Company registration number SC056163 (Scotland)
M.T.M. CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
M.T.M. CONSTRUCTION LIMITED
COMPANY INFORMATION
Directors
D R Milne
G A Mutch
Secretary
LC Secretaries Limited
Company number
SC056163
Registered office
Johnstone House
52-54 Rose Street
Aberdeen
United Kingdom
AB10 1HA
Auditor
Azets Audit Services
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
M.T.M. CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 25
M.T.M. CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 1 -

Principal activities

The principal activity of the company during the year was civil engineering and building construction.

Business review

As noted in our previous report, there are significant challenges maintaining consistent turnover as a result of escalation in construction costs. Although turnover has reduced from the prior year, the company has managed to navigate the difficult landscape and remain profitable. Tendering opportunities remain reduced due to cost pressures being faced by businesses and simiarly with publicly funding contracts. We continue to explore all opportunities and undertake a diverse range of works whilst uncertainty remains in the economy and believe that as confidence returns, the construction sector will see increased activity both locally and nationally.

Risks and uncertainties

The company is dependant on the local economy and is endeavouring to maintain a wide client base to minimise the effect of any downturn in a particular sector.

 

Details of the company's financial risk management objectives and policies are included in note 23 to the accounts.

Future developments

As noted in the business review, trading conditions remain very challenging due to both the ongoing effects of inflationary increases on costs and the downturn in the oil and gas industry.

Key performance indicators

The management of the company regards the following to be key performance indicators that are used to monitor the company's progress.

 

        2024        2023

        £'000        £'000

Gross Profit         1,946        1,744

Gross Profit percentage         21.5%        17.2%

Profit before tax         978        568

Net Profit percentage              10.8%        5.6%

 

These are closely monitored using quarterly management accounts.

On behalf of the board

D R Milne
Director
21 May 2025
M.T.M. CONSTRUCTION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 2 -

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

Results and dividends

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

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

Directors

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

D R Milne
B J Ollason
(Resigned 18 December 2023)
R C Mitchell
(Resigned 18 December 2023)
G A Mutch
Auditor

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

Strategic report

The company has chosen in accordance with Companies Act 2006, s.414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the company's results and activities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
D R Milne
Director
21 May 2025
M.T.M. CONSTRUCTION LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2024
- 3 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

M.T.M. CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF M.T.M. CONSTRUCTION LIMITED
- 4 -
Opinion

We have audited the financial statements of M.T.M. Construction Limited (the 'company') for the year ended 31 August 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

M.T.M. CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M.T.M. CONSTRUCTION LIMITED
- 5 -
Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

M.T.M. CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M.T.M. CONSTRUCTION LIMITED
- 6 -

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

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

 

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

 

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

 

 

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Angus Cowie
Senior Statutory Auditor
For and on behalf of Azets Audit Services
21 May 2025
Chartered Accountants
Statutory Auditor
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
M.T.M. CONSTRUCTION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
9,067,855
10,164,294
Cost of sales
(7,122,073)
(8,420,671)
Gross profit
1,945,782
1,743,623
Administrative expenses
(1,732,386)
(1,698,471)
Other operating income
161,818
186,870
Operating profit
5
375,214
232,022
Interest receivable and similar income
8
142,324
65,043
Interest payable and similar expenses
9
(3,994)
(8,342)
Fair value adjustments of assets
10
464,259
279,775
Profit before taxation
977,803
568,498
Tax on profit
11
(139,350)
(58,925)
Profit for the financial year
838,453
509,573

