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Registered number: 08949189









MONTEL CIVIL ENGINEERING LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2024

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
COMPANY INFORMATION


Directors
J E Kirkland 
D F Rogerson 




Registered number
08949189



Registered office
Suite A & B
Unit 1 Wainwright Road

Shire Business Park

Worcester

Worcestershire

WR4 9FA




Independent auditors
PKF Smith Cooper Audit Limited
Statutory Auditors

158 Edmund Street

Birmingham

B3 2HB





 
MONTEL CIVIL ENGINEERING LIMITED
 

CONTENTS



Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditors' report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13 - 14
Analysis of net debt
15
Notes to the financial statements
16 - 31


 
MONTEL CIVIL ENGINEERING LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024

Introduction
 
The Directors present the Strategic Report of Montel Civil Engineering Limited (the "Company") for the year ended 31 May 2024.
The Company continues to be engaged as a regional civil engineering contractor working out of its head office in Worcester, covering most aspects of civil engineering. Regional coverage now spans the Midlands, South West and East of England, providing a consistent service delivery to our clients, both in the public and private sector. The client base is primarily blue chip with the work being undertaken as principal contractor.
The Company carries out projects ranging in value from minor works through to array of multi-million pound schemes, the Company has built a strong reputation as a pro-active, user friendly civil engineering contractor.
The Company continues to be an owner managed business and the philosophy remains on the values instilled over recent years with the aim to be the civil engineering contractor of choice.

Business review
 
The Directors aim to present a balanced and brief review of the development and performance of the business during the year and its position at the end of the year. Our review is appropriate to the size and nature of the business. 
In the year ended 31 May 2024, the Company recorded its first ever trading loss with Turnover of £25.6m (2023 - £33.2m) and an operating loss of £856k (2023 – Profit of £1,821k). Turnover and Margin were impacted as a result of challenging market conditions leading to a number of secured and preferred contractor projects being delayed and pushed into the 2024-2025 financial year.
Against these challenging economic conditions, the Company has shown a strong resilience by tailoring its business strategy to prevailing market conditions leading 2024-2025 having a more balanced portfolio of work spanning multiple sectors.
During the year, the Directors have reviewed the company’s client base, market sectors and bid selectivity, recognising the risks and exposure associated within each, and have implemented a strict bid/no bid criteria. Our strategy is to reduce reliance on main contractor competitively tendered schemes, with an increase focus on frameworks such as Thames Water Runway 2, Warwickshire and Hereford Council Highways and Public Realm schemes.
At 31 May 2024, the company had a future forward order book of £22.2 million, with further key potential orders of £23.8 million. As a result, the Company entered 2024-25 with 100% of the year’s budgeted workload either secured or having preferred contractor status.
We expect the UK construction market to continue to remain challenging during the remainder of 2024, following the general election and with interest rates continuing to remain high, starving the house building sector. The Directors are feeling more confident for 2025 returning to a gradual level of growth within the industry, stimulated by an increase level in government spending on infrastructure and a recovery within the house building sector from interest rate reductions.
Results
The results for the year ended 31 May 2024 are set out in the financial statements. The Company's loss before taxation was £727k (2023: Profit-  £1,869k). The loss for the financial year was £596k (2023: Profit- £1,494k). The Company had net assets of £3.9m at year end, down from net assets of £5.0m from the prior year.

 
Page 1

 
MONTEL CIVIL ENGINEERING LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024

