Registration number:
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Gem Environmental Building Services Limited
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Brebners
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Gem Environmental Building Services Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Statement of Income and Retained Earnings |
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Statement of Financial Position |
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Notes to the Financial Statements |
Gem Environmental Building Services Limited
Company Information
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Directors |
K W Harris G S Sidhu M Barney R J Clarke |
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Registered office |
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Auditor |
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Gem Environmental Building Services Limited
Strategic Report for the Period from 1 April 2023 to 30 June 2024
The directors present their strategic report for the period from 1 April 2023 to 30 June 2024.
Principal activity
The principal activity of the company is that of building services and maintenance.
For the period under review GEM has continued building on its core skills to become a pioneer provider of Eco services, through a range of associated proprietary technologies in the form of its agility, smart and heat metering software and firmware products.
These enable customers to meet the increasingly stringent regulations surrounding the ever-growing pressure to achieve a national net-zero carbon footprint. High demand for these products is driven by statute, underwritten by local authority contracts, and guaranteed by legislation.
Executive Chairman's statement and business review
As Executive Chairman I am pleased to provide an update on the company's progress with its development plans for all of its services, against the backdrop of the most challenging environment post COVID, and the substantial inflationary pressure reported in the 2023 annual report.
This report covers the fifteen-month period from 1 April 2023 to 30 June 2024.
Key highlights for the period are:
• Successful deployment of the Smart IOT solution into local authority dwellings enabling customers to measure energy consumption, light levels, ventilation, and mould risks, with this roll-out continuing post period end.
• Growing projects pipeline with the final quarter run rate of £2.4m versus £1.5m in prior quarters, a trend which continues into 24/25.
• Further consultancy service agreements added in the final quarter, with two more local authorities (Royal Borough of Kensington & Chelsea and LB of Lambeth) engaging GEM to identify (and propose solutions) to meet their requirements under the Energy Act.
• Continued use of the innovative Agility Software by Southern Housing, Islington Council and Westminster City Council. Due to this software’s agnostic approach to measuring and monitoring heat networks and communal heating, it is regarded as an extremely competitive solution by clients.
• Positive EBITDA in Quarter 4 stalled in May 2024, but the positive trend continued into the post period end quarters.
By building on these key achievements the directors believe that the company is well placed to exploit future opportunities as and when they arise.
Gem Environmental Building Services Limited
Strategic Report for the Period from 1 April 2023 to 30 June 2024
Fair review of the business
Results in the period as follows:
• Revenues of £27m, an 18.9% increase on the previous period.
• Cash at bank of £65k.
•141 employees and a diverse ethnic and gender mix with a 23%/77% female/male split.
•100 customer facing employees providing engineering, consultancy, or software services.
•Social value activities including but not limited to: 12 active apprentices recruited via channels such as the Construction Youth Trust, schools and colleges within the local authorities with whom the company is engaged; volunteering hours and monetary donations towards summer days out for the elderly, disabled children and vulnerable groups; and donations to local food banks, local authority run charities and community needs such as household suppliers or communal maintenance.
•Whilst turnover increased 18.9%, and gross profit margin was up to 25.2% (24.2% - 2023) administrative expenses increased resulting in a negative EBITDA* of £ (3.0) m (2023 - £ (1.6) m) for the period.
*EBITDA is defined as earnings before interest, tax, depreciation, and amortisation.
Inflation peaked just before this period began and has been falling since, but the legacy of high inflation both on costs and wages has continued throughout the period. As GEM has multiple long-term local government and social housing contracts, inflation impacted the company's financial performance as it had to complete some fixed price, low margin business with these higher costs from which customers were protected.
Revenues from the company’s traditional servicing and maintenance business increased to £18.9m (2023 - £15.8m), despite the period including 6 weeks where trading was significantly reduced.
Project revenue increased to £8m (2023 - £6.9m). During the period, a significant project pipeline was developed as evidenced by the final quarter project revenues averaging £0.8m per month versus £0.5m per month across the preceding quarters.
