Company registration number 05518699 (England and Wales)
Sword Construction UK Limited
Annual Report And Financial Statements
For The Year Ended 30 September 2024
Sword Construction UK Limited
Company Information
Directors
Mr I D Sword
Mr A P Cunningham
Mr A L P Lambert
Mr L J Daley
Ms M Sword
Company number
05518699
Registered office
The Carriage House
Mill Street
Maidstone
Kent
ME15 6YE
Auditor
Loucas
The Carriage House
Mill Street
Maidstone
Kent
ME15 6YE
Business address
The Old Brick Yard
Island Carr Road
Island Carr Industrial Estate
Brigg
North Lincs
DN20 8PD
Bankers
Barclays Bank Plc
81 High Street
Scunthorpe
North Lincs
DN15 6LZ
Sword Construction UK Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
Sword Construction UK Limited
Strategic Report
For The Year Ended 30 September 2024
Page 1
The directors present the strategic report for the year ended 30 September 2024.
Fair review of the business
Company turnover decreased in 2024 to £10,105,170 (2023 £16,084,192), however, this was not unexpected. The previous years turnover was inflated by the Company’s involvement in a 3-year specialist project concluding at the start of 2023. Prior to the engagement in the specialist project, Company turnover was circa £10-12m pa.
The Company has unfortunately suffered a loss for the second consecutive year, current year 2024 (£1,306,808) (2023 loss (£984,188)).
The Company’s turnover and profit has continued to be impacted by the issues reported at the end of the last financial period, namely delays in/failure of the Company’s Debtors to make timely payments. Turnover and profitability has further been affected by delays in the progression of existing and commencement of new projects successfully tendered for.
The Company balance sheet, although obviously affected, remains in a strong net asset position in 2024 of £733,431 after the Company has paid out dividends of £502,000.
Despite the Company's lack of profit, the Company has no additional lending and maintains cash balances to ensure liabilities are met. Indeed, the Company’s cash flow and cash and cash equivalents for 2024 has improved by circa 39% on 2023.
The Company has been operating now for some 20 years. During this time having experienced; a lengthy recession 2008/2009; Covid 2020-22; and challenging conditions for a number of years in the construction sector. It has unfortunately experienced similar issues with delays in/debtors’ failing to make timely payment, resulting previously in losses in consecutive years. However, despite all of this the Company has continued to operate and enjoyed many years of growth and prosperity, proving its resilience and commitment to the long term.
The Company has put in place improved systems commencing in the latter half of 2024 to reduce the risk of and impact of delays and failures in payments, and improve in its financial and risk forecasting. The positive impact of these measures is already being seen in its current 24/25 accounting period and turnover for this period is expected to increase on 2024 by circa 20% and the Board is confident of a reported profit in this period and indeed into the next accounting period.
The Board’s confidence comes from already having commenced a number of new projects some of which are continuing until the end of 2026. Further the fact that a number of these contracts have come from the forging of new relationships with key Principal Contractors as well as repeat business through the nurturing of existing relations with others. All of which is an indicator of continued successful operational performance.
Principal risks and uncertainties
The director considers proper risk management to be crucial to the company's future success and gives a high priority to ensuring that adequate systems and structures are in place to measure, analyse and limit exposure to risk. The director has established key procedures to ensure that internal controls are effective and are commensurate with a company of this size. A key control is the day to day supervision of the business by the director. Other internal controls continue to be developed.
Sword Construction UK Limited
Strategic Report (Continued)
For The Year Ended 30 September 2024
Page 2
Key performance indicators
In light of market conditions, the key performance indicators used by the company are turnover, gross profit percentage and net profit percentage.
2024
2023
Turnover
10,105,170
16,084,192
Gross Profit Percentage
3.61%
7.16%
Net Profit Percentage
12.93%
7.38%
Ms M Sword
Director
26 June 2025
Sword Construction UK Limited
Directors' Report
For The Year Ended 30 September 2024
Page 3
The directors present their report and financial statements for the year ended 30 September 2024.
Principal activities
The principal activity of the company during the year was that of civil engineering.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £502,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr I D Sword
Mr A P Cunningham
Mr A L P Lambert
Mr L J Daley
Mr A Patel
(Resigned 31 March 2025)
Ms M Sword
Auditor
Loucas were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Ms M Sword
Director
26 June 2025
Sword Construction UK Limited
Directors' Responsibilities Statement
For The Year Ended 30 September 2024
Page 4
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.