Health, Safety and the Environment 
The health, safety and well-being of all who work with us and around us is of the utmost importance: our care for colleagues, contractors and stakeholders.
The Accident Incidence Rate (AIR) for 2024 for our employees and supply chain was 0 (2023: 12.07). This is significantly better than the HSE benchmark for the industry. The AIR measures serious injuries and accidents leading to more than seven day’s absence from work. The AIR has continued to maintain at this point following the 2024 financial year.
In 2024, our Company achieved its second consecutive annual RoSPA Gold Safety Award.
The Company continues to concentrate on its management of health and safety in 2024-2025 with the objectives clearly focused on leading indicators to prevent incidents and injuries.
Social Value 
With the Company's ever increasing commitment to our Corporate Social Responsibility and Community Engagement, we have a dedicated, directly employed, team that are allocated specifically to this subject matter.
Whilst the site management team are the first point of contact for our clients, their consultants, statutory bodies, and adjacent properties, Montel allocates one of our Customer Liaison Managers to pertinent schemes – to proactively engage with our neighbours, local businesses, retail premises, and those interested stakeholders wishing to gain further knowledge regarding the project; as well as nearby schools – so that we can positively promote our industry, encourage students to consider careers in construction and civil engineering, whilst also explaining the health & safety risks associated with building sites.
 

Principal risks and uncertainties
 
New Work 
As with all businesses, we require a steady flow of new business in order to provide the revenue to cover the company’s costs.
We actively monitor and manage the pipeline of projects in conversion from tender to contract. Weekly meetings are held, attended by the Chief Executive Officer and Regional Directors, where the pipeline of opportunities is discussed and updated with actions agreed. This links with the “Approval to Bid” process which considers opportunities and removes those which are not in line with our desired risk profile.
The Company maintains an active business development team and new business targets and wins are reported on a monthly basis to the Board of Directors. Maintaining the Company’s position on the many Framework Agreements with public sector, and public utility bodies is at the core of the Company’s strategy and the Company maintains close dialogue with all awarding and monitoring bodies.
Contract Delivery
Certainty of contract delivery remains a key focus and we expect to see further improvements as our system and process modernisation is bedded in. Contracts are monitored closely, and each month costs and likely outcomes are reviewed in detail by Contract Managers and the Company’s commercial team. We continue to monitor compliance with legislation both at project and business unit level and are not aware of any material issues in this regard. 


 
Page 2

 
MONTEL CIVIL ENGINEERING LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024


Supply Chain and Inflation
The construction industry generally has recently suffered from labour shortages and inflationary pressures in respect of material prices. We work closely with our customers and suppliers to monitor and mitigate, where possible, the impact of external events beyond the Company’s control.
Volatility within the supply chain manufacturing processes, particularly for key inputs such as energy, fuel and materials as well as wage inflation, will continue to fluctuate for some time to come. 
To mitigate risk, the Company carefully considers overall project durations, along with the introduction of fluctuation clauses which allow the price of contracts to be adjusted to reflect changes in the law, the cost of materials and/ or the cost of labour during the construction periods. 
Going Concern 
The Directors regularly review financial forecasts, including cashflow projections, in order to ensure that the Company will be able to meet its financial obligations. 
Detailed forecasts are updated on a monthly basis, whilst rolling 13 week cashflow forecasts are updated each week. The Company is in regular dialogue with its shareholders and have representation at a monthly Board of Directors meeting.
Financial risk management policy
The Company’s principal financial instruments comprise of cash. The main purpose of this financial instrument is the finance for the Company’s operations. The Company has various other financial instruments, such as trade debtors and trade creditors, which arise directly from its operations. The Company does not enter into derivative transactions.
The main risks arising from the Company's financial instruments are liquidity risk and credit risk. The directors review and agree policies for managing each of these risks and they are summarised below.
Liquidity Risk
The Company's objective is to maintain a healthy cash balance through its use of cash forecasting and management tools.
Credit Risk
The Company only trades with recognised, creditworthy third parties. Receivables balances are monitored on an ongoing basis with the result that the Company's exposure to bad debts is not significant.


This report was approved by the board on 3 September 2024 and signed on its behalf.



J E Kirkland
Director

Page 3

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024

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

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £596k (2023 - profit £1,494k).

Dividends paid during the year were £500k (2023 - £117k). No final dividend was proposed.