The business has been loss making since the COVID period, and those losses have inevitably impacted cash flows and resulted in more spot purchasing at higher material prices. Pressure on cash-flow was further stretched by the growth in project revenues, which require further working capital. In May 2024 the shareholder procured and invested £2.3m of funding, which was used to settle HMRC debt. Furthermore, during this period of around six weeks, the core servicing and maintenance business was unable to trade at normal levels. It is estimated that around £0.6m of revenues were delayed into 2024/25, whilst scope to defer costs was extremely limited, hence there was an exceptional loss in the final quarter which temporarily delayed the recovery that had been built up in the previous quarters as inflation eased.
Across the period, the company has continued its financial investment in the ongoing development of the GEM Green Eco business. £0.9m (2023 - £0.8m) has been invested in continuing to build a team, in infrastructure and in providing advocacy for government and clients in the district heating sector ahead of the introduction of the new Energy Act for which the Group has identified significant customer solutions through its agility and smart offerings.
As reported last year, the company has established sector leading technology solutions for customers to meet their requirements under the Energy Act, due to become law in early 2025. Substantial management time has been spent on this project, and around the period end the first customer contracts were under discussions and have, post period end, been signed and rolled out.
A restructuring of the Group has seen the intellectual property rights for agility and smart service offerings transferred out of GEM for risk mitigation purposes and GEM will pay a licence fee from the revenues it generates from these offerings which have commenced post period end. GEM has a perpetual exclusive licence for the smart and agility software in the social housing district heating market nationwide.
Gem Environmental Building Services Limited
Strategic Report for the Period from 1 April 2023 to 30 June 2024
Assessment of Risks to the company
• Inflation - the company's focus is on inflation within the supply chain and workforce, and customers’ budget constraints, all of which must be balanced against residents’ own cost of living pressures. The wider world conflicts and uncertainties will continue to drive inflation and fuel poverty pressures. This inevitably affects our people, our purchasing power, our clients, end-users, and the resultant annual pricing reviews with our clients.
That said, from a client perspective, given the legislative, environmental, and Health & Safety agenda within government, the solutions the company can offer provide considerable leverage for GEM in terms of clients’ needs to ensure the solutions GEM offers are made a priority.
• Credit - both in the context of credit insurers’ appetite to the wider construction sector, and with the historic losses within the company, access to credit via supply chain credit limits presents a challenge, especially in the light of GEM’s growth trajectory and so need for further working capital.
The return to profitability, increasing order book for project work, which generates a higher gross profit margin, and roll-out of recurring revenue technology is and will improve access to credit over time.
Corporate Governance
GEM has achieved, and is continually improving on, its ISO Certification and is progressing toward Tier 1 & 2 ESG requirements, which cover activities such as Leadership & Purpose, Board Composition, Director Responsibilities, Opportunity and Risk, Remuneration, Health, and Well-being & Safety.
As of 30 June 2024, GEM holds the following accreditations: BESA; ISO -9001, 14001 and 45001; CHAS; Construction Online - Silver and Bronze; Constructionline; Social Value; Gas Safe; FORS - Bronze; IGEM; LRQA; NAPIT, NICEIC and Sage Contractor.
The company reviews its key policies and terms of reference on an annual basis and makes relevant changes to maintain best practices and support ever changing legislation, which has seen the continuation of separate Remuneration, Audit, ESG and Health, Well-being and Safety Committees to emphasise the importance of these within our growing company.
Board Composition
The composition of the board is currently;
Executive Members:
• Richard Clarke - Executive Chairman
• Keith Harris - Managing Director
Non-Executive Members:
• Mitchell Barney - Social Values and Brand
• Gurmail Sidhu - Legal Professional
Other contributors:
• Peter Wall - SME Investor and Mentor
Gem Environmental Building Services Limited
Strategic Report for the Period from 1 April 2023 to 30 June 2024
Board meetings
Board meetings are held monthly as a minimum.
At every board meeting the directors review the operational effectiveness, governance, and financial aspects of GEM comprehensively, with a particular focus on the overall strategy and KPIs.
Shareholder relations
The board meets with the ultimate shareholders on a regular basis, at a minimum monthly, to review progress towards the strategic goals set.
Research and development
GEM continues to undertake research and development in order to improve and diversify its service offering.
Future Prospects
Since the period end, GEM has returned to positive EBITDA.
In addition to the ongoing Servicing & Repair revenues, which were £8.9m for the period to December 2024, GEM has a substantial projects pipeline of £25.4m, either via committed purchase orders, projects commenced awaiting purchase order (£8.4m) or a proportion of works which have been priced and verbally agreed and awaiting purchase order.
A sizeable proportion of these projects revenues are to enable the infrastructure for, or the actual installation of smart and agility software, sensors, and platforms. Once complete there are recurring revenues alongside the enabling and installation income, currently included in project revenues.
Given all the above the business has identified the need to raise substantial additional funds to provide sufficient working capital, build credit ratings and secure better materials pricing. Subsequent to 30 June 2024 professional advisers have been appointed for this work. In tandem with this a new leadership team for the group’s finances has been put in place to control the growing business.
As we look forward to 2024/25, GEM enjoys a positive outlook with a stable service and maintenance business, substantial and growing project works, and an exciting solution for many local authorities and other property owners with exposure to district heat networks which will generate recurring revenues. Thus, the business is expected to grow quickly in the next 6-18 months.
Approved by the
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Director
Gem Environmental Building Services Limited
Directors' Report for the Period from 1 April 2023 to 30 June 2024
The directors present their report and the financial statements for the period from 1 April 2023 to 30 June 2024.
Directors of the company
The directors who held office during the period were as follows:
Dividends
No interim dividends (2023: £1,679,979) were declared and paid during the year. No final dividend is proposed.
Disclosure of information in the Strategic Report
The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of future developments, research & development and financial instruments.
Directors' liabilities
As permitted by the Articles of Association, the directors have the benefit of an indemnity which is a qualifying third party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Approved by the director on
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R J Clarke
Director
Gem Environmental Building Services Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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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.
Gem Environmental Building Services Limited
Independent Auditor's Report to the Members of Gem Environmental Building Services Limited
for the Period from 1 April 2023 to 30 June 2024
Opinion
We have audited the financial statements of Gem Environmental Building Services Limited (the 'company') for the period from 1 April 2023 to 30 June 2024, which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the company's affairs as at 30 June 2024 and of its loss for the period 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. |
Basis for opinion
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 director's 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 original financial statements were 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
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Gem Environmental Building Services Limited
Independent Auditor's Report to the Members of Gem Environmental Building Services Limited
for the Period from 1 April 2023 to 30 June 2024
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
We have nothing to report in respect of the following matters where 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 Statement of Directors' Responsibilities (set out on page 7), 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.
Gem Environmental Building Services Limited
Independent Auditor's Report to the Members of Gem Environmental Building Services Limited
for the Period from 1 April 2023 to 30 June 2024
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:
Based on our understanding of the company and the industry in which it operates, we determined that the principal risks of non-compliance with laws and regulations related to the reporting framework (FRS 102 and the Companies Act 2006), UK corporate taxation laws, health and safety legislation, regulatory requirements of the National Inspection Council for Electrical Installation Contracting and the Gas Safe Register and data protection legislation. These risks were communicated to our audit team and we remained alert to any indications of non-compliance throughout our audit.
We understood how the company is complying with relevant legislation by making enquiries of management and conducting a review of board minutes. We also considered the results of our audit procedures and to what extent these corroborate this understanding and assessed the susceptibility of the company’s financial statements to material misstatement. This included consideration of how fraud might occur and evaluation of management’s incentives and opportunities for fraudulent manipulation of the financial statements.
We designed our audit procedures to identify any non-compliance with laws and regulations. Such procedures included, but were not limited to, inspection of any regulatory or legal correspondence; challenging assumptions and judgements made by management; identifying and testing journal entries with a focus on large or unusual transactions as determined based on our understanding of the business; and identifying and assessing the effectiveness of controls in place to prevent and detect fraud.
Owing to the inherent limitations of an audit, there remains a risk that a material misstatement may not have been detected, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance with laws and regulations and cannot be expected to detect all instances of non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
The primary responsibility for the detection and prevention of fraud rests with those responsible for governance and management. The further removed non-compliance with laws and regulations is from the events reflected in the financial statements, the less likely the auditor will become aware of it.
