The directors present the strategic report for the year ended 30 April 2024.
The principal activity of the company is a holding company. The principal activity of the group is the provision of equipment and services to civil engineering contractors and consultants. The group primarily operates in the UK, Middle East and North American markets.
The directors are pleased with the group's performance for the year. Revenue has grown strongly once again, and profit before tax has increased as major projects come online.
Net current assets have risen from last year to a historically high level, reflecting the group’s strong liquidity. Net assets have also increased, reinforcing a robust Statement of Financial Position.
The group faces a number of principal risks and uncertainties as detailed below:
Credit risk
Credit risk applies to financial instruments such as trade receivables. Policies and procedures exist to ensure the management of trade receivables minimises as far as reasonably practicable the group's exposure to credit risk. Tight controls applied to debt collection are in place and cash continues to be collected in accordance with expectation.
Liquidity risk
The group seeks to manage financial risk by ensuring that sufficient liquidity is available to meet foreseeable needs and invests cash assets safely and profitably.
Foreign exchange risk
The group operates in international markets and it is therefore exposed to currency movements. The group's financial risk management objective is broadly to make neither a trading profit nor loss from expense to currency. The group does not use hedge accounting.
Cash flow risk
The group's policy is to ensure that it always has sufficient cash to allow it to meet its liabilities when they become due. This risk is managed through budgeting and forecasts and through regular review of cash.
UK exit from the European Union
The group has increased prices to counter potential rises in shipping costs due to bureaucracy as well as increased fuel & energy costs. WJ have not experienced any shortages on regular materials so there is no impact on site operations.
Revenue and profits are expected to increase further in the year to April 2025.
Future orders continue to be secured across all key markets. Canada, the UK, and Saudi Arabia are expected to deliver strong results due to significant government contracts aimed at stimulating economic growth.
The group remains committed to researching technological advancements and operational improvements to maintain its competitive edge.
UK Exit from EU
The group continues to increase prices where necessary to counter potential rises in material & shipping costs due to bureaucracy as well as increased fuel & energy costs. WJ have not experienced any shortages of regular materials so there is no impact on site operations.
Business Relationships
WJ focus on working collaboratively with current clients to ensure successful completion of projects. This usually ensures both parties have a successful outcome from running projects & forms a good basis for working together on future projects.
Our People
Staff at all levels are valued & encouraged to participate in on-going training which helps everyone take responsibility & pride for good outcomes from their work.
Community, Charity & Environment
WJ believe it should not negatively impact its community or environment. Where there is an option to choose a positive over a negative outcome it will always choose the positive outcome. WJ’s current chosen charity is Young Minds, a charity specialising in children and adolescent mental health
Culture & Values
WJ focus on delivering excellence on every project. Clients expect to receive a service they can then recommend to others. The key to delivering the right kind of service is WJ staff. All staff receive regular training & updates to ensure they learn & progress which benefits themselves, WJ & the clients.
Shareholders
The shareholders of WJ are all current employees. They help to lead & drive the business forward. Information is regularly shared between management & shareholders to ensure a good working relationship.
The group's key performance indicators are revenue, profit before tax and net assets.
The directors can report the following KPI's for the year:
Turnover - £38,598,646 (2023: £33,969,562)
Profit before tax - £3,826,292 (2023: £2,574,468)
Net assets - £18,548,736 (2023: £16,559,999)
WJ focus on working collaboratively with current clients to ensure successful completion of projects. This usually ensures both parties have a successful outcome from running projects and forms a good basis for working together on future projects.
Staff at all levels are valued and encouraged to participate in on-going training which helps everyone take responsibility and pride for good outcomes from their work.
WJ believe it should not negatively impact its community or environment. Where there is an option to choose a positive over a negative outcome it will always choose the positive outcome. WJ's current chosen charity is Young Minds, a charity specialising in children and adolescent mental health.
WJ focus on delivering excellence on every project. Clients expect to receive a service they can then recommend to others. The key to delivering the right kind of service is WJ staff. All staff receive regular training and updates to ensure they learn and progress which benefits themselves, WJ and the clients.
Shareholders
The shareholders of WJ are all current employees. They help to lead and drive the business forward. Information is regularly shared between management and shareholders to ensure a good working relationship.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 April 2024.
The group has branches outside of the United Kingdom, in Ireland and Dubai.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £885,279. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group invests in research and development activities relevant to the size and nature of its operations with the aim of supporting future development of the group.
The group provides information on matters of concern to them as employees, including the financial and economic factors affecting the performance of the group.
