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Registered number:
FOR THE PERIOD ENDED 29 APRIL 2024
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GATESTOCK EAST MIDLANDS LIMITED
COMPANY INFORMATION
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GATESTOCK EAST MIDLANDS LIMITED
CONTENTS
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GATESTOCK EAST MIDLANDS LIMITED
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 29 APRIL 2024
The Directors are pleased to present their Strategic Report for Gatestock East Midlands Limited.
The Company is a holding company. Its direct investments comprise of one primary active trading subsidiary, Maypine Construction Limited, which is principally engaged in the construction of groundworks and infrastructure for housing developments and has a client base of major house builders and developers, and Gatestock Holdings Limited, which is involved in plant and machinery hire and maintenance.
The Group's activity mainly derives from the operations of Maypine Construction Limited. Maypine Construction Limited is principally engaged in the construction of groundworks and infrastructure for housing developments and has a client base of major house builders and developers. The business is based in Raunds, Northamptonshire and its operations are based primarily in the East Midlands and part of East Anglia. The period has been very challenging within the house building sector and as such there has been a downturn in revenue generated by the business. Compounded by greater competition and smaller margins, remedial work and site completions have cost significant sums to achieve maintenance/adoption on sites. Bad debts amounting to £420,855 have been released within the period, contributing to the loss for the Group, with a further £169,668 from these customers remaining unprovided. The Directors monitor cashflow regularly and outstanding monies are continually discussed with clients. Over the period, clients have become more inflexible in agreeing to outstanding monies and increased costs which has had an impact on our overdraft facility, which has been running at an uncomfortable level. The Group's position within the facility has not changed, and the Directors remain in discussions with their bankers who are continuing to support the Group at this time. The Directors believe the worldwide uncertainty of the USA tariffs, wars in Ukraine and the Middle East are causing some uncertainty in the UK market and house sales remain slow. The Directors believe that 2024-25 will be a gradual positivity in the sector and that 25-26 will further increase workload due to the UK Government proposal of 1.5 million houses to be built during their governance. The Directors are continually pricing new tenders, however the Company has struggled to win any new work recently. Results and performance The results of the Group for the period, as set out on page 10 and 11, show a loss before tax of £1,400,183 (2023 profit before tax of £255,041). Turnover has decreased by 45.6% and the Group’s gross profit margin has decreased from £2,748,128 to £1,368,6355. The gross profit percentage on turnover has decreased to 8.5% compared to 9.2% in 2023. The Balance sheet activity reflects that Net assets have decreased from £1,620,319 to £367,726. Decreased activity levels have brought about a 45.6% decrease in turnover this period and this reflects the decreasing demand within the construction sector following the slow down as a result of rising borrowing rates and inflation. There remains significant long-term uncertainty for the UK economy post period-end. The business has experienced a period of declining activity this period which continue to affect overall profitability. The industry itself continues to face difficulties with rising prices for materials and supply of materials aggregating with decreasing demand due to economic pressures. The impact is reflected in the individual subsidiary company results and key performance indicators detailed later in this report.
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GATESTOCK EAST MIDLANDS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 APRIL 2024
Interest rate risk
The Group’s exposure to market risk for the changes in interest rates relates primarily to the Group’s overdraft facility. The Group’s policy is to manage its interest cost using floating facilities, which will fluctuate according to the levels of working capital required. Liquidity and solvency risk The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs. Company policy has been to have sufficient facilities available to maintain short term flexibility. The Group seeks to manage short term liquidiy concerns, and has sufficient plant and machinery among the Group to liquidate should cash be needed in the short term. Credit risk The Group’s principal financial assets are cash and trade debtors. Risks associated with cash are limited as the bank has high credit ratings assigned by international credit rating agencies. The principal risk lies with trade debtors. To manage credit risk the directors set limits for customers based on payment history. Credit limits are reviewed on a regular basis in conjunction with ageing and collection history.
The key performance indicators of the subsidiaries are as follows:
Maypine Construction Limited Overall profit is a key indicator of the company’s performance. The (loss)/profit before tax for the period was £(1,388,166) (2023 - £8,887). Company EBITDA was £(1,331,830) (2023: £62,983), a decrease of £1,394,813 in the period. Working capital management is seen as an important target for the business. At the period end, the net current (liabilities)/asset level was £(376,086) with the working capital ratio of 0.85 (2023 - £1,212,080 ratio 1.38). Gatestock Holdings Limited Overall profit is a key indicator of the company’s performance. The profit before tax for the period was £50,925 (2023 - £263,208). Company EBITDA was £565,730 (2023: £904,454), a decrease of £338,724 in the period.
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GATESTOCK EAST MIDLANDS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 APRIL 2024
The overdraft facility is expensive and has had an impact on cashflow with potential for concern over the going concern ability of for the Group, on top of new work being difficult to win. Tenders have been competitive, but the Group has failed to win any new work recently. As a result, the Directors acknowledge a material uncertainty exists for the Company and wider Group that may cast significant doubt on the Company’s and the Group’s ability to continue as a going concern.
