The directors present the strategic report for the year ended 31 December 2023.
The group consists of a number of businesses operating nationally in different sectors. Although Drylining and partitioning remains the most significant part of the business, we have seen substantial growth in the vehicle hire markets.
MEASOM DRYLINE
Measom (Dryline) Limited continues to operate nationally through regional centres providing a complete range of high quality drylining, partitioning and fire protection systems in the building and construction industry.
Our strengths lie in our ability to collaborate with our partners. What makes us different is our capability to listen, understand and advise using our experience that can be traced back to 1934. A key strength of the company is its proven ability to undertake drylining schemes in a wide diversity of projects in education, healthcare, commercial, retail, residential and leisure sectors of the industry.
Systems are installed to meet both aesthetic and functional requirements as well as specific fire, acoustic, thermal, durability and structural criteria. Construction is not just confined to lightweight partitions - the company installs load bearing metal studs for external walls, internal elements and high bay separating walls, as well as complete building frames. Our highly experienced project teams provide advice and guidance on contractual matters, programming, design aspects and optimum cost solutions.
We delivered a wide range of projects across the UK during 2023. The overall performance of the business in the previous year exceeded expectations. Turnover increased by 35% in the year to £35m. Margins improved with gross profit increasing from 20.3% to 22.4%. Overheads decreased as a percentage of both direct costs and revenue and this resulted in a profit for the year before taxation of 3% or £1m. The business focus on productivity together with continued investment in new technologies helped to deliver improvements in gross profit performance decreases in overheads. The key business focus of improved productivity will continue in the short to medium term and management will strive to deliver greater efficiencies resulting in a decrease in overheads as a percentage of turnover.
Turnover for 2024 is forecast to decrease as a result of both the general economic uncertainty and some project start dates delayed. However, secured orders together with a strong sales pipeline indicate that 2025 will exceed revenue achieved in 2023.
The Balance sheet remains strong with cash balances increasing in the year to £1.9m. The company also paid a dividend in the year of £500,000. At the year end the company was in a very strong position with total equity of £3.7m.
COMPELLO AUTOMOTIVE & LANESBOROUGH LEASING
The group continued to trade in the vehicle rental market through two brands. Compello Automotive Limited is an enlightened vehicle rental provider that gives customers the freedom to shape their own rental solution. Our approach is enlightened and consultative and built on transparent relationships that provides all types of vehicles to all kinds of organisations, anywhere in the UK by using our extensive supplier network
Lanesborough Leasing T/A Paull's Vehicle Rental has been serving the local vehicle rental market in and around Leicestershire and the East Midlands since the 1970’s. We understand the needs of our partners and they rely on us understanding their needs and requirements.
The uncertainty and volatility affecting the motor manufacturing industry over the last five years has shown some improvement in the last year although still providing some challenges. This has enabled us to renew part of our fleet with expenditure of £0.8m on vehicle additions. We continue to benefit in terms of residual values of our fleet with profit on disposals and with our extensive supplier network we have been able to support our customers when our competitors have found fleet availability challenging.
Turnover increased in the year from £7.3m to £9.1m, comfortably exceeding plan. This growth was also reflected in the net results. Following a strategic review, we are repositioning our local vehicle hire business to concentrate on specialist and semi-specialist vehicles in 2024 and expect that this will affect the reported revenue in the short term.
The group remains in a very strong position with total equity of £1m.
Economic Uncertainty
Although this presents a potential risk for the company, we feel confident that we can secure projects in sectors that remain buoyant in the medium term and the group remains well placed to manage these uncertainties. The company has been investing in an apprenticeship programme and training centre to mitigate impact of our workforce.
The company’s business does involve a number of inherent risks which are captured in the risk register and these are monitored regularly by the management team who will manage this risk by continuing its philosophy of providing the highest quality of products and services to existing clients.
Financial Risk Management
The Management team have identified that the business does have credit and liquidity risk if we are unable to recover amounts receivable on a timely basis. We monitor key contracts on a weekly basis and obtain credit references.
Contract Delivery
The Measom Dryline delivers large, lengthy and complex projects which carry risks if these are delayed and do not meet client expectations which could threaten our reputation and profitability. The management team ensure robust tender and contract controls to ensure projects are delivered using the correct experience and expertise.
The group refers to key performance indicators in order to monitor business performance with reference to time, cost, quality and health and safety. Management also focuses on financial targets, being turnover, margin and return on capital employed. These have been mentioned above and are included in the Profit and Loss Account and Balance Sheet.
The group has maintained strong liquidity and has continued to do so during the following year. The business maintains a strong capital base to allow us to meet current contractual commitments, to enable us to deliver further growth and to ensure that the group can withstand the challenge of any macro-economic issues such as the Pandemic.