The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment, collusion, omission, misrepresentation or forgery.
Gem Environmental Building Services Limited
Independent Auditor's Report to the Members of Gem Environmental Building Services Limited
for the Period from 1 April 2023 to 30 June 2024
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.
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For and on behalf of
130 Shaftesbury Avenue
London
W1D 5AR
Gem Environmental Building Services Limited
Statement of Income and Retained Earnings for the Period from 1 April 2023 to 30 June 2024
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Note |
15 months to 30 June |
Year ended 31 March |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
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Administrative expenses |
( |
( |
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Other operating income |
- |
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Operating loss |
( |
( |
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Other interest receivable and similar income |
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Interest payable and similar charges |
( |
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(170,077) |
41,852 |
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Loss before tax |
( |
( |
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Taxation |
- |
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Loss for the financial period |
( |
( |
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Retained earnings brought forward |
609,128 |
3,132,111 |
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Dividends paid |
- |
( |
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Retained earnings carried forward |
(2,683,376) |
609,128 |
Gem Environmental Building Services Limited
Statement of Financial Position as at 30 June 2024
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Note |
30 June |
31 March |
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Fixed assets |
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Tangible assets |
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Current assets |
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Stocks |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current (liabilities)/assets |
( |
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Total assets less current liabilities |
( |
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Creditors: Amounts falling due after more than one year |
( |
( |
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Net (liabilities)/assets |
( |
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Capital and reserves |
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Called up share capital |
3 |
3 |
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Profit and loss account |
(2,683,376) |
609,128 |
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Shareholders' (deficit)/funds |
(2,683,373) |
609,131 |
Approved and authorised by the
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R J Clarke
Director
Company registration number: 03893436
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
The principal activity of the company is that of building services and maintenance
The principal place of business is:
1 Torriano Mews
London
NW5 2RZ
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Accounting policies |
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except any items disclosed in the accounting policies as being shown at fair value and are presented in sterling, which is the functional currency of the entity.
Summary of disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS102:
(a) No cash flow statement has been presented for the company
(b) Disclosures in respect of financial instruments have not been presented
(c) No disclosure has been given for the aggregate remuneration of key management personnel.
Disclosure of long or short period
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
Going concern
The company made a loss for the period ended 30 June 2024 and had net current liabilities of £1,976,198 and net liabilities at that date of £2,683,373. At that date an amount of £1,424,757 was due to a director, along with amounts totalling £1,235,175 due to companies under the common control of a director. These parties have confirmed they will not call for repayment until such time as the company has sufficient working capital to meet its future obligations.
The company has a pipeline of future works and the directors are confident that the company will return to profitability in the forthcoming year.
The company operates in sectors which remain in demand and, with the resources that the company has, the company is well positioned to weather the continued fall out and uncertainty created from adverse global economic conditions.
The company has prepared financial forecasts, including detailed cashflow projections extending untl the end of June 2026. Based on these forecasts the directors anticipate that the company will consistently generate positive cash flows from its operations and maintain sufficient financial resources to meet its obligations as they fall due for the foreseeable future.
On the basis of the above, and after making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered in the course of the company's normal activities, stated net of discounts and of Value Added Tax.
The company recognises turnover from building services on the date the services are provided. Turnover in respect of maintenance contracts is recognised over the period to which they relate.
In respect of long-term contracts and contracts for on-going services, turnover represents the value of work done in the year, including estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.
Government grants
Government grants are recognised when it is reasonable to expect that the grants will be received and that all related conditions will be met, usually on submission of a valid claim for payment.
Grants of a revenue nature are credited to income so as to match them with the expenditure to which they relate.
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
Tax
The tax expense for the period comprises tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
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Asset class |
Depreciation method and rate |
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Motor vehicles |
25% straight line |
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Furniture, fittings and equipment |
20-25% straight line |
Research and Development
Research and development expenditure is written off in the period in which it is incurred.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Provisions
Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation.