Directors

The directors who served during the year were:

J E Kirkland 
S Turbutt (resigned 30 November 2023)
D F Rogerson 

Directors' indemnity insurance

The Company maintains an appropriate level of directors’ and officers’ insurance in respect of legal actions against the directors. No cover is provided where the director has acted fraudulently or dishonestly.

Page 4

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsPKF Smith Cooper Audit Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 3 September 2024 and signed on its behalf.
 





J E Kirkland
Director

Page 5

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MONTEL CIVIL ENGINEERING LIMITED
 

Opinion


We have audited the financial statements of Montel Civil Engineering Limited (the 'Company') for the year ended 31 May 2024, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 May 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.


Page 6

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MONTEL CIVIL ENGINEERING LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 4, 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.


Page 7

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MONTEL CIVIL ENGINEERING LIMITED (CONTINUED)


Auditors' 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 Auditors' 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:

Based on our understanding of the company and industry, key laws and regulations that we identified included:

Companies Act;
Tax Legislation; and
Health and Safety and Employment Legislation.

We identified that the principal risk of fraud or non-compliance with laws and regulations related to:

management bias in respect of accounting estimates and judgements made;
management override of control; and
posting of unusual journals or transactions.

We focussed on those areas that could give rise to a material misstatement in the Company financial statements.

Our procedures included, but were not limited to:

Enquiry of management and those charged with governance/ review of available correspondence around actual and potential litigation and claims, including instances of non-compliance with laws and regulations and fraud;
Reviewing minutes of meetings of those charged with governance, where available;
Reviewing legal expenditure in the year to identify instances of non-compliance with laws and regulations and fraud;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations and;
Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias, in particular review of amounts recoverable on contracts and accruals.

It is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.






Page 8

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MONTEL CIVIL ENGINEERING LIMITED (CONTINUED)


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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our 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 Auditors' 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.





Stephen Newman (Senior statutory auditor)
  
for and on behalf of
PKF Smith Cooper Audit Limited
 
Statutory Auditors
  
158 Edmund Street
Birmingham
B3 2HB

6 September 2024
Page 9

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024

2024
2023
Note
£
£

  

Turnover
 4 
25,638,051
33,196,205

Cost of sales
  
(24,015,657)
(29,165,665)

Gross profit
  
1,622,394
4,030,540

Administrative expenses
  
(2,478,001)
(2,209,810)

Operating (loss)/profit
 5 
(855,607)
1,820,730

Interest receivable and similar income
 9 
143,867
72,562

Interest payable and similar expenses
 10 
(15,597)
(24,589)

(Loss)/profit before tax
  
(727,337)
1,868,703

Tax on (loss)/profit
 11 
131,659
(375,000)

(Loss)/profit for the financial year
  
(595,678)
1,493,703

There was no other comprehensive income for 2024 (2023:£NIL).

The notes on pages 16 to 31 form part of these financial statements.

Page 10

 
MONTEL CIVIL ENGINEERING LIMITED
REGISTERED NUMBER: 08949189

BALANCE SHEET
AS AT 31 MAY 2024

As restated
2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 13 
324,688
237,831

  
324,688
237,831

Current assets
  

Debtors: amounts falling due after more than one year
 14 
222,645
473,492

Debtors: amounts falling due within one year
 14 
6,341,628
9,466,145

Cash at bank and in hand
 15 
3,733,986
3,792,381

  
10,298,259
13,732,018

Creditors: amounts falling due within one year
 16 
(6,524,111)
(8,710,562)

Net current assets
  
 
 
3,774,148
 
 
5,021,456

Total assets less current liabilities
  
4,098,836
5,259,287

Creditors: amounts falling due after more than one year
 17 
(211,454)
(244,568)

Provisions for liabilities
  

Deferred tax
 20 
-
(31,659)

Net assets
  
3,887,382
4,983,060


Capital and reserves
  

Called up share capital 
 21 
100
100

Share premium account
 22 
482,743
482,743

Profit and loss account
 22 
3,404,539
4,500,217

  
3,887,382
4,983,060


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 3 September 2024.