The Group recognises that some of its activities may have an impact on the environment and are committed to reducing and minimising that impact through continually seeking to improve environmental performance by ensuring that all our employees and manufacturing supply chain develop a sound understanding of any possible environmental impacts and what is expected of them. The company has an environmental training programme and has introduced waste reduction and recycling initiatives at all locations. Our Head Office and regional offices all endeavour to be 100% paperless. We also seek to use the most environmentally efficient modes of transport and reduce unnecessary travel.
Health and safety ranks equally with all other business objectives and is integrated into every part of our operations. Essential to this policy is the identification, management or elimination of risk, although we cannot do it alone. We collaborate at every level to gain co-operation and full support to guarantee effective implementation.
Making a positive contribution to the communities where we work has always been a central part of the company’s philosophy. Our community engagement activities range from promoting local employment and training on our projects to fundraising and sponsorship. We work with our clients to help build better futures for the next generation.
We recognise that our people are our most valuable resource. It is the company’s aim to create a culture of learning and personal development where employees at every level and the company take joint responsibility for on-going training and improvement. As a business we do everything we can to support each other and every employee with their Measom journey.
The director's priorities in the wellbeing of the stakeholders of the company are split into sub-groups below:
Section 172 of The Companies Act 2006 requires a Director of a company to act in a way they consider, in good faith, would most likely promote the success of the Company for the benefit of its members as a whole. In doing this, section 172 requires Directors to have regard to, amongst other matters, the:
Likely consequences of any decisions in the long term,
Interests of the Company’s employees,
Need to foster the Company’s business relationships with suppliers, customers and others,
Impact of the Company’s operations on the community and the environment,
Desirability of the Company maintaining a reputation for high standards of business conduct, and
Need to act fairly as between members of the Company.
In discharging our section 172 duties we have regard to the matters set out above. In addition, we also have regard to other factors which we consider relevant to the decision being made. By considering the Company’s purpose, vision and values together with its strategic priorities and having a process in place for decision making, we aim to make sure that our decisions are consistent and predictable.
We delegate authority for day to day management of the Company to senior leadership teams and then engage management in setting, approving and overseeing execution of the business strategy and related policies. Board meetings are held regularly in which Directors consider the Company’s activities and make decisions. As part of those meetings the Directors receive information in a range of different formats to ensure that they have regard to section 172 matters when making relevant decisions.
The Company’s key stakeholders are its workforce, customers, suppliers and local communities in which it operates. The views of and the impact of the Company’s activities on those stakeholders are an important consideration for the Directors when making decisions. The size and spread of both the Company’s stakeholders and F.C. Measom Group means that generally our stakeholder engagement takes place at an operational and group level. We find that as well as being a more efficient and effective approach, this also helps us achieve a greater positive impact on environmental, social and other issues than working alone as an individual Company.
We follow a general framework for corporate governance principles that encourages the Directors to make decisions for the long term success of the Company and its stakeholders and it also complies with the requirements of section 172 of the Companies Act 2006.
We set out below examples on how we have had regard to matters set out in section 172 when discharging our responsibilities:
The Group Board have a bi-annual strategic review, where they consider the long term strategy for the group, such as which markets, sectors and industries it operates in as well as the products and services it offers.
The Group Board has quarterly governance reviews where they review the groups risk register.
There are regular team meetings where the group Board engage with its employees and provide updates about the business. Teams also engage with their members to promote best practice.
Regular communication takes place with the Company’s supply chain with a focus on community engagement initiatives to ensure that the Company and group is having a positive impact on its wider stakeholders.
By order of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mayfield & Co. were appointed as auditor to the group 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.
F. C. Measom Net Zero Strategy
Carbon emissions are Measom’s most significant sustainability impact. We recognise that global warming is a climate, ecological and social emergency and are committed to playing our part in mitigating global warming, and helping our customers do the same. We see this as an essential part of our vision to be the partner of choice and at the forefront of our chosen sector.
A number of steps have already been taken to reduce our carbon emissions, including designing to reduce waste, returning waste plasterboard direct to the manufacturer for reuse, installation of electric vehicle charging points and introduction of electric vehicles to our car fleet. This sets out our ambitious plans to build on this and achieve Net Zero, a goal which aligns with and supports delivery of the aspirations of many key organisations, including:
The UN Sustainable Development Goals, particularly Goal 13, Climate Action.
The UK Government’s commitment to be Net Zero by 2050.
The Science-Based Target Initiative’s best practice recommendations in relation to near-term and net zero targets.
