Registered number:
For the year ended
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Rowcon Limited
Company Information
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Rowcon Limited
Contents
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Rowcon Limited
Group Strategic Report
For the year ended 31 December 2024
The directors present their strategic report for the year ended 31 December 2024.
The principal activity of the group during 2024 was that of building contractor on a range of residential projects. Turnover in the year was £33m which was a significant increase of over £6m when compared to 2023. Around 80% of turnover related to contracts with registered providers and councils. The contracts were mainly with existing clients, however 20% of turnover came from new clients.
The directors report a profit after tax of £195k. During 2024, the construction industry continued to be impacted by wider market influences with industry cost inflation remaining higher than pre-2020 years and supply chains still being disrupted. Shortages of materials and lack of availability of labour remained key challenges during the year leading to build costs remaining high. However the group has been able to manage a number of pressures to ensure delivery and turnover have increased. Energy prices which peaked during 2022 still remain high and present a significant challenge to contracts agreed prior to 2022. Understanding these challenges and how to deliver for clients in these, still uncertain, times has been key to driving the increase in turnover during the year. Work during the period has been split almost equally between contracts priced pre-2022 and contracts priced more recently. Those contracts priced after the period of high inflation in 2022 have allowed for current prices and expected fluctuations to be managed more appropriately. The group has also delivered 75% of its first Management Contract with a new client during the year offering up a better cost risk share than traditional Design and Build contracts. The group is already engaged in negotiations around delivering a second Management Contract. Looking forward, for future years the pipeline of work remains strong with prospects for group performance in the next few years improving. The group has benefitted from a number of opportunities which were originally developed through pre-contract agreements and it remains a key focus for the group developing stronger partnerships with clients through this method. During the year we were awarded a place on the ICN Framework which will continue to gives us access to key clients across the North West. During the year the group increased the balance sheet to a Net Assets position of £70k, returning to a positive position for the first time since 2021. The strong prospects within the Group means the forecast is for this group position to continue to grow returning to the levels seen in 2020 and prior. Strategically the group is looking to continue to use its pre-contract business model which has worked well throughout the period building budget certainty to underpin relationships with a trusted client base in the North West. The pre-contract model gives the group a high degree of confidence around converting schemes in the pipeline to contracted work and then on the ability to deliver positive margins on these schemes. Building on the strategic alliances we have formed with key partners will help ensure we are well placed to address any volatility in the market going forward. During the year the group has continued its internal development of Senior Managers, continuing to form the Strategic Management Team. This team has been key in driving the delivery during the year and in developing the strong pipeline for the group. The group remains committed to developing its internal staff and recognising the key talent in the business as well as recruiting in staff to ensure we have the necessary skills to manage the challenges going forward. The directors are confident they have the required skills to develop and deliver the business model supported by key members of the group. The group remains debt free with cash balances of £3.8m at the year end, which have increased and meet the cash flow requirements of the current level of turnover.
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Rowcon Limited
Group Strategic Report (continued)
For the year ended 31 December 2024
Future developments Following the General Election in July 2024 the government has set an ambitious target to deliver 1.5m homes in the next 5 years. They have also recently announced £2bn of new grant funding to help deliver this. The strong relationships with key local partners means the group is confident that we will be a key part of delivering these new homes in the North West. The skills and competencies across the group will be key for our clients to support them in being able to deliver the output central government requires. The group’s model of being involved through pre-contract will enable the group further strengthen the forward order book so delivery and turnover remains as strong as it currently is.
Current world events mean there is still a degree of risk of economic disruption which will impact prices and supply chains for the group. To mitigate this risk the group has included allowances for movements in price in contracts recently signed so enjoys a degree of protection against potential movement.
The group also maintains a constructive dialogue with clients throughout contracts which helps to mitigate any impact of disruption in the supply chain by working with the client at the initial point of being aware of any impact. The group employs suitably qualified and experienced staff to manage the relationship and process.
