a local level and quarterly with the STO Group Board. More frequent informal senior management/Director meetings take place weekly at an entity level. The Directors are careful to ensure that in the process of decision-making encompasses the expectations of all stakeholders.
The decision-making process is an inclusive and transparent process which adheres to the overall strategy of the group. Key decisions taken in 2023 are mapped out in the Directors report within the accounts.
Employee development is an essential and differentiating part of the STO Building Group
We believe that we are only as good as our team. We invest significantly in our employee’s development, to provide clients with the highest quality of expertise and service consistency, to enable employees to build a rewarding and meaningful career at our company and to provide us with a competitive advantage in the marketplace.
We supplement our comprehensive in-house professional development programs – STOBG University – with an employee tuition assistance program, as well as certificate and degree programs offered at accredited institutions. Each employee is encouraged to participate in these programs, which is an integral part of our annual performance and career development review.
STO Building Group University core pillars include:
Rotational Project Engineer Program/Management Training (RPE)
STO Building Group’s RPE Program provides entry-level college graduates with backgrounds in architecture, civil engineering, construction management, and interior design exposure to a well-rounded professional experience in construction management. RPE employees are rotated (9 to 12 months) through each of STO Building Group’s four major disciplines: Field Operations, Estimating, Purchasing and Engineering. They are guided through the program by a mentor, as well as receiving training. RPE graduates become superintendents, estimators, or engineers, with the benefit of comprehensive experience in each of the key construction disciplines.
Development Programs
1. Leadership Fundamentals Certificate (LFC)
STO Building Group’s four-year program enables selected employees pursuing management positions to enhance their skills in leadership, client relationships, communications and ethics. The coursework also includes presentation and communications training and time, conflict and stress management.
2. Management Development Certificate (MDC)
To develop our future leaders, selected managers will complete a comprehensive four-year program that improves their abilities in managing teams, leadership strategy, supervision techniques, hiring, coaching and employee performance management. We partner with various 3rd parties to include courses on project management, financial principles, negotiation and conflict resolution, and advanced presentation techniques. In addition, as a part of our commitment to sustainable building, our managers participate in the latest sustainability and renewable energy courses available.
STO Building Group Training Courses
In-house trainers and industry experts instruct our employees in fundamental and more advanced skills to increase their effectiveness, including goal setting and time management as well as the company’s proprietary software and technology.
STO Building Group’s Emerging Leaders
To enable the company’s next generation of ‘Emerging Leaders’ to see deeper into the culture of the organization, develop their leadership skills, and empower them to initiate change within the company and the wider industry, the company engages a group of high potential employees representing every facet of STO Building Group.
Professional Development Seminars
We host seminars for mid-level professionals and line supervisors to improve their technical and managerial skills and to prepare them for a future in senior management. Seminars include topics on construction management skills, safety certification and estimating.
Executive Development Programs
Through regular management consultant led sessions, 360-degree multi-rater feedback and team-building exercises, Structure Tone executives’ leadership and inter-personal skills are developed.
Tuition Reimbursement
In addition to our in-house programs, we provide financial assistance to employees furthering their education, especially for courses in construction management, or in courses that could enhance their skills in their current or future positions.
External Relationships - Customers, Suppliers and Sub Contractors
“We partner and collaborate to imagine, execute and realise our client’s vision”
We understand that the strong relationships we have with our suppliers form an integral part of the success of our projects. We have established many long-term associations, allowing our subcontractors to develop alongside us, achieving joint objectives and ensuring continuity of work and improvement of service.
Our existing and new supply chain members naturally become an integral part of our delivery, health and safety, financial and sustainability initiatives and it is essential that we encourage their capability and development.
This is achieved through training initiatives, regular discussion at site and director level and ensuring feedback is given and received from each project. For example, we are currently working with our key suppliers to raise awareness of Health and Safety and sustainability issues and also encouraging practical training and the appointment of apprentices with our sub-contractors to ensure future skilled operatives in the industry to mirror our recruitment initiatives.
We have a moral duty to our clients and a duty of care under the CDM regulations to ensure that our new and existing sub-contractors can competently deliver the service we require. To ensure competence we have a qualification procedure to identify health and safety competence, financial security, design, ability to deliver and employment practices.
We have a policy for the development of the supply chain and workload risk monitors which ensure that we are not over-committing to any individual contractors, especially on high risk works such as mechanical, electrical, partitions and steelwork. The aim of the supply chain management scheme is to improve industry standards on all our projects. Evidence of this is captured on end of project score sheets which measure against recognised and industry KPI’s.