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

M.T.M. CONSTRUCTION LIMITED
BALANCE SHEET
AS AT
31 AUGUST 2024
31 August 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
13
631,243
643,208
Investment property
14
1,000,000
1,000,000
Investments
15
2,458,468
2,028,115
4,089,711
3,671,323
Current assets
Stocks
16
1,443,871
1,451,166
Debtors
17
1,031,545
1,687,111
Cash at bank and in hand
3,735,793
5,392,129
6,211,209
8,530,406
Creditors: amounts falling due within one year
18
(1,209,526)
(2,178,477)
Net current assets
5,001,683
6,351,929
Total assets less current liabilities
9,091,394
10,023,252
Provisions for liabilities
Deferred tax liability
20
117,467
54,082
(117,467)
(54,082)
Net assets
8,973,927
9,969,170
Capital and reserves
Called up share capital
22
74,336
125,272
Capital redemption reserve
24
110,664
59,728
Profit and loss reserves
24
8,788,927
9,784,170
Total equity
8,973,927
9,969,170
The financial statements were approved by the board of directors and authorised for issue on 21 May 2025 and are signed on its behalf by:
D R Milne
Director
Company Registration No. SC056163
M.T.M. CONSTRUCTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
- 9 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 September 2022
125,272
59,728
9,274,597
9,459,597
Year ended 31 August 2023:
Profit and total comprehensive income for the year
-
-
509,573
509,573
Balance at 31 August 2023
125,272
59,728
9,784,170
9,969,170
Year ended 31 August 2024:
Profit and total comprehensive income for the year
-
-
838,453
838,453
Own shares acquired
-
-
(1,833,696)
(1,833,696)
Redemption of shares
22
(50,936)
50,936
-
0
-
0
Balance at 31 August 2024
74,336
110,664
8,788,927
8,973,927
M.T.M. CONSTRUCTION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
260,948
559,866
Interest paid
(3,994)
(8,342)
Income taxes paid
(2,544)
(4,843)
Net cash inflow from operating activities
254,410
546,681
Investing activities
Purchase of tangible fixed assets
(247,283)
(158,126)
Proceeds from disposal of tangible fixed assets
62,982
43,485
Proceeds from disposal of investments
33,906
-
0
Interest received
142,324
65,043
Net cash used in investing activities
(8,071)
(49,598)
Financing activities
Purchase of own shares
(1,833,696)
-
0
Net repayment of finance lease obligations
(68,979)
(143,026)
Net cash used in financing activities
(1,902,675)
(143,026)
Net (decrease)/increase in cash and cash equivalents
(1,656,336)
354,057
Cash and cash equivalents at beginning of year
5,392,129
5,038,072
Cash and cash equivalents at end of year
3,735,793
5,392,129
M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
- 11 -
1
Accounting policies
Company information

M.T.M. Construction Limited is a private company limited by shares incorporated in Scotland. The registered office is Johnstone House, 52-54 Rose Street, Aberdeen, United Kingdom, AB10 1HA.

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, modified to include the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss. The principal accounting policies adopted are set out below.

1.2
Going concern

The current and future financial position of the company, its cash flows and liquidity position have been reviewed by the directors and based on this it is anticipated that the company will continue to have adequate cash reserves to meet its liabilities as they fall due. Accordingly, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.true

1.3
Turnover

In respect of contracts for on-going services, turnover is recognised by reference to the stage of completion. Revenue from property letting is recognised in the period for which the rent is due. Turnover is stated net of Value Added Tax.

 

Major contracts are subjected to a measurement of the value for work done on each contract at the year end. The measured value is brought into the accounts as turnover of the year and is separately shown, under debtors as amounts recoverable on major contracts. Full provision is made for foreseeable future losses.

 

In respect of rental of equipment, turnover is recognised in the period when it is earned.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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 3 years.

 

If there is an indication that there has been a significant change in the amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 12 -
1.5
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
50 years (land is not depreciated)
Plant and equipment
6 years
Office furniture and equipment
2 to 6 years
Motor vehicles
4 to 5 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

1.7
Fixed asset investments

Investments are measured at fair value with changes in fair value being recognised in profit or loss.

1.8
Impairment of fixed assets

At each reporting period end date, the company 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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

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

1.9
Stocks

Materials and developments in progress are valued at the lower of cost and net realisable value.

M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 13 -
1.10
Construction contracts

Major contracts are subjected to a measurement of the value of the work done on each contract at the year end. The measured value is brought into the accounts as turnover of the year and is shown under debtors as amounts recoverable on major contracts. Full provision is made for future foreseeable losses.

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

1.12
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

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

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 company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 14 -
Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

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

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.14
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 15 -
1.15
Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the balance sheet and the amount of the provision as an expense.

1.16
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.

1.17
Retirement benefits

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

1.18
Leases

Assets held under hire purchase contracts are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the statement of comprehensive income on a straight line basis.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.19
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.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty
Work in progress and construction contracts

Valuations of work done are carried out by qualified surveyors on a contract by contract basis. The valuations include a degree of inherent uncertainty when estimating the profitability of a contract, particularly long term contracts.