Lease payments are apportioned between finance costs in the Income Statement and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Turnover |
The analysis of the company's turnover for the period from continuing operations is as follows:
|
15 months to 30 June |
Year ended 31 March |
|
|
Sale of goods |
|
|
|
Rendering of services |
|
|
|
|
|
The company's activities arise solely in the UK.
|
Other operating income |
The analysis of the company's other operating income for the period is as follows:
|
15 months to 30 June |
Year ended 31 March 2023 |
|
|
Government grants |
- |
|
|
Other gains and losses |
The analysis of the company's other gains and losses included within administrative expenses for the period is as follows:
|
15 months to 30 June |
Year ended 31 March 2023 |
|
|
Gain/loss on disposal of property, plant and equipment |
( |
( |
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Operating loss |
Arrived at after charging/(crediting)
|
15 months to 30 June |
Year ended 31 March 2023 |
|
|
Depreciation expense |
|
|
|
Bad debt expense |
|
- |
|
Operating lease expense - property |
|
|
|
Operating lease expense - plant and machinery |
|
|
|
Operating lease expense - motor vehicles |
624,041 |
472,186 |
|
Loss on disposal of property, plant and equipment |
|
|
|
Other interest receivable and similar income |
|
15 months to 30 June |
Year ended 31 March |
|
|
Other finance income |
|
|
|
Interest payable and similar expenses |
|
15 months to 30 June |
Year ended 31 March 2023 |
|
|
Interest on bank overdrafts and borrowings |
|
|
|
Interest on obligations under hire purchase contracts |
|
|
|
Interest expense on other finance liabilities |
- |
( |
|
|
( |
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
15 months to 30 June |
Year ended 31 March |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
Other employee expense |
|
|
|
|
|
The average number of persons employed by the company during the period, analysed by category was as follows:
|
15 months to 30 June |
Year ended 31 March |
|
|
Management |
|
|
|
Office administration and support |
|
|
|
Engineers |
|
|
|
|
|
|
Directors' remuneration |
The directors' remuneration for the period was as follows:
|
15 months to 30 June |
Year ended 31 March 2023 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
392,513 |
435,029 |
In respect of the highest paid director:
|
15 months to 30 June |
Year ended 31 March 2023 |
|
|
Aggregate remuneration |
|
|
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the company to the scheme and amounted to £
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Auditor's remuneration |
|
15 months to 30 June |
Year ended 31 March 2023 |
|
|
Audit of the financial statements |
|
|
Fees payable to the auditor for other services:
|
15 months to 30 June 2024 |
Year ended 31 March 2023 |
|
|
£ |
£ |
|
|
Other assurance services |
37,118 |
38,517 |
|
Corporation tax compliance |
9,500 |
7,750 |
|
46,618 |
46,267 |
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Taxation |
Tax charged/(credited) in the income statement
|
15 months to 30 June |
Year ended 31 March |
|
|
Current taxation |
||
|
UK corporation tax adjustment to prior periods |
- |
( |
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
- |
( |
|
Tax receipt in the income statement |
- |
( |
The tax on profit before tax for the period is higher than the standard rate of corporation tax in the UK (2023 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
15 months to 30 June |
Year ended 31 March |
|
|
Loss before tax |
( |
( |
|
Corporation tax at standard rate |
( |
( |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
|
Effect of tax losses |
|
|
|
Deferred tax credit from unrecognised temporary difference from a prior period |
- |
( |
|
Increase in UK current tax from adjustment for prior periods |
- |
|
|
Tax increase/(decrease) from effect of capital allowances and depreciation |
|
( |
|
Decrease in UK current tax from research and development credits |
- |
( |
|
Total tax credit |
- |
( |
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Tangible assets |
|
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Total |
|
|
Cost or valuation |
||||
|
At 1 April 2023 |
|
|
|
|
|
Additions |
- |
|
- |
|
|
Disposals |
- |
( |
- |
( |
|
At 30 June 2024 |
|
|
|
|
|
Depreciation |
||||
|
At 1 April 2023 |
|
|
|
|
|
Charge for the period |
- |
|
|
|
|
At 30 June 2024 |
|
|
|
|
|
Carrying amount |
||||
|
At 30 June 2024 |
- |
|
|
|
|
At 31 March 2023 |
- |
|
|
|
Assets held under hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under hire purchase contracts:
|
30 June |
31 March |
|
|
Motor Vehicles |
5,104 |
12,760 |
|
Stocks |
|
30 June 2024 |
31 March 2023 |
|
|
Stock |
|
|
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Debtors |
|
30 June 2024 |
31 March 2023 |
|
|
Trade debtors |
|
|
|
Amounts owed by group undertakings |
|
|
|
Other debtors |
|
|
|
Prepayments |
|
|
|
Accrued income |
|
|
|
Corporation tax asset |
- |
|
|
|
|
Trade debtors are stated after provisions for impairment of £203,000 (2023: £Nil).
