Company registration number SC071884 (Scotland)
HUTCHEON SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
HUTCHEON SERVICES LIMITED
COMPANY INFORMATION
Directors
Gregor A Robb
Graeme P Farquhar
Garry Shand
Donald H Galloway
Gary D Campbell
Martin Leiper
Secretary
Stronachs Secretaries Limited
Company number
SC071884
Registered office
28 Albyn Place
Aberdeen
United Kingdom
AB10 1YL
Auditor
BK Plus Audit Limited
Azzurri House
Walsall Road
Aldridge
Walsall
WS9 0RB
Bankers
Royal Bank of Scotland PLC
40 Albyn Place
Aberdeen
AB10 1YN
Solicitors
Stronachs
28 Albyn Place
Aberdeen
United Kingdom
AB10 1YL
HUTCHEON SERVICES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Statement of financial position
10
Notes to the financial statements
11 - 23
HUTCHEON SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 1 -
The directors present the strategic report for the year ended 30 November 2024.
Principal activities
The principal activity of the company continued to be that of general electrical, mechanical and plumbing contractors.
Business Review
Principal risks and uncertainties
Market and economic risk
The majority of the company's trade occurs locally in the UK. As a result, the company has limited exposure to exchange rate and associated risks.
Economic Factors affecting the Industry
In recent years, the construction industry like most other sectors has been affected both by upward inflationary pressures and increasing borrowing costs which have had an impact on capital project expenditure within the UK. However, these negative economic factors eased during the course of the year and as a result have not had a material impact on the trading results of the company.
The ongoing impact of Brexit and the crisis in Ukraine still negatively impacts the construction industry business with increased material costs and longer delivery lead times, along with increasing labour costs and skills shortages. However, the company has adapted and has developed various strategies to minimise these negative impacts.
Funding and Liquidity Risk
The company is not materially affected by any funding or liquidity risks and the impact of increased borrowing costs will be minimal due to the positive liquidity position of the company and the low level of borrowing.
Financial Risk
The company's principal financial assets are cash balances and trade receivables. Our customers are subject to credit checks and credit limits. The trade debtors' figure is stated net of any bad debt provision, which we do not consider to be material. The company strives to ensure that it maintains a broad client base and undertakes a diverse range of commercial, industrial and private sector works. In addition, the fact that the company provides a multi-service facility ensures that it is less exposed to fluctuations in one specific market area.
Development and performance
Turnover for the year to 30 November 2024 has decreased from the 2023 level of £21.6m to around £20.5m. This was to be expected given the record level of turnover in 2023. The company has maintained profitability in the year to November 2024 due to the continuing high levels of turnover, effective control of overheads and efficiencies being made in its tendering, buying and operational processes.
The company continued with its principal activities based around the construction industry. The directors are aware that the company needs to continually review its core business activities in light of the ever-changing marketplace. As a result, the client base was widened, operational efficiency savings were implemented, and investment was made in training to ensure that its services meet the current requirements of the marketplace in which it operates.
The company performed in line with expectations in the year both in terms of turnover and profitability. This was due to a combination of achieving higher trading margins within our core divisions and focusing upon efficiencies within all aspects of the business.
Key performance indicators
The company used several appropriate key performance measures to monitor the performance of the business during the year to 30 November 2024. The directors review management accounts for all the operating divisions each month with particular reference to turnover, labour costs and project profitability. These results are reviewed in conjunction with projections of future works accepted for and those yet to be awarded.
.
.
HUTCHEON SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 2 -
Future Developments
The company intends to continue to focus on its core activities in the construction industry over the next 12 months. Although the company will continue to be impacted to some degree by economic factors affecting the industry in general, the company anticipates that its trading results will not be significantly adversely affected during the year to November 2025 as strategies have been implemented to mitigate against any such future impact.
Gregor A Robb
Director
18 July 2025
HUTCHEON SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 November 2024.
Results and dividends
Ordinary dividends were paid amounting to £750,000. 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:
Gregor A Robb
Graeme P Farquhar
Garry Shand
Donald H Galloway
Gary D Campbell
Martin Leiper
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
Gregor A Robb
Director
18 July 2025
HUTCHEON SERVICES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 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.
