Company registration number SC059948 (Scotland)
MALCOLM ALLAN HOUSEBUILDERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 3 MAY 2024
MALCOLM ALLAN HOUSEBUILDERS LIMITED
COMPANY INFORMATION
Directors
M Allan
G Allan
B Allan
Company number
SC059948
Registered office
Castle Office
Castle Farm
Kintore
Inverurie
Aberdeenshire
United Kingdom
AB51 0XR
Auditor
Azets Audit Services
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
MALCOLM ALLAN HOUSEBUILDERS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 21
MALCOLM ALLAN HOUSEBUILDERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 3 MAY 2024
- 1 -
The directors present the strategic report for the year ended 3 May 2024.
Principal activities and business review
The principal activity of the company during the year was that of housebuilders and the construction of commercial property.
The directors are pleased with the company's performance which produced a satisfactory return. The competitive market for both housing and commercial development in the local area has contributed to the results achieved for the year under review.
In the year ended 03 May 2024 the company achieved turnover of £16.3m (2023: £11.9m) and a profit before tax of £1.7m (2023: £1.3m). Net assets at the balance sheet date were £60.7m (2023: £59.4m). The increase was in line with the expectations of the directors.
Principal risks and uncertainties
Competition
The company faces competition by other local housebuilders in the area. There are regular project management meetings which ensure all matters are addressed timeously and customer satisfaction is maintained.
Employees
The future success of the company depends on the skills and efforts of our employees and the ability to retain and develop these individuals. The company emphasises accountability and responsibility at the local level and encourages an entrepreneurial approach to running operations. The company constantly reviews its remuneration packages to make sure they remain competitive and also maintains development and succession planning programmes.
Suppliers
The company has a widespread supplier database due to its operations in multiple areas throughout the United Kingdom.
Regulation
Certain aspects of the company's activities mean that some employees can be exposed to hazardous environments. The company is committed to maintaining a safe working environment and a culture of zero tolerance to accidents. The company has in place quality and safety processes which are regularly audited by professional bodies and customers.
Apart from the above the directors are not aware of any major risks or uncertainties facing the company with the Statement of Financial Position continuing to be strong.
Key performance indicators
The directors consider the key performance indicators of the business to be turnover: £16.3m; (2023: £11.9m), gross profit: £1.8m; (2023: £1.7m), gross profit %: 11.0%; (2023: 14.3%), profit before tax: £1.7m; (2023: £1.3m), net assets: £60.7m; (2023: £59.4m) and cash position: £3.0m; (2023: £2.3m). The directors believe that there are no significant non-financial key performance indicators.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
- 2 -
Financial instruments
The company holds or issues financial instruments in order to achieve three main objectives, being:
(a) to finance its operations;
(b) to manage its exposure to interest risk arising from its operations and from its sources of finance; and
(c) for trading purposes.
In addition, various financial instruments (e.g. trade debtors, trade creditors, accruals and prepayments) arise directly from the company's operations.
Transactions in financial instruments result in the company assuming or transferring to another party one or more of the financial risks described below.
Liquidity risk
The company's aim is to maintain a balance between continuity of funding and flexibility through maintaining a sustainable level of external borrowings. Constant monitoring of the company's position allow the directors to anticipate if and when funds will be required.
Interest rate risk
The company did not have bank borrowings at the end of 3 May 2024 and 3 May 2023.
Credit risk
The company monitors credit risk closely and considers that its current policies of credit checks meets its objectives of managing exposure to credit risk.
The company has no significant concentrations of credit risk. Amounts shown in the balance sheet best represent the maximum credit risk exposure in the event other parties fail to perform their obligations under financial instruments.
B Allan
Director
27 January 2025
MALCOLM ALLAN HOUSEBUILDERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 3 MAY 2024
- 3 -
The directors present their annual report and financial statements for the year ended 3 May 2024.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M Allan
G Allan
B Allan
Future developments
The demand for both housing and commercial development has continued to be unfavourable, however the directors anticipate that the company will remain profitable in the forthcoming year. The future of the company can only be ensured by the judicious acquisition at appropriate terms of suitable land banks and the directors are always on the look out for such assets.