J E Kirkland
Director

The notes on pages 16 to 31 form part of these financial statements.

Page 11

 
MONTEL CIVIL ENGINEERING LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 June 2022
100
482,743
3,123,184
3,606,027


Comprehensive income for the year

Profit for the year
-
-
1,493,703
1,493,703

Dividends
-
-
(116,670)
(116,670)



At 1 June 2023
100
482,743
4,500,217
4,983,060


Comprehensive income for the year

Loss for the year
-
-
(595,678)
(595,678)

Dividends
-
-
(500,000)
(500,000)


At 31 May 2024
100
482,743
3,404,539
3,887,382


The notes on pages 16 to 31 form part of these financial statements.

Page 12

 
MONTEL CIVIL ENGINEERING LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024

2024
2023
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(595,678)
1,493,703

Adjustments for:

Depreciation of tangible assets
101,115
95,711

(Profit)/Loss on disposal of tangible assets
(11,333)
7,337

Interest paid
15,597
24,589

Interest received
(143,867)
(72,562)

Taxation charge
(131,659)
375,000

Decrease/(increase) in debtors
3,547,975
(3,423,418)

(Decrease) in creditors
(2,112,724)
(713,171)

Corporation tax (paid)
(248,573)
(751,137)

Net cash generated from operating activities

420,853
(2,963,948)


Cash flows from investing activities

Purchase of tangible fixed assets
(260,346)
(168,222)

Sale of tangible fixed assets
83,707
71,449

Interest received
143,867
72,562

HP interest paid
(15,597)
(8,168)

Net cash from investing activities

(48,369)
(32,379)
Page 13

 
MONTEL CIVIL ENGINEERING LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024


2024
2023

£
£



Cash flows from financing activities

New hire purchase agreements
130,884
154,985

Repayment of hire purchase agreements
(61,763)
(159,883)

Dividends paid
(500,000)
(116,670)

Interest paid
-
(16,421)

Net cash used in financing activities
(430,879)
(137,989)

Net (decrease) in cash and cash equivalents
(58,395)
(3,134,316)

Cash and cash equivalents at beginning of year
3,792,381
6,926,697

Cash and cash equivalents at the end of year
3,733,986
3,792,381


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
3,733,986
3,792,381

3,733,986
3,792,381


The notes on pages 16 to 31 form part of these financial statements.

Page 14

 
MONTEL CIVIL ENGINEERING LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MAY 2024





At 1 June 2023
Cash flows
New hire purchase contracts
At 31 May 2024
£

£

£

£

Cash at bank and in hand

3,792,381

(58,395)

-

3,733,986

Hire purchase contracts

(195,928)

61,763

(130,884)

(265,049)


3,596,453
3,368
(130,884)
3,468,937

The notes on pages 16 to 31 form part of these financial statements.

Page 15

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

1.


General information

Montel Civil Engineering Limited is a private limited company, limited by shares and incorporated in the United Kingdom. The address of the registered office is given in the company information of these financial statements. The company's registration number is 08949189. The nature of the company's operations and principal activities are described in the Strategic report on page 1.
The financial statements are prepared in Sterling which is the functional currency of the company. The financial statements level of rounding is to the nearest £1.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

Page 16

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

2.Accounting policies (continued)

 
2.2

Revenue


Turnover is earned from the provision of construction services across a range of sectors in both public and private markets. Turnover is measured at the fair value of the consideration receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales-related taxes. 
The Company enters into construction contracts on a fixed and variable fee basis. The contract is assessed to determine whether it contains a single combined performance obligation or multiple performance obligations. The Company recognises the performance obligation related turnover over time using the percentage of completion method of accounting. The percentage of completion is calculated based on the ratio of costs incurred to date compared with the total expected costs for that contract. Profit on such contracts in progress is taken when the outcome of the contract can be assessed with reasonable certainty. Where the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the extent of costs incurred, if it is probable that they will be recovered. 
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately and held on the balance sheet in accruals. 
The estimation technique used in attributing profit made on contracts to a particular period is reviewed with reference to forecasts monitored by contract managers on a contract by contract basis. These focus on turnover and costs to complete and enable an assessment to be made of the final outturn of each contract. 
Turnover for contract variations, and claims in respect of completing projects ahead of a targeted cost are included as variable consideration in the Company’s estimate of the transaction price only if it is highly probable that a significant reversal of revenue will not occur. In making this assessment, the Company considers its historical record of performance on similar contracts, whether the Company has access to the labour and materials resources needed to meet the contract programme, and the potential impact of other reasonably foreseen constraints.
Contract assets, which are included in ‘debtors’ as “amounts recoverable on long term contracts”, are recognised as the proportion of performance obligations fulfilled by the Company and for which the definitive right to receive cash was subject to approval and receipt of a payment certificate. Contract assets are converted into a trade debtor, also included in ‘debtors’, at the point the amount is certified and invoiced; resulting in the Company's unconditional right to receive cash. Contract assets therefore represent a portion of future payments receivable by the Company under existing contracts.
When payments received from customers exceed turnover recognised to date on a particular contract, any excess (a contract liability) is included in 'trade and other payables' as contract liabilities, “payments on account”. Material costs incurred in bidding for and mobilising contracts that related directly to a contract and are incurred in securing the contract are also included as part of the contract costs if they can be separately identified and measured reliably from the point that it is probable the contract will be obtained. 
The Company has taken advantage of the practical exemption to expense the incremental costs of obtaining a contract when the amortisation period of the asset otherwise recognised would have been one year or less.

Page 17

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

2.Accounting policies (continued)

 
2.3

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to Statement of comprehensive income on a straight-line basis over the lease term.

 
2.4

Interest income

Interest income is recognised in the Statement of comprehensive income using the effective interest method.

 
2.5

Finance costs

Finance costs are charged to the Statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.6

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 18

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

2.Accounting policies (continued)

 
2.7

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in Statement of comprehensive income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.8

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Plant and machinery
-
12.5 - 25%
Motor vehicles
-
20 - 25%
Office equipment
-
15 - 25%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of comprehensive income.

Page 19

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

2.Accounting policies (continued)

 
2.9

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.10

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.11

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

  
2.12

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to Statement of comprehensive income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.

 
2.13

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Page 20

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

2.Accounting policies (continued)


2.13
Financial instruments (continued)

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

 
2.14

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year; however, the nature of estimation means that the actual outcomes could differ from those estimations.
The following judgment (apart from those involving estimation) has had the most significant effect on the amounts recognised in the financial statements.
- Revenue recognition
When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be profitable, contract revenue and costs are recognised over the period of the contract by reference to the stage of completion based on actual costs incurred to the end of the accounting period compared to forecasted costs to determine the appropriate amount to be recognised in a given period. When it is probable that the total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
In determining the stage of completion, the Company has appropriate systems for cost estimating, forecasting and revenue and costs reporting. The system also requires consistent judgment (forecasting) of the final outcome of the contract. Estimates are an inherent part of this assessment and the actual future outcome may deviate from the estimated outcome, however, historical experience has shown that estimates are, on the whole, sufficiently reliable.


4.


Turnover

The whole of the turnover is attributable to the civil engineering undertaken by the company.

All turnover arose within the United Kingdom.

Page 21

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

5.


Operating profit

The operating profit is stated after charging:

2024
2023
£
£

Depreciation of tangible fixed assets
101,115
95,711

Defined contribution pension costs
153,088
147,407

Other operating lease rentals
50,532
71,692


6.


