Company registration number 07606442 (England and Wales)
HARGREAVES CONTRACTING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
HARGREAVES CONTRACTING LIMITED
COMPANY INFORMATION
Directors
M Moorhouse
A R Crompton
N J Ashworth
Company number
07606442
Registered office
Fourth Floor
Unit 5B, The Parklands
Bolton
BL6 4SD
Auditor
Sumer Auditco Limited
The Beehive
City Place
Gatwick
RH6 0PA
HARGREAVES CONTRACTING LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
HARGREAVES CONTRACTING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Review of the business

The year ended 31 March 2024 resulted in a profit before taxation amounting to £1,893,749(2023: £1,177,608) and a net asset position of £3,897,806 (2023: £2,620,983).

Principal risks and uncertainties

The Company’s exposure to price, credit, liquidity, cash flow and contract risk is monitored regularly and diligently by the directors and appropriate robust control procedures are implemented accordingly. Whilst the market remains at times variable, we continue to take a cautious and prudent approach to the pricing of tenders particularly single stage and design and build opportunities. We remain intrinsically risk averse and continue to concentrate on maintaining, reinforcing and cultivating our long term alliances with our much valued client base.

Development and performance

The financial statements for 2024 show continuing growth both in terms of turnover and profitability. Correspondingly shareholder funds were also significantly increased in the year. The year also saw a significant increase in average contract values and also marked our entry into the Education sector which had previously eluded us. Although the industrial/commercial market has been less busy in the period, we have nevertheless benefited from our strong associations with Registered Providers which has provided a strong pipeline of live work.

Key performance indicators

The success of the business continues to be measured by the realisation of consistent profit margins, increase in net assets and the effective control of overhead costs which is clearly demonstrated by the increase in gross profit from 11.20% to 11.81% in the last trading period.

 

Repeat business remains the cornerstone of our operations and we continue to seek to expand our portfolio of Blue Chip clients. We also seek to continue the steady increase in contract values and restore the balance between industrial/​commercial sector and residential work.

Future Developments

The focus remains very much on carefully managed strategic growth along with an effective succession plan achieved through the strengthening of the Board and the recruitment of suitably experienced personnel to ensure we develop and hone the skillsets needed to meet the technical challenges of the industry.

On behalf of the board

M Moorhouse
Director
5 November 2024
HARGREAVES CONTRACTING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company continued to be that of property construction.

Results and dividends

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

Ordinary dividends were paid amounting to £500,000. The directors do not recommend payment of a further dividend.

Directors

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

M Moorhouse
A R Crompton
N J Ashworth
Auditor

Sumer Auditco Limited were appointed as auditor of the company following the transfer of the audit business from Cowgill Holloway LLP, and are deemed to be reappointed under section 487 (2) of the Companies Act 2006.

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.

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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

HARGREAVES CONTRACTING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
On behalf of the board
M Moorhouse
Director
5 November 2024
HARGREAVES CONTRACTING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARGREAVES CONTRACTING LIMITED
- 4 -
Opinion

We have audited the financial statements of Hargreaves Contracting Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, 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.

Opinions on other matters prescribed by the Companies Act 2006

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

HARGREAVES CONTRACTING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARGREAVES CONTRACTING LIMITED (CONTINUED)
- 5 -
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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the Directors (as required by auditing standards) and discussed with the Directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

 

Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; laws related to Health and Safety, Employment, UK Companies Act, Pension Legislation, Tax Legislation and Construction Regulations.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.

HARGREAVES CONTRACTING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARGREAVES CONTRACTING LIMITED (CONTINUED)
- 6 -

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

We design procedures in line with our responsibilities, outline below to detect material misstatement due to fraud:

 

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.

