FOR THE YEAR ENDED 31 DECEMBER 2024
SOLUM (SW) LTD
COMPANY INFORMATION
SOLUM (SW) LTD
CONTENTS
SOLUM (SW) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present their Strategic Report on the Company for the year ending 31 December 2024.
Trading
The group operates in the groundworks, enabling works and civil engineering industries.
Turnover in the year was £13.07m, which, although lower than FY2023 and FY 2024, (two consecutive financial years of exceptionally high turnover and profit margin, resulting from the post-pandemic boom) was broadly in line with our forecasts and long-term growth strategy, and was as anticipated, given the sector slowdown following the surge in activity after Covid.
The business performed well in the year, although we were impacted by the collapse of the ISG Group - a large client - in the third quarter, costing around £400k, as well as lost opportunity for profit on the remainder of the unfinished contract. The impact of this is reflected in our annual profits for the year. Had this failure not been experienced, our annual net profit would have been circa £600k – ahead of forecast. We achieved a gross margin of 16%, in line with expectations.
Cashflow
We continue to enjoy excellent client relationships, which allow us to secure timely settlement of accounts, payment of retentions, and closely manage work-in-progress. As a result, we continue to maintain effective control of our cashflow.
The final deferred consideration payment to the founding directors was made in February 2024, using cash reserves retained from the group’s strong financial performance in 2023.
The cash position was impacted by the previously mentioned collapse of a significant client mid-contract; we were robust enough to endure this without any impact on our suppliers. We are proud that we remain a champion in the industry; one of our key priorities is our relationship with our supply chain, and we placed great focus during the year on paying our suppliers to term.
We did experience some key clients deferring their payments at the end of the year, but we continued to pay suppliers on time as we maintained our commitment to always keep to terms. Credit agency reports show that we significantly beat the industry average in terms of payment days.
People
We continue to place great value on the people in our business and have invested in training and qualifications at all levels throughout the year.
Twelve of our employees completed NVQ qualifications in the year, one apprenticeship was completed, and we welcomed four new apprentices into the business across different disciplines.
We worked hard to forge collaborative relationships with local colleges, universities and prisons to raise awareness of opportunities within the construction sector and specifically the groundworks industry. We have been pleased to recruit into the business because of these relationships.
Our headcount has increased by 13% on the prior year, and staff retention remains high, reflecting our commitment to our team.
The group operates in the groundworks, enabling works and civil engineering industries.
Turnover in the year was £13.07m, which, although lower than FY2023 and FY 2024, (two consecutive financial years of exceptionally high turnover and profit margin, resulting from the post-pandemic boom) was broadly in line with our forecasts and long-term growth strategy, and was as anticipated, given the sector slowdown following the surge in activity after Covid.
The business performed well in the year, although we were impacted by the collapse of the ISG Group - a large client - in the third quarter, costing around £400k, as well as lost opportunity for profit on the remainder of the unfinished contract. The impact of this is reflected in our annual profits for the year. Had this failure not been experienced, our annual net profit would have been circa £600k – ahead of forecast. We achieved a gross margin of 16%, in line with expectations.
Cashflow
We continue to enjoy excellent client relationships, which allow us to secure timely settlement of accounts, payment of retentions, and closely manage work-in-progress. As a result, we continue to maintain effective control of our cashflow.
The final deferred consideration payment to the founding directors was made in February 2024, using cash reserves retained from the group’s strong financial performance in 2023.
The cash position was impacted by the previously mentioned collapse of a significant client mid-contract; we were robust enough to endure this without any impact on our suppliers. We are proud that we remain a champion in the industry; one of our key priorities is our relationship with our supply chain, and we placed great focus during the year on paying our suppliers to term.
We did experience some key clients deferring their payments at the end of the year, but we continued to pay suppliers on time as we maintained our commitment to always keep to terms. Credit agency reports show that we significantly beat the industry average in terms of payment days.
People
We continue to place great value on the people in our business and have invested in training and qualifications at all levels throughout the year.
