Company registration number SC354801 (Scotland)
GGK CONTRACTS (SCOTLAND) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
GGK CONTRACTS (SCOTLAND) LIMITED
COMPANY INFORMATION
Directors
G Brown
J Robertson
J Brown
(Appointed 12 August 2024)
Company number
SC354801
Registered office
1 East Hermiston Farm
Currie
Midlothian
EH14 4AJ
Auditor
MHA
Chartered Accountants
6 St Colme Street
Edinburgh
EH3 6AD
GGK CONTRACTS (SCOTLAND) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
GGK CONTRACTS (SCOTLAND) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -
The directors present their strategic report for the year ended 30 June 2024.
Review of the business
The principal activity of the company is civil engineering and groundworks.
The results for the period are shown in the profit and loss account on page 8. Trading in the period resulted in a net profit before taxation of £504,896 (2023 £227,242). These results build on the previous trading performance where the company continued to operate profitably following the Pandemic.
The board remain focused on stabilising turnover and maintaining a net profit position and responding to the challenging trading conditions on a local, national, and international level. This in turns impacts on operating costs of the company. The company continually reviews its tender pricing strategy.
Principal risks and uncertainties
The main risks continue to be the uncertainty of the construction market and the impact of increased operating costs.
Our continued long-term relationships with suppliers and customers ensures that any uncertainty can be mitigated and the company will continue to take steps to mitigate the impact on overall trading performance.
Key performance indicators
The board continues to monitor the following key performance indicators:
Other performance indicators
Essential non-financial indicators routinely monitored by the board include:
Workforce retention levels
Customer relationships and reputation
Health and Safety performance
Contract performance information and data
GGK CONTRACTS (SCOTLAND) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
Future developments
In summary, the business remains profitable and has recovered in the period since the pandemic. The company has largely retained its existing clients and continues to develop new relationships across the Country. The workload projections for 2025 and beyond remain positive and the Board are focused on identifying new contract opportunities.
The Board continues to recognise the need to further understand the views of the companies’ stakeholders which includes.
Shareholders
Employees
Customers
Suppliers
Sub contractors
The directors thank all our customers for their ongoing business and support. The directors wish to formally acknowledge the support commitment and hard work by our employees, suppliers and sub-contractors which enables the company to maintain and achieve improved operational performance.
The directors place strong emphasis on long term partnerships and working arrangements.
G Brown
Director
4 June 2025
GGK CONTRACTS (SCOTLAND) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company continued to be that of civil engineering and groundworks.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £nil (2023 - £153,900). 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:
G Brown
J Robertson
J Brown
(Appointed 12 August 2024)
Auditor
The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP.
MHA will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Statement of directors' responsibilities
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
GGK CONTRACTS (SCOTLAND) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 4 -
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
G Brown
Director
4 June 2025
GGK CONTRACTS (SCOTLAND) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GGK CONTRACTS (SCOTLAND) LIMITED
- 5 -
Opinion
We have audited the financial statements of GGK Contracts (Scotland) Limited (the 'company') for the year ended 30 June 2024 which comprise the profit and loss account, 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:
give a true and fair view of the state of the company's affairs as at 30 June 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
GGK CONTRACTS (SCOTLAND) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GGK CONTRACTS (SCOTLAND) LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:
Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims;
Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
Reviewing minutes of meetings of those charged with governance;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities 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.
GGK CONTRACTS (SCOTLAND) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GGK CONTRACTS (SCOTLAND) LIMITED
- 7 -
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.
