Company Registration No. 04312150 (England and Wales)
DES Group Limited
Annual report and financial statements
for the year ended 31 December 2023
DES Group Limited
Company information
Directors
Raymond Andrews
Kevin Carney
Jeffrey Webster
Secretary
Deborah Morris
Company number
04312150
Registered office
Elizabeth House
56-60 London Road
Staines-Upon-Thames
Surrey
TW18 4HF
Independent auditor
Saffery LLP
St John's Court
Easton Street
High Wycombe
HP11 1JX
DES Group Limited
Contents
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
DES Group Limited
Strategic report
For the year ended 31 December 2023
1

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The principal activity of the company in the period under review was that of mechanical and electrical engineering, contracting and industrial installations and engineering design services.

 

The directors are pleased to present the financial statements for the year ended 31 December 2023 which show an increase in turnover for the year from £12.7m to £16.3m. As a result of close project management the gross profit % has increased to 27.6% resulting in a gross profit for the year of £4.5m. The directors continue to carefully monitor overheads and as a result are able to report another year of healthy profits. The company’s balance sheet and net current asset position remain strong.

Principal risks and uncertainties

The main risk facing the company is the general economic uncertainty and the impact that this may have on its customers willingness to commit to capital projects in the UK. However the company is well established in the industry and has long standing relationships with its customers across a number of industry sectors. The company reviews and agrees policies for managing the risks detailed below to minimise exposure.

 

The company is exposed to fair value interest rate risk on bank overdrafts. The company seeks to reduce this risk by keeping any borrowings to a minimum.

 

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provisions are made for doubtful debts where necessary.

 

The board reviews the company’s own credit rating to ensure that it remains favourable, thereby allowing the company to obtain competitive commercial terms for its suppliers.

 

The board continually monitors the cash requirements of the company to ensure that the company has ready access to the funds that the board deem necessary at any time during the year. The monitoring and review of future projections by the board ensures that there are adequate facilities readily available from the company’s finance providers to support the company’s cash flow requirements.

Other performance indicators

The directors monitor the performance of the company by reference to certain key performance indicators; the most relevant being gross margin and net profit.

On behalf of the board

Raymond Andrews
Director
25 September 2024
DES Group Limited
Directors' report
For the year ended 31 December 2023
2

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

Principal activities

The principal activity of the company continued to be that of mechanical and electrical engineering, contracting, industrial installations and engineering design services.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £387,457. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Raymond Andrews
Kevin Carney
David Fowkes
(Resigned 2 August 2024)
Dean Osgood
(Resigned 17 May 2023)
Jeffrey Webster
Auditor

Saffery LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

 

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

DES Group Limited
Directors' report (continued)
For the year ended 31 December 2023
3
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Raymond Andrews
Director
25 September 2024
DES Group Limited
Independent auditor's report
To the members of DES Group Limited
4
Opinion

We have audited the financial statements of DES Group Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the 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).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information 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.

DES Group Limited
Independent auditor's report (continued)
To the members of DES Group Limited
5

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

 

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

 

Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.

DES Group Limited
Independent auditor's report (continued)
To the members of DES Group Limited
6

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

 

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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.

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.

Sheryl Davis
Senior Statutory Auditor
For and on behalf of Saffery LLP
26 September 2024
Chartered Accountants
Statutory Auditors
St John's Court
Easton Street
High Wycombe
HP11 1JX
DES Group Limited
Statement of comprehensive income
For the year ended 31 December 2023
7
2023
2022
Notes
£
£
Turnover
3
16,317,778
12,710,203
Cost of sales
(11,810,822)
(9,373,759)
Gross profit
4,506,956
3,336,444
Administrative expenses
(3,754,090)
(2,948,209)
Other operating income
-
0
563
Operating profit
4
752,866
388,798
Interest payable and similar expenses
7
(25,035)
(27,789)
Profit before taxation
727,831
361,009
Tax on profit
8
(147,531)
(71,971)
Profit for the financial year
580,300
289,038

The income statement has been prepared on the basis that all operations are continuing operations.