Twelve of our employees completed NVQ qualifications in the year, one apprenticeship was completed, and we welcomed four new apprentices into the business across different disciplines.
We worked hard to forge collaborative relationships with local colleges, universities and prisons to raise awareness of opportunities within the construction sector and specifically the groundworks industry. We have been pleased to recruit into the business because of these relationships.
Our headcount has increased by 13% on the prior year, and staff retention remains high, reflecting our commitment to our team.
Page 1
SOLUM (SW) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Corporate Social Responsibility
We place strong emphasis on CSR, and this plays a key role in our overall business strategy. Our vision is to be a business that ‘builds for good’, and we’re committed to this through our core value of responsibility. We were delighted to win regional Social Value awards from two of our key clients in the year for our contributions to this area.
We are taking steps to become a ‘greener’ and more sustainable construction business. In 2024 we started to use industry-specific tools and software to report quarterly on our carbon emissions, which will enable us to establish our baseline CO2 creation, and allow us to take steps to reduce this moving forward. We have also increased the proportion of electric/hybrid vehicles in our fleet, and started to introduce a paperless accounting system, which is being fully implemented in 2025.
We have been privileged to provide support to local community projects in the year, including completing the groundworks at the Forget-Me-Not Remembrance Garden at Gloucestershire Royal Hospital, and installation of playground equipment at Eastcombe Recreation Ground. We were also proud to support numerous local charities and sports teams through donations, sponsorship and fundraising events. Examples include provision of kits for local junior rugby and football teams, a team of employees participating in the Bristol Half Marathon (raising sponsorship of over £3,000) and ongoing support to local cancer research efforts.
We place strong emphasis on CSR, and this plays a key role in our overall business strategy. Our vision is to be a business that ‘builds for good’, and we’re committed to this through our core value of responsibility. We were delighted to win regional Social Value awards from two of our key clients in the year for our contributions to this area.
We are taking steps to become a ‘greener’ and more sustainable construction business. In 2024 we started to use industry-specific tools and software to report quarterly on our carbon emissions, which will enable us to establish our baseline CO2 creation, and allow us to take steps to reduce this moving forward. We have also increased the proportion of electric/hybrid vehicles in our fleet, and started to introduce a paperless accounting system, which is being fully implemented in 2025.
We have been privileged to provide support to local community projects in the year, including completing the groundworks at the Forget-Me-Not Remembrance Garden at Gloucestershire Royal Hospital, and installation of playground equipment at Eastcombe Recreation Ground. We were also proud to support numerous local charities and sports teams through donations, sponsorship and fundraising events. Examples include provision of kits for local junior rugby and football teams, a team of employees participating in the Bristol Half Marathon (raising sponsorship of over £3,000) and ongoing support to local cancer research efforts.
Our biggest risk remains the potential loss of income from the failure of a main contractor, as we experienced in 2024. Protection against client failures is a challenge, with restricted options for cover in the sector being offered by insurers. As such, our strategy to mitigate this risk is to spread our business amongst a selection of clients, working mainly with ‘top-tier’ contractors. Continuous due diligence and market tracking provides further confidence and management of the exposure.
Our key performance indicators are turnover, gross profit margin, cash and net assets, which are detailed in the financial statements.
We proactively managed our turnover throughout the year (by the strategic application for and acceptance of new projects) to fit our profile in terms of capacity and resources, to ensure that these KPIs reflect our financial objectives.
We proactively managed our turnover throughout the year (by the strategic application for and acceptance of new projects) to fit our profile in terms of capacity and resources, to ensure that these KPIs reflect our financial objectives.
The cash position has recovered well since the bad debt in Q3 2024. Our 2025 mid-year Management Information shows turnover and gross profit for the year-to-date running slightly ahead of plan, and current forecasts indicate that year-end performance will be in line with expectations.