Sword Construction UK Limited
Independent Auditor's Report
To The Members Of Sword Construction UK Limited
Page 5
Opinion
We have audited the financial statements of Sword Construction UK Limited (the 'company') for the year ended 30 September 2024 which comprise the profit and loss account, 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:
give a true and fair view of the state of the company's affairs as at 30 September 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
Sword Construction UK Limited
Independent Auditor's Report (Continued)
To The Members Of Sword Construction UK Limited
Page 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
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, 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:
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements, including how fraud may occur by enquiring of management's own consideration of fraud. In particular we assessed whether judgements made in making accounting estimates are indicative of potential bias, and evaluated the business rationale of significant transactions outside the normal course of business. We also addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and other adjustments. We also considered potential financial or other pressures, opportunities and motivations for fraud. As part of discussions with management we identified the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations and how management monitor these processes.
We obtained an understanding of the legal and regulatory environment applicable to the company and established the most relevant laws and regulations are FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice), Companies Act 2006, direct and indirect taxation legislation in the United Kingdom, and operational laws and regulations including health and safety, employment law, anti-money laundering, anti-bribery and corruption, and GDPR rules.
Additionally we also identified ISO 9001 and ISO 45001 as being regulations that could reasonably be expected to have a material effect on the financial statements. This has been identified through our experience of the sector in which the entity operates, and through discussions with the directors and management.
Sword Construction UK Limited
Independent Auditor's Report (Continued)
To The Members Of Sword Construction UK Limited
Page 7
We considered the extent of compliance with these laws and regulations as part of our procedures on the related financial statement lines. We made enquiries of management with regards to compliance with the above laws and regulations and corroborated any necessary evidence, for example, review and inspection of legal invoices and correspondence with the relevant authorities and the entity's solicitors. With regards to ISO 9001 and ISO 45001 we also reviewed inspection documents from audits carried out by accreditation bodies such as Achilles Building Confidence and the Railway Industry Supplier Qualification Scheme (RISQS).
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentation or through collusion. There are inherent limitations in the audit procedures performed as non-compliance with laws and regulations may not necessarily be reflected in transactions reported in the financial statements, and therefore we may be less likely to become aware of it. Management and those charged with governance of the entity have the primary responsibility for the prevention and detection of fraud.
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.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Mr Athos Louca FCCA, ICPAC (Senior Statutory Auditor)
For and on behalf of Loucas
26 June 2025
Chartered Certified Accountants
Statutory Auditor
The Carriage House
Mill Street
Maidstone
Kent
ME15 6YE
Sword Construction UK Limited
Profit And Loss Account
For The Year Ended 30 September 2024
Page 8
2024
2023
Notes
£
£
Turnover
3
10,105,170
16,084,192
Cost of sales
(9,740,374)
(14,933,218)
Gross profit
364,796
1,150,974
Administrative expenses
(1,716,029)
(2,259,866)
Other operating income
10,509
250
Operating loss
4
(1,340,724)
(1,108,642)
Interest receivable and similar income
8
36,141
7,904
Interest payable and similar expenses
9
(2,225)
(1,437)
Amounts written off investments
10
-
(84,595)
Loss before taxation
(1,306,808)
(1,186,770)
Tax on loss
11
202,582
Loss for the financial year
(1,306,808)
(984,188)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Sword Construction UK Limited
Statement Of Comprehensive Income
For The Year Ended 30 September 2024
Page 9
2024
2023
£
£
Loss for the year
(1,306,808)
(984,188)
Other comprehensive income
-
-
Total comprehensive income for the year
(1,306,808)
(984,188)
Sword Construction UK Limited
Balance Sheet
As At 30 September 2024
Page 10
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
13
22,412
29,883
Current assets
Debtors
14
2,330,369
4,967,491
Cash at bank and in hand
330,974
236,808
2,661,343
5,204,299
Creditors: amounts falling due within one year
15
(1,940,804)
(2,672,544)
Net current assets
720,539
2,531,755
Total assets less current liabilities
742,951
2,561,638
Creditors: amounts falling due after more than one year