This report was approved by the board and signed on its behalf.
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Rowcon Limited
Directors' Report
For the year ended 31 December 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors are responsible for preparing the group strategic report, the directors' report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £195,411 (2023 - £94,574).
The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
The likely future developments in the group's business and its subsidiary undertakings are detailed in the strategic report.
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Rowcon Limited
Directors' Report (continued)
For the year ended 31 December 2024
The group's principal financial instruments comprise bank deposits, and various items such as trade debtors, trade creditors, finance and operating lease agreements, which arise directly from its operations. The main purpose of these instruments is to finance the group's operations.
Due to the nature of the financial instruments used by the group there is no exposure to price risk. The group operates wholly within the UK and foreign exchange risk is not material. The group's approach to managing other risks applicable to the financial instruments concerned is shown below. The group's treasury management policies are designed to ensure continuity of funding. The group makes use of money market facilities, when funds are available, in order to maximise interest received. Trade debtors are managed in respect of credit and cash flow risk by policies concerning contract terms and the regular monitoring of amounts outstanding. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet both anticipated requirements and to provide a prudent level of headroom. The group is a lessee in respect of finance and operating leased assets. The liquidity risk in respect of these is managed in the same way as trade creditors above.
There have been no significant events affecting the Group since the year end.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Rowcon Limited
Independent Auditors' Report to the Members of Rowcon Limited
We have audited the financial statements of Rowcon Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the consolidated statement of comprehensive income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of 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).
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 Group 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.
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 or the 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.
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 Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Rowcon Limited
Independent Auditors' Report to the Members of Rowcon Limited (continued)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the group 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 group strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the group strategic report or the directors' report.
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Rowcon Limited
Independent Auditors' Report to the Members of Rowcon Limited (continued)
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 Group 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:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: • The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. • The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud. • Supporting documentation relating to the Company's policies and procedures for: - Identifying, evaluating, and complying with laws and regulations - Detecting and responding to the risks of fraud • The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. • The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. • The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption. Audit response to risks identified Our procedures to respond to the risks identified included the following: • Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. • Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud. • Evaluation of management’s controls designed to prevent and detect irregularities. • Enquiring of management about any actual and potential litigation and claims. • Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Rowcon Limited
Independent Auditors' Report to the Members of Rowcon Limited (continued)
We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error. • Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and • Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
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 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
3 Stockport Exchange
Cheshire
SK1 3GG
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Rowcon Limited
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
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Rowcon Limited
Registered number: 09146684
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 34 form part of these financial statements.
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Rowcon Limited
Registered number: 09146684
Company Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 34 form part of these financial statements.
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Rowcon Limited
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
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Rowcon Limited
Company Statement of Changes in Equity
For the year ended 31 December 2024
Company Statement of Changes in Equity
For the year ended 31 December 2023
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Rowcon Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
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Rowcon Limited
Consolidated Analysis of Net Debt
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
Rowcon Limited is a private company limited by shares and incorporated in England. The address of the registered office and principal place of business is Gardale House, 118b Gatley Road, Gatley, Cheadle, SK8 4AU. The company's registered number is 09146684.
The nature of the company's operation and its principal activity is that of a holding company. The group continues to operate predominantly in the social housing and speculative housing construction markets.
2.Accounting policies
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 Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The group is currently undertaking a number of profitable contracts and has secured a strong order book with activity scheduled throughout 2025 and 2026. The group also maintains strong relationships with its network of clients which will further increase the number of live enquiries already in progress and the group expects to continue to be successful in being awarded future contracts from these live enquiries.
The group’s cash flow forecast reflects the expected timing of income from clients and the payment of costs to the supply chain. This cash flow forecast is expected to be cash positive throughout the forecast period. Accordingly, the directors believe it is appropriate to prepare the financial statement to 31 December 2024 on a going concern basis.