A continual review of cash flow and profit and loss account forecasts is undertaken, with a strategic focus on short-term cashflow forecasting based on the current performance of all live contracts. Opportunities to further sharpen this focus are being actively pursued, with new technologies and Artificial Intelligence being introduced as part of our strategy to bring a broader range of planning tools and opportunities for real-time analysis of KPIs.
A long-planned management buy-out process commenced in 2022, to allow the exit from the business of the three founding directors and formally complete the gradual handover to the next generation of leadership. The Managing Director, who has over 25 years of industry experience, has been a director of the business since 2015 and formally served as MD since 2023. He is now using his extensive experience to continue to lead the business into its next phase.
The MD is supported by a Senior Management Team who have been in place through this period of transition and have developed into their leadership roles to provide strategic direction across all aspects of the business.
A continual review of cash flow and profit and loss account forecasts is undertaken, with a strategic focus on short-term cashflow forecasting based on the current performance of all live contracts. Opportunities to further sharpen this focus are being actively pursued, with new technologies and Artificial Intelligence being introduced as part of our strategy to bring a broader range of planning tools and opportunities for real-time analysis of KPIs.
A long-planned management buy-out process commenced in 2022, to allow the exit from the business of the three founding directors and formally complete the gradual handover to the next generation of leadership. The Managing Director, who has over 25 years of industry experience, has been a director of the business since 2015 and formally served as MD since 2023. He is now using his extensive experience to continue to lead the business into its next phase.
The MD is supported by a Senior Management Team who have been in place through this period of transition and have developed into their leadership roles to provide strategic direction across all aspects of the business.
Page 2
SOLUM (SW) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Following the final payment of deferred consideration in early 2024, the three founding directors officially resigned from their executive positions at the end of Q1 2025, in line with their planned exit strategies. As minority shareholders they remain invested in the success of the business, and continue to contribute their experience and insight in advisory and supporting roles.
The business plans to buy back the minority shareholdings from the founding directors and following the recovery from 2024’s bad debt, this process is expected to commence in Q3 2025. Notwithstanding this process, a proportion of available cash will be retained by the business to ensure the continued growth of cash reserves and facilitate a planned increase in turnover as part of our 5-year strategy, and to equip the group in managing the risk of future client failures.
We continue to extend caution towards adverse contract conditions and payment terms, and we carefully consider these factors, as well as the duration of fixed contracts, when tendering for, or accepting, new projects.
We consider the funds available in retained profit and working capital to be sufficient to counter the potential risks and based on this information we believe the group can meet all its financial obligations as they fall due for the foreseeable future. We therefore continue to adopt the going concern basis in presenting the accounts for 2024.
The business plans to buy back the minority shareholdings from the founding directors and following the recovery from 2024’s bad debt, this process is expected to commence in Q3 2025. Notwithstanding this process, a proportion of available cash will be retained by the business to ensure the continued growth of cash reserves and facilitate a planned increase in turnover as part of our 5-year strategy, and to equip the group in managing the risk of future client failures.
We continue to extend caution towards adverse contract conditions and payment terms, and we carefully consider these factors, as well as the duration of fixed contracts, when tendering for, or accepting, new projects.
We consider the funds available in retained profit and working capital to be sufficient to counter the potential risks and based on this information we believe the group can meet all its financial obligations as they fall due for the foreseeable future. We therefore continue to adopt the going concern basis in presenting the accounts for 2024.
No material events have occurred subsequent to the year end.
This report was approved by the board on 29 September 2025 and signed on its behalf.
Page 3
1
SOLUM (SW) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the company for the year ended 31 December 2024.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements for the company in accordance with applicable law and regulations.
In preparing these financial statements for the company, the directors are required to:
∙select suitable accounting policies for the company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements for the company 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 to enable them to ensure that the financial statements for the company 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.
The profit for the year, after taxation, amounted to £79,932 (2023: £1,527,698).
During the year dividends of £650,000 (2023: £1,950,000) were paid.
The directors who served during the year were:
Whist margins will always be tight within the construction industry, a solid financial and operating base is in place for the future management of the company and investment has been made in back office systems, health, safety and welfare. This will help drive performance, efficiencies, communication and growth potential.