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Disclosure of information in the strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
B Allan
Director
27 January 2025
MALCOLM ALLAN HOUSEBUILDERS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 3 MAY 2024
- 4 -
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:
select suitable accounting policies 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 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.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MALCOLM ALLAN HOUSEBUILDERS LIMITED
- 5 -
Opinion
We have audited the financial statements of Malcolm Allan Housebuilders Limited (the 'company') for the year ended 3 May 2024 which comprise the statement of income and retained earnings, the balance sheet 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:
give a true and fair view of the state of the company's affairs as at 3 May 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MALCOLM ALLAN HOUSEBUILDERS LIMITED
- 6 -
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
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.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MALCOLM ALLAN HOUSEBUILDERS LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we 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. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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 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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Matthew Allan
Senior Statutory Auditor
For and on behalf of Azets Audit Services
28 January 2025
Chartered Accountants
Statutory Auditor
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
MALCOLM ALLAN HOUSEBUILDERS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 3 MAY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
16,339,597
11,933,331
Cost of sales
(14,547,516)
(10,202,382)
Gross profit
1,792,081
1,730,949
Administrative expenses
(1,440,486)
(1,527,761)
Other operating income
69,624
63,881
Operating profit
4
421,219
267,069
Interest receivable and similar income
6
1,316,268
1,051,038
Profit before taxation
1,737,487
1,318,107
Tax on profit
8
(435,925)
(244,068)
Profit for the financial year
1,301,562
1,074,039
Retained earnings brought forward
59,333,250
58,259,211
Retained earnings carried forward
60,634,812
59,333,250
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
BALANCE SHEET
AS AT 3 MAY 2024
03 May 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
1,894,498
1,992,015
Investment property
10
893,538
893,538
2,788,036
2,885,553
Current assets
Stocks
11
40,032,882
36,981,689
Debtors
12
18,246,656
19,917,155
Cash at bank and in hand
2,991,016
2,266,877
61,270,554
59,165,721
Creditors: amounts falling due within one year
13
(2,906,075)
(2,199,541)
Net current assets
58,364,479
56,966,180
Total assets less current liabilities
61,152,515
59,851,733
Provisions for liabilities
Deferred tax liability
14
417,703
418,483
(417,703)
(418,483)
Net assets
60,734,812
59,433,250
Capital and reserves
Called up share capital
16
100,000
100,000
Profit and loss reserves
60,634,812
59,333,250
Total equity
60,734,812
59,433,250
The financial statements were approved by the board of directors and authorised for issue on 27 January 2025 and are signed on its behalf by:
B Allan
Director
Company Registration No. SC059948
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 3 MAY 2024
- 10 -
1
Accounting policies
Company information
Malcolm Allan Housebuilders Limited, SC059948, is a private company limited by shares incorporated in Scotland. The registered office is Castle Office, Castle Farm, Kintore, Inverurie, Aberdeenshire, United Kingdom, AB51 0XR.
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.
This 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:
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 each category of financial instrument; 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 financial statements of the company are consolidated in the financial statements of MA Housebuilders Holdings Limited. These consolidated financial statements are available from its registered office, 2 Marischal Square, Broad Street, Aberdeen, Scotland, AB10 1DQ.
1.2
Going concern
As part of their consideration of going concern the directors have reviewed the company’s profit projections which are based on internal information and recent experience. true
Based on their assessment of the company’s prospects and viability the directors have formed a judgement, at the time of approving the financial statements, that there are no material uncertainties that cast doubt on the company’s going concern status and that there is reasonable expectation that the company has adequate resources to continue in operational existence for at least twelves months from the date of approval of the financial statements. The directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing its financial statements.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
1
Accounting policies
(Continued)
- 11 -
1.3
Turnover
In respect of property sales, turnover is recognised when the properties are sold. In respect of contracts for on-going services, turnover is recognised by reference to the stage of completion. Turnover is stated net of Value Added Tax.
Major contracts are subjected to a measurement of the value of work done on each contract at the year end. Full provision is made for foreseeable future losses.
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:
Property
4% straight line
Plant and machinery
20% reducing balance
Motor vehicles
25% reducing balance
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
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.6
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.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
1
Accounting policies
(Continued)
- 12 -
1.7
Stocks
Major contracts are subjected to a measurement of the value of work done on each contract at the year end. Full provision is made for foreseeable future losses.
Housing developments in progress are stated at the lower of cost and net realisable value. Cost is based on the cost of land and the costs incurred in developing that land. Net realisable value is based on estimated selling price less all further costs to complete.
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.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
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.
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.
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.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
1
Accounting policies
(Continued)
- 13 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
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.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
1
Accounting policies
(Continued)
- 14 -
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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
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.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
Foreign exchange
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.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
- 15 -
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.
Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual value of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
Work in progress and construction contracts
Valuations of work done are carried out by qualified surveyors on a contract by contract basis. The valuations include a degree of inherent uncertainty when estimating the profitability of a contract, particularly long term contracts.
