Company registration number 08807649 (England and Wales)
SMD CONSTRUCTION GROUP LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
SMD CONSTRUCTION GROUP LTD
CONTENTS
Page
Company information
1
Strategic report
2 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 10
Group statement of comprehensive income
11
Group statement of financial position
12
Company statement of financial position
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 36
SMD CONSTRUCTION GROUP LTD
COMPANY INFORMATION
- 1 -
Directors
Mr B Pratten
Mr R T Firth
Company number
08807649
Registered office
The Outlook
Ling Road
Tower Park
Poole
Dorset
BH12 4PY
Auditor
Azets Audit Services
37 Commercial Road
Poole
Dorset
BH14 0HU
SMD CONSTRUCTION GROUP LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 2 -

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

Review of the business

The principal activity of the Group continued to be the design and installation of structural flooring solutions for the construction industry. Our continued mission is to be one of the UK’s leading providers of structural flooring and roofing solutions to the construction sector, along with expanding our brand and products overseas, ensuring a key focus on safety, innovation, and the environment.

Executive summary

 

The Group has performed well in what continues to be an extremely volatile market and industry during this period. We have continued to see businesses not being able to continue trading in all sectors of the industry due to tight margins and overcommitments on historical projects. Our focus has been on longer-term stability and the continued service and support of our stakeholders. Over this period, we have delivered many large and small high-profile projects in all divisions throughout the UK, providing high-performance, quality solutions.

Financial Performance

 

Group turnover for the financial year was £23,633,082 (2023: £21,341,753) and the profit / loss on ordinary activities after taxation was £26,044 (2023: (£31,716)). The financial position as of 31 July 2024 is shown in the group's balance sheet. The group may not have delivered the financial returns initially budgeted for but remains financially very secure in what has been a difficult period. Considerable effort has been given to reviewing and rationalising all ongoing costs, both fixed and variable, to ensure we can further improve the profitability and performance of the business without compromising quality, performance, or safety.

 

Structural Metal Decks Ltd has experienced several specific operational challenges, supplier issues and customer closures during this period and as such has not delivered on the budgeted performance for the year, an extensive review of operational procedures has been carried out during the period, with improvements delivered in all departments to ensure we make the required improvements moving forward. An increase in provisions for this period has also had to be considered with regards to ongoing supplier and customer issues.

ThruDeck Services Ltd continues to re-establish itself in the Scottish region, order levels and financial performance has improved and continue to do so moving forward. This year financial performance was not unexpected during this period of regrowth. Business performance will continue to be managed and monitored quarterly in the coming 12 months to ensure it continues its path of recovery.

Precast Structural Solution’s growth and performance is in line with expectations for this relatively new division.

Sales, market competition and margin

We are acutely aware that the construction industry is facing increasing competition, and this necessitates a strategic focus on maintaining high-quality service delivery and customer satisfaction along with developing our own internal operational procedures to ensure we protect contract margins.

The challenges posed by subcontractor performance in the last 12-months has been significant. We faced delays in project timelines and difficulties in maintaining quality assurance. To mitigate these risks, we have enhanced our subcontractor vetting processes and established stricter performance monitoring systems. Regular audits and performance evaluations ensure that all subcontractors adhere to our stringent quality and safety standards.

Additionally, the economic environment has led to financial strain for some of our customers, resulting in delayed payments and, in certain cases, customer insolvency. To counteract these risks, we are actively reviewing our customer base, to ensure we limited any potential risk, ensuring our focus is engaging with sustainable long-term customer partnerships.

The volatility of raw material costs has also presented challenges, particularly in our concrete operations, but this appears to be stabilising, and we believe during the next 12-months this will not be such a big consideration for the group.

SMD CONSTRUCTION GROUP LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 3 -

Ongoing challenges

Key challenges this year included the inconsistent performance of subcontractors, rising insolvencies among customer, and adverse weather conditions that have primarily impacted our concrete operations. These factors contributed to contract delays and operational inefficiencies. In response, we implemented strategic initiatives to the relevant group companies to streamline operations and enhance cost management, ultimately helping to preserving our long-term financial stability and ensuring continued support for our customers.

As we look to the future, there are indications that raw material prices are stabilising. This potential stabilisation could position us favourably within the market, enabling us to regain lost margins and secure targeted volumes of our flooring products, which are critical for operational predictability.

Addressing the ongoing scarcity of experienced personnel in the construction sector is a priority for us. We are implementing several initiatives aimed at attracting and retaining skilled professionals. These initiatives include offering competitive salaries, professional development programs, mentorship opportunities, overseas recruitment programme and creating a workplace culture that fosters innovation and teamwork.

Along with the financial health of the Group, the other key priority is the Health and Safety of both its employees and the public, which is closely monitored by the Senior Management Team. The AFR (Accident Frequency Rate) of the company was Zero in 2024 (2023: 0) and equates to 0 reportable accidents in 140,517-man hours during this reporting period (2023: 0 reportable accidents in 153,708-man hours).

Principal risk and uncertainties

The Group’s principal financial instruments comprise bank balances, trade debtors, trade creditors, and finance lease agreements. The main purpose of these instruments is to finance the group operations. In respect of bank balances, liquidity risk is managed by maintaining a balance between continuity of funding, flexibility, and maximum returns. All the Group’s cash balances are held to achieve a competitive rate of interest.

Trade debtors are managed regarding credit and cash flow risk policies concerning the credit offered to customers and regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debts.

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. The Group continues to manage a subsidence issue at its head office, but currently this situation is not causing any further concerns; this issue will continue to be monitored moving forward.

Sustainability and corporate social responsibility

The Group is aware of its sustainability and Corporate Social Responsibility and has spent considerable time during this period reviewing and planning towards achieving its target of a carbon-zero operation by 2030. Additional initiatives have been delivered over the past months within the offices to reduce energy use, and we continue the process of changing over to electric vehicles.

Further focus for us during this period has been the introduction of a Green product range in our composite floor and roof decking products which is now available to our customers, this solution utilises low-carbon material sources, which in turn help reduce the carbon footprint that our operations produces on a project.

Future Outlook

Moving forward over the next 12 months, the Group will be looking to further solidify its position as one of the UK's leading suppliers in structural flooring and roofing solutions and further expand on its products and services offer to the market.

The Group remains committed to the further development of our concreting operations. This commitment aligns with our vision to diversify and strengthen our portfolio, ensuring sustained growth and resilience in a dynamic market.

Additional commitment will be focused on further driving the performance in our Scottish region to ensure that we firmly reestablish ourselves in this geographical location, along with pushing the targets and expectations of the new in-situ division.

The next 12 months will also see an increased focus on driving our green credentials across the group.

SMD CONSTRUCTION GROUP LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 4 -

Conclusion

In summary, this year has presented substantial challenges, particularly concerning subcontractor performance and external market pressures. Nevertheless, the Group has maintained a strong financial position and continues to perform robustly within the market. We are optimistic that stabilisation in material prices and improvements in subcontractor performance will enable us to achieve our financial targets in the upcoming year.

On behalf of the board

Mr B Pratten
Director
18 October 2024
SMD CONSTRUCTION GROUP LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 5 -

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

Principal activities

The principal activity of the company and group continued to be that of the construction of composite flooring.

Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

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

Mr B Pratten
Mr R T Firth
Auditor

In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the group will be put at a General Meeting.

Directors’ confirmations

In the case of each director in office at the date the directors’ report is approved:

On behalf of the board
Mr B Pratten
Director
18 October 2024
SMD CONSTRUCTION GROUP LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 6 -

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law).

Under company law, 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 the financial statements, the directors are required to:

The directors are responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

SMD CONSTRUCTION GROUP LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMD CONSTRUCTION GROUP LTD
- 7 -
Opinion

We have audited the financial statements of SMD Construction Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 July 2024 which comprise 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).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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. 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.