Greenhouse gas (GHG) emissions baseline
In 2023 we conducted our first full assessment of Measom’s direct (scope 1 and 2) and indirect (scope 3) GHG emissions for the year. Total GHG emissions were 27,614 tCO2e.
GHG emissions were measured by an independent carbon specialist in accordance with the GHG Protocol Corporate Standard, with emission factors sourced from UK Government Conversion factors for 2023. The operational consolidation (control) approach was used, and emissions from carbon dioxide, methane and nitrous oxide were calculated. Scope 2 emissions have been calculated using the market-based method. For scope 3 categories 1, 2 and 4 the spend-based method and industry emission factors were applied. A breakdown of emissions is shown in Table 1. These form the baseline against which future progress and targets will be assessed.
Scope 1 and 2 emissions for 2023 were 39.6 tCO2e. Scope 1 emissions relate to business travel in company owned/leased vehicles. Scope 2 emissions relate to electricity use in offices and for the two company owned/leased electric vehicles. These have been calculated using both the location based method (17.0 tCO2e) and the market-based method (12.4 tCO2e), with the latter forming the baseline for targets.
Scope 3 emissions for 2023 were 27,574 tCO2e. These account for over 99% of the company’s total GHG emissions. Scope 3 emissions were calculated for all relevant categories, which are categories 1 (purchased goods and services), 2 (capital goods), 3 (fuel- and energy- related activities), 4 (upstream transportation and distribution), 5 (waste generated in operations), 6 (business travel), 7 (employee commuting including working from home), and 12 (end of life treatment of sold products).
Targets and commitments
Measom’s ultimate carbon target is to achieve Net Zero scope 1, 2 and 3 emissions by 2050. In accordance with the Science-Based Target Initiative (SBTi) best practice for SMEs, this long-term goal is coupled with a near-term target to achieve a 42% reduction in scope 1 and 2 emissions by 2030. We also commit to measuring and reducing our scope 3 emissions. We will be seeking SBTi validation of our near-term and Net Zero targets in the coming months.
Net Zero strategy
Our net zero strategy is structured around seven goals which will enable delivery of our near- and long-term scope 1, 2 and 3 targets.
We will measure, report and continuously improve our approach to energy and climate change mitigation.
We will reduce our energy demand:
We will transition to lower and zero carbon energy sources:
We will reduce our scope 3 emissions:
We will engage our stakeholders and advocate for climate change reduction.
Governance and reporting
The Board is ultimately responsible for delivery of this strategy and will be aided with strategy delivery on a day-to-day based by the Senior Management Team. Progress against the strategy will be monitored on a quarterly basis and we will report externally on progress on an annual basis.
We have audited the financial statements of F.C.Measom 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
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 purpose 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 company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation (ie. gives a true and fair view).
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.
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.
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 £362,229 (2022 - £66,439 loss).
F.C.Measom Limited (“the company”) is a private limited company incorporated in England and Wales. The registered office is 1934 The Yard, Exploration Drive, Leicester, LE4 5JD.
The group consists of F.C.Measom Limited and all of its subsidiaries.
The comparative figures in these financial statements were prepared for a period longer than one year in order to align the year end of this company with that of it's subsidiary companies. For this reason, the comparative amounts presented in the financial statements (including the related notes) are not entirely comparable.
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, modified to include the revaluation of investment properties at fair value.
The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company F.C.Measom 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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
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.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional 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.
Revenue from contracts for the provision of construction 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.
Revenue from the hiring out of motor vehicles and equipment is recognised over the life of the hire agreement.
Rental income from the investment properties is recognised over the period to which it relates.
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.
Fair value gains and losses on investment properties are recognised as a separate revaluation reserve within net assets.
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.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The 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.
Debtors and creditors with no stated interest rate and receivable or payable within one year are measured at transaction price. Any losses arising from impairment are recognised in the profit and loss account.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, 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 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.
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 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.
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.
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.
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 average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The rate of corporation tax changed from 19% to 25% from 1 April 2023.
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
In the consolidated group accounts the brought forward balances of motor vehicles have been restated due to a misstatement made in prior years on consolidation. The net effect of the misstatement on the accounts is £nil.
Investment property comprises residential and non residential properties. The fair value of the investment property has been arrived at on the basis of a valuation carried out at 31 December 2023 by the directors. The directors have been advised by Deborah Beevers MRICS of OXO House Associates Ltd. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Included within other creditors are loans totalling £4,627,021 (2022: £5,026,371) which are secured by a fixed and floating charge over all property or undertaking of the group.
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.
On 31 May 2022 the group disposed of its 51% holding in Level 5 Tools LLC. Included in these consolidated financial statements are losses of £4,749,117 arising from the company's interests in Level 5 Tools LLC up to the date of its disposal.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date: