REGISTERED NUMBER: 04933418 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 March 2025

for

DRAIN LINE SOUTHERN LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Statement of Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Cash Flow Statement

14

Notes to the Cash Flow Statement

15

Notes to the Financial Statements

16

DIRECTORS:

D M Mogre

S P Whelan

T J Miles

N K Mulligan

S Staples

P Monck

SECRETARY:

S P Whelan

REGISTERED OFFICE:

Preston Park House

South Road

Brighton

East Sussex

BN1 6SB

BUSINESS ADDRESS:

East Sussex Highways Depot

Burwash Road

Heathfield

East Sussex

TN21 8RA

REGISTERED NUMBER:

04933418 (England and Wales)

AUDITORS:

Feist Hedgethorne Limited

Statutory Auditors

Chartered Accountants

Preston Park House

South Road

Brighton

East Sussex

BN1 6SB

The directors present their strategic report for the year ended 31 March 2025.

Introduction

Drain Line is an independently owned specialist SME drainage business. Alongside our core highways drainage division, we now deliver a broader range of services including civil engineering, traffic management, and reactive maintenance services.

In 2025, 85% of company turnover was earned from long-term fixed highways contracts for local authority and tier 1 main contractor clients. A further 5% came from larger rail infrastructure organisations, with the remaining 10% from ad hoc clients, ranging from PLCs to small businesses and residential customers.

We continue to invest heavily in the health, safety, and wellbeing of our staff and stakeholders. Our partnership with BSI remains central to this. Notably, our investment in AI vehicle safety software has significantly reduced incident rates, improving safety across the business.

Business Overview

2024/25 was a challenging but transformative year, marking our shift from a drainage-only business to a broader TMC specialist.

Turnover grew by 34.5% to £22.85m (2024: £16.98m). Profit after tax was £1.2m, down from £1.7m the previous year, representing a net margin of 5.2%.

This reduction in profitability is largely due to:

-

First-year mobilisation costs on several newly secured long-term contracts (3-8 years), which typically take time to stabilise and deliver expected margins

-

Continued inflationary labour pressures, particularly in recruiting and retaining skilled HGV drivers, driving up overall employment costs.

Net assets increased by 7% to £2.39m (2024: £2.24m). Capital expenditure totalled £1.1m, including the purchase of our flagship Kaiser Whale Recycler, and ongoing IT infrastructure upgrades.

Key Performance Indicators - Financial and Non-Financial

Below is a table summarising the Key Performance Indicators we use to manage our business. We monitor our vehicle utilisation on a weekly basis at our Operations Meeting held in person and via Teams at our Head Office each Thursday. Our vehicle KPI is split into different vehicle categories with combination units being the most important due to the cost of running this section of the fleet.

Financial

2025

2024

+/(-)

Turnover

£22,852,067

£16,984,690

34.5%

Gross Profit Margin

14.1%

20.9%

(32.5%)

Operating Profit

£1,736,823

£2,419,273

(28.2%)

Operating Profit Margin

7.6%

14.2%

(46.5%)

Net Profit

£1,190,709

£1,703,352

(30.1%)

Net Profit Margin

5.2%

10%

(48.0%)

Adjusted EBITDA

£2,551,885

£3,040,970

(16.1%)

Non-Financial

2025

2024

+/(-)

Average Employees

255

189

34.9%

Principle Risks and Uncertainties

It is crucial to understand and address the principal risks and uncertainties that affect our operations, financial performance, and long-term sustainability.

The table below highlights the major threats along with the potential impact and our mitigating actions.

Matter for Concern

Potential Impact

Mitigating Actions

Labour skills shortage.

Inability to operate due to lack of suitably trained employees.

Increase investment in our Learning and Training Department including online training platforms like Human Focus.

Lead time delays with vehicle parts.

Increased vehicle off-road (VOR) time.

Expansion of our mobile technician team and improved PPM regime.

Margin erosion (labour costs).

Lower profitability.

Engagement with staff, performance-linked pay structures, and proactive contract re-pricing.

Economic and market risks.

Increasing BoE interest rates making financing investments more expensive.

Expanding our finance brokers to actively search a wider finance market. Placing our excess cash in savings accounts to take advantage of higher interest rates to help offset our higher finance costs. Working directly with finance companies to secure better terms.

Cybersecurity.

As our reliance on digital systems and data increases, the risk of cyber threats, such as data breaches and ransomware attacks, becomes more significant.

Improve our cyber insurance policies. Work more closely with our outsourced IT partner Docex 360 to implement more sophisticated security measures like two factor multi-authentication across all devices.

Future Developments

We continue to pursue growth through long-term highways contracts and strategic client partnerships. In 2025, we secured:

-

An 8-year contract for a new client on a local authority contract.

-

A 7-year contract with another new client on a National Highways contract.

-

A place on the National Highways Area 5 framework (awaiting mobilisation).

-

A 5-year Safety Defects and Reactive Works contract with an existing client on a local authority contract.

Research, Development, and Initiatives

We remain committed to innovation, environmental responsibility, and community impact. Highlights include:

-

Continued investment in low-emission vehicles, recycling, and digital systems.

-

Ongoing support of our groundbreaking social value initiative helping homeless individuals into employment.

-

Appointment of a dedicated CSR Manager to oversee and grow our impact in the communities we serve.

ON BEHALF OF THE BOARD:

N K Mulligan - Director

26 November 2025

The directors present their report with the financial statements of the company for the year ended 31 March 2025.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of drainage specialists.

DIVIDENDS

The total distribution of dividends for the year ended 31 March 2025 was £1,042,689 (2024: £962,355).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2024 to the date of this report.

D M Mogre

S P Whelan

T J Miles

N K Mulligan

S Staples

P Monck

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Cash flow risk

The company is exposed to the financial risk of changes in interest rates. The company works directly with finance companies to secure better terms.

Credit risk

The company's credit risk arises primarily through trade debtors. The amounts presented in the balance sheet are net of bad debt provisions. A bad debt provision is recognised by the entity when there is objective evidence that a debtor has become impaired - for example where the customer enters into bankruptcy proceedings.

Liquidity risk

In order to maintain liquidity and to ensure that the company has sufficient funds available for ongoing operations and to meet its obligations, the company places surplus funds in a high-interest-bearing savings account.

DIRECTORS' INDEMNITIES

The company has provided qualifying third-party indemnity provisions for the benefit of its directors during the financial year. These provisions remain in force at the reporting date.

GOING CONCERN

The directors have reviewed projected cash flows, confirmed contract commitments, and assessed market conditions. On this basis, and considering strong forward visibility of income, we believe the company will remain a going concern for the next 12 months.

DISABLED EMPLOYEES

Drainline Southern Ltd is a Disability Confident Committed employer. We are committed to creating an inclusive workplace where disabled people and those with long-term health conditions are treated fairly and supported throughout their employment. Our recruitment process is inclusive and accessible, and we guarantee interviews for disabled applicants who meet the minimum criteria for a role. We make reasonable adjustments during recruitment and employment and provide additional support to employees who acquire a disability, enabling them to remain in work wherever possible. These commitments are embedded in our Workplace Disability Policy.

ENGAGEMENT WITH EMPLOYEES

The company actively engages with employees on matters affecting their health, safety, wellbeing, and working conditions. This includes regular toolbox talks, site meetings, and ongoing risk assessment discussions. Senior management and directors regularly visit operational sites to gather feedback directly and promote visible leadership.

Staff are also kept informed of company performance and key developments through internal communications. This transparency helps foster a sense of shared responsibility and engagement with the company's strategic direction. Feedback is encouraged and acted upon, contributing to a collaborative and inclusive working environment.

DISCLOSURE IN THE STRATEGIC REPORT

Certain matters required by regulation to be dealt with in the annual report have been dealt with in the Strategic Report rather than in the Director's Report. These include principal risks and uncertainties and future developments.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Feist Hedgethorne Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

N K Mulligan - Director

26 November 2025

Opinion

We have audited the financial statements of Drain Line Southern Limited (the 'company') for the year ended 31 March 2025 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 31 March 2025 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

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 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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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 six, 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 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.