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Construction contracts When the outcome of construction contracts can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion at the end of the reporting period. Reliable estimation of the outcome of construction contracts requires reliable estimates of the stage of completion, future costs and collectability of billings. The stage of completion is measured by surveys of work performed. When the outcome of a construction contract cannot be estimated reliably, revenue is only recognised to the extent of contract costs incurred that it is probable will be recoverable. When it is probable that the total contract costs will exceed total contract revenue on a construction contract, the expected loss shall be recognised as an expense immediately, with a corresponding provision for an onerous contract. Revenue in respect of variations to contracts and incentive payments is recognised when it is probable it will be agreed by the customer. Own developments Revenue derived from the sale of speculative developments is recognised upon the transfer of risks and rewards of ownership to the buyer, when there is an exchange of unconditional contracts.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at costs less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the profit and loss account over its useful economic life of 5 years.
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
2.Accounting policies (continued)
Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases.
Finance leases are capitalised as tangible fixed assets at commencement of the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments calculated using the interest rate implicit in the lease. Where the implicit rate cannot be determined the company's incremental borrowing rate is used. Incremental direct cost, incurred in negotiating and arranging the lease, are included in the cost of the asset. Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for impairment at each reporting date. The capital element of lease obligations is recorded as a liability on inception of the arrangement. Lease payments are apportioned between capital repayment and finance charge, using the effective interest rate method to produce a constant rate of charge on the balance of the capital repayments outstanding.
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
2.Accounting policies (continued)
The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
2.Accounting policies (continued)
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:
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 profit or loss.
Leases are classified as operating leases whenever the terms of the lease do not transfer substantially all the risks and rewards of ownership to the company. Rentals payable under operating leases are charged to the profit or loss on a straight line basis over the lease term. The aggregate benefit of lease incentives are recognised as a reduction to the expense over the lease term on a straight line basis.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments held as fixed assets are shown at cost, which is considered to be the fair value. Other fixed asset investments, as detailed in note 15, represent sold properties in which the company retains an interest comprising a proportion of the costs of units being sold under a shared ownership scheme.
Stock of land for development is included at the lower of acquisition cost or net realisable value. Net realisable value for this purpose is the estimated selling value less estimated selling costs.
The group recognises costs that relate to future activity on a construction contract as an asset if it is probable that the costs will be recovered. Contract and speculative building work in progress is valued at cost or net realisable value, whichever is the lower. Cost for this purpose includes all direct costs as follows:- direct labour and materials, work done by subcontractors, hire of plant and equipment used on contract sites, and all overheads except those relating to administration. Net realisable value for this purpose is estimated selling value less cost to completion including selling costs.
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
2.Accounting policies (continued)
The group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, and loans to and from related parties.
Debt instruments that are payable or receivable within one year, typically trade payable or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. 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 profit or loss. 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. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date. Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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. a) Revenue and margin recognition The group's revenue recognition and margin recognition policies, which are set out in note 2.4, are central to how the group values the work it has carried out in each financial year. These policies require forecasts to be made of the outcomes of construction contracts, which require assessments and judgements to be made. The group reviews and, when necessary, revises the estimates of revenue and costs as the contract progresses. b) Provisions Provisions are liabilities of uncertain timing or amount and therefore making a reliable estimate of the quantum and timing of liabilities judgement is applied and re-evaluated at each reporting date. The group recognised provisions at 31 December 2024 of £603,000 (2023 - £639,750).
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
12.Taxation (continued)
There were no factors that may affect future tax charges.
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
Capital redemption reserve
Profit and loss account
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
At the 31 December 2024 there existed performance bonds and similar agreements entered into in the normal course of business totalling £2,196,747 (2023 - £2,474,213)
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £103,208 (2023 - £93,362). Contributions totalling £20,566 (2023 - £17,100) were payable to the fund at the balance sheet date.
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Rowcon Limited
Notes to the Financial Statements
For the year ended 31 December 2024
The company is jointly controlled by the directors.
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