 

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

SMD CONSTRUCTION GROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMD CONSTRUCTION GROUP LTD
- 8 -

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

SMD CONSTRUCTION GROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMD CONSTRUCTION GROUP LTD
- 9 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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:

To address the risk of fraud through management bias and override of controls, we:

SMD CONSTRUCTION GROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMD CONSTRUCTION GROUP LTD
- 10 -

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.

Mr Paul Francis (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
Statutory Auditor
37 Commercial Road
Poole
Dorset
BH14 0HU
18 October 2024
SMD CONSTRUCTION GROUP LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
2024
2023
Notes
£
£
Turnover
3
23,633,082
21,341,753
Cost of sales
(20,612,747)
(18,665,005)
Gross profit
3,020,335
2,676,748
Administrative expenses
(2,997,294)
(2,715,872)
Other operating income
3,750
-
Operating profit/(loss)
4
26,791
(39,124)
Interest receivable and similar income
31,683
15,093
Interest payable and similar expenses
8
(16,002)
(18,200)
Profit/(loss) before taxation
42,472
(42,231)
Tax on profit/(loss)
9
(16,428)
10,515
Profit/(loss) for the financial year
26,044
(31,716)
Total comprehensive income for the year is all attributable to the owners of the parent company.

The notes on pages 17 to 36 form part of these financial statements.

SMD CONSTRUCTION GROUP LTD
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 JULY 2024
31 July 2024
- 12 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
10
827
220
Tangible assets
11
1,157,668
1,332,769
1,158,495
1,332,989
Current assets
Stocks
15
335,739
338,759
Debtors
17
5,503,578
4,620,544
Cash at bank and in hand
1,348,900
2,230,270
7,188,217
7,189,573
Creditors: amounts falling due within one year
18
(3,398,088)
(3,394,159)
Net current assets
3,790,129
3,795,414
Total assets less current liabilities
4,948,624
5,128,403
Creditors: amounts falling due after more than one year
19
(66,882)
(237,247)
Provisions for liabilities
Deferred tax liability
22
62,463
97,921
(62,463)
(97,921)
Net assets
4,819,279
4,793,235
Capital and reserves
Called up share capital
24
9,900
9,900
Share premium account
2,490,100
2,490,100
Revaluation reserve
127,357
127,357
Profit and loss reserves
2,191,922
2,165,878
Total equity
4,819,279
4,793,235
The financial statements were approved by the board of directors and authorised for issue on 18 October 2024 and are signed on its behalf by:
18 October 2024
Mr B Pratten
Director
Company registration number 08807649 (England and Wales)
SMD CONSTRUCTION GROUP LTD
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2024
31 July 2024
- 13 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investments
12
5,000,200
5,000,200
Current assets
Debtors
17
290,276
332,842
Cash at bank and in hand
51,285
22,283
341,561
355,125
Creditors: amounts falling due within one year
18
(351,307)
(364,871)
Net current liabilities
(9,746)
(9,746)
Net assets
4,990,454
4,990,454
Capital and reserves
Called up share capital
24
9,900
9,900
Share premium account
2,490,100
2,490,100
Profit and loss reserves
2,490,454
2,490,454
Total equity
4,990,454
4,990,454

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 £0 (2023 £0 profit).