M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 16 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Construction contracts
9,067,855
10,164,294
2024
2023
£
£
Other revenue
Interest income
142,324
65,043
Rental income
153,339
170,728
4
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
27,000
25,000
5
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(802)
(4,456)
Depreciation of owned tangible fixed assets
242,016
250,484
Profit on disposal of tangible fixed assets
(45,750)
(43,485)
M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 17 -
6
Employees

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

2024
2023
Number
Number
Contracting and workshop
34
37
Office and administration
18
19
Total
52
56

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
2,121,589
2,197,209
Social security costs
249,919
262,044
Pension costs
90,698
84,495
2,462,206
2,543,748
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
266,020
247,930
Company pension contributions to defined contribution schemes
13,425
12,600
279,445
260,530

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
175,020
163,930
M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 18 -
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
142,324
65,043
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
142,324
65,043
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
1,608
3,529
Other finance costs:
Interest on finance leases and hire purchase contracts
2,386
4,813
3,994
8,342
10
Fair value adjustment of assets
2024
2023
£
£
Fair value gains on financial instruments
Gain on financial assets held at fair value through profit or loss
464,259
262,694
Other gains
Changes in the fair value of investment properties through profit or loss
-
17,081
464,259
279,775
M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 19 -
11
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
73,421
-
0
Foreign current tax on profits for the current period
2,544
4,843
Total current tax
75,965
4,843
Deferred tax
Origination and reversal of timing differences
63,385
54,082
Total tax charge
139,350
58,925

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

2024
2023
£
£
Profit before taxation
977,803
568,498
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.52%)
244,451
122,341
Tax effect of expenses that are not deductible in determining taxable profit
5,382
799
Adjustments in respect of prior years
4,271
-
0
Depreciation on assets not qualifying for tax allowances
886
(1,386)
Other permanent differences
-
0
101
Fair value adjustment on investments
(116,064)
(60,194)
Exempt ABGH distributions
(2,756)
(4,515)
Foreign tax credits
2,544
4,843
Movement in deferred tax not recognised
-
0
(13,531)
Remeasurement of deferred tax for change in tax rates
-
0
9,425
Amounts credited directly to OCI or otherwise transferred
636
1,042
Taxation charge for the year
139,350
58,925
M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 20 -
12
Intangible fixed assets
Goodwill
£
Cost
At 1 September 2023 and 31 August 2024
10,000
Amortisation and impairment
At 1 September 2023 and 31 August 2024
10,000
Carrying amount
At 31 August 2024
-
0
At 31 August 2023
-
0
13
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Office furniture and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 September 2023
229,512
2,487,766
259,517
1,011,512
3,988,307
Additions
-
0
66,446
-
0
180,837
247,283
Disposals
-
0
(22,736)
-
0
(115,056)
(137,792)
At 31 August 2024
229,512
2,531,476
259,517
1,077,293
4,097,798
Depreciation and impairment
At 1 September 2023
153,848
2,128,131
214,439
848,681
3,345,099
Depreciation charged in the year
3,950
144,556
16,197
77,313
242,016
Eliminated in respect of disposals
-
0
(22,170)
-
0
(98,390)
(120,560)
At 31 August 2024
157,798
2,250,517
230,636
827,604
3,466,555
Carrying amount
At 31 August 2024
71,714
280,959
28,881
249,689
631,243
At 31 August 2023
75,664
359,635
45,078
162,831
643,208

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

2024
2023
£
£
Plant and equipment
-
0
190,514
M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 21 -
14
Investment property
2024
£
Fair value
At 1 September 2023 and 31 August 2024
1,000,000

Investment property comprises residential and commercial property in Aberdeen. The fair value of the commercial property has been arrived at on the basis of current and future projected occupancy rates and signficant associated costs. Management believe the fair value of the property is £nil as an external third party is unlikely to purchase. The fair value of the residential property has been arrived at on the basis of a valuation carried out on 16 May 2024 by a third party chatered surveyor. Management believe there is no material difference between the current valuation and year end date.