Plant and machinery have recently been sold to help the Group's cashflow in the short term. We continue to invest in our health and safety programs and training working towards ISO 45001 accreditation committing to our staff and labour for a safe working environment. We continue to work closely with housing developers in the region and to maintain our reputation of excellent performance and project delivery. In doing so we will be well placed to grow as house builders and undertake larger and more ambitious projects. Continued development of our IT systems, together with significant investment in capital expenditure and the continued investment training program to our workforce will allow us to cement our place as a valued and trusted partner to our customers.
This report was approved by the board and signed on its behalf.
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GATESTOCK EAST MIDLANDS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 29 APRIL 2024
The Directors present their report and the financial statements for the period ended 29 April 2024.
The loss for the period, after taxation, amounted to £1,249,317 (2023 - profit £193,232).
Dividends of £3,276 (2023: £114,919) were declared and paid during the period.
The Directors who served during the period were:
The Directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Future Developments have been addressed within the Group Strategic Report.
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GATESTOCK EAST MIDLANDS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 APRIL 2024
For details of significant events affecting the Group since the period end, please refer to the Post Balance Sheet Events within Note 29, and the Controlling Party disclosures within Note 30.
The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP.
MHA will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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GATESTOCK EAST MIDLANDS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GATESTOCK EAST MIDLANDS LIMITED
We have audited the financial statements of Gatestock East Midlands Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 29 April 2024, which comprise the Consolidated Statement of Income and Retained Earnings, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows and the related notes, 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).
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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
We draw attention to Note 2.3 in the financial statements, which indicates that the Company’s ability to continue as a going concern is dependent on securing sufficient financing and achieving future cash flows. These conditions, along with other matters set forth in Note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
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GATESTOCK EAST MIDLANDS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GATESTOCK EAST MIDLANDS LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent Company 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.
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GATESTOCK EAST MIDLANDS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GATESTOCK EAST MIDLANDS LIMITED (CONTINUED)
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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below: • enquiry of management and those charged with governance around actual and potential litigation and claims; • enquiry of entity’s staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations; • performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias; • reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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GATESTOCK EAST MIDLANDS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GATESTOCK EAST MIDLANDS LIMITED (CONTINUED)
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.
for and on behalf of
Chartered Accountants
Statutory Auditor
Northampton, United Kingdom
Date:
MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in England and Wales (registered number OC455542).
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GATESTOCK EAST MIDLANDS LIMITED
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 29 APRIL 2024
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GATESTOCK EAST MIDLANDS LIMITED
REGISTERED NUMBER: 13957723
CONSOLIDATED BALANCE SHEET
AS AT 29 APRIL 2024
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GATESTOCK EAST MIDLANDS LIMITED
REGISTERED NUMBER: 13957723
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 29 APRIL 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 38 form part of these financial statements.
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GATESTOCK EAST MIDLANDS LIMITED
REGISTERED NUMBER: 13957723
COMPANY BALANCE SHEET
AS AT 29 APRIL 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 38 form part of these financial statements.
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GATESTOCK EAST MIDLANDS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 29 APRIL 2024
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GATESTOCK EAST MIDLANDS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 29 APRIL 2024
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 29 APRIL 2024
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Gatestock East Midlands Limited is a private company limited by shares, registered in England and Wales, registered number 13957723.
The principal activity of the Company is that of a holding company. The Company's registered office and principal place of business is Enterprise Road, Raunds, Wellingborough, Northamptonshire, NN9 6JE.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Income and Retained Earnings in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the 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 Income and Retained Earnings from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 05 March 2022.
Therefore, the Group continues to recognise a merger reserve which arose on a past business combination that was accounted for as a merger in accordance with UK GAAP as applied at that time.
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
2.Accounting policies (continued)
The financial statements have been prepared on a going concern basis.