The financial statements were approved by the board of directors and authorised for issue on 18 October 2024 and are signed on its behalf by:
18 October 2024
Mr B Pratten
Director
Company Registration No. 08807649
SMD CONSTRUCTION GROUP LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 14 -
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 August 2022
9,900
2,490,100
127,357
2,197,594
4,824,951
Year ended 31 July 2023:
Loss and total comprehensive income
-
-
-
(31,716)
(31,716)
Balance at 31 July 2023
9,900
2,490,100
127,357
2,165,878
4,793,235
Year ended 31 July 2024:
Profit and total comprehensive income
-
-
-
26,044
26,044
Balance at 31 July 2024
9,900
2,490,100
127,357
2,191,922
4,819,279
SMD CONSTRUCTION GROUP LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 15 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 August 2022
9,900
2,490,100
2,490,454
4,990,454
Year ended 31 July 2023:
Profit and total comprehensive income for the year
-
-
-
-
0
Balance at 31 July 2023
9,900
2,490,100
2,490,454
4,990,454
Year ended 31 July 2024:
Profit and total comprehensive income
-
-
-
-
0
Balance at 31 July 2024
9,900
2,490,100
2,490,454
4,990,454
SMD CONSTRUCTION GROUP LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2024
- 16 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
28
(787,574)
1,199,957
Interest paid
(16,002)
(18,200)
Income taxes refunded
103,974
-
0
Net cash (outflow)/inflow from operating activities
(699,602)
1,181,757
Investing activities
Purchase of intangible assets
(1,471)
-
Purchase of tangible fixed assets
(4,392)
(76,293)
Proceeds on disposal of tangible fixed assets
-
17,816
Increase on directors' loan accounts
(556)
(504)
Interest received
31,683
15,093
Net cash generated from/(used in) investing activities
25,264
(43,888)
Financing activities
Repayment of bank loans
(114,806)
(13,508)
Payment of finance leases obligations
(92,226)
(107,225)
Net cash used in financing activities
(207,032)
(120,733)
Net (decrease)/increase in cash and cash equivalents
(881,370)
1,017,136
Cash and cash equivalents at beginning of year
2,230,270
1,213,134
Cash and cash equivalents at end of year
1,348,900
2,230,270
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 17 -
1
Accounting policies
Company information

SMD Construction Group Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales.

 

The registered office is:

Unit C

The Outlook

Ling Road

Poole

Dorset

BH12 4PY

 

The group consists of SMD Construction Group Ltd and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company SMD Construction Group Ltd 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 31 July 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.

SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 18 -

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.

1.4
Going concern

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.

1.5
Turnover

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from construction contracts is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.6
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 6 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.8
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Development costs
6 years
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 19 -
1.9
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
Straight line over 50 years
Plant and equipment
33% straight line
Fixtures and fittings
33% straight line
Computers
33% straight line
Motor vehicles
25% straight line

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.

1.10
Fixed asset investments

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.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 20 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.12
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

 

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.13
Construction contracts

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

 

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

 

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

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

 

1.14
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 21 -
1.15
Financial instruments

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

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

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the 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.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 22 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

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

 

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

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.16
Equity instruments

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.

1.17
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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.

SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 23 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the 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.

1.18
Employee benefits

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

 

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

 

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

1.19
Retirement benefits

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

1.20
Leases

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

 

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

1.21
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 24 -
2
Judgements and key sources of estimation uncertainty

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.

Critical judgements

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

Revenue

Revenue includes work carried out but not yet invoiced or certified. This involves the use of judgement by management as to the value of work done. Long term contracts are valued on percentage of work completed vs cost incurred againist the total estimated cost of the contract. In addition, fixed overhead is apportioned value depending on the size of the contracts at the year end based on the level of overhead they absorb. The accrued income across the group totalled £411,715 (2023: £562,396) and deferred income across the group totalled £111,493 (2023: £287,907).

Recoverability of trade debtors

The group makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of debtors, the ageing profile and historical experience. At the balance sheet date £375,734 (2023: £103,598) was provided for as a bad debt provision within these financial statements.