Stuart Stead
Senior Statutory Auditor
For and on behalf of Sumer Auditco Limited
5 November 2024
Statutory Auditor
The Beehive
City Place
Gatwick
RH6 0PA
HARGREAVES CONTRACTING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
24,851,177
19,111,647
Cost of sales
(21,917,042)
(16,971,518)
Gross profit
2,934,135
2,140,129
Administrative expenses
(1,130,066)
(961,365)
Operating profit
4
1,804,069
1,178,764
Interest receivable and similar income
7
98,343
7,344
Interest payable and similar expenses
8
(8,663)
(8,500)
Profit before taxation
1,893,749
1,177,608
Tax on profit
9
(116,927)
(220,540)
Profit for the financial year
1,776,822
957,068
HARGREAVES CONTRACTING LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
69,072
151,508
Current assets
Stocks
12
308,872
251,709
Debtors
13
962,181
5,112,468
Cash at bank and in hand
6,707,178
3,946,213
7,978,231
9,310,390
Creditors: amounts falling due within one year
14
(4,087,506)
(6,674,223)
Net current assets
3,890,725
2,636,167
Total assets less current liabilities
3,959,797
2,787,675
Creditors: amounts falling due after more than one year
15
(49,509)
(131,713)
Provisions for liabilities
Deferred tax liability
17
12,482
34,979
(12,482)
(34,979)
Net assets
3,897,806
2,620,983
Capital and reserves
Called up share capital
19
3
2
Capital redemption reserve
2
2
Profit and loss reserves
3,897,801
2,620,979
Total equity
3,897,806
2,620,983

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 5 November 2024 and are signed on its behalf by:
M Moorhouse
Director
Company registration number 07606442 (England and Wales)
HARGREAVES CONTRACTING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
2
2
1,663,911
1,663,915
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
957,068
957,068
Balance at 31 March 2023
2
2
2,620,979
2,620,983
Year ended 31 March 2024:
Profit and total comprehensive income
-
-
1,776,822
1,776,822
Issue of share capital
19
1
-
-
1
Dividends
10
-
-
(500,000)
(500,000)
Balance at 31 March 2024
3
2
3,897,801
3,897,806
HARGREAVES CONTRACTING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
22
3,437,922
(7,258)
Interest paid
(8,663)
(8,500)
Income taxes paid
(232,837)
(126,514)
Net cash inflow/(outflow) from operating activities
3,196,422
(142,272)
Investing activities
Purchase of tangible fixed assets
(8,476)
(9,063)
Proceeds from disposal of tangible fixed assets
70,000
-
0
Repayment of loans
432
1,372
Interest received
98,343
7,344
Net cash generated from/(used in) investing activities
160,299
(347)
Financing activities
Proceeds from issue of shares
1
-
0
Payment of finance leases obligations
(95,757)
(24,334)
Dividends paid
(500,000)
-
0
Net cash used in financing activities
(595,756)
(24,334)
Net increase/(decrease) in cash and cash equivalents
2,760,965
(166,953)
Cash and cash equivalents at beginning of year
3,946,213
4,113,166
Cash and cash equivalents at end of year
6,707,178
3,946,213
HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
1
Accounting policies
Company information

Hargreaves Contracting Limited is a private company limited by shares incorporated in England and Wales. The registered office is Fourth Floor, Unit 5B, The Parklands, Bolton, BL6 4SD.

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

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

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

 

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

 

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

1.4
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.

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:

Leasehold improvements
20% per annum straight line method
Fixtures, fittings & equipment
20% per annum straight line method
Computer equipment
20% per annum reducing balance method
Motor vehicles
25% per annum reducing balance method
HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -

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.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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.

1.7
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 balance sheet 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.

HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

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.

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.

HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

1.8
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.

1.9
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 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset 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.

HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
1.10
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.

1.11
Retirement benefits

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

1.12
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 balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

2
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.

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.

Estimation of costs to complete for construction contracts

In line with accounting standards for construction contracts, the company recognises revenue and profit based on the stage of completion and costs to complete. In doing so, management must make certain estimations. The management review all contracts on a monthly basis and assess financial and operational performance versus budget as well as physically inspecting the work to corroborate the stage of completion.

HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Construction management
24,826,330
19,091,906
Rental income
24,847
19,741
24,851,177
19,111,647
2024
2023
£
£
Other revenue
Interest income
98,343
7,344
4
Operating profit
2024
2023
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
13,200
13,500
Depreciation of owned tangible fixed assets
4,597
3,747
Depreciation of tangible fixed assets held under finance leases
22,462
49,266
Profit on disposal of tangible fixed assets
(6,147)
-
Operating lease charges
29,186
29,072
5
Employees

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

2024
2023
Number
Number
Directors
3
3
Operational
13
13
Administrative
7
6
Total
23
22
HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
5
Employees
(Continued)
- 17 -

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,817,487
1,694,277
Social security costs
73,255
64,319
Pension costs
110,397
90,993
2,001,139
1,849,589
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
278,864
253,619
Company pension contributions to defined contribution schemes
48,041
42,408
326,905
296,027
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
140,328
139,112
Company pension contributions to defined contribution schemes
43,042
13,008

The highest paid director has exercised share options during the year.

