Company registration number:
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present the strategic report for the year ended 31 March 2024.
Mostrim Groundworks are an established groundworks and civil engineering company, undertaking work for various clients.
During the year company worked on around twenty-five sites and we continue to invest in providing quality out comings for our clients as well as health and safety to provide safe working conditions for our staff and sub-contractors. Our strategy is growing organically by providing a quality service, retaining funds to undertake increased workloads in the future. Post our year end we continue to win new work in a challenging market with the expectation of maintain turnover levels through out the current year and with the new government’s intention to increase new build housing it may possible to exceed this level. The company has built strong trading relationships both with its clients and suppliers over the last 13 years. We maintain a policy of paying our suppliers promptly in line with normal trade terms and find this generates much goodwill for the company with our trading partners.
Price risk due to fixed rate contracts and inflationary pressure on materials and other direct costs this is managed where possible by fixing prices with suppliers at the out set of new contracts.
Health and Safety is risk which we keep under review with site inspections and manage with training our staff and sub-contractors. Mostrim Groundworks is primarily reliant on the UK housing market and demand can be volatile. We constantly check our forward order book as well as the level of work being tender for to manage cash liquidity and business activity forecasts, in order to make timely adjustment to our operating capacity. Trade debtors represent about 44% of the net balance sheet value and this is made up of retentions held by clients both for ongoing and completed work. This risk is managed by checking the statutory accounts of clients we under take work for. Long-term statistical analysis suggests about 5% of retentions are not recovered.
Both gross & net margins have returned closer to the more average levels seen over the last seven years.
The company continues to maintain a strong balance sheet with cash reserves and foreseeable income able to meet our obligations as they fall due. The profit margins have recovered from the levels see for the year ended 31 March 2023 which were affected, by changes in fuel duty for plant operating on site together with general price inflation on materials and labour costs. The fixed price nature of long-term contracts, required the company to absorb most of these price increases during that year. The sales revenue growth trend over the last seven years is about 15%, although individual years have come in both above and below this trend line. Year End 31/03/2024 Year End 31/03/2023 Year End 31/03/2022 Revenue Growth 15.1% 7.7% 72% Gross Margin 14.3% 10.9% 19.5% Net Margin 7.23% 3.57% 11%
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
There are no further key performance indicators.
The forward order book as at 31 March 2024 stood at £39 Million.
We are currently tendering a further £52 Million worth of work and our average success rate is about 20%.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their report and the financial statements for the year ended 31 March 2024.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.
The profit for the year, after taxation, amounted to £1,536,747 (2023 - £713,171).
Dividends totalling £1,252,863 (2023 - £941,181) were paid during the year.
The directors who served during the year were:
The company has chosen in accordance with Section 414c(11) of the Companies Act 2006 (Strategic Report and Director's
Report) Regulation 2013 to set out within the company's Strategic Report the Company's Report Information Required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008. This included information that would have been included in the business review, future developments and details of principal risk and uncertainties.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MOSTRIM GROUNDWORKS LTD
We have audited the financial statements of Mostrim Groundworks Ltd (the 'Company') for the year ended 31 March 2024, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position, the Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MOSTRIM GROUNDWORKS LTD (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MOSTRIM GROUNDWORKS LTD (CONTINUED)
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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙The Company is subject to laws and regulations that directly affect the financial statements including financial reporting
legislation. We determined that the following laws and regulations were most significant including:
−The Companies Act 2006;
−Financial Reporting Standard 102;
−UK tax legislation;
−UK employment legislation;
−UK health and safety legislation;
−General Data Protection Regulations; and
−Construction (Design and Management) Regulations 2015.
∙We assessed the extent of compliance with these laws and regulations as part of our procedures on the related
financial statement items.
∙We understood how the Company is complying with those legal and regulatory frameworks by making enquires to
management and those responsible for legal and compliance procedures. We corroborated our enquires through our review of board minutes.
∙The engagement responsible individual assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
∙We assessed the susceptibility of the Company financial statements to material misstatement, including how fraud
might occur. Audit procedures performed by the engagement team included:
−Identifying and assessing the design effectiveness of controls management has in place to prevent and detect
fraud;
−Understanding how those charged with governance considered and addressed the potential for override of controls
or other inappropriate influence over the financial reporting process;
−Challenging assumptions and judgements made by management in its significant accounting estimates; and
−Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
∙As a result of the above procedures, we considered the opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for fraud in the following areas:
−The application of inappropriate judgements or estimation to manipulate the Company's financial position;
−Posting of unusual journals and complex transactions;
−The use of management override of controls to manipulate results, or to cause the Company to enter into
transactions not in its best interests.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MOSTRIM GROUNDWORKS LTD (CONTINUED)
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we
will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
The comparative figures are unaudited.
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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Senior Statutory Auditor
Ashcombe House
5 The Crescent
Surrey
KT22 8DY
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2024
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STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 24 form part of these financial statements.
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Mostrim Groundworks Ltd is a private company, limited by shares, incorporated in England and Wales. The address of the registered office and the principal place of business is detailed on the company information page of these financial statements.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The functional and presentational currency is sterling, and these financial statements are rounded to the nearest whole £.
The following principal accounting policies have been applied:
Construction contracts When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the balance sheet date ("percentage of completion method"). When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of financial
assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Key sources of estimation uncertainty The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows: Work in progress valuation and stage of completion Work in progress is measured by comparing budgeted costs against the actual costs incurred to date and the percentage of the project completed. The percentage of project completion is calculated against budgeted sales and actual sales to date. Budgets are checked and revised as the projects progresses. The calculated model assumes the budgeted profit is taken evenly throughout the life of the project. Should a loss be forecast for a project the whole loss is taken at that point. The calculated model produces either a work in progress figure or a payment on account for each of the current active projects. Closing Work in Progress The work in progress and payments on account figures are moved from the profit and loss account to the Balance sheet as an asset or current liability as the case may be. Opening work in progress The work in progress and payments on account amounts from the prior year are moved from the Balance Sheet back to the Profit and Loss account.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Page 18
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
12.Taxation (continued)
There are no factors which may affect future tax charges.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
17.Share capital (continued)
The company has three classes of shares, being £1 Ordinary shares, £1 A shares and £1 B shares.
The holders of the A and B shares shall not be entitled by reason of their holding of such shares to receive notice of, attend or vote at any general meeting of the company. The A and B shares shall on redemption or a winding up or other repayment of capital entitle the holders to have the assets of the company available for distribution amongst the members applied, in priority to any other class of shares, in paying to them pari passu the capital payable on such shares, but the holders thereof shall not be entitled to share in any surplus capital or further payment.
Profit and loss account
Lloyds Bank Plc hold a first legal charge over the Company's leasehold property and a fixed and floating charge over all property or undertaking of the Company. As at 31 March 2024, the Company had no bank borrowings with Lloyds Bank Plc (2023 - £Nil).
The pension cost charge represents contributions payable by the Company to the fund and amounted to £12,735
(2023 - £11,629). Contributions totalling £1,146 (2023 - £1,071) were receivable to the fund at the reporting date and are included in debtors.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
The ultimate controlling party is Stephen Clarke.
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