Information on the likely future developments in the business has been included in the strategic report.
The auditor, Rayner Essex LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The company, as a holding company, is considered a low energy user given that the UK carbon usage is below the de minimis threshold of 40,000 KwH and as such, is exempt from reporting under the SECR regulations. All subsidiaries are exempt from reporting under SECR regulations.
We have audited the financial statements of WJ Management Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with the directors and other management, and from our commercial knowledge and experience of water consultancy and management services within the construction sectors;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment and other relevant regulations;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC and other relevant regulators.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,717,868 (2023 - £986,137 profit).
WJ Management Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 5, Abbotts Business Park, Primrose Hill, Kings Langley, Hertfordshire, WD4 8FR.
The group consists of WJ Management Limited and all of its subsidiaries.
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.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company WJ Management Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 April 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Turnover on contracts arises from increases in valuations on contracts and is recognised based on surveys of work performed and certified by the customer. Amounts not certified are shown as amounts recoverable on contracts in debtors.
Profits on contracts is calculated in accordance with accounting standards and industry practice. Profit recognition is based on an assessment of the overall profitability on individual contracts and is recognised when the outcome of a contract can be assessed with reasonable certainty. The profit recognised reflects that part of the total profit currently estimates to fairly represent the profit attributable to work certified at the statement of financial position date. Any adjustments required to reflect the stage of completion to the statement of financial position date are processed through cost of sales. The assessment of the final outcome of each contract is determined by regular review of the revenues and costs to complete that contract. Provision is made for losses incurred or foreseen in bringing the contract to completion as soon as they become apparent.
The group also rents surplus office spaces at its head office in Kings Langley. Rental income is recognised for the period to which the rental income relates.
The Companies Act 2006 requires depreciation of fixed assets including freehold buildings. However, the directors do not believe it is appropriate to depreciate the group's freehold property on the basis that the freehold property is maintained to such a high standard that their market value is excess of the book value shown in the accounts.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The 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 income statement, 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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Employee Share option plan (ESOP)
The cost of the company's shares held by the ESOP is deducted from equity in the company and consolidated statement of financial position under the heading ESOP share reserve. Any gain or loss on disposal of these shares by the ESOP is also recognised directly in equity. Other assets and liabilities of the ESOP (including cash and borrowings) are recognised as assets and liabilities of the company.
Share based payments
Where share options are awarded to employees by the ESOP, the fair value of the options at the date of grant is charged to the consolidated income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each statement of financial position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated income statement over the remaining vesting period.
No adjustment has been recognised in the current year or prior year in respect of the fair value of share options outstanding on the grounds of materiality.
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 statement of financial position 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 leased asset are consumed.
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.
Grants relating to the Government Job Retention Scheme are recognised when the requirements are met and recognised in the consolidated income statement in the period in which it relates.
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the statement of financial position date. Transactions in foreign currency are recorded at the rate ruling at the date of the transaction.
The results of overseas operations are translated at the rate ruling at the date of the transaction. However the statement of financial position is translated at the rate ruling at the date of the statement of financial position. Exchange differences arising on translation of opening assets are reported in the consolidated statement of reserves.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of an asset and projected disposal values.
The group has recognised impairment provisions in respect of bad and doubtful trade receivables. The judgements, estimates and associated assumptions necessary to calculate these provisions are based on historical experience and other reasonable factors.
This provision is based on the assessment of aging of the trade receivable balances and customer specific reasons. The value of trade receivables is the net provision for bad and doubtful trade receivables.
A provision is recognised when the group has a present legal or constructive obligation as a result of a past event for which it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. If the effect is material, provisions are determined by discounting the expected future cash flow at a rate that reflects the time value of money and the risks specific to the liability.
Whether a present obligation is probable or not requires judgement. The nature and type of risks for these provisions differ and management's judgement is applied regarding the nature and extent of the obligations in deciding if an outflow of resources is probable or not.
Profit recognition is subject to judgement and is based on assessment of the ongoing of the profitability of individual contracts. Profits are recognised by the directors when the outcome of the contract can be assessed with reasonable certainty. The profit recognised reflected that part of the total profit expected that fairly represents the profit attributable to turnover certified at the accounting date. Contract reviews are undertaken on a monthly basis by senior staff and directors.
There are many transactions and calculations for which the ultimate tax determination is uncertain. The group takes professional advice on its tax affairs and recognises liabilities for anticipated tax based on estimates of what taxation is likely to be due.
Management estimation is required to determine the amount of any deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
During the year retirement benefits were accruing to 5 directors (2023: 5) in respect of defined contribution pension schemes.