17
(9,520)
(19,399)
Net assets
733,431
2,542,239
Capital and reserves
Called up share capital
19
100
100
Profit and loss reserves
733,331
2,542,139
Total equity
733,431
2,542,239
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 26 June 2025 and are signed on its behalf by:
Ms M Sword
Director
Company registration number 05518699 (England and Wales)
Sword Construction UK Limited
Statement Of Changes In Equity
For The Year Ended 30 September 2024
Page 11
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2022
100
4,729,967
4,730,067
Year ended 30 September 2023:
Loss and total comprehensive income
-
(984,188)
(984,188)
Dividends
12
-
(1,203,640)
(1,203,640)
Balance at 30 September 2023
100
2,542,139
2,542,239
Year ended 30 September 2024:
Loss and total comprehensive income
-
(1,306,808)
(1,306,808)
Dividends
12
-
(502,000)
(502,000)
Balance at 30 September 2024
100
733,331
733,431
Sword Construction UK Limited
Statement Of Cash Flows
For The Year Ended 30 September 2024
Page 12
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
22
603,744
(484,937)
Interest paid
(2,225)
(1,437)
Income taxes paid
(31,615)
(447,776)
Net cash inflow/(outflow) from operating activities
569,904
(934,150)
Investing activities
Purchase of tangible fixed assets
(520)
Loans issued/repaid
750,000
Interest received
36,141
7,904
Net cash generated from investing activities
36,141
757,384
Financing activities
Repayment of bank loans
(9,879)
(9,882)
Dividends paid
(502,000)
(1,203,640)
Net cash used in financing activities
(511,879)
(1,213,522)
Net increase/(decrease) in cash and cash equivalents
94,166
(1,390,288)
Cash and cash equivalents at beginning of year
236,808
1,627,096
Cash and cash equivalents at end of year
330,974
236,808
Sword Construction UK Limited
Notes To The Financial Statements
For The Year Ended 30 September 2024
Page 13
1
Accounting policies
Company information
Sword Construction UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Carriage House, Mill Street, Maidstone, Kent, ME15 6YE.
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
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:
Civil Engineering
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.4
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.
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
1
Accounting policies
(Continued)
Page 14
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:
Plant and machinery
25% Reducing Balance
Fixtures, fittings & equipment
25% Reducing Balance
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
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
1.6
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.
1.7
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.
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
1
Accounting policies
(Continued)
Page 15
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.
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.
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
1
Accounting policies
(Continued)
Page 16
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
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.
1.9
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.
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
1
Accounting policies
(Continued)
Page 17
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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.
Critical judgements
No significant judgements have had to be made by management in preparing these financial statements.
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.
Impairment of debtors
The provision for impairment of receivables requires that management closely review the outstanding trade receivables, also considering ageing, payment history and credit risk coverage. An assessment is made on an individual basis with each customer's balance being reviewed closely.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Civil engineering
10,105,170
16,084,192
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
3
Turnover and other revenue
(Continued)
Page 18
2024
2023
£
£
Other revenue
Interest income
36,141
7,904
4
Operating loss
2024
2023
Operating loss for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
7,471
9,936
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
11,550
12,100
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Operational
7
7
Administrative
5
6
Directors
5
5
Total
17
18
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
711,437
688,718
Social security costs
61,438
61,817
Pension costs
14,150
12,997
787,025
763,532
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
Page 19
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
310,283
251,677
Company pension contributions to defined contribution schemes
8,331
7,919
318,614
259,596
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
65,766
53,880
Company pension contributions to defined contribution schemes
1,761
1,756
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
2,414
Other interest income
33,727
7,904
Total income
36,141
7,904
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
2,414
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