15
Fixed asset investments
2024
2023
£
£
Listed investments
2,444,953
2,014,600
Other investments
13,515
13,515
2,458,468
2,028,115
Movements in fixed asset investments
Investments
Other
Total
£
£
£
Cost or valuation
At 1 September 2023
2,014,600
13,515
2,028,115
Valuation changes
464,259
-
464,259
Disposals
(33,906)
-
(33,906)
At 31 August 2024
2,444,953
13,515
2,458,468
Carrying amount
At 31 August 2024
2,444,953
13,515
2,458,468
At 31 August 2023
2,014,600
13,515
2,028,115
16
Stocks
2024
2023
£
£
Materials and developments in progress
1,443,871
1,451,166
M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 22 -
17
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
524,061
1,245,834
Amounts recoverable on major contracts
377,125
316,479
Prepayments and accrued income
130,359
124,798
1,031,545
1,687,111
18
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
19
-
0
68,979
Trade creditors
544,842
883,298
Corporation tax
73,421
-
0
Other taxation and social security
203,064
762,776
Other creditors
16,614
35,042
Accruals and deferred income
371,585
428,382
1,209,526
2,178,477

The company has a floating charge in favour of the Clydesdale Bank Plc. There is a standard security in favour of the bank over certain property owned by the company.

19
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
-
0
68,979
M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 23 -
20
Deferred taxation

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

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
117,467
101,161
Tax losses
-
(47,079)
117,467
54,082
2024
Movements in the year:
£
Liability at 1 September 2023
54,082
Charge to profit or loss
63,385
Liability at 31 August 2024
117,467
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
90,698
84,495

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

22
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
74,336
125,272
74,336
125,272

The company has one class of ordinary shares which carry no right to fixed income, each carry the right to vote at general meetings of the company.

During the year, 50,936 ordinary shares were repurchased by the company at a price of £36 per share.

M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 24 -
23
Financial risk management objectives and policies

The company holds or issues financial instruments in order to achieve three main objectives, being:

 

(a) to finance its operations;

 

(b) to manage its exposure to interest and currency risks arising from its operations and from its sources of finance; and

 

(c) for trading purposes.

 

In addition, various financial instruments (e.g. trade debtors, trade creditors, accruals and prepayments) arise directly from the company's operations.

 

Transactions in financial instruments result in the company assuming or transferring to another party one or more of the financial risks described below.

 

Credit risk

 

The company monitors credit risk closely and considers that its current policies of credit checks meets its objectives of managing exposure to credit risk.

 

The company has no significant concentrations of credit risk. Amounts shown in the balance sheet best represent the maximum credit risk exposure in the event other parties fail to perform their obligations under financial instruments. Trade debtors are monitored on an ongoing basis and provision made for doubtful debts where necessary.

 

Liquidity risk

 

The company manages its cash and borrowing requirements to minimise interest expense, whilst ensuring that the company has sufficient liquid resources to meet the operating needs of the business.

 

Currency risk

 

The company's foreign currency exposure arises from its foreign investment trading. The company manages this risk by restricting its investment base to US companies, where the company would only be affected by fluctuations of the US Dollar exchange rate.

 

Fair values of financial assets and liabilities

 

Financial instruments included in the accounts have been reviewed and the carrying values per the accounts is the same as the fair value of these financial instruments.

24
Reserves
Capital redemption reserve

This reserve records the nominal value of shares repurchased by the company.

Profit and loss reserve

This reserve records retained earnings and accumulated losses.

M.T.M. CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 25 -
25
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
47,800
47,800
Between two and five years
191,200
191,200
In over five years
4,560,382
4,608,313
4,799,382
4,847,313
26
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2024
2023
£
£
Aggregate compensation
304,809
284,720
27
Ultimate controlling party

The company was under the control of D R Milne throughout the current and previous year.

28
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
838,453
509,573
Adjustments for:
Taxation charged
139,350
58,925
Finance costs
3,994
8,342
Investment income
(142,324)
(65,043)
Gain on disposal of tangible fixed assets
(45,750)
(43,485)
Fair value gain on investment properties
-
0
(17,081)
Depreciation and impairment of tangible fixed assets
242,016
250,484
Other gains and losses
(464,259)
(262,694)
Movements in working capital:
Decrease/(increase) in stocks
7,295
(9,625)
Decrease/(increase) in debtors
655,566
(883,612)
(Decrease)/increase in creditors
(973,393)
1,014,082
Cash generated from operations
260,948
559,866
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