Page 4
SOLUM (SW) LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The auditors, Bishop Fleming Audit Limited, 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.
Page 5
SOLUM (SW) LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM (SW) LTD
We have audited the financial statements of Solum (SW) Ltd (the 'company') for the year ended 31 December 2024, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position and the related notes, 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).
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 Auditors' 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 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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
Page 6
SOLUM (SW) LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM (SW) LTD (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
Page 7
SOLUM (SW) LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM (SW) LTD (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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We have considered the nature of the industry and sector, control environment, and business performance including the design of remuneration policies;
∙We have considered the nature of the industry and sector, control environment and business performance.
∙We have considered the results of our enquiries of management and the board about their own identification and assessment of the risks of irregularities.
∙For any matters identified we have obtained and reviewed the Company’s documentation of their policies and procedures relating to:
∙Identifying, evaluating and complying with laws and regulations, including Duty, and whether they were aware of any instances of non-compliance;
∙Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and
∙The internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.
∙We have considered the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within th organisation for fraud, and incorrect recognition of revenue at the year-end was identified as the greatest potential area for fraud.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company’s ability to operate or to avoid a material penalty. These included compliance with Health and Safety regulations, GDPR, Company law, tax legislation, Duty, and employment legislation.
Our procedures to respond to the fraud risks identified, including revenue recognition as a key audit matter, included the following:
∙Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements.
∙Performing various substantive tests of detail related to the recognition of revenue.
∙Enquiring of management and those charged with governance concerning actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
Page 8
SOLUM (SW) LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM (SW) LTD (CONTINUED)
∙Reading minutes of meetings of those charged with governance.
∙In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; and assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout
the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements,
recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from an error, as fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is from the events and transactions reflected in the
financial statements, the less likely we would become aware of it.
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 Auditors' 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 Auditors' 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 Auditors
10 Temple Back
BS1 6FL
Page 9
SOLUM (SW) LTD
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 10
SOLUM (SW) LTD
REGISTERED NUMBER:05668267
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 23 form part of these financial statements.
Page 11
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Solum (SW) Ltd is a private company, limited by shares, incorporated in England and Wales. The registered office is Upper Buckover Farm, Wotton-Under-Edge, South Gloucestershire, GL12 8DZ and the registered number is 05668267.
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 management to exercise judgment in applying the company's accounting policies (see note 3).
FRS 102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions, which have been complied with. The company has taken advantage of the following exemption from preparing a statement of cash flows on the basis that it is a qualifying entity and its ultimate parent company, Solum SW Holdings Limited, includes the company's cash flows in its Consolidated Statement of Cash Flows. The consolidated financial statements of Solum SW Holdings Limited as at 31 December 2024 may be obtained from Companies House.
The following principal accounting policies have been applied:
The cash position has recovered well since the bad debt in Q3 2024. Our 2025 mid-year Management Information shows turnover and gross profit for the year-to-date running slightly ahead of plan, and current forecasts indicate that year-end performance will be in line with expectations.
A continual review of cash flow and profit and loss account forecasts is undertaken, with a strategic focus on short-term cashflow forecasting based on the current performance of all live contracts. Opportunities to further sharpen this focus are being actively pursued, with new technologies and Artificial Intelligence being introduced as part of our strategy to bring a broader range of planning tools and opportunities for real-time analysis of KPIs.
A long-planned management buy-out process commenced in 2022, to allow the exit from the business of the three founding directors and formally complete the gradual handover to the next generation of leadership. The Managing Director, who has over 25 years of industry experience, has been a director of the business since 2015 and formally served as MD since 2023. He is now using his extensive experience to continue to lead the business into its next phase.
The MD is supported by a Senior Management Team who have been in place through this period of transition and have developed into their leadership roles to provide strategic direction across all aspects of the business.