Amounts owed by group undertakings are interest free, unsecured and repayable on demand.
|
Cash and cash equivalents |
|
30 June |
31 March |
|
|
Cash at bank |
|
|
|
Creditors |
|
Note |
30 June 2024 |
31 March 2023 |
|
|
Due within one year |
|||
|
Loans and borrowings |
|
|
|
|
Trade creditors |
|
|
|
|
Social security and other taxes |
|
|
|
|
Other payables |
|
|
|
|
Accrued expenses |
|
|
|
|
Deferred income |
|
- |
|
|
|
|
||
|
Due after one year |
|||
|
Loans and borrowings |
|
|
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Loans and borrowings |
|
30 June |
31 March |
|
|
Current loans and borrowings |
||
|
Bank loan |
|
|
|
Hire purchase obligations |
- |
8,167 |
|
|
|
|
|
30 June |
31 March |
|
|
Non-current loans and borrowings |
||
|
Bank loan |
|
|
|
Hire purchase obligations |
- |
|
|
|
|
|
The bank loan is secured by a fixed and floating charge over the assets and undertakings of the company. Interest is payable at 3.99% above the Bank of England base rate.
Liabilities under hire purchase agreements are secured on the assets concerned.
|
Share capital |
Allotted, called up and fully paid shares
|
30 June |
31 March |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
3 |
|
3 |
There are no restrictions on the payment of dividends or repayments of capital.
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Reserves |
The profit and loss account includes all current and prior retained earnings and accumulated losses.
|
Commitments and Guarantees |
The total of future minimum lease payments not reflected in the statement of financial position is as follows:
|
30 June |
31 March |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
Later than five years |
|
|
|
|
|
|
Dividends |
|
30 June |
31 March |
|||
|
£ |
£ |
|||
|
Dividend of £Nil (2023 - £559,993) per ordinary share |
- |
1,679,979 |
||
|
Related party transactions |
In accordance with FRS102 paragraph 33.1A exemption is taken not to disclose transactions or amounts due between wholly owned undertakings.
At 30 June 2024 an amount of £Nil (2023: £807,078) was due from a company under the control of a director in respect of expenses met on that company's behalf.
At 30 June 2024 an amount of £1,235,175 (2023: £33,250) was due to companies under the control of a director in respect of expenses met by those company's on behalf of the company.
At 30 June 2024 an amount of £1,424,757 (2023: £Nil) was due to a director. This amount is secured by a fixed and floating charge over the assets and undertakings of the company.
|
Transactions with directors |
At 31 March 2024 an amount of £380,479 (2023: £370,086) was due from the directors. Interest is payable to the company at 2.00% and 2.25% per annum amounting to £10,393 (2023: £7,237) and there are no set repayment terms. A provision for non recoverability has been made against this amount.
Gem Environmental Building Services Limited
Notes to the Financial Statements for the Period from 1 April 2023 to 30 June 2024
|
Parent and ultimate parent undertaking |
The company's immediate parent is Socius Investments Limited and the ultimate parent is JTMM Investments Limited.
The parent of the smallest and largest group preparing group accounts incorporating the results of the company is JTMM Investments Limited, whose financial statements are available from Companies House. The registered address of JTMM Investments Limited is 130 Shaftesbury Avenue, 2nd Floor, London, W1D 5EU.
The ultimate controlling party is M. Barney.