The Directors present the strategic report for the year ended 31 December 2024.
During the year BEAR Scotland continued to operate the Scottish Trunk Road Network Management Contract for the for the South East and North West Units. We continued to operate the Operation and Maintenance Contracts for the A92 Dundee to Arbroath and the M80 Stepps to Haggs.
Financial Highlights
The turnover of the group increased by 20% to £199m for 2024 from £166m in 2023 due to increased budgets from Transport Scotland in the client year 2024/25. Group profit before tax in 2024 is £5.0m (£1.1m 2023).
Operational Challenges
2024 was much improved over the prior year because of higher client budgets and focus on contract efficiencies to improve performance. The year faced significant wet weather challenges which impacted our resurfacing programme in the North West. Some parts of Scotland experienced record-breaking wet weather during the summer, with some locations recording their second or third wettest summer on record.
Awards
We were awarded Gold from the Defence Employer Recognition Scheme (ERS). In the year BEAR also received the ROSPA Gold award for Health and Safety for the eighth consecutive year.
Community Engagement
Every year BEAR Scotland supports good causes across Scotland. In 2024 corporate donations totalled £20,086. This was supplemented with £30,000 in fundraising initiatives, meaning an overall total of over £50,000 was donated to 31 charities and 39 local community groups.
As well as four long-term charity partners, Cash for Kids, SAMH, My Name’5 Doddie and RBLI, employees vote on a charity of the year. The 2024 Charity Partner of the Year was Macmillan Cancer Support and various fund raising activities helped raise a total of £5,852 for Macmillan.
Section 172 Statement
BEAR Scotland directors believe they have acted in good faith in the application of their duties under Section 172 of the Companies Act 2006 to promote the success of the Group and its wider stakeholders. We continually review our ongoing strategy and believe we are building long-term sustainable, responsible business.
Our stakeholders
The directors consider the group’s key stakeholders are employees, clients, shareholders, supply chain and the wider community and environment. The Board strives to understand the respective interests of the stakeholder groups so that these may be properly considered in the Board’s decisions. We do this through various methods: direct engagement; receiving of reports and updates from members of management team; coverage in our Board papers of relevant stakeholder interests and proposed courses of action.
Interests of the Group’s employees
The directors take active steps to ensure that the suggestions, views, and interests of the workforce are captured and considered in our decision-making. We do this through:
a variety of regular employee representative group meetings hosted by the Managing Director and supported by several members of the leadership team.
Townhall meetings
safety tours, depot and office visits, safety days and safety meetings
continual review of safety performance
visible leadership
employee surveys
online group chat forums
newsletters
analysis of employee statistics
Client Engagement
Across all our Contracts we have regular progress meetings with our clients supplemented by more specific business-related meetings. In addition, we have regular high-level management meetings with our clients to discuss longer-term strategy and meet challenges head on at source.
Shareholder Engagement
The directors meet with the shareholders quarterly at the board and audit committee meetings. These meetings review and discuss all aspects of the group’s affairs, decisions, and strategy. There are regular communications between these meetings providing updates and decision proposals. Where relevant, additional interim meetings are arranged to ensure any key issues are dealt with timeously. Shareholders have undertaken several safety tours across the network in the year.
Supply Chain Engagement
The BEAR Supply Chain and Procurement Policy has been developed to assist in complying with our quality, safety, and environmental management systems, and to promote procurement of more sustainable solutions, products, and materials as well as the development of sustainable business relationships.
BEAR prides itself on a very strong partnership culture. To consistently deliver an excellent level of service and outstanding quality, we need to work effectively alongside our supply chain. BEAR is committed to continuous improvement, to capturing innovation, and to sustainable development. Our supply chain strategy is designed to encourage openness, trust, and collaboration. Whilst BEAR has strategic partnerships with several large national suppliers, we also take steps to ensure that we engage with local suppliers and SMEs. We are fully aware of and embrace our responsibilities to support the local economy and our duty to create jobs and improve people’s lives.
Banking and Insurance Engagement
The Finance Director reviews the group’s cash position and forecast quarterly with the bank and a strategic review annually. The directors attend in-depth quarterly insurance reviews with insurers and annual renewal meetings.