2,168
1,132
Other finance costs:
Other interest
57
305
2,225
1,437
10
Amounts written off investments
2024
2023
£
£
Gain/(loss) on disposal of investments held at fair value
-
(84,595)
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
Page 20
11
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
(200,952)
Deferred tax
Origination and reversal of timing differences
(1,630)
Total tax charge/(credit)
(202,582)
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Loss before taxation
(1,306,808)
(1,186,770)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
(326,702)
(296,693)
Tax effect of expenses that are not deductible in determining taxable profit
2,822
32,892
Unutilised tax losses carried forward
315,278
Effect of change in corporation tax rate
63,459
Permanent capital allowances in excess of depreciation
(433)
(2,240)
Losses utilised
9,035
Taxation charge/(credit) for the year
-
(202,582)
12
Dividends
2024
2023
£
£
Final paid
502,000
1,203,640
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
Page 21
13
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 October 2023 and 30 September 2024
7,000
130,315
137,315
Depreciation and impairment
At 1 October 2023
6,932
100,500
107,432
Depreciation charged in the year
17
7,454
7,471
At 30 September 2024
6,949
107,954
114,903
Carrying amount
At 30 September 2024
51
22,361
22,412
At 30 September 2023
68
29,815
29,883
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
217,033
167,857
Gross amounts owed by contract customers
1,225,487
3,821,883
Corporation tax recoverable
561,107
529,492
Other debtors
188,361
273,264
Prepayments and accrued income
138,381
174,995
2,330,369
4,967,491
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
16
10,000
10,000
Trade creditors
1,659,945
1,810,023
Taxation and social security
99,278
132,010
Other creditors
17,908
366,673
Accruals and deferred income
153,673
353,838
1,940,804
2,672,544
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
Page 22
16
Loans and overdrafts
2024
2023
£
£
Bank loans
19,520
29,399
Payable within one year
10,000
10,000
Payable after one year
9,520
19,399
17
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
9,520
19,399
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
14,150
12,997
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.
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
45
45
45
45
Ordinary B shares of £1 each
10
10
10
10
Ordinary C shares of £1 each
10
10
10
10
Ordinary D shares of £1 each
10
10
10
10
Ordinary E shares of £1 each
5
5
5
5
Ordinary F shares of £1 each
10
10
10
10
Ordinary G shares of £1 each
10
10
10
10
100
100
100
100
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
Page 23
20
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
£
£
£
£
Other related parties
5,964
42,080
1,310,625
2,028,741
Consultancy fees
Subcontractor costs
2024
2023
2024
2023
£
£
£
£
Other related parties
63,383
95,950
55,957
67,196
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due to related parties
£
£
Other related parties
1,215,716
1,461,896
The following amounts were outstanding at the reporting end date:
Other information
During the year the following dividends were paid:
£129,429 (2023 - £337,682) was paid to RALS Civils Holdings Ltd, a company which is controlled by Anil Patel, a director of the reporting entity.
£129,429 (2023 - £337,682) was paid to AJA Construction Ltd, a company which is controlled by Anthony Cunningham, a director of the reporting entity.
£129,429 (2023 - £337,682) was paid to Lambert BAHIG Limited, a company which is controlled by Andrew Lambert, a director of the reporting entity.
£93,714 (2023 - £190,591) was paid to Prendale Holdings UK Ltd, a company which is controlled by Luke Daley, a director of the reporting entity.
Sword Construction UK Limited
Notes To The Financial Statements (Continued)
For The Year Ended 30 September 2024
Page 24
21
Directors' transactions
Dividends totalling £20,000 (2023 - £0) were paid in the year in respect of shares held by the company's directors.
The director, Mr I D Sword, received rents in the year totalling £21,900 (2023 - £21,900) in respect of The Old Brickyard, Island Carr Estate, Brigg.
Mr I D Sword has given a limited guarantee to the bank for £140,000.
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Closing balance
£
£
Mr I D Sword - Director's Loan Account
-
770
770
770
770
22
Cash generated from/(absorbed by) operations
2024
2023
£
£
Loss after taxation
(1,306,808)
(984,188)
Adjustments for:
Taxation charged/(credited)
(202,582)
Finance costs
2,225
1,437
Investment income
(36,141)
(7,904)
Depreciation and impairment of tangible fixed assets
7,471
9,936
Other gains and losses
-
84,595
Movements in working capital:
Decrease in debtors
2,668,737
2,993,606
Decrease in creditors
(731,740)
(2,379,837)
Cash generated from/(absorbed by) operations
603,744
(484,937)
23
Analysis of changes in net funds
1 October 2023
Cash flows
30 September 2024
£
£
£
Cash at bank and in hand
236,808
94,166
330,974
Borrowings excluding overdrafts
(29,399)
9,879
(19,520)
207,409
104,045
311,454
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