3
Turnover and other revenue

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

2024
2023
£
£
Turnover analysed by class of business
Sale of goods
23,154,609
21,001,414
Other revenue
478,473
340,339
23,633,082
21,341,753
2024
2023
£
£
Turnover analysed by geographical market
UK
23,633,082
21,279,148
Rest of World
-
62,605
23,633,082
21,341,753
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
3
Turnover and other revenue
(Continued)
- 25 -
2024
2023
£
£
Other revenue
Interest income
31,683
15,093
Management charge outside the group
106,887
116,769
4
Operating profit/(loss)
2024
2023
£
£
Operating profit/(loss) for the year is stated after charging/(crediting):
Exchange losses/(gains)
1,197
(380)
Research and development costs
2,670
(7,994)
Depreciation of owned tangible fixed assets
120,609
130,491
Depreciation of tangible fixed assets held under finance leases
84,144
81,569
Profit on disposal of tangible fixed assets
-
(17,765)
Amortisation of intangible assets
864
619
Cost of stocks recognised as an expense
14,986,502
13,967,009
Operating lease charges
842,795
773,996
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
2,350
2,000
Audit of the financial statements of the company's subsidiaries
19,250
18,250
21,600
20,250
For other services
Accountancy compliance
6,500
5,500
Taxation compliance
3,000
2,750
9,500
8,250
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 26 -
6
Employees

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

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Admin and Support
31
38
13
15
Site workers
25
27
-
-
Directors
5
5
2
2
Total
61
70
15
17

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
2,307,980
2,427,360
585,446
654,358
Social security costs
241,519
247,461
65,053
71,032
Pension costs
70,876
73,461
27,301
27,609
2,620,375
2,748,282
677,800
752,999
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
113,917
108,857
Company pension contributions to defined contribution schemes
6,835
6,545
120,752
115,402
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
2,698
6,440
Other finance costs:
Interest on finance leases and hire purchase contracts
13,304
11,760
Total finance costs
16,002
18,200
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 27 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,180
-
0
Deferred tax
Origination and reversal of timing differences
15,248
(10,515)
Total tax charge/(credit)
16,428
(10,515)

The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit/(loss) before taxation
42,472
(42,231)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.00%)
10,618
(8,869)
Tax effect of expenses that are not deductible in determining taxable profit
219
1,807
Tax effect of utilisation of tax losses not previously recognised
(36,504)
(911)
Unutilised tax losses carried forward
(14,236)
60,770
Effect of change in corporation tax rate
(372)
(24,466)
Double tax relief
-
0
(3,134)
Permanent capital allowances in excess of depreciation
41,455
(25,197)
Deferred taxation
15,248
(10,515)
Taxation charge/(credit)
16,428
(10,515)
10
Intangible fixed assets
Group
Goodwill
Development costs
Total
£
£
£
Cost
At 1 August 2023
1,449,996
3,724
1,453,720
Additions
-
0
1,471
1,471
At 31 July 2024
1,449,996
5,195
1,455,191
Amortisation and impairment
At 1 August 2023
1,449,996
3,504
1,453,500
Amortisation charged for the year
-
0
864
864
At 31 July 2024
1,449,996
4,368
1,454,364
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
10
Intangible fixed assets
(Continued)
- 28 -
Carrying amount
At 31 July 2024
-
0
827
827
At 31 July 2023
-
0
220
220
The company had no intangible fixed assets at 31 July 2024 or 31 July 2023.
11
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 August 2023
1,283,836
1,046,745
389,906
9,925
449,415
3,179,827
Additions
-
0
-
0
4,026
366
25,260
29,652
At 31 July 2024
1,283,836
1,046,745
393,932
10,291
474,675
3,209,479
Depreciation and impairment
At 1 August 2023
440,681
961,198
331,656
7,145
106,378
1,847,058
Depreciation charged in the year
29,129
53,371
22,143
2,086
98,024
204,753
At 31 July 2024
469,810
1,014,569
353,799
9,231
204,402
2,051,811
Carrying amount
At 31 July 2024
814,026
32,176
40,133
1,060
270,273
1,157,668
At 31 July 2023
843,155
85,547
58,250
2,780
343,037
1,332,769
The company had no tangible fixed assets at 31 July 2024 or 31 July 2023.