Community and Environmental Engagement
BEAR Scotland’s corporate responsibility energies focus on areas where our support can make a real difference. From charities and academia to social responsibility and community events, we sponsor a broad and diverse range of organisations and activities, all of which are actively contributing to improving the areas in which we work, 100% of which is in Scotland.
In managing risk, the group maintains a Strategic Risk Register that is reviewed quarterly with the Audit Committee. Key areas reviewed include Health and Safety, political landscape and impact on funding, business opportunity and project-specific risks.
Financial Risk Management Policy
The group uses various financial instruments which include cash, trade debtors, amounts recoverable on contract, trade creditors, amounts due to related party undertakings that arise directly from operations and hire purchase contracts. The main purpose of these financial instruments is to raise finance for the group's operations. The existence of these financial instruments exposes the group to a number of financial risks.
The main risks arising from the group's financial instruments are interest rate risk, credit risk, liquidity risk and competitive risk.
The directors review and agree policies for managing each of these risks and they are summarised below.
Interest Rate Risk
The group's borrowing facilities are used to finance capital expenditure. The finance lease and hire purchase contracts are on a fixed interest basis over the period of the loan.
Credit Risk
The group's principal financial assets are cash and trade debtors. The associated credit risk is limited as the group's clients are predominantly public sector entities, which have a strong credit rating supported by the Scottish Government.
Liquidity Risk
The group aims to mitigate liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs through reviewing trading and preparing forecasts.
Competitive Risk
The group is reliant on public bodies for contracts which are subject to periodic competitive tender. Renewal of these contracts is uncertain and based on financial and performance criteria.
The group’s long-term contracts have operational KPIs related specifically to the service delivery for each contract which are monitored and reviewed monthly with our clients.
The group’s operational KPIs are centred on contract profitability and overall group profit. The group achieved operational key performance indicators during the year. Profits were 0.2% above the business plan target for the year. We continue to manage unprecedented challenges of market salary increases and recruitment.
Management Systems
The group operates under the following UKAS approved certified management systems: ISO 45001:2018 (Occupational, Health and Safety), ISO 14001:2015 (Environmental), ISO 9001:2015 (Quality). These standards are integral to the day-to-day operation of our business. In addition, the business operates a number of National Highway Sector Scheme certifications. The group views the health, safety and wellbeing of our employees and those stakeholders who depend on our services, as its prime objective.
Employee involvement
The group takes its responsibilities to employees seriously and as a policy, provides employees with information on matters of concern to them. It is also the policy of the group to consult, where practical, with employees or their representatives so that their views may be considered in making decisions likely to affect their interests.
Equality and Inclusion
We offer challenging and worthwhile opportunities for employment to everyone, no matter of gender, sexual orientation, background, age, or disability. Our commitment to inclusion stems from the very top of our business and we know having a wide range of diversity and experience will help us deliver services that respond to our customers and the communities we serve.
Having signed the Diversity and Inclusion Charter of the Chartered Institution of Highways and Transportation, we have demonstrated our commitment in our industry to recognise, respect, capitalise and celebrate contributions from different people to strengthen team performance. As supporters of the Disability Confident Scheme the commitment of the group is to provide equal opportunities for individuals in all aspects of employment.
Energy and Carbon Reporting
GHG emissions and energy use data 2024
UK and offshore energy consumption - kWh | ||
Source | 2024 | 2023 |
Electricity | 2,486,452 | 1,476,014 |
Gas | 638,334 | 971,628 |
Transport | 23,652,682 | 23,215,542 |
Heating Oil | 76,690 | 85,580 |
Total | 26,854,158 | 25,748,764 |
UK and offshore emissions tCO2e | ||
| 2024 | 2023 |
Emissions from combustion of gas tCO2e (Scope 1) | 589 | 187 |
Emissions from combustion of fuel for transport purposes (Scope 1) | 5,651
| 4,124 |
Emissions from business travel in rental cars or employee-owned vehicles where company is responsible for purchasing the fuel (Scope 3) | 1,476 | |
Emissions from purchased electricity (Scope 2, location-based) | 338 | 191 |
Total CO2 emissions | 6,597 | 6,000 |
Intensity ratio - tCO2e per FTE | 8 | 8 |
FTEs at 31 December 2024 | 873 | 789 |
Methodology | Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance | |
Energy efficiency / Carbon reduction actions
Renewable energy
BEAR Scotland sourced 717,862 kWhs of renewable energy, saving 146 tonnes of CO2. The electricity is certified as renewable through Renewable Generation Guarantee of Origin certificates.