HUTCHEON SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF HUTCHEON SERVICES LIMITED
- 5 -
Opinion
We have audited the financial statements of Hutcheon Services Limited (the 'company') for the year ended 30 November 2024 which comprise the statement of income and retained earnings, the statement of financial position 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 November 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.
HUTCHEON SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF HUTCHEON SERVICES LIMITED (CONTINUED)
- 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.
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:
HUTCHEON SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF HUTCHEON SERVICES LIMITED (CONTINUED)
- 7 -
In identifying and assessing the risk of material misstatement due to non-compliance with laws and regulations we have carried out the following:
Ensured that the engagement team have the appropriate competence, capabilities and skills to identify or recognise non-compliance with laws and regulations;
Identified at planning the specific laws and regulations applicable to the entity through discussions with directors and management and through our own knowledge of the sector;
Focused on the laws and regulations we consider may have a direct effect on the financial statements, including FRS 102, the Companies Act 2006, employment regulations and tax compliance legislation;
Reviewed the financial statement disclosures and tested these to supporting documentation to assess compliance with applicable laws and regulations;
Made enquiries of management; and
Ensured the engagement team remained alert to instances of non-compliance throughout the audit.
In identifying and assessing the risk of material misstatement due to irregularities, including fraud and how it may occur, the potential for management bias and the override of controls we have:
Obtained an understanding at planning of the entity's operations, including the nature of its sources of revenue to understand the types of transactions, account balances, financial disclosures and business risks that may result in risk of material misstatement;
Made enquiries of management at planning as to where they consider there was a susceptibility to fraud, and their knowledge of any actual, suspected or alleged fraud;
Vouched balances and reconciling items in key control account reconciliations to supporting documentation;
Carried out detailed testing, on a sample basis, to verify the completeness, existence and accuracy of transactions and balances;
Challenged assumptions and judgements made by management in their significant accounting estimates;
Performed analytical procedures to identify any significant or unusual transactions; and
Investigated the business rationale behind any significant or unusual transactions.
We did not identify any matters relating to non-compliance with laws and regulations, or relating to fraud.
Because of the inherent limitations of an audit, there is an unavoidable risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk of not detecting a material misstatement due to fraud is inherently more difficult than detecting those that result from error as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. In addition, the further removed any non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
HUTCHEON SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF HUTCHEON SERVICES LIMITED (CONTINUED)
- 8 -
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
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. 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Christopher Hession C.A. (Senior Statutory Auditor)
For and on behalf of BK Plus Audit Limited, Statutory Auditor
Chartered Certified Accountants
Azzurri House
Walsall Road
Aldridge
Walsall
WS9 0RB
18 July 2025
HUTCHEON SERVICES LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
20,545,437
21,603,311
Cost of sales
(16,547,691)
(17,892,318)
Gross profit
3,997,746
3,710,993
Administrative expenses
(2,853,933)
(2,593,983)
Other operating income
282,564
334,843
Operating profit
4
1,426,377
1,451,853
Interest receivable and similar income
8
52,442
30,324
Interest payable and similar expenses
9
(8,389)
(10,009)
Amounts written off investments
10
(100,000)
-
Profit before taxation
1,370,430
1,472,168
Tax on profit
11
(380,078)
(341,034)
Profit for the financial year
990,352
1,131,134
Retained earnings brought forward
2,194,447
3,313,313
Dividends
12
(750,000)
(2,250,000)
Retained earnings carried forward
2,434,799
2,194,447
The income statement has been prepared on the basis that all operations are continuing operations.
The notes on pages 11 to 23 form part of these financial statements.
