Company registration number SC247496 (Scotland)
D A MACDONALD (CONTRACTORS) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
D A MACDONALD (CONTRACTORS) LIMITED
COMPANY INFORMATION
Directors
Mr D A MacDonald
Mrs I J MacDonald
Secretary
Mrs I J MacDonald
Company number
SC247496
Registered office
Site 13A
Kilmory Industrial Estate
Kilmory
Lochgilphead
Argyll
United Kingdom
PA31 8RR
Auditor
Azets Audit Services
5 Whitefriars Crescent
Perth
United Kingdom
PH2 0PA
D A MACDONALD (CONTRACTORS) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
D A MACDONALD (CONTRACTORS) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 1 -

The directors present the strategic report for the year ended 30 April 2024.

Review of the business

The company's turnover during the year to 30 April 2024 has decreased to £9.5m (2023: increased to £9.8m). The profit of the company has increased to £1.46m (2023: £0.55m). This increase is a result of improved trading during the period.

Principal risks and uncertainties

The company has exposure to a number of risks and uncertainties including government regulation and the tender process for contracts. The company monitors developments in these areas on an ongoing basis to ensure that the effects of any changes can be mitigated.

Financial Risk Management Objectives and Policies

The company's principal financial instruments comprise bank deposits. The main purpose of this financial instrument is to finance the company's operations. The company has various other financial instruments such as trade debtors and trade creditors, which arise directly from operations. The main risks arising from the company's financial instruments relate to credit. The board reviews and agrees policies for managing these risks which are summarised below.

Credit Risk

The company trades with only recognised, creditworthy third parties. In addition, receivable balances are monitored on an ongoing basis with the result that the company's exposure to bad debts is not significant.

On behalf of the board

Mr D A MacDonald
Director
21 January 2025
D A MACDONALD (CONTRACTORS) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -

The directors present their annual report and financial statements for the year ended 30 April 2024.

Principal activities

The principal activity of the company continued to be that of civil engineering services.

Results and dividends

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

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:

Mr D A MacDonald
Mrs I J MacDonald
Auditor

The auditor, Azets Audit Services, is 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.

D A MACDONALD (CONTRACTORS) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
On behalf of the board
Mr D A MacDonald
Director
21 January 2025
D A MACDONALD (CONTRACTORS) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF D A MACDONALD (CONTRACTORS) LIMITED
- 4 -
Opinion

We have audited the financial statements of D A MacDonald (Contractors) Limited (the 'company') for the year ended 30 April 2024 which comprise the profit and loss account, 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:

D A MACDONALD (CONTRACTORS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF D A MACDONALD (CONTRACTORS) LIMITED
- 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.

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.

D A MACDONALD (CONTRACTORS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF D A MACDONALD (CONTRACTORS) LIMITED
- 6 -

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:

 

 

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.

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.

Neil Morrison
Senior Statutory Auditor
For and on behalf of Azets Audit Services
23 January 2025
Chartered Accountants
Statutory Auditor
5 Whitefriars Crescent
Perth
United Kingdom
PH2 0PA
D A MACDONALD (CONTRACTORS) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 APRIL 2024
- 7 -
2024
2023
Notes
£
£
Turnover
9,518,305
9,771,436
Cost of sales
(5,594,080)
(7,492,355)
Gross profit
3,924,225
2,279,081
Administrative expenses
(1,994,165)
(1,755,299)
Other operating income
-
0
152,237
Operating profit
3
1,930,060
676,019
Interest receivable and similar income
6
7,763
-
0
Interest payable and similar expenses
7
(160)
(972)
Profit before taxation
1,937,663
675,047
Tax on profit
8
(473,393)
(121,259)
Profit for the financial year
1,464,270
553,788

The profit and loss account has been prepared on the basis that all operations are continuing operations.