Auditors' remuneration

2024
2023
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
19,000
18,750

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2024
2023
£
£

Wages and salaries
4,119,723
3,901,827

Social security costs
442,357
407,241

Cost of defined contribution scheme
153,088
147,407

4,715,168
4,456,475


The average monthly number of employees, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Administration and support
19
17



Production
42
42

61
59

Page 22

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

8.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
447,341
396,613

Company contributions to defined contribution pension schemes
29,046
33,288

476,387
429,901


During the year retirement benefits were accruing to 3 directors (2023 - 3) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £260,489 (2023 - £198,816).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £24,000 (2023 - £8,288).

In addition to above, the Company paid £nil (2023 - £8,763) for directors' services during the year.


9.


Interest receivable

2024
2023
£
£


Other interest receivable
143,867
72,562


10.


Interest payable and similar expenses

2024
2023
£
£


Other interest payable
-
16,421

Finance leases and hire purchase contracts
15,597
8,168

15,597
24,589

Page 23

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

11.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
-
375,000


Deferred tax


Tax losses
(131,659)
-


Taxation on (loss)/profit on ordinary activities
(131,659)
375,000

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 20%). The differences are explained below:

2024
2023
£
£


(Loss)/profit on ordinary activities before tax
(727,337)
1,868,703


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 20%)
(181,834)
373,741

Effects of:


Expenses not deductible for tax purposes
534
20,191

Depreciation for year in excess of capital allowances
7,160
(13,027)

Unrelieved tax losses carried forward
34,070
-

Other differences leading to an increase/ (decrease) in the tax charge
8,411
(5,905)

Total tax charge for the year
(131,659)
375,000


Factors that may affect future tax charges

The Company has estimated losses of £650,000 (2023 - £nil) available for carry forward against future trading profits.


12.


Dividends

2024
2023
£
£


Ordinary shares interim
500,000
116,670

Page 24

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

13.


Tangible fixed assets





Plant and machinery
Motor vehicles
Office equipment
Total

£
£
£
£



Cost


At 1 June 2023
137,351
192,402
105,388
435,141


Additions
1,566
229,168
29,612
260,346


Disposals
-
(111,331)
-
(111,331)



At 31 May 2024

138,917
310,239
135,000
584,156



Depreciation


At 1 June 2023
51,863
71,375
74,072
197,310


Charge for the year
27,445
61,480
12,190
101,115


Disposals
-
(38,957)
-
(38,957)



At 31 May 2024

79,308
93,898
86,262
259,468



Net book value



At 31 May 2024
59,609
216,341
48,738
324,688



At 31 May 2023
85,488
121,027
31,316
237,831

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2024
2023
£
£



Plant and machinery
53,508
78,204

Motor vehicles
216,341
121,027

269,849
199,231

Page 25

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

14.


Debtors

As restated
2024
2023
£
£

Due after more than one year

Retentions
222,645
473,492

222,645
473,492


As restated
2024
2023
£
£

Due within one year

Trade debtors
1,692,763
3,473,495

Amounts recoverable on long term contracts
2,278,080
2,980,849

Retentions
2,089,309
2,685,273

Other debtors
60,338
266,674

Corporation tax recoverable
72,611
-

Prepayments
48,527
59,854

Deferred taxation
100,000
-

6,341,628
9,466,145


Included within other debtors are loans made to directors of the business amounting to £50,889 (2023 - £258,101). Details surrounding these loans are disclosed in the notes to these financial statements.



15.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
3,733,986
3,792,381


Page 26

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

16.


Creditors: Amounts falling due within one year

As restated
2024
2023
£
£

Trade creditors
3,659,755
3,898,407

Payments on account
284,388
-

Corporation tax
-
175,962

Other taxation and social security
413,247
489,782

Obligations under finance lease and hire purchase contracts
91,083
55,186

Other creditors
23,394
49,425

Accruals
2,052,244
4,041,800

6,524,111
8,710,562


Obligations under finance lease and hire purchase contracts are secured against the assets to which they relate.


17.


Creditors: Amounts falling due after more than one year

As restated
2024
2023
£
£

Net obligations under finance leases and hire purchase contracts
173,966
140,742

Trade creditors
37,488
103,826


Obligations under finance lease and hire purchase contracts are secured against the assets to which they relate.