Iain Binnie
(Senior Statutory Auditor)
for and on behalf of MHA, Statutory Auditor
Edinburgh, United Kingdom
4 June 2025
MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in England and Wales (registered number OC455542)
GGK CONTRACTS (SCOTLAND) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
18,082,796
16,570,943
Cost of sales
(14,955,759)
(13,603,384)
Gross profit
3,127,037
2,967,559
Administrative expenses
(2,576,836)
(2,642,905)
Operating profit
4
550,201
324,654
Interest payable and similar expenses
7
(117,135)
(97,412)
Profit before taxation
433,066
227,242
Tax on profit
8
(123,886)
(68,045)
Profit for the financial year
309,180
159,197
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GGK CONTRACTS (SCOTLAND) LIMITED
BALANCE SHEET
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,046,555
952,345
Current assets
Stocks
11
116,168
107,787
Debtors
12
4,210,908
3,438,583
Cash at bank and in hand
96,895
108,633
4,423,971
3,655,003
Creditors: amounts falling due within one year
13
(4,091,767)
(3,490,069)
Net current assets
332,204
164,934
Total assets less current liabilities
1,378,759
1,117,279
Creditors: amounts falling due after more than one year
14
(745,487)
(831,028)
Provisions for liabilities
Deferred tax liability
17
(231,687)
(193,846)
(231,687)
(193,846)
Net assets
401,585
92,405
Capital and reserves
Called up share capital
19
91
91
Capital redemption reserve
9
9
Profit and loss reserves
401,485
92,305
Total equity
401,585
92,405
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 4 June 2025 and are signed on its behalf by:
G Brown
Director
Company registration number SC354801 (Scotland)
GGK CONTRACTS (SCOTLAND) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2022
91
9
87,008
87,108
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
-
159,197
159,197
Dividends
9
-
-
(153,900)
(153,900)
Balance at 30 June 2023
91
9
92,305
92,405
Year ended 30 June 2024:
Profit and total comprehensive income for the year
-
-
309,180
309,180
Balance at 30 June 2024
91
9
401,485
401,585
GGK CONTRACTS (SCOTLAND) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
640,930
829,084
Interest paid
(117,135)
(97,412)
Income taxes paid
(13,026)
Net cash inflow from operating activities
523,795
718,646
Investing activities
Purchase of tangible fixed assets
(410,740)
(346,220)
Proceeds from disposal of tangible fixed assets
78,281
67,102
Net cash used in investing activities
(332,459)
(279,118)
Financing activities
Repayment of bank loans
(60,000)
(55,000)
New finance lease obligations
372,476
336,220
Payment of finance leases obligations
(515,550)
(534,025)
Dividends paid
(153,900)
Net cash used in financing activities
(203,074)
(406,705)
Net (decrease)/increase in cash and cash equivalents
(11,738)
32,823
Cash and cash equivalents at beginning of year
108,633
75,810
Cash and cash equivalents at end of year
96,895
108,633
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 12 -
1
Accounting policies
Company information
GGK Contracts (Scotland) Limited is a private company limited by shares incorporated in Scotland. The registered office is 1 East Hermiston Farm, Currie, Midlothian, EH14 4AJ.
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
Going concern
During Covid the company’s profitability suffered, resulting in a loss after tax and a net liability position for the year ended 31 January 2021. Following a period of restructuring and refinancing the directors were please to report a return to profit and net assets for the period ended 30 June 2022 and the year ended 30 June 2023. This recovery has continued in the year ended 30 June 2024, and the directors are pleased to report a profit of £309,108 and net assets of £401,585.true
During this period the company has been operating within current funding arrangements, which is essential for the adoption of the going concern assumption. In order to ensure this is achieved the company continually monitors its cash flow and adjust prices and payments to reflect the changes in the operating environment specifically:
• Labour resource and availability.
• The availability and price of materials
• The increased costs of vehicles, plant and machinery
The company continues to make profits in the current year, and has prepared profit and loss and cash flow projections through to 30 June 2026. Based on this the company considers that it has a satisfactory level of financial resources, together with a solid base of existing customers, and expertise in its field of operations namely Surfacing and Civil Engineering Works. As a consequence the directors believe that the company is well placed to manage its business risks successfully. The company order book is strong which enables the company to focus on contracts which are beneficial in both terms of available expertise and financial return.
In addition to this the company has the ongoing financial support the major shareholder and other creditors who have provided long term finance.
The directors therefore have a reasonable expectation that the company has adequate resources to continue in operational existence for the period of 12 months from the approval of these accounts and beyond, and so continue to adopt the going concern basis of accounting in preparing the annual financial statements.
1.3
Contract accounting
The profit on contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis, measured on a month by month basis in line with the contract managers valuation to date. These valuations model are calculated as the proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Full provision is made for losses on all contracts in the period in which they are foreseen.
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 13 -
1.4
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:
Tenants improvements
2% Straight Line
Plant and equipment
12.5% - 25% Straight Line
Fixtures, fittings and equipment
25% Straight Line
Motor vehicles
20% 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 credited or charged to profit or loss.