Following the final payment of deferred consideration in early 2024, the three founding directors officially resigned from their executive positions at the end of Q1 2025, in line with their planned exit strategies. As minority shareholders they remain invested in the success of the business, and continue to contribute their experience and insight in advisory and supporting roles.
The business plans to buy back the minority shareholdings from the founding directors and following the recovery from 2024’s bad debt, this process is expected to commence in Q3 2025. Notwithstanding this process, a proportion of available cash will be retained by the business to ensure the continued growth of cash reserves and facilitate a planned increase in turnover as part of our 5-year strategy, and to equip the group in managing the risk of future client failures.
A continual review of cash flow and profit and loss account forecasts is undertaken, with a strategic focus on short-term cashflow forecasting based on the current performance of all live contracts. Opportunities to further sharpen this focus are being actively pursued, with new technologies and Artificial Intelligence being introduced as part of our strategy to bring a broader range of planning tools and opportunities for real-time analysis of KPIs.
A long-planned management buy-out process commenced in 2022, to allow the exit from the business of the three founding directors and formally complete the gradual handover to the next generation of leadership. The Managing Director, who has over 25 years of industry experience, has been a director of the business since 2015 and formally served as MD since 2023. He is now using his extensive experience to continue to lead the business into its next phase.
The MD is supported by a Senior Management Team who have been in place through this period of transition and have developed into their leadership roles to provide strategic direction across all aspects of the business.
Following the final payment of deferred consideration in early 2024, the three founding directors officially resigned from their executive positions at the end of Q1 2025, in line with their planned exit strategies. As minority shareholders they remain invested in the success of the business, and continue to contribute their experience and insight in advisory and supporting roles.
The business plans to buy back the minority shareholdings from the founding directors and following the recovery from 2024’s bad debt, this process is expected to commence in Q3 2025. Notwithstanding this process, a proportion of available cash will be retained by the business to ensure the continued growth of cash reserves and facilitate a planned increase in turnover as part of our 5-year strategy, and to equip the group in managing the risk of future client failures.
Page 12
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.ACCOUNTING POLICIES (CONTINUED)
We continue to extend caution towards adverse contract conditions and payment terms, and we carefully consider these factors, as well as the duration of fixed contracts, when tendering for, or accepting, new projects.
We consider the funds available in retained profit and working capital to be sufficient to counter the potential risks and based on this information we believe the group can meet all its financial obligations as they fall due for the foreseeable future. We therefore continue to adopt the going concern basis in presenting the accounts for 2024.
Page 13
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.ACCOUNTING POLICIES (CONTINUED)
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives.
Depreciation is provided on the following basis:
Page 14
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.ACCOUNTING POLICIES (CONTINUED)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The company 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 company's Statement of Financial Position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) 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 company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
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.
Page 15
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.ACCOUNTING POLICIES (CONTINUED)
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments 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.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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 company 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 company 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 company's contractual obligations expire or are discharged or cancelled.
Page 16
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The estimates and underlying assumptions are reviewed on an ongoing basis. Any revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period. If the revision affects both current and future periods, then it is recognised in both the current and future period.
The key estimates in the accounts relate to the company’s revenue recognition and long-term service contracts policies are set out in note 2.3. These policies are central to the way in which the company values the work it has carried out at each reporting date and the estimation of the percentage completion of the contract. These policies require forecasts to be made of the outcome of long-term service contracts and require assessments and judgements to be made on the recovery of precontract costs, variations in work scopes, claim recoveries, expected contract costs to complete and the progress on contract programmes. The company has appropriate control procedures in place to ensure estimates are calculated on a consistent basis.
Analysis of turnover by country of destination:
Page 17
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 18
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
There were no factors that may affect future tax charges.
Page 19
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
Page 20
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 21
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
Capital redemption reserve
Profit and loss account
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. At the year end, £17,831 (2023: £19,581) remained payable to the fund.
Page 22
SOLUM (SW) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The ultimate parent company of the group of which the company is a member is Solum SW Holdings Limited.
Page 23