HUTCHEON SERVICES LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
30 NOVEMBER 2024
30 November 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
14
601,071
718,336
Investments
15
100,000
601,071
818,336
Current assets
Stocks
16
847,207
1,131,103
Debtors
17
3,622,897
3,952,210
Cash at bank and in hand
2,809,672
2,529,820
7,279,776
7,613,133
Creditors: amounts falling due within one year
18
(5,262,127)
(5,953,301)
Net current assets
2,017,649
1,659,832
Total assets less current liabilities
2,618,720
2,478,168
Creditors: amounts falling due after more than one year
19
(41,395)
Provisions for liabilities
Deferred tax liability
21
52,125
110,530
(52,125)
(110,530)
Net assets
2,566,595
2,326,243
Capital and reserves
Called up share capital
23
33,400
33,400
Share premium account
24
98,396
98,396
Profit and loss reserves
2,434,799
2,194,447
Total equity
2,566,595
2,326,243
The notes on pages 11 to 23 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 18 July 2025 and are signed on its behalf by:
Graeme P Farquhar
Director
Company registration number SC071884 (Scotland)
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 11 -
1
Accounting policies
Company information
Hutcheon Services Limited is a private company limited by shares incorporated in Scotland. The registered office is 28 Albyn Place, Aberdeen, United Kingdom, AB10 1YL.
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of Hutcheon Investments Limited. These consolidated financial statements are available from the Registrar of Companies, Companies House, Crown Way, Cardiff, CF14 3UZ.
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 turnover shown in the profit and loss account represents the value of work done, including estimates of amounts not invoiced, based on the stage of completion of services provided during the year, exclusive of Value Added Tax.
Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 12 -
1.4
Tangible fixed assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
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
20% reducing balance
Plant and machinery
15% reducing balance
Fixtures and fittings
15% reducing balance
Motor vehicles
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
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.6
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
1.7
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 13 -
Work in progress
Work in progress is valued on the basis of direct costs plus attributable overheads based on normal level of activity. Provision is made for any foreseeable losses where appropriate.
1.8
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.
1.9
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 statement of financial position 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.
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.
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.10
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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset 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.
1.12
Retirement benefits
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.13
Leases
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset.
Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Operating leases
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Bad debt provision
During the course of the year, and during the year end process, management are required to determine whether any debts should be regarded as bad debts. This process is based on their knowledge of the business coupled with post year end information identifying debts not recovered relating to the previous financial period.
Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the useful economic lives and residual values of the assets. Useful lives and residual values are reassessed annually. They are assessed where necessary to reflect current estimates based on economic utilisation and physical condition.
Contingencies
During the year end process, management use their extensive industry experience to estimate the cost of completion of remedial work.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Rendering of services
20,545,437
21,603,311
2024
2023
£
£
Other revenue
Interest income
52,442
30,324
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
3
Turnover and other revenue
(Continued)
- 16 -
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
196,918
196,249
Impairment of owned tangible fixed assets
90,000
Profit on disposal of tangible fixed assets
(1,201)
(2,478)
Impairment of investment
100,000
Operating lease charges
180,692
180,692
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
18,000
16,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production staff
159
169
Administrative staff
13
12
Total
172
181
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
8,521,846
9,388,089
Social security costs
641,770
641,764
Pension costs
318,414
328,799
9,482,030
10,358,652
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 17 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
2,640
Company pension contributions to defined contribution schemes
106,717
99,088
106,717
101,728
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 6 (2023 - 6).
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
52,442
30,324
9
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
-
1,817
Interest on finance leases and hire purchase contracts
6,553
6,793
Other interest
1,836
1,399
8,389
10,009
10
Amounts written off investments
2024
2023
£
£
Other gains and losses
(100,000)
-
11
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
438,483
373,380
Deferred tax
Origination and reversal of timing differences
(58,405)
(32,346)
Total tax charge
380,078
341,034
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
11
Taxation
(Continued)
- 18 -
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
1,370,430
1,472,168
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
342,608
368,042
Tax effect of expenses that are not deductible in determining taxable profit
37,470
5,461
Effect of capital allowances and depreciation
(32,491)
Other tax adjustments
22
Taxation charge for the year
380,078
341,034
12
Dividends
2024
2023
£
£
Final paid
750,000
2,250,000
13
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2024
2023
Notes
£
£
In respect of:
Property, plant and equipment
14
90,000
Fixed asset investments
15
100,000
-
Recognised in:
Administrative expenses
90,000
-
Amounts written off investments
100,000
-
The impairment losses in respect of financial assets are recognised in other gains and losses in the income statement.