DES Group Limited
Statement of financial position
As at 31 December 2023
31 December 2023
8
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
573,050
394,838
Investments
12
43,002
43,002
616,052
437,840
Current assets
Stocks
14
8,350
8,350
Debtors
15
3,511,458
4,084,085
Cash at bank and in hand
1,347,198
623,905
4,867,006
4,716,340
Creditors: amounts falling due within one year
16
(3,832,576)
(3,713,309)
Net current assets
1,034,430
1,003,031
Total assets less current liabilities
1,650,482
1,440,871
Creditors: amounts falling due after more than one year
17
(172,970)
(156,202)
Net assets
1,477,512
1,284,669
Capital and reserves
Called up share capital
21
73,700
73,700
Capital redemption reserve
26,300
26,300
Profit and loss reserves
1,377,512
1,184,669
Total equity
1,477,512
1,284,669
The financial statements were approved by the board of directors and authorised for issue on 25 September 2024 and are signed on its behalf by:
Raymond Andrews
Director
Company Registration No. 04312150
DES Group Limited
Statement of changes in equity
For the year ended 31 December 2023
9
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
73,700
26,300
1,130,683
1,230,683
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
289,038
289,038
Dividends
9
-
-
(235,052)
(235,052)
Balance at 31 December 2022
73,700
26,300
1,184,669
1,284,669
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
580,300
580,300
Dividends
9
-
-
(387,457)
(387,457)
Balance at 31 December 2023
73,700
26,300
1,377,512
1,477,512
DES Group Limited
Statement of cash flows
For the year ended 31 December 2023
10
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
25
1,446,200
(64,246)
Interest paid
(25,035)
(27,789)
Income taxes paid
(71,971)
(60,864)
Net cash inflow/(outflow) from operating activities
1,349,194
(152,899)
Investing activities
Purchase of tangible fixed assets
(342,653)
(92,921)
Proceeds from disposal of tangible fixed assets
56,523
23,832
Repayment of loans
(462)
-
0
Net cash used in investing activities
(286,592)
(69,089)
Financing activities
Repayment of bank loans
(59,045)
(53,391)
Payment of finance leases obligations
107,193
(30,243)
Dividends paid
(387,457)
(235,052)
Net cash used in financing activities
(339,309)
(318,686)
Net increase/(decrease) in cash and cash equivalents
723,293
(540,674)
Cash and cash equivalents at beginning of year
623,905
1,164,579
Cash and cash equivalents at end of year
1,347,198
623,905
DES Group Limited
Notes to the financial statements
For the year ended 31 December 2023
11
1
Accounting policies
Company information

DES Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Elizabeth House, 56-60 London Road, Staines-Upon-Thames, Surrey, TW18 4HF.

1.1
Accounting convention

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 under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

The directors have prepared budgets and forecasts and considered the current level of customer enquiries and ongoing contracts, taking into account the potential impact of the forecast economic slowdown. Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
Intangible fixed assets - goodwill

Goodwill arising on the acquisition of subsidiary undertakings represents the excess of the fair value of the consideration over the fair value of the identifiable assets and liabilities acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
12

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings
2% straight line
Leasehold land and buildings
Over the life of the lease
Plant and machinery
25% straight line
Office equipment
25% straight line
Motor vehicles
25% straight line

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 credited or charged to profit or loss.

1.6
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.7
Impairment of fixed assets

At each reporting period end date, the company 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.

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.

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to net realisable value.

DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
13

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.9
Cash at bank and in hand

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

The company 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 company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

Basic financial assets, which include debtors, 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

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.

Impairment of financial assets

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.

DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
14
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.

Classification of financial liabilities

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 company after deducting all of its liabilities.

Basic financial 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

Equity instruments issued by the company 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 company.

1.12
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
15
Deferred tax

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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has 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.

1.13
Employee benefits

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.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

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 statement of financial position 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 leases asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
16
2
Critical accounting judgements and key sources of estimation uncertainty

In the application of the company’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 directors have made key assumptions regarding the stage of completion, future costs to complete and collectability of billings of contracts in progress at the year end in order to ensure that the revenue recognition policy has been applied, and that profitability on those contracts have been recognised appropriately.

DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
17
3
Turnover analysed by geographical market
2023
2022
£
£
United Kingdom
16,317,778
12,710,203
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
16,100
13,275
Depreciation of owned tangible fixed assets
68,457
30,112
Depreciation of tangible fixed assets held under finance leases
77,364
81,271
Profit on disposal of tangible fixed assets
(37,903)
(23,830)
Operating lease charges
223,266
189,428
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Management and administration
28
27
Engineering
61
61
Total
89
88

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
5,527,786
4,724,595
Social security costs
627,605
606,639
Pension costs
214,842
144,739
6,370,233
5,475,973
DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
18
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
248,654
209,502
Company pension contributions to defined contribution schemes
116,866
48,000
365,520
257,502

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 4).

Remuneration for the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
400,000
300,000

The remuneration to the highest paid director was paid in the form of a management charge in both the current and prior year. The charge is not included with the directors' remuneration figure shown above in either the current or prior year.