The Group has been loss making over the past 2 periods and has struggled with cash generation over the same period. The Group is reliant on the house building appetite in the local area which has struggled with rising costs and political uncertainty for an extended period. The Group shows a net current (liabilities)/assets position of £(459,992) (2023: £662,950) and a net assets position of £367,726 (2023: £1,620,319) following a £1,249,317 loss after tax for the period ended 29 April 2024. The Group's financial projection reflects the level of sales expected from the continued implementation of the Group's business strategy. The Directors believe that the Group's cost base cash requirements can continue to be managed, however, there are factors which create uncertainty. This includes significant pressure on the Group's cash requirement as a result of poor trading results in the Group. This is mainly due to the challenging year within the house building sector and as such there has been a downturn in revenues generated by the business. The Directors are continually pricing new tenders but the Group has failed to win any new work recently. Furthermore, bad debts amounting to £420,855 have been released within the period, contributing to the loss for the Company, along with a further £169,668 from these customers remaining unprovided. The overdraft facility is expensive and has had an impact on cashflow with potential concern over going concern for the Group, on top of new work being difficult to win. As at the year end, the overdraft position is £662,233 (2023: £nil), and the Group has CBILS loans amounting to £500,000 (2023: £700,000), of which £200,000 is due within 1 year (2023: £200,000). The maturity date of the loan is October 2026. The Group’s bankers are continuing to support the Group at this time, by not revoking the overdraft facility, despite the business performance, but has reduced the review period down from 12 months to 3 months. In addition, one of the Group’s subsidiaries, Gatestock Holdings, has sold a significant quantity of its tangible fixed assets during the period, and post period end throughout the period ended 29 April 2025 to support the cashflow requirements of the Group. Net book values totalling £500,794 (2025: £454,353 unaudited) have been sold, generating proceeds of £543,166 (2025: £460,437 unaudited). The Group has subsequently recognised profits on disposal of £42,372 in the 12 months to 29 April 2024 (2025: £6,084). However, continued reliance from the sale of cash generating assets is unsustainable. Taken together, these conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company’s and the wider Group’s ability to continue as a going concern. Nevertheless, the Directors believe there is sufficient cash flow available for the Group to operate for at least 12 months from the date of approval these financial statements. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
2.Accounting policies (continued)
Turnover represents amounts invoiced during the period, excluding Value Added Tax, except in respect of contracting activities. For contracting activities, turnover represents the value of work carried out during the period, including amounts not yet invoiced. The value of work completed at the reporting date is assessed by undertaking surveys and completing internal valuations on each element of works completed and in progress. On a regular basis, revenue and contract costs on long term contracts are reveiewed by management, any material variances are investigated and updates made where appropriate. The amount by which turnover exceeds progress payments received and receivable is classified as "Amounts recoverable on contracts" and is separately disclosed in debtors. Progress payments received in excess of amounts matched with turnover are classfied as "Payments received on account" and are disclosed in creditors.
The amount of profit recognised is a proportion of the total forecast profit on the contract by reference to the stage of completion at the balance sheet date, taking accounts of agreed claims.
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Income and Retained Earnings over its useful economic life, which has been assessed as a period of 5 years by the Directors.
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated Statement of Income and Retained Earnings includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated Balance Sheet, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition. Any premium on acquisition is dealt with in accordance with the goodwill policy.
Page 20
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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, 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Page 21
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
2.Accounting policies (continued)
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
Page 22
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
The estimates and underlying assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are reviewed on an ongoing basis. Revisions to accounting estimates are recognided in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgements There are no judgements (apart from those involving estimates) that have had a significant effect of amounts recognised in the Financial Statements. Estimates The critical accounting estimates or judgements relevant to the financial statements are embedded within the relevant notes to the financial statements. Revenue and profit recognition on long term contracts Profit recognition on long term contracts is deemed to be significant judgement open to uncertainty that would have a material impact on the financial statements. The amount recognised each period is a proportion of the total forecast profit by reference to the stage of completion at the balance sheet date. Useful economic lives of tangible fixed assets The useful economic lives used by the Group in respect of tangible fixed assets are set out in the accounting policies. These estimates are the best estimate based on past experience and expected performance and are regularly reviewed to ensure they remain appropriate. The net book value of tangible fixed assets as at 29 April 2024 was £1,563,082 after a depreciation charge of £469,458. Useful economic life of goodwill The useful economic life used by the Group in respect of Goodwill arising on business combinations is set out in the accounting policies. This estimate is the best estimate based on Directors experiences and has been benchmarked against the useful economic lives of the non-current assets acquired as part of the business combination. The net book value of intangible fixed assets as at 29 April 2024 was £72,667 after an amortisation charge of £24,222.
The whole of the turnover is attributable to civil engineering, being the Group's sole business activity.
Page 23
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 24
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 25
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 26
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
11.Taxation (continued)
There were no factors that may affect future tax charges.
Page 27
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 28
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 29
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 30
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 31
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 32
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Bank loans of £300,000 (2023: £500,000) are government-backed as a result of the COVID-19 pandemic. This loan accrues interest at a rate of 3.32% over the Bank of England Base Rate. This loan is secured by debenture across the whole Gatestock East Midlands Limited group.
Page 33
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 34
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 35
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
23.Deferred taxation (continued)
Merger Relief Reserve
Profit and loss account
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £89,919 (2023: £127,370). Contributions totalling £7,534 (2023: £8,890) were payable to the fund at the balance sheet date and are included in creditors.
Page 36
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
Page 37
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GATESTOCK EAST MIDLANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 APRIL 2024
In the opinion of the directors the ultimate controlling party is S Tate by virtue of his controlling interest in the ordinary shares of the Company.
The control changed as of 18 September 2024 to being owned by Gatestock Capital Group Limited, a company incorporated in England & Wales, with a registered office of Enterprise Road, Raunds, Wellingborough, NN9 6JE. As of 18 September 2024, in the opinion of the Directors, there is no ultimate controlling part of the ultimate parent company Gatestock Capital Group Limited.
Page 38
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