1.5
Impairment of fixed assets
The carrying value of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.7
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.
1.8
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.
Debtors
Debtors with no stated interest rate or receivable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account.
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
Creditors
Creditors with no stated interest rate and payable within one year are recorded at transaction price.
All interest bearing loans and borrowings which are basic financial instruments are initially recognised at the present value of cash payable. After initial recognition they are measured at amortised cost.
1.9
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.
1.10
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.
1.11
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 15 -
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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 balance sheet 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 leases asset are consumed.
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.
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Accounting for long term contracts
The company estimates the outcome of its long term contracts. This is normally measured by the proportion of the costs incurred to date compared to the estimated total contract costs, expect where this would not be representative of the stage of completion.
Estimated total contract costs are based on management's detailed budgets and projections. Where management judge that the outcome of a long term contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recovered.
Useful economic lives of tangible fixed assets
The annual depreciation charge for tangible assets is sensitive to changes in estimates of useful economic lives of the assets. The useful economic lives are assessed annually and amended when necessary to reflect the current estimate.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Revenue from contracts
18,082,796
16,570,943
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
17,500
16,500
Depreciation of owned tangible fixed assets
66,142
74,140
Depreciation of tangible fixed assets held under finance leases
231,282
193,018
Profit on disposal of tangible fixed assets
(77,626)
(61,027)
Operating lease charges
25,350
21,450
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Operatives
113
119
Office and management
22
23
Total
135
142
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
5
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
5,725,287
5,621,051
Social security costs
605,634
603,207
Pension costs
157,512
146,095
6,488,433
6,370,353
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
144,518
144,652
Company pension contributions to defined contribution schemes
36,600
25,800
181,118
170,452
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
16,035
16,999
Other finance costs:
Interest on finance leases and hire purchase contracts
89,646
61,658
Other interest
11,454
18,755
117,135
97,412
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
86,045
21,460
Adjustments in respect of prior periods
3,088
Total current tax
86,045
24,548
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
8
Taxation
2024
2023
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
37,841
43,497
Total tax charge
123,886
68,045
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
433,066
227,242
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
108,267
46,585
Tax effect of expenses that are not deductible in determining taxable profit
15,619
15,762
Adjustments in respect of prior years
3,088
Effect of change in corporation tax rate
7,342
Permanent capital allowances in excess of depreciation
(4,732)
Taxation charge for the year
123,886
68,045
9
Dividends
2024
2023
£
£
Final paid
153,900
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 19 -
10
Tangible fixed assets
Tenants improvements
Plant and equipment
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 July 2023
101,809
2,384,573
139,612
1,192,056
3,818,050
Additions
310,295
21,545
78,900
410,740
Disposals
(282,920)
(77,939)
(360,859)
At 30 June 2024
101,809
2,411,948
161,157
1,193,017
3,867,931
Depreciation and impairment
At 1 July 2023
14,799
1,790,290
134,284
926,332
2,865,705
Depreciation charged in the year
2,036
170,778
9,215
133,846
315,875
Eliminated in respect of disposals
(282,920)
(77,284)
(360,204)
At 30 June 2024
16,835
1,678,148
143,499
982,894
2,821,376
Carrying amount
At 30 June 2024
84,974
733,800
17,658
210,123
1,046,555
At 30 June 2023
87,010
594,283
5,328
265,724
952,345
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
758,302
594,283
Motor vehicles
127,115
129,878
885,417
724,161
11
Stocks
2024
2023
£
£
Raw materials and consumables
116,168
107,787
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 20 -
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,719,263
1,128,995
Gross amounts owed by contract customers
1,543,526
1,948,895
Corporation tax recoverable
92,344
45,418
Other debtors
821,797
290,095
Prepayments and accrued income
33,978
25,180
4,210,908
3,438,583
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
15
60,000
60,000
Obligations under finance leases
16
387,978
457,330
Payments received on account
139,245
Trade creditors
2,507,866
2,406,258
Corporation tax
199,849
66,878
Other taxation and social security
317,761
171,164
Other creditors
171,496
128,099
Accruals and deferred income
307,572
200,340
4,091,767
3,490,069
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
70,000
130,000
Obligations under finance leases
16
402,029
475,751
Other creditors
273,458
225,277
745,487
831,028
15
Loans and overdrafts
2024
2023
£
£
Bank loans
130,000
190,000
Payable within one year
60,000
60,000
Payable after one year
70,000
130,000
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
15
Loans and overdrafts
(Continued)
- 21 -
Bank loans represent a lending facility obtained under the Coronavirus Business Interruption Loan Scheme. The loan is subject to interest of 4.9% over the base rate set by the Bank of England and a final repayment date 6 years after draw down. The loan is 100% guaranteed by the UK Government and the first twelve months of interest payments are covered by the UK Government.