7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
17,187
22,841
Interest on finance leases and hire purchase contracts
7,848
4,948
25,035
27,789
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
147,551
71,971
Adjustments in respect of prior periods
(20)
-
0
Total current tax
147,531
71,971
DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
8
Taxation (continued)
19

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:

2023
2022
£
£
Profit before taxation
727,831
361,009
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
171,040
68,592
Tax effect of expenses that are not deductible in determining taxable profit
10,107
3,182
Adjustments in respect of prior years
(20)
-
0
Permanent capital allowances in excess of depreciation
(33,596)
-
0
Movement in unprovided deferred tax
-
0
197
Taxation charge for the year
147,531
71,971
9
Dividends
2023
2022
£
£
Interim paid
387,457
235,052
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
42,183
Amortisation and impairment
At 1 January 2023 and 31 December 2023
42,183
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
20
11
Tangible fixed assets
Land and buildings
Plant and machinery
Office equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
279,102
47,721
302,067
773,491
1,402,381
Additions
-
0
56,974
14,973
270,706
342,653
Disposals
-
0
-
0
-
0
(136,242)
(136,242)
At 31 December 2023
279,102
104,695
317,040
907,955
1,608,792
Depreciation and impairment
At 1 January 2023
87,522
45,133
284,796
590,092
1,007,543
Depreciation charged in the year
14,400
3,070
17,912
110,439
145,821
Eliminated in respect of disposals
-
0
-
0
-
0
(117,622)
(117,622)
At 31 December 2023
101,922
48,203
302,708
582,909
1,035,742
Carrying amount
At 31 December 2023
177,180
56,492
14,332
325,046
573,050
At 31 December 2022
191,580
2,588
17,271
183,399
394,838

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Motor vehicles
254,882
128,601
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
43,002
43,002
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Design & Engineering Services Limited
England and Wales
Ordinary shares
100
-
DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
21
14
Stocks
2023
2022
£
£
Raw materials and consumables
8,350
8,350
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,071,155
3,089,557
Gross amounts owed by contract customers
390,584
945,931
Other debtors
3,174
3,095
Prepayments and accrued income
46,545
45,502
3,511,458
4,084,085
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
18
65,298
59,045
Obligations under finance leases
19
67,941
42,814
Payments received on account
1,601,185
1,693,756
Trade creditors
566,230
1,105,925
Amounts owed to group undertakings
43,002
43,002
Corporation tax
147,531
71,971
Other taxation and social security
740,059
495,067
Other creditors
460,181
187,980
Accruals and deferred income
141,149
13,749
3,832,576
3,713,309

 

17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
18
72,266
137,564
Obligations under finance leases
19
100,704
18,638
172,970
156,202
DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
22
18
Loans and overdrafts
2023
2022
£
£
Bank loans
137,564
196,609
Payable within one year
65,298
59,045
Payable after one year
72,266
137,564

Some of the directors have given personal guarantees to the company's bankers of £25,000 each. In addition there is a fixed and floating legal chance in place over the company's assets in respect of the bank borrowings.

19
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
67,941
42,814
In two to five years
100,704
18,638
168,645
61,452

Finance lease payments represent rentals payable by the company for certain motor vehicles purchased. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

The finance leases are secured against the assets to which they relate.

20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
214,842
144,739

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
23
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4,020
4,020
4,020
4,020
A Ordinary shares of £1 each
36,849
36,849
36,849
36,849
B Ordinary shares of £1 each
14,000
14,000
14,000
14,000
C Ordinary shares of £1 each
6,701
6,701
6,701
6,701
D Ordinary shares of £1 each
1,000
1,000
1,000
1,000
E Ordinary shares of £1 each
9,130
9,130
9,130
9,130
F Ordinary shares of £1 each
1,000
1,000
1,000
1,000
G Ordinary shares of £1 each
1,000
1,000
1,000
1,000
73,700
73,700
73,700
73,700

The ordinary A, B, C, D, E, F and G shares are separate share classes for the purposes of the declaration of dividends. The declaration of a dividend in respect of one class of share shall not compel a dividend at the same rate to be declared in respect of other classes of share.

 

In all other respects, the A, B, C, D, E, F and G shares rank equally.

22
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
55,475
112,577
Between two and five years
24,375
56,875
79,850
169,452
DES Group Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
24
23
Related party transactions

During the year, the company sold goods and services to entities with directors in common control totalling £7,080 (2022: £1,951).

 

During the year, the company purchased goods and services from entities with directors in common control totalling £400,000 (2022: £371,070). At the year end, the company owed the entity £240,000 (2022: £156,000).

24
Ultimate controlling party

The Directors consider that Mr R Andrews was the ultimate controlling party throughout the year.

25
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
580,300
289,038
Adjustments for:
Taxation charged
147,531
71,971
Finance costs
25,035
27,789
Gain on disposal of tangible fixed assets
(37,903)
(23,830)
Depreciation and impairment of tangible fixed assets
145,821
111,383
Movements in working capital:
Decrease/(increase) in debtors
573,089
(705,650)
Increase in creditors
12,327
165,053
Cash generated from/(absorbed by) operations
1,446,200
(64,246)
26
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
623,905
723,293
1,347,198
Borrowings excluding overdrafts
(196,609)
59,045
(137,564)
Obligations under finance leases
(61,452)
(107,193)
(168,645)
365,844
675,145
1,040,989
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