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

Group
Company
2024
2023
2024
2023
£
£
£
£
Plant and equipment
-
0
5,352
-
0
-
0
Motor vehicles
242,947
301,962
-
0
-
0
242,947
307,314
-
-
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
11
Tangible fixed assets
(Continued)
- 29 -

The difference between the depreciation charged on cost and the depreciation charged on the revalued amount is deemed immaterial and therefore has not be included within the financial statements.

 

Land and Buildings with a carrying amount of £400,000 were revalued at 13th August 2018 by an independent valuer not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

 

An additional property with a carrying amount of £395,000 were revalued at 30th October 2019 by an independent valuer not connected with the company on the basis of market value. On this date, a property owned by the business was impaired inline with the valuation undertaken. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

 

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

 

Historical cost - Building
2024
2023
£
£
Group
Cost
1,316,719
1,316,719
Accumulated depreciation
(333,624)
(304,690)
Carrying value
983,095
1,012,029
12
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
13
-
0
-
0
5,000,200
5,000,200
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 August 2023 and 31 July 2024
5,000,200
Carrying amount
At 31 July 2024
5,000,200
At 31 July 2023
5,000,200
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 30 -
13
Subsidiaries

Details of the company's subsidiaries at 31 July 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
SMD Intech Private Ltd
India
Ordinary shares
-
99.99
Structural Metal Decks Limited
England and Wales
Ordinary shares
100.00
-
Thru Deck Services Limited
Scotland
Ordinary shares
-
100.00
NDS Site Installation Services Ltd
England and Wales
Ordinary shares
100.00
-
Performance Stud Welding Ltd
England and Wales
Ordinary shares
100.00
-
Precast Structural Solutions Ltd
England and Wales
Ordinary shares
-
100.00

The principal activity of SMD Intech Private Ltd continued to be that of structural deck development. The principal activity of SMD Middle East FZE, Structural Metal Decks Limited, Thru Deck Services Limited continued to be that of construction of composite flooring. The principal activity of Precast Structural Solutions continued to be that of concrete flooring solutions.

 

The results of SMD Middle East FZE and SMD Intech Private Ltd have not been consolidated in these financial statements, due to the results being immaterial to the group results.

 

NDS Site Installation Services Ltd and Performance Stud Welding Ltd were dormant at 31 July 2023.

14
Associates

Details of associates at 31 July 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
National Decking Services Limited
England and Wales
Ordinary shares
-
25

The results of National Decking Services Limited have not been consolidated in these financial statements due to being immaterial to the group.

15
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Materials
335,739
338,759
-
0
-
0
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 31 -
16
Financial instruments
Group
Company
2024
2023
2024
2023
£
£
£
£
Carrying amount of financial assets measured at amortised cost
Trade debtors
4,432,299
3,289,214
2,081
42,756
Accrued income
411,715
562,396
-
-
Other debtors
232,754
203,579
150
150
5,076,768
4,055,189
2,231
42,906
Carrying amount of financial liabilities measured at amortised cost
Trade creditors
2,936,308
2,763,282
83,215
113,432
Bank loans and hire purchase
173,270
355,042
-
-
Other creditors
46,722
24,499
245,660
226,549
Accruals
125,233
128,159
5,838
5,501
3,281,533
3,270,982
334,713
345,482
17
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,432,299
3,289,214
2,081
42,756
Corporation tax recoverable
-
0
103,974
-
0
-
0
Other debtors
435,077
424,032
202,473
220,603
Prepayments and accrued income
614,564
730,980
85,722
69,483
5,481,940
4,548,200
290,276
332,842
Deferred tax asset (note 22)
21,638
72,344
-
0
-
0
5,503,578
4,620,544
290,276
332,842
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 32 -
18
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans
20
-
0
13,508
-
0
-
0
Obligations under finance leases
21
106,388
104,287
-
0
-
0
Trade creditors
2,936,308
2,763,282
83,215
113,432
Amounts owed to group undertakings
-
0
-
0
242,147
226,549
Corporation tax payable
1,180
-
0
-
0
-
0
Other taxation and social security
70,764
72,517
16,594
19,389
Deferred income
111,493
287,907
-
0
-
0
Other creditors
46,722
24,499
3,513
-
0
Accruals
125,233
128,159
5,838
5,501
3,398,088
3,394,159
351,307
364,871
19
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
20
-
0
101,298
-
0
-
0
Obligations under finance leases
21
66,882
135,949
-
0
-
0
66,882
237,247
-
-
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
47,265
-
-
20
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
-
0
114,806
-
0
-
0
Payable within one year
-
0
13,508
-
0
-
0
Payable after one year
-
0
101,298
-
0
-
0