Auditors' 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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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:

The extent to which the audit was considered capable of detecting irregularities, including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

-

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

-

we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the telecommunications industry;

-

we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation;

-

we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

-

identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

-

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

-

considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

-

performed analytical procedures to identify any unusual or unexpected relationships;

-

tested journal entries to identify unusual transactions;

-

assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

-

investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

-

agreeing financial statement disclosures to underlying supporting documentation;

-

enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Chris Morey (Senior Statutory Auditor)

for and on behalf of Feist Hedgethorne Limited

Statutory Auditors

Chartered Accountants

Preston Park House

South Road

Brighton

East Sussex

BN1 6SB

27 November 2025

TURNOVER

3

22,852,067

16,984,690

Cost of sales

(19,629,390

)

(13,437,688

)

GROSS PROFIT

3,222,677

3,547,002

Administrative expenses

(1,518,459

)

(1,127,729

)

1,704,218

2,419,273

Other operating income

32,605

-

OPERATING PROFIT

1,736,823

2,419,273

Interest receivable and similar income

34,532

19,722

1,771,355

2,438,995

Interest payable and similar expenses

5

(168,173

)

(152,785

)

PROFIT BEFORE TAXATION

6

1,603,182

2,286,210

Tax on profit

7

(412,473

)

(582,858

)

PROFIT FOR THE FINANCIAL YEAR

1,190,709

1,703,352

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,190,709

1,703,352

FIXED ASSETS

Intangible assets

9

28,230

59,691

Tangible assets

10

4,536,120

4,224,799

Investments

11

200

200

4,564,550

4,284,690

CURRENT ASSETS

Debtors

12

4,233,102

3,035,086

Cash at bank

1,651,689

2,217,699

5,884,791

5,252,785

CREDITORS

Amounts falling due within one year

13

(4,526,295

)

(3,929,304

)

NET CURRENT ASSETS

1,358,496

1,323,481

TOTAL ASSETS LESS CURRENT LIABILITIES

5,923,046

5,608,171

CREDITORS

Amounts falling due after more than one year

14

(2,441,200

)

(2,379,731

)

PROVISIONS FOR LIABILITIES

17

(1,089,895

)

(984,509

)

NET ASSETS

2,391,951

2,243,931

CAPITAL AND RESERVES

Called up share capital

18

164

164

Share premium

39,991

39,991

Capital redemption reserve

24

24

Retained earnings

2,351,772

2,203,752

SHAREHOLDERS' FUNDS

2,391,951

2,243,931

The financial statements were approved by the Board of Directors and authorised for issue on 26 November 2025 and were signed on its behalf by:

N K Mulligan - Director

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 April 2023

164

1,462,755

39,991

24

1,502,934

Changes in equity

Dividends

-

(962,355

)

-

-

(962,355

)

Total comprehensive income

-

1,703,352

-

-

1,703,352

Balance at 31 March 2024

164

2,203,752

39,991

24

2,243,931

Changes in equity

Dividends

-

(1,042,689

)

-

-

(1,042,689

)

Total comprehensive income

-

1,190,709

-

-

1,190,709

Balance at 31 March 2025

164

2,351,772

39,991

24

2,391,951

Cash flows from operating activities

Cash generated from operations

1

1,949,203

3,103,001

Interest element of hire purchase and finance lease rental payments paid

(168,173

)

(152,785

)

Tax paid

(272,074

)

(36,743

)

Net cash from operating activities

1,508,956

2,913,473

Cash flows from investing activities

Purchase of tangible fixed assets

(134,990

)

(326,091

)

Sale of tangible fixed assets

64,000

113,470

Interest received

34,532

19,722

Net cash from investing activities

(36,458

)

(192,899

)

Cash flows from financing activities

Capital repayments in year

(995,819

)