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 19 -
14
Tangible fixed assets
Tenants improvements
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 December 2023
482,255
488,327
377,285
1,114,441
2,462,308
Additions
4,763
179,189
183,952
Disposals
(72,799)
(72,799)
At 30 November 2024
482,255
493,090
377,285
1,220,831
2,573,461
Depreciation and impairment
At 1 December 2023
476,866
387,106
328,202
551,798
1,743,972
Depreciation charged in the year
5,389
14,205
6,877
170,447
196,918
Impairment losses
60,000
30,000
90,000
Eliminated in respect of disposals
(58,500)
(58,500)
At 30 November 2024
482,255
461,311
365,079
663,745
1,972,390
Carrying amount
At 30 November 2024
31,779
12,206
557,086
601,071
At 30 November 2023
5,389
101,221
49,083
562,643
718,336
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
£
£
Motor vehicles
117,975
244,699
More information on impairment movements in the year is given in note 13.
15
Fixed asset investments
2024
2023
£
£
Other investments
100,000
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
15
Fixed asset investments
(Continued)
- 20 -
Movements in fixed asset investments
Other
£
Cost or valuation
At 1 December 2023 & 30 November 2024
100,000
Impairment
At 1 December 2023
-
Impairment losses
100,000
At 30 November 2024
100,000
Carrying amount
At 30 November 2024
-
At 30 November 2023
100,000
16
Stocks
2024
2023
£
£
Raw materials and consumables
14,663
30,004
Work in progress
832,544
1,101,099
847,207
1,131,103
17
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,430,446
1,563,733
Amounts owed by group undertakings
1,470,745
2,065,225
Other debtors
402,210
239,900
Prepayments and accrued income
319,496
83,352
3,622,897
3,952,210
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 21 -
18
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
20
45,236
80,595
Trade creditors
1,877,158
1,883,015
Corporation tax
238,483
373,380
Other taxation and social security
186,491
215,766
Other creditors
649,359
824,613
Accruals and deferred income
2,265,400
2,575,932
5,262,127
5,953,301
19
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
20
41,395
20
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
45,236
80,595
In two to five years
41,395
45,236
121,990
21
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
66,891
125,778
Retirement benefit obligations
(10,766)
(11,248)
Provision for liabilities
(4,000)
(4,000)
52,125
110,530
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
21
Deferred taxation
(Continued)
- 22 -
2024
Movements in the year:
£
Liability at 1 December 2023
110,530
Credit to profit or loss
(58,405)
Liability at 30 November 2024
52,125
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
318,414
328,799
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.
23
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
33,400
33,400
33,400
33,400
24
Share premium account
This reserve records the amount above the nominal value received for shares sold, less transaction costs.
HUTCHEON SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 23 -
25
Financial commitments, guarantees and contingent liabilities
The company has provided an inter-company guarantee in relation to bank borrowings of its immediate parent company, HSB Holdings Limited. The amount due by HSB Holdings Limited at 30 November 2024 was £565,580 (2023 - £702,149).
The company has a contingent liability in respect of a possible tax liability and related interest liability.
The company made investments in 2016 which resulted in the company (as well as other corporate investors) claiming a share of trading losses generated by the investment entity. The amount invested was £100,000 and the tax saved was £141,000.
Subsequent to the year end, the company was advised by the investment entity’s agents that a tax tribunal dealing with a test case had upheld HMRC’s position that the investment entity’s losses were not allowable for corporate tax deduction. At the date of sign off of these accounts, the corporate investors and their advisers are considering an appeal to a higher tax tribunal to contest the decision of the lower tier tribunal and thereby to have the losses allowed.
Where there is ultimately no appeal made to an upper tier tribunal, or where such an appeal proceeds and is unsuccessful, the company would become liable to repay the tax saved on claiming the loss share of £141,000, as well as interest from the relevant tax year to date of determination, which interest amount could be in the region of £55,000. Due to the ongoing uncertainty in relation to the resolution of this matter, no provision has been made in the 2024 accounts for tax payable and related interest.
26
Related party transactions
Transactions with related parties
At the year end company was under the control of its directors.
At the year end, the balance due by members of the Hutcheon Investments Limited group of companies was £1,470,745 (2023 - £2,065,225) and amounts due are repayable on demand and do not attract interest.
27
Ultimate controlling party
Hutcheon Investments Limited, a company registered in Scotland, is the ultimate controlling party.
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