7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
98,192
7,344
Other interest income
151
-
0
Total income
98,343
7,344
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
98,192
7,344
HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
8
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
8,663
8,453
Other interest
-
0
47
8,663
8,500
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
228,032
232,688
Adjustments in respect of prior periods
(88,608)
-
0
Total current tax
139,424
232,688
Deferred tax
Origination and reversal of timing differences
(22,497)
(12,148)
Total tax charge
116,927
220,540

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:

2024
2023
£
£
Profit before taxation
1,893,749
1,177,608
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
473,437
223,746
Tax effect of expenses that are not deductible in determining taxable profit
725
228
Adjustments in respect of prior years
(88,608)
-
0
Permanent capital allowances in excess of depreciation
-
0
(517)
Tax relief on share options
(268,627)
-
0
Change in rate of corporation tax
-
0
(2,917)
Taxation charge for the year
116,927
220,540
10
Dividends
2024
2023
£
£
Final paid
500,000
-
0
HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
11
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2023
7,722
7,506
48,916
197,063
261,207
Additions
-
0
167
3,309
5,000
8,476
Disposals
-
0
-
0
-
0
(106,916)
(106,916)
At 31 March 2024
7,722
7,673
52,225
95,147
162,767
Depreciation and impairment
At 1 April 2023
7,722
3,707
32,632
65,638
109,699
Depreciation charged in the year
-
0
906
3,691
22,462
27,059
Eliminated in respect of disposals
-
0
-
0
-
0
(43,063)
(43,063)
At 31 March 2024
7,722
4,613
36,323
45,037
93,695
Carrying amount
At 31 March 2024
-
0
3,060
15,902
50,110
69,072
At 31 March 2023
-
0
3,799
16,284
131,425
151,508

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

2024
2023
£
£
Motor vehicles
45,111
131,425
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
308,872
251,709
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
502,694
4,209,301
Gross amounts owed by contract customers
410,477
806,122
Other debtors
24,500
56,733
Prepayments and accrued income
24,510
40,312
962,181
5,112,468
HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
16
10,781
24,334
Payments received on account
369,664
957,351
Trade creditors
1,764,120
3,346,457
Corporation tax
139,275
232,688
Other taxation and social security
94,116
68,512
Other creditors
776,828
651,727
Accruals and deferred income
932,722
1,393,154
4,087,506
6,674,223
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
16
49,509
131,713
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
10,781
24,334
In two to five years
49,509
131,713
60,290
156,047

Finance lease payments represent rentals payable by the company for certain items held within tangible fixed assets. 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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
16,093
37,877
Pension creditor
(3,611)
(2,898)
12,482
34,979
HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
17
Deferred taxation
(Continued)
- 21 -
2024
Movements in the year:
£
Liability at 1 April 2023
34,979
Credit to profit or loss
(22,497)
Liability at 31 March 2024
12,482

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
110,397
90,993

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.

19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A1 shares of 1p each
100
100
1.00
1.00
Ordinary A2 shares of 1p each
100
100
1.00
1.00
Ordinary B shares of 1p each
51
23
0.51
0.23
251
223
2.51
2.00

On 1 December 2023 a director exercised his option under an EMI scheme to purchase 28 Ordinary B shares at an exercise price of £0.01 per share.

20
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:

2024
2023
£
£
Within one year
36,359
30,163
Between two and five years
38,292
67,248
74,651
97,411
HARGREAVES CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
21
Ultimate controlling party

As at 31 March 2024 the company had no individual controlling party.

22
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit for the year after tax
1,776,822
957,068
Adjustments for:
Taxation charged
116,927
220,540
Finance costs
8,663
8,500
Investment income
(98,343)
(7,344)
Gain on disposal of tangible fixed assets
(6,147)
-
Depreciation and impairment of tangible fixed assets
27,059
53,013
Movements in working capital:
Increase in stocks
(57,163)
(36,569)
Decrease/(increase) in debtors
4,149,855
(2,922,566)
(Decrease)/increase in creditors
(2,479,751)
1,720,100
Cash generated from/(absorbed by) operations
3,437,922
(7,258)
23
Analysis of changes in net funds
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
3,946,213
2,760,965
6,707,178
Obligations under finance leases
(156,047)
95,757
(60,290)
3,790,166
2,856,722
6,646,888
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