18.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2024
2023
£
£


Within one year
91,083
55,186

Between 1-5 years
173,966
140,742

265,049
195,928

Page 27

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

19.


Financial instruments

2024
2023
£
£

Financial assets


Financial assets measured at fair value through Statement of comprehensive income
3,733,986
3,792,381

Financial assets that are debt instruments measured at amortised cost
6,343,135
9,879,783

10,077,121
13,672,164


Financial liabilities


Financial liabilities measured at amortised cost
(6,033,875)
(8,065,695)


Financial assets measured at fair value through Statement of comprehensive income comprise cash at bank and in hand.


Financial assets that are debt instruments measured at amortised cost comprise trade debtors, other debtors, amounts recoverable on long term contracts and retentions.


Financial liabilities measured at amortised cost comprise payments received on account, trade creditors, other creditors, and accruals and deferred income.

Page 28

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

20.


Deferred taxation




2024


£






At beginning of year
(31,659)


Credited to statement of comprehensive income
131,659



At end of year
100,000

The deferred taxation balance is made up as follows:

2024
2023
£
£


Accelerated capital allowances
(31,659)
(31,659)

Tax losses carried forward
131,659
-

100,000
(31,659)


21.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



100 (2023 - 100) Ordinary shares of £1.00 (2023 - £1.00) each
100
100



22.


Reserves

Share premium account

This reserve records the amount above the nominal value received for the shares issued.

Profit and loss account

This reserve records all current and prior period retained profits and losses.


23.


Prior year adjustment

There has been a restatement to the financial statements for the comparative year ended 31 May 2023 to correct the split of debtors and creditors within one year and greater than one year. There has been no restatement to the overall net assets shown in the balance sheet as at 31 May 2023. The adjustment has resulted in debtors and creditors within one year reducing by £473,492 and £103,826 respectively and debtors and creditors greater than one year increasing by £473,492 and £103,826 respectively.

Page 29

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

24.


Commitments under operating leases

At 31 May 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
47,000
29,287

Later than 1 year and not later than 5 years
58,718
45,001

105,718
74,288


25.


Transactions with directors / controlling parties

Transactions with directors and controlling parties:

Amounts advanced in year 2024
Debtor / (Creditor) at year-end 2024
Amounts advanced in year 2023
Debtor / (Creditor) at year-end 2023
        £
        £
        £
        £
Directors

50,889

50,889

318,106
 
258,101
 
Controlling party

877

9,449

5,369
 
8,573
 

51,766

60,338

323,475
 
266,674
 

During the year, £11,761 (2023 - £nil) was provided against the directors loan.
The amounts advanced are interest free and hold no conditions.


26.


Related party transactions

Transactions with related parties:
During the year, transactions with companies under common control. 


Income earned in 2024
Expenditure incurred in 2024
Debtor at year-end 2024
Creditor at year end 2024
£
£
£
£

Enviromontel Training & Rescue Limited
-
(9,433)
-
(5,858)
Henwick Mill Groundworks Limited
-
(288)
-
-
-
(9,721)
-
(5,858)

Page 30

 
MONTEL CIVIL ENGINEERING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
Income earned in 2023
Expenditure incurred in 2023
Debtor at year-end 2023
Creditor at year end 2023
        £
        £
        £
        £
Enviromontel Training & Rescue Limited

-

(7,543)

-
 
(336)
 
Enviromontel Limited

15,742

-

-
 
-
 
Selbourne Homes Limited

-

(11,350)

-
 
-
 

15,742

(18,893)

-
 
(336)
 

During the year, the company paid £nil (2023 - £8,763) to a company providing directors' services.
All directors of the company who have authority and responsibility for planning, directing and controlling
the activities of the company are considered to be key management personnel. Directors remuneration is disclosed in note 8 of the financial statements.


27.


Controlling party

The company is controlled by J E Kirkland and I J Ansell.

 
Page 31