D A MACDONALD (CONTRACTORS) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 8 -
2024
2023
£
£
Profit for the year
1,464,270
553,788
Other comprehensive income
-
-
Total comprehensive income for the year
1,464,270
553,788
D A MACDONALD (CONTRACTORS) LIMITED
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
2,587,422
2,872,553
Current assets
Stocks
11
26,890
26,670
Debtors falling due after more than one year
12
370,682
350,453
Debtors falling due within one year
12
1,886,527
2,235,976
Cash at bank and in hand
3,574,657
3,133,267
5,858,756
5,746,366
Creditors: amounts falling due within one year
13
(1,369,231)
(2,974,849)
Net current assets
4,489,525
2,771,517
Total assets less current liabilities
7,076,947
5,644,070
Provisions for liabilities
Deferred tax liability
15
541,549
572,942
(541,549)
(572,942)
Net assets
6,535,398
5,071,128
Capital and reserves
Called up share capital
17
10,002
10,002
Profit and loss reserves
6,525,396
5,061,126
Total equity
6,535,398
5,071,128
The financial statements were approved by the board of directors and authorised for issue on 21 January 2025 and are signed on its behalf by:
Mr D A MacDonald
Director
Company Registration No. SC247496
D A MACDONALD (CONTRACTORS) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 May 2022
10,002
5,007,338
5,017,340
Year ended 30 April 2023:
Profit and total comprehensive income for the year
-
553,788
553,788
Dividends
9
-
(500,000)
(500,000)
Balance at 30 April 2023
10,002
5,061,126
5,071,128
Year ended 30 April 2024:
Profit and total comprehensive income for the year
-
1,464,270
1,464,270
Balance at 30 April 2024
10,002
6,525,396
6,535,398
D A MACDONALD (CONTRACTORS) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
862,643
2,097,343
Interest paid
(160)
(972)
Income taxes refunded/(paid)
25,491
(199,999)
Net cash inflow from operating activities
887,974
1,896,372
Investing activities
Purchase of tangible fixed assets
(565,679)
(1,054,636)
Proceeds from disposal of tangible fixed assets
115,312
531,645
Interest received
7,763
-
0
Net cash used in investing activities
(442,604)
(522,991)
Financing activities
Payment of finance leases obligations
(3,980)
(63,718)
Dividends paid
-
0
(500,000)
Net cash used in financing activities
(3,980)
(563,718)
Net increase in cash and cash equivalents
441,390
809,663
Cash and cash equivalents at beginning of year
3,133,267
2,323,604
Cash and cash equivalents at end of year
3,574,657
3,133,267
D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 12 -
1
Accounting policies
Company information

D A MacDonald (Contractors) Limited is a private company limited by shares incorporated in Scotland. The registered office is Site 13A, Kilmory Industrial Estate, Kilmory, Lochgilphead, Argyll, United Kingdom, PA31 8RR.

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.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company's ability to continue as a going concern.

1.3
Turnover

Turnover represents the sales value, excluding VAT, of work in the period under contracts to supply services to third parties. It includes the relevant proportion of contract value for performance up to the period end.

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:

Freehold land and buildings
1 % on cost
Plant and equipment
25 % on reducing balance
Fixtures and fittings
25 % on reducing balance
Motor vehicles
25 % on 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
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.

D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 13 -
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.

1.7
Construction contracts

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.

1.8
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.

D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 14 -
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.

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.

D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -
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.

1.12
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14
Retirement benefits

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

D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
1.15
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the 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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Accounting for long term contracts

The company estimates the outcome of its construction contracts. This is normally measured by total costs incurred to date plus relevant proportion of expected profit for that contract.

 

Estimated profits are based on management's detailed budgets and projections.

 

Where management judge that 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 they will be recoverable.

 

Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Provision for snagging

The company includes a provision for snagging works which take place after the retention has been requested.

 

The very nature of the projects means it is very difficult to know with certainty what the likely costs will be. The company bases their estimation on the amount of hours, material, subcontractor and other costs for each project.

 

A prudent approach is taken to this estimation as it is difficult to predict what level of snagging customers will identify.