LED lighting
We are committed to replacing any light fittings and emergency light fittings with LED compatible fittings when facilities requests are made and when practicable. This is generally replacement of fluorescent tube type fittings and LED improvements.
Transport
Emissions from transportation represent most of our carbon emissions. In recognition of this in 2025 we will look to further expand the number of EV charging points across our network and electric vehicles. We will also investigate the use of other low carbon fuel available to help decarbonise our fleet as well as trailing zero emission plant equipment where possible.
Future developments
The business is now embarking on a programme of focused business improvement and innovation following a sustained period of bidding. We will manage and maintain two of the four Transport Scotland Trunk Road Maintenance Contracts until at least 2028. In addition, we will operate the M80 Contract to August 2031 and the A92 Contract to at least August 2030.
On behalf of the board
The Directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 12.
The profit for the year, after taxation, amounted to £3,715,345 (2023: £717,364).
Ordinary dividends were paid amounting to £4,750,000 (2023: £1,000,000) The Directors do not recommend payment of a further dividend.
The Directors who held office during the year and up to the date of signature of the financial statements were as follows:
During the year the company made charitable contributions totalling £20,086 (2023: £17,202).
No notable events post year-end.
Following a competitive tender process for audit services, Henderson Loggie LLP was successful and have replaced Grant Thornton as our auditors.
The auditor, Henderson Loggie LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
We have audited the financial statements of BEAR Scotland Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Other information
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
As part of our planning process:
We enquired of management the systems and controls the group has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. Management informed us that there were no instances of known, suspected or alleged fraud;
We obtained an understanding of the legal and regulatory frameworks applicable to the group. We determined that the following were most relevant: compliance with the UK Companies Act, FRS 102, health & safety regulations, GDPR, employment law, and anti-bribery and corruption laws;
We considered the incentives and opportunities that exist in the group, including the extent of management bias, which present a potential for irregularities and fraud to be perpetrated, and tailored our risk assessment accordingly; and
Using our knowledge of the group, together with the discussions held with management at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Enquired with management about any known or suspected instances of non-compliance with laws and regulations. including fraud;
Reviewing minutes of meetings of those charged with governance;
Reviewing key policies in place including the health and safety;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular valuation of winter service for network maintenance contracts, recoverability of trade debtors, valuation of salt stock and valuation of sub-contractor accruals.
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £3,715,345 (2023 - £717,364 profit).
BEAR Scotland Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Bear House, Inveralmond Road, Inveralmond Industrial Estate, Perth, PH1 3TW.
The group consists of BEAR Scotland Limited and its subsidiary undertaking.
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.
The 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 for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Group Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the control ceases.
The consolidated financial statements present the results of group and its own subsidiaries ("the group") as they formed a single entity.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, trading forecasts and projections show that the group is expected to continue generating positive cash flows for the foreseeable future.
The group holds adequate cash balances at year end with no borrowing other than finance lease and hire purchase contracts. The group's main customer is Transport Scotland, a government agency, which is considered to be financially stable, with the group continuing to benefit from ongoing long term contracts.
Consequently, the Directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future - thus, they continue to adopt the going concern basis of accounting in preparing these financial statements.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes and is recognised as follows:
Revenue from contracts for the construction and maintenance of roads is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Revenue from short term provision of services is recognised in the period in which the services are provided in accordance with the the stage of completion based on pre-agreed rates.
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 recognised in the profit and loss account.
In the parent company's individual financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that the estimated future cash flows derived from the assets have been adversely impacted. 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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the application of the group’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.
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.
The group provides a winter maintenance service for the Scottish Trunk Road Contracts for a fixed sum per month. The Directors assess the historical activity and experience to arrive at a reasonable allowance for the delivery of this service. They expect there to be an exceptional winter every four years, and thus defer a portion of the winter lump sum amounts received for these expected exceptional costs. This is reviewed every winter period.
The group holds large quantities of salt stock, which can be held for a number of years. This requires the group to record the volume of salt held, and multiply this by a salt-density factor at each year end, to establish what tonnage of salt stock is held.
The Directors have utilised their knowledge of the group's main customer to assess the likelihood of amounts invoiced being received, and have appropriately provided for those amounts that have been invoiced that may not be received.