Community and Environment
As members of our own communities, we understand we have a responsibility and obligation to ensure our work and our behaviour contributes to the greater good. Given our role in shaping the built environment, we literally affect how people interact with the world.
Our annual social responsibility report encapsulates the many ways we collectively work to support our culture of responsibility. This report will continue to live and breathe as our organization grows, adopts new practices, and adapts to our changing world. We will always strive to be better, and we hope this report will continue to reflect that ongoing work.
In 2021 STUK have supported The Lighthouse Club which raises vital funds and emotional support to the construction community. We have also been the main sponsor of the Sparks Children’s Charity annual golf event raising £20k in groundbreaking medical research. We also supported and sponsored the London to Brighton cycle ride for the BHF and in April 2021 employees participated in a staff pass the baton challenge over a 24-hour period to raise money for the family of a deceased member of the construction industry.
The STO Global Group donated a total of $2.1m to different charities and helped fundraise an additional $10m in the previous year.
Sustainability
As a leader in the field of sustainable construction and energy conservation, we partner with our clients and their consultants to develop strategies that realise significant energy and environmental benefits while increasing building value and occupant wellness. We know that each client’s needs and culture are different, and that while green certifications are a component of a sustainable approach, they are not all inclusive of sustainability.
We work to help our clients meet their sustainability goals while also providing viable alternatives for even greater efficiencies and implementing sustainable construction practices into the project management plan. Whether objectives are centred on reducing carbon footprint or on employee health and well-being, we will help each client to attain those goals.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 14.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
In accordance with the Companies (Directors' Report) and Limited Liability Partnerships (Amendment) (EU Exit) Regulations 2019, the following report outlines StructureTone International Limited's energy consumption, greenhouse gas emissions, and related performance indicators for the financial year ended 31 December 2023.
The figures were calculated using UK government conversion factors, expressed as tonnes of carbon dioxide equivalent.
The data has been prepared using the GHG Reporting Protocol – Corporate Standard methodology, taking best available data and estimates where required. The reporting meets the minimum requirements for SECR and no voluntary emission sources are stated. The single source of emissions in 2023 was electricity, contributing 100% of carbon emissions. The Company does not have any fleet vehicles or company cars.
31 December 2023 31 December 2022
Energy (kwh)
Electricity 154,601 265,912
Emissions (tCO2e) 32,014 51,422
Intensity (tCO2e/£’000 revenue) 133,950 121,062
Revenue (£’000) 133,950 121,062
tCO2e per £’000 of revenue 0.24 0.42
Intensity (tCO2e/FTE)
Full time equivalent employees 98 124
TCO2e per FTE 326.67 414.69
Renewable Energy Consumption:
0% of renewable energy was consumed during the reporting year.
Future Goals and Initiatives:
StructureTone International Limited are partnering with a carbon accounting platform to the improve accuracy of carbon emissions recorded including scope 3 emissions, and generate a carbon reduction plan leading to a date in which the company will achieve net zero emissions.
Structure Tone Ltd will focus heavily on reducing their greenhouse gas emissions exploring opportunities to source renewable energy and reduce overall energy consumption.
Assurance Statement:
We confirm that the data presented in this SECR submission is accurate and in compliance with the relevant reporting requirements, emission factors have been obtained using the latest UK Governments Greenhouse gas reporting conversion factors.
Sustainability Integration:
In addition to financial performance, StructureTone International Limited remains committed to sustainability. Our efforts in reducing energy consumption and greenhouse gas emissions are integral to our long-term strategy, aligning with environmental and social responsibility.
We have audited the financial statements of StructureTone International Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise 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.
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 and 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 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 group's and 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 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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement 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 purposes of expressing an opinion on the effectiveness of the company’s 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 group's or the parent 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 group or the parent 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.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
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.
Explanation as to what extent the audit was considered 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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of noncompliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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 or intentional misrepresentations, or through collusion.
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 for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.
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 €50,118 (2022 - €247,990 loss).
StructureTone International Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Sixth Floor, 80 Cannon Street, London, EC4N 6HL.
The group consists of StructureTone 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 euros, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest €000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company StructureTone International Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
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.
The business activities, together with the factors likely to affect its future development, performance and position are set out in the strategic report. The strategic report further describes the financial position of the group, its cash flows and liquidity position; the objectives, policies and processes for managing its capital; its financial risk management objectives and its exposure to credit and liquidity risk.