D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 17 -
3
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
12,177
9,750
Depreciation of owned tangible fixed assets
804,755
814,061
Depreciation of tangible fixed assets held under finance leases
-
83,026
Profit on disposal of tangible fixed assets
(69,257)
(281,169)
Operating lease charges
5,501
5,571
4
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
12,177
9,750
5
Employees

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

2024
2023
Number
Number
Direct labour
48
60
Administration
7
7
Total
55
67

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
2,259,645
2,472,517
Social security costs
222,788
236,259
Pension costs
122,863
81,913
2,605,296
2,790,689
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
7,763
-
0
D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 18 -
7
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
160
972
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
504,786
-
0
Deferred tax
Origination and reversal of timing differences
(31,393)
121,259
Total tax charge
473,393
121,259

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
1,937,663
675,047
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
484,416
168,762
Tax effect of expenses that are not deductible in determining taxable profit
214,442
176,453
Tax effect of income not taxable in determining taxable profit
(17,314)
(53,422)
Effect of change in corporation tax rate
-
0
(40,503)
Group relief
(22,400)
6,536
Capital allowances
(154,358)
(257,826)
Deferred tax movement
(31,393)
121,259
Taxation charge for the year
473,393
121,259
9
Dividends
2024
2023
£
£
Interim paid
-
0
500,000
D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 19 -
10
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 May 2023
208,641
7,050,501
32,219
835,622
8,126,983
Additions
-
0
457,909
1,937
105,833
565,679
Disposals
-
0
(243,481)
-
0
(100,832)
(344,313)
At 30 April 2024
208,641
7,264,929
34,156
840,623
8,348,349
Depreciation and impairment
At 1 May 2023
21,092
4,710,215
25,640
497,483
5,254,430
Depreciation charged in the year
2,086
692,224
2,132
108,313
804,755
Eliminated in respect of disposals
-
0
(214,182)
-
0
(84,076)
(298,258)
At 30 April 2024
23,178
5,188,257
27,772
521,720
5,760,927
Carrying amount
At 30 April 2024
185,463
2,076,672
6,384
318,903
2,587,422
At 30 April 2023
187,549
2,340,286
6,579
338,139
2,872,553

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
£
£
Plant and equipment
-
0
50,542
11
Stocks
2024
2023
£
£
Raw materials and consumables
26,890
26,670
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
750,748
1,235,870
Gross amounts owed by contract customers
1,074,694
559,869
Corporation tax recoverable
-
0
326,488
Other debtors
43,065
113,749
Prepayments and accrued income
18,020
-
0
1,886,527
2,235,976
D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
12
Debtors
(Continued)
- 20 -
2024
2023
Amounts falling due after more than one year:
£
£
Other debtors
370,682
350,453
Total debtors
2,257,209
2,586,429
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
14
-
0
3,980
Trade creditors
697,803
948,855
Amounts owed to group undertakings
-
0
1,600,000
Corporation tax
203,789
-
0
Other taxation and social security
208,006
207,406
Other creditors
16,509
4,427
Accruals and deferred income
243,124
210,181
1,369,231
2,974,849
14
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
-
0
3,980

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

15
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
541,549
572,942
D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
15
Deferred taxation
(Continued)
- 21 -
2024
Movements in the year:
£
Liability at 1 May 2023 as restated
572,942
Credit to profit or loss
(31,393)
Liability at 30 April 2024
541,549
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
122,863
81,913

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.

17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,002
10,002
10,002
10,002
18
Related party transactions

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.true

19
Ultimate controlling party

The parent company of D A MacDonald (Contractors) Limited is Inveraire Holdings Limited, a company incorporated in Scotland and its registered office is Site 13A Kilmory Industrial Estate, Kilmory, Lochgilphead, Argyll PA31 8RR.

 

The company is controlled by Mr D A MacDonald and Mrs I J MacDonald.

 

The ultimate controlling party is Mr D A MacDonald.

D A MACDONALD (CONTRACTORS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
20
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
1,464,270
553,788
Adjustments for:
Taxation charged
473,393
121,259
Finance costs
160
972
Investment income
(7,763)
-
0
Gain on disposal of tangible fixed assets
(69,257)
(281,169)
Depreciation and impairment of tangible fixed assets
804,755
897,087
Movements in working capital:
Increase in stocks
(220)
(7,000)
Decrease in debtors
2,732
121,644
(Decrease)/increase in creditors
(1,805,427)
690,762
Cash generated from operations
862,643
2,097,343
21
Analysis of changes in net funds
1 May 2023
Cash flows
30 April 2024
£
£
£
Cash at bank and in hand
3,133,267
441,390
3,574,657
Obligations under finance leases
(3,980)
3,980
-
3,129,287
445,370
3,574,657
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