The company banking facilities are secured by a floating charge over all company assets in favour of The Royal Bank of Scotland.
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
387,978
457,330
In two to five years
402,029
475,751
790,007
933,081
Finance lease obligations are secured against the tangible assets to which they relate to.
17
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
243,425
194,346
Short term timing differences
(11,738)
(500)
231,687
193,846
2024
Movements in the year:
£
Liability at 1 July 2023
193,846
Charge to profit or loss
37,841
Liability at 30 June 2024
231,687
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 22 -
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
157,512
146,095
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. The unpaid contributions outstanding at period end, and included in creditors, amounted to £46,951 (2023 - £5,211).
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary Shares of £1 each
89
89
89
89
B Ordinary Shares of £1 each
1
1
1
1
C Ordinary Shares of £1 each
1
1
1
1
91
91
91
91
20
Operating lease commitments
Lessee
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
23,400
23,400
21
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2024
2023
2024
2023
£
£
£
£
Entities over which the entity has control, joint control or significant influence
109,563
162,246
544,528
393,686
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
21
Related party transactions
(Continued)
- 23 -
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due to related parties
£
£
Entities over which the entity has control, joint control or significant influence
144,934
235,586
Other related parties
201,219
172,403
Trade creditors includes £72,915 (2023: £180,309) of amounts due to entities over which the entity has control, joint control or significant influence.
Other creditors includes £72,019 (2023: £55,277) of amounts due to entities over which the entity has control, joint control or significant influence.
Other creditors includes £201,219 (2023: £172,403) of amounts due to other related parties.
Loan balances between the company and its directors carry no fixed terms for repayment and no interest is applied to such balances.
Loan balances between the company and related parties associated by common control and other related parties carry no fixed terms for repayment and no interest is applied to such balances.
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
123,296
110,419
Directors
273,613
168,300
Trade debtors includes £123,296 (2023 : £110,419) of amounts due from entities over which the entity has control, joint control, or significant influence.
Other debtors includes £273,613 (2023 : £168,300) of amounts due from directors.
Loan balances between the company and its directors carry no fixed terms for repayment and no interest is applied to such balances. The balance owed to the company by directors has been repaid in full post year end.
Loan balances between the company and related parties associated by common control carry no fixed terms for repayment and no interest is applied to such balances.
22
Directors' transactions
Included within other debtors is £273,613 (2023 - £168,300) in respect of loans made to directors of the company. There is no interest charged on the outstanding balance and there are no fixed terms for repayment. The company considers it directors to be they key management personnel as defined by FRS 102. As the directors are the only key management personnel, the directors remuneration figures disclosed are considered to be the same as the key management personnel.
GGK CONTRACTS (SCOTLAND) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 24 -
23
Ultimate controlling party
G Brown is the ultimate controlling party.
24
Cash generated from operations
2024
2023
£
£
Profit after taxation
309,180
159,197
Adjustments for:
Taxation charged
123,886
68,045
Finance costs
117,135
97,412
Gain on disposal of tangible fixed assets
(77,626)
(61,027)
Depreciation and impairment of tangible fixed assets
315,875
267,158
Movements in working capital:
(Increase)/decrease in stocks
(8,381)
11,135
Increase in debtors
(725,399)
(301,622)
Increase in creditors
586,260
588,786
Cash generated from operations
640,930
829,084
25
Analysis of changes in net debt
1 July 2023
Cash flows
Other non-cash changes
30 June 2024
£
£
£
£
Cash at bank and in hand
108,633
(11,738)
-
96,895
Borrowings excluding overdrafts
(190,000)
60,000
-
(130,000)
Obligations under finance leases
(933,081)
515,550
(372,476)
(790,007)
(1,014,448)
563,812
(372,476)
(823,112)
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