Based on the projections of contracted work for the next 12 months, the existing financing facilities and the ongoing financial support from the wider group, which has been confirmed in a formal letter, the directors have a reasonable expectation at the time of approving the financial statements that the group has adequate resources to continue in operational existence for a period of no less than 12 months from the date of that approval.
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised as contract activity progresses so that for incomplete contracts it reflects the partial performance of the contractual obligations. For such contracts the amount of revenue reflects the amount of the right to consideration by reference to the value of work performed. Revenue not billed to clients is included in debtors and payments on account in excess of the relevant amount of revenue are included in creditors.
Construction contracts
Revenue arises from the increase in the value of work performed on construction contracts and on the value of services provided during the year. Where the outcome of a long term contract can be reliably estimated and it is probable that the contract will be profitable, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting date. Stage of completion is assessed on the output basis, by reference to the proportion of the work certified to date relative to the estimated total contract value. Variations and claims are included in revenue where it is probable that the amount, which can be measured reliably, will be recovered from the client. When the outcome of a long-term contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable those costs will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
Construction work in progress is stated at cost plus profit recognised to date less a provision for foreseeable losses and less amounts to be billed, and is included in amounts recoverable on contracts. Cost includes all expenditure related directly to specific projects and an appropriate allocation of fixed and variable overheads based on normal operating capacity. Amounts valued and billed to clients are included in trade debtors. Where cash received from customers exceeds the value of work performed, the amount is included in credit balances on long term contracts.
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.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
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 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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
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.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimation and assumption that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are:
The stage of completion on contracts is a key area of judgement as it determines the value of profit recognised on a contract in the financial statements.
The directors have a wealth of experience in assessing the work performed on a contract to date and determining the remaining costs to complete, to enable them to determine the stage of completion on a contract and therefore the gross profit to recognise in the financial statements.
The recoverability of trade and other debtors is regularly reviewed in the light of available economic information specific to each receivable and provisions are recognised for any balance which is considered to be irrecoverable.
Provisions against projects are liabilities of uncertain timing or amount and therefore in making a reliable estimate of the amount and timing of liabilities judgement is applied and re-evaluated at each reporting date. At the date of signing these accounts, there was a key audit judgement for an estimate made in respect of a certain contract provision. The best estimate was made by the directors based on their experience.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Investment income includes the following:
Changes to the future UK corporation tax rates were substantively enacted as part of the Finance Bill 2021 on 24 May 2021. It makes provision for the rate of corporation tax in the UK to increase from April 2023 from 19% to 25% where a company has taxable profits exceeding £250,000 (equivalent to €282,000). The group is expected to be taxed at 23.52% for the year ended 31 December 2023.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The entity is within the scope of the OECD Pillar Two model rules. Pillar Two legislation was enacted in the United Kingdom, the jurisdiction in which the entity is incorporated, and came into effect for periods commencing on or after 31 December 2023 (i.e. 2024).
Since the Pillar Two legislation was not effective for this reporting period, the entity has no related current tax exposure.
The entity applies the exception to recognising and disclosing information about deferred tax assets and liabilities in respect of Pillar Two tax or legislation provided by the July 2023 amendments to FRS102 in paragraphs 29.12A, 29.28(b) and 29.29 of Section 29 (Income tax). Additional information is not known or reasonably estimable at this time, but further work will be undertaken prior to the next annual report.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Financial assets measured at amortised cost comprise cash, trade and other debtors, and amounts owed by group undertakings.
Financial liabilities measured at amortised cost comprise trade and other creditors, amounts owed by group undertakings, and accrued expenses.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
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.
During the year, a special resolution was passed to reduce the issued share capital from €19,749,295 to €17,363,352 by the cancellation of 2,385,943 €1 00 Ordinary Shares of the Company, and that such reduction be effected by the movement of €2,385,943 to distributable reserves.
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 group has taken advantage of the exemption in Financial Reporting Standard 102 Section 33.1A from the requirement to disclose transactions with group companies on the grounds that all entities which were party to such transactions are wholly owned members of the group.
In 2021, 1,688,904 Ordinary shares of €1 each were issued and fully paid in the financial year. However, this was accounted twice i.e. in 2021 and 2022 and as a result, a prior year adjustment has been booked to reduce the share capital balance by €1,689k and to increase amounts owed to group undertakings by €1,689k.
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