The bank loan was repayable over 15 years from the date of the initial drawdown of the loan. Interest was payable at 2.35% over base rate. The bank loan was repaid in full October 2023.

 

The bank loan was secured by way of a fixed and floating charge over the group's assets.

 

 

SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 33 -
21
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
106,388
104,287
-
0
-
0
In two to five years
66,882
135,949
-
0
-
0
173,270
240,236
-
-

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 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

Obligations on finance lease are secured againist the assets to which they relate.

22
Deferred taxation

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

Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Group
£
£
£
£
Accelerated capital allowances
62,463
97,921
-
-
Tax losses
-
-
21,638
72,344
62,463
97,921
21,638
72,344
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 August 2023
25,577
-
Charge to profit or loss
15,248
-
Liability at 31 July 2024
40,825
-

 

23
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
70,876
73,461
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
23
Retirement benefit schemes
(Continued)
- 34 -

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.

Contributions totaling £14,999 (2023: £13,142) were payable to the fund at the balance sheet date and are included in creditors.

24
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
9,900
9,900
9,900
9,900
25
Operating lease commitments
Lessee

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:

Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
29,276
31,809
-
-
Between two and five years
6,139
16,870
-
-
35,415
48,679
-
-
26
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2024
2023
2024
2023
£
£
£
£
Group
Other related parties
143,951
75,139
8,744,759
8,530,352

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2024
2023
£
£
Group
Other related parties
2,263,643
1,693,178
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
26
Related party transactions
(Continued)
- 35 -

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2024
2023
Balance
Balance
£
£
Group
Other related parties
161,506
159,784

The company has taken advantage of the exemption in FRS 102 Section 33 from the requirement to disclose transactions with group companies on the grounds that the company is a wholly owned subsidiary within the group or its ultimate holding company.

27
Directors' transactions

During the year a total of £nil (2023: £nil) was credited to the directors' loan account. Interest of £556 (2023: £506) was charged on this balance. At the balance sheet date the balance owed from the directors was £25,002 (2023: £24,446).

28
Cash (absorbed by)/generated from group operations
2024
2023
£
£
Profit/(loss) for the year after tax
26,044
(31,716)
Adjustments for:
Taxation charged/(credited)
16,428
(10,515)
Finance costs
16,002
18,200
Investment income
(31,683)
(15,093)
Gain on disposal of tangible fixed assets
-
(17,765)
Amortisation and impairment of intangible assets
864
619
Depreciation and impairment of tangible fixed assets
204,753
212,060
Movements in working capital:
Decrease in stocks
3,020
24,174
(Increase)/decrease in debtors
(1,037,158)
796,911
Increase in creditors
190,570
52,932
(Decrease)/increase in deferred income
(176,414)
170,150
Cash (absorbed by)/generated from operations
(787,574)
1,199,957
SMD CONSTRUCTION GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 36 -
29
Analysis of changes in net funds - group
1 August 2023
Cash flows
31 July 2024
£
£
£
Cash at bank and in hand
2,230,270
(881,370)
1,348,900
Borrowings excluding overdrafts
(114,806)
114,806
-
Obligations under finance leases
(240,236)
66,966
(173,270)
1,875,228
(699,598)
1,175,630
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