Sub-contractors are routinely engaged by the group to complete work across the road network. Work is completed daily, and in the absence of invoices from suppliers, the group must assess what value of work has been performed by the sub-contractors pre-year end. This relies upon the expertise and knowledge of the commercial team within the group, and as such there is an inherent degree of estimation.
All turnover arose within the United Kingdom.
The average monthly number of persons (including Directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Wages and salaries include £716,554 (2023: £952,230) paid to temporary agency operatives.
The number of Directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 2).
Included in Directors' emoluments is an accrued charge relating to short term incentives of £69,449 (2023: £28,363).
Directors of the group participate in an approved long term incentive plan. LTIP amounts accruing to two (2023 - two) directors at the year end total £46,667 (2023: £26,667).
Management fees paid to a related party in relation to Directors' remuneration for the year were £54,923 (2023: £182,850).
No management fees are due to a related party at year end (2023: £36,570).
The corporation tax rate effective in the period has been set at 25% (2023 - 23.52%).
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:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts. The depreciation charge on these assets is included in the Operating profit note.
Details of the company's subsidiary at 31 December 2024 are as follows:
The company was dormant during the financial period and is registered in Scotland.
Stock recognised in cost of sales during the year as an expense was £13,305,014 (2023: £11,118,451). No impairment losses were recognised in either the current or prior period.
An impairment loss of £53,427 (2023: £309,476) was recognised against trade debtors.
Amounts owed by related parties are interest-free and repayable on demand.
There is a bank overdraft facility available which is secured by a bond and floating charge over the assets and shareholder guarantees of the company.
Finance lease payments represent rentals payable by the group for certain items of plant and machinery. Leases are secured against the asset to which they relate. The value of the assets held as security is £13,889,249 (2023: £14,663,658).
This provision relates to de-mobilisation costs associated with long-term contracts. It includes expenses for de-mobilising staff and machinery at the termination dates of these contracts. The group estimates this liability to be £600,723 at 31 December 2024 (2023: £477,464), based on past experience, and has accordingly provided this sum. The provision is expected to be utilised upon the cessation of the related contracts.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Contributions amounting to £290,192 (2023: £264,675) were payable to the scheme at year end and are included in creditors.
All shares rank pari passu except as regards the appointment of Directors and quorum at a general meeting as follows:
Appointment of Directors
The holders of the majority of each class of shares shall be entitled to appoint, remove and reappoint as necessary, two persons as Directors of the company such that there shall be six voting Directors in all. Additional non-voting Directors may be appointed by agreement of all classes of shareholders.
Quorum
A quorum at general meetings shall consist of a member or members not holding less than half the nominal value of each class of share.
Profit and loss reserves include all current and prior years retained profit and losses.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
Included in the Statement of Comprehensive Income and Balance Sheet are the following transactions and year end balances with these related parties. All transactions were undertaken on normal trading terms.
Vinci Construction Holding Limited and its subsidiary undertakings
Sales of £1,517,429 (2023: £554,463) and purchases of £1,972,223 (2023: £83,388) have been recognised in the financial statements. At year end the group were owed £693,349 (2023: £Nil) by the related party and had a liability of £213,207 (2023: £173,625) with them. In the year, a dividend of £1,781,250 (2023: £375,000) was paid out.
Jacobs UK Ltd and its subsidiary undertakings
Sales of £Nil (2023: £Nil) and purchases of £5,117,864 (2023: £6,073,783) have been recognised in the financial statements. At year end the group were owed £11,458 (2023: £Nil) by the related party and had a liability of £383,033 (2023: £387,328) with them. In the year, a dividend of £1,187,500 (2023: £250,000) was paid out.
Breedon Group plc and its subsidiary undertakings
Sales of £3,882 (2023: £6,314) and purchases of £27,572,327 (2023: £21,074,081) have been recognised in the financial statements. At year end the group were owed £16,390 (2023: £16,390) by the related party and had a liability of £1,258,305 (2023: £239,871) with them. In the year, a dividend of £1,781,250 (2023: £375,000) was paid out.
Ringway Jacobs Ltd
Sales of £Nil (2023: £Nil) and purchases of £83,352 (2023: £11,760) have been recognised in the financial statements. At year end the group were owed £Nil (2023: £Nil) by the related party and had a liability of £36,163 (2023: £Nil) with them.