During the year 0 directors (2023: 1) exercised share options.
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:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 30 April 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Details of associates at 30 April 2024 are as follows:
The statutory year end for LDD-WJ Groundwater Limited is 31 December. For the purposes of these consolidated financial statements, interim accounts for the year ended 30 April 2024 have been prepared. These interim accounts have been subject to audit procedures deemed appropriate for the purposes of inclusion of the accounts within these consolidated financial statements.
Group
Share of net assets Loans to owed from associates Total
Investment
As at 1 May 2023 63,026 538,509 601,535
Share of profit /(loss) (6,468) (6,468)
Investment/ (amount repaid) (12,923) (12,923)
Foreign exchange (2,304) (2,304)
As at 30 April 2024 54,254 525,586 579,840
In line with FRS102 s14, the following amounts represent the WJ Management share of operating results, assets and liabilities in LDD-WJ Groundwater Limited:
Turnover - £1,282,000 (2023: £1,691,000)
Profit/ (loss) before tax (£15,000) (2023: (£49,000))
Tax - £4,000 (2023: (£31,000))
Profit/ (loss) after tax - (£11,000) (2023: (£80,000))
Fixed assets - £221,000 (2023: £267,000)
Current assets - £539,000 (2023: 534,000)
Creditors due within one year - £688,000 (2023: (£718,000)
Creditors due more than one year - £17,000 (2023: (£19,000)
Net assets / (liabilities) - £54,000 (2023: £64,000)
The facilities provided to the group are secured by way of a fixed and floating charge over all assets held by the group, a first legal charge over the freehold property of the group and a composite company unlimited multilateral guarantee given by the WJ Management Limited and WJ Groundwater Limited.
The assets acquired under hire purchase contracts are secured on the assets concerned by way of composite company multilateral guarantee.
Bank loans relates to various term loans. The first with a carrying amount of £109,616 (2023: £147,206) is repayable by August 2026. The second, with a carrying value of £294,043 (2023: £340,984) is repayable by November 2028. The third, with a carrying value of £183,333 (2023: £283,333) is repayable in February 2026 , and the fourth, with a carrying value of £554,167 (2023: £nil) is repayable in November 2025.
Finance lease payments represent rentals payable by the company or group 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. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £218,223 (2023: £186,932). Contributions totalling £39,889 (2023: £65,000) were payable at the Statement of Financial Position date and are within other creditors.
Employee Share Ownership Plan (ESOP)
The company established an Employee Share Ownership Plan (ESOP) in March 2008; the W J Management Limited Employees' Share Trust, to incentivise employees of the business through the issue of options which are awarded to employees. In 2015, options over shares held by the ESOP were granted to certain employees under a revised share incentivisation scheme. Following the grant of options, employees had 5 years from the grant date to exercise the options. Any options which are not exercised within 5 years will lapse.
Options are awarded to employees at the discretion of the existing shareholders and directors of the company. Under the scheme the trustee, William Heath & Co, repurchases the company's ordinary shares from existing shareholders, at market value subject to a discretionary reduction in value based on the period over which shares are held by the employee. Any repurchase of shares is completed using facilities provided by the company which meets the net financing costs.
Shares in the company held by the ESOP scheme are deducted from equity and amounts can be seen in the ESOP share reserve. Shares held by the ESOP do not have entitlement to vote or receive dividends.
At 30 April 2024 the trustee holds 56,467 shares in the company (2023: 56,467) of which 0 shares (2023: £9,356) are under option to employees.
The ESOP is a separate legal entity, with Independent Trustees and inclusion of the ESOP shares in these financial statements does not infer the shares are in any way owned or in the legal possession of the company.
This reserve records the amount above the nominal value received for shares.
This represents foreign exchange gains and losses on translation of overseas subsidiaries.
This represents the cost of the company's shares held by the ESOP.
The UAE entities within the group have provided guarantees to clients with various end dates totalling £237,289 (2023: £123,714)
The Group have provided guarantees including letters of credit to clients with various end dates totalling £1,149,022 (2023: £804,177).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Amounts contracted for but not provided in the financial statements:
The group has taken advantage of the FRS102 section 33.1A exemption from disclosing transactions with wholly owned group companies.
The group has transacted with LDD-WJ Groundwater Limited, a company incorporated in Israel. WJ Management Limited, the parent company of WJ Groundwater Limited, has a 50% shareholding in this entity.
During the year WJ Groundwater Limited has provided goods and services totalling £NIL (2023: £78,502).