Determining fair values of investment properties
The fair value of the investment property is reviewed on an annual basis taking into consideration any recent third party valuations and the knowledge of the directors. Any movement on the fair value of the investment property would be recognised through the Profit and Loss Account.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of properties
15,477,400
11,627,909
Construction contracts
862,197
305,422
16,339,597
11,933,331
2024
2023
£
£
Other revenue
Interest income
1,316,268
1,051,038
Grants received
21,753
17,096
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
- 16 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(21,753)
(17,096)
Fees payable to the company's auditor for the audit of the company's financial statements
25,000
22,150
Depreciation of owned tangible fixed assets
341,526
316,855
Profit on disposal of tangible fixed assets
(4,036)
(8,458)
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production
49
47
Office and management
13
13
Total
62
60
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,567,578
2,483,668
Social security costs
261,263
272,230
Pension costs
117,893
106,884
2,946,734
2,862,782
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
1,316,268
1,051,038
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
- 17 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
253,600
248,925
Company pension contributions to defined contribution schemes
60,000
40,000
313,600
288,925
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
124,000
120,785
Company pension contributions to defined contribution schemes
60,000
40,000
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
436,705
212,757
Adjustments in respect of prior periods
(2,095)
Total current tax
436,705
210,662
Deferred tax
Origination and reversal of timing differences
(780)
40,552
Adjustment in respect of prior periods
(7,146)
Total deferred tax
(780)
33,406
Total tax charge
435,925
244,068
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
8
Taxation
(Continued)
- 18 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
1,737,487
1,318,107
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.54%)
434,372
257,591
Tax effect of expenses that are not deductible in determining taxable profit
399
7,375
Gains not taxable
704
Adjustments in respect of prior years
(2,095)
Effect of change in corporation tax rate
8,852
Permanent capital allowances in excess of depreciation
1,154
(21,213)
Deferred tax adjustments in respect of prior years
(7,146)
Taxation charge for the year
435,925
244,068
The main rate of corporation tax increased from 19% to 25% on 1 April 2023. This increase in rate will have an impact on the company’s future tax charges. The company’s deferred tax balances as at 03 May 2024 have been calculated based on the rate of 25%.
9
Tangible fixed assets
Property
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 4 May 2023
911,406
3,423,182
539,546
4,874,134
Additions
263,665
39,308
302,973
Disposals
(214,000)
(21,700)
(235,700)
At 3 May 2024
911,406
3,472,847
557,154
4,941,407
Depreciation and impairment
At 4 May 2023
233,061
2,359,538
289,520
2,882,119
Depreciation charged in the year
33,858
237,152
70,516
341,526
Eliminated in respect of disposals
(155,758)
(20,978)
(176,736)
At 3 May 2024
266,919
2,440,932
339,058
3,046,909
Carrying amount
At 3 May 2024
644,487
1,031,915
218,096
1,894,498
At 3 May 2023
678,345
1,063,644
250,026
1,992,015
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
- 19 -
10
Investment property
2024
£
Fair value
At 4 May 2023 and 3 May 2024
893,538
Investment property comprises of properties held by the company for rent. The fair value of the investment property has been arrived at on the basis of directors estimation as at 3 May 2024. The original cost of the investment properties was £893,538.
11
Stocks
2024
2023
£
£
Work in progress
40,032,882
36,981,689
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
130,976
108,487
Other debtors
18,026,085
19,701,330
Prepayments and accrued income
89,595
107,338
18,246,656
19,917,155
Amounts included in other debtors of £17,875,079 (2023: £18,281,359) relates to a loan held with a related party. The loan is repayable on demand and is subject to interest at 2% plus base rate.
13
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
2,162,941
1,672,616
Corporation tax
436,450
208,409
Other taxation and social security
86,959
89,199
Other creditors
103,333
98,102
Accruals and deferred income
116,392
131,215
2,906,075
2,199,541
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
- 20 -
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Fixed asset timing differences
418,792
419,789
Short term timing differences
(1,089)
(1,306)
417,703
418,483
2024
Movements in the year:
£
Liability at 4 May 2023
418,483
Credit to profit or loss
(780)
Liability at 3 May 2024
417,703
15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
117,893
106,884
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.
As at the reporting date, amounts payable of £9,665 (2023: £10,859) had not been paid over to the schemes.
16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
17
Financial commitments, guarantees and contingent liabilities
The related company, Uppermill Farms Limited's bankers, hold a letter of guarantee pledged by Malcolm Allan Housebuilders Limited for all sums advanced to the related company which at 3 May 2024 was £nil (2023: £nil).
In the normal course of trade, the company's bankers hold a guarantee bond of £1,194,390 (2023: £150,000).
The company's bankers also hold a floating charge and negative pledge over the assets of the company.
MALCOLM ALLAN HOUSEBUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 3 MAY 2024
- 21 -
18
Operating lease commitments
Lessor
The operating leases represent leases of property to third parties.
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2024
2023
£
£
Within one year
3,265
8,797
19
Related party transactions
The company has common directors with Uppermill Farms Limited and during the year under review the company developed property for Uppermill Farms Limited for a total value of £696,571 (2023: £305,422). The company received interest from Uppermill Farms Limited of £1,206,982 (2023: £943,615) on the loan due from that company. The balance at the year end included in other debtors due from Uppermill Farms Limited was £17,875,079 (2023: £18,281,359), this balance is unsecured and repayable on demand.
20
Ultimate controlling party
The ultimate parent company is MA Housebuilders Holdings Limited, a company incorporated in Scotland whose registered office is 2 Marischal Square, Broad Street, Aberdeen, Scotland, AB10 1DQ.
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