(552,439

)

Equity dividends paid

(1,042,689

)

(962,355

)

Net cash from financing activities

(2,038,508

)

(1,514,794

)

(Decrease)/increase in cash and cash equivalents

(566,010

)

1,205,780

Cash and cash equivalents at beginning of year

2

2,217,699

1,011,919

Cash and cash equivalents at end of year

2

1,651,689

2,217,699

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2025

2024

£

£

Profit before taxation

1,603,182

2,286,210

Depreciation charges

815,283

621,697

Loss/(profit) on disposal of fixed assets

1,446

(1,657

)

Finance costs

168,173

152,785

Finance income

(34,532

)

(19,722

)

2,553,552

3,039,313

Increase in trade and other debtors

(1,198,016

)

(708,887

)

Increase in trade and other creditors

593,667

772,575

Cash generated from operations

1,949,203

3,103,001

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 March 2025

31.3.25

1.4.24

£

£

Cash and cash equivalents

1,651,689

2,217,699

Year ended 31 March 2024

31.3.24

1.4.23

£

£

Cash and cash equivalents

2,217,699

1,011,919

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1.4.24

Cash flow

changes

At 31.3.25

£

£

£

£

Net cash

Cash at bank

2,217,699

(566,010

)

1,651,689

2,217,699

(566,010

)

1,651,689

Debt

Hire purchase and

finance leases

(3,226,526

)

995,819

(1,025,600

)

(3,256,307

)

(3,226,526

)

995,819

(1,025,600

)

(3,256,307

)

Total

(1,008,827

)

429,809

(1,025,600

)

(1,604,618

)

1.	STATUTORY INFORMATION

Drain Line Southern Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

Monetary amounts in these financial statements are rounded to the nearest pound.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Preparation of consolidated financial statements

The Company owns 100% of the share capital of Enviroflow Services Limited, a dormant company. As Enviroflow Services Limited is dormant no consolidated accounts are prepared.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates and these estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The items in the financial statements where these judgements and estimates have been made include the useful economic life of intangible and tangible fixed assets, the depreciation and amortisation of these assets and provisions.

Key sources of estimation uncertainty:

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are depreciated over the approved depreciation rates. The carrying amount of tangible fixed assets is £4,536,120 (2024: £4,224,799) as noted in note 9.

The company considers whether intangible assets are impaired. Where an indication of impairment is identified the recoverable value requires estimation. Goodwill is amortised over its useful economic life. The carrying amount of intangible assets is £28,230 (2024: £59,691) as noted in note 8.

The value of accrued income for the year ended 31 March 2025, of £516,998 (2024: £438,794) represents the directors' best estimate of the value of accrued income. The estimate takes into account work completed to date.

The company’s current tax provision of £307,086 (2024: £272,075) relates to management’s assessment of the amount of tax payable on the company’s profit for the year where the liabilities remain to be agreed with HM Revenue and Customs. Due to the uncertainty associated with such taxation items, there is a possibility that the final outcome may differ significantly on conclusion of open tax matters at a future date.

No significant judgements have been made by management in preparing these financial statements.

Turnover

Turnover represents the fair value of consideration received or receivable net of VAT and trade discounts for fixed highways contracts for local authority and tier 1 main contractor customers and for ad hoc services relating to small scale civil engineering and traffic management services.

Income earned from applications on fixed highways contracts is recognised on receipt of an assessment from the contractors, at a preset date each month. Works completed but not yet assessed are recognised in the Statement of Comprehensive Income and included in the Balance Sheet as accrued income, whilst works completed which are not expected to be assessed are deferred.

Ad hoc services are recognised as contract activity progresses. Revenue not billed is included in debtors and payments on account in excess of the relevant amount of revenue are included in creditors.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2022, is being amortised evenly over its estimated useful life of five years.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended by management.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant & machinery

-

straight line over 4-7 years

Fixtures, fittings & equipment

-

straight line over 3-4 years

Motor vehicles

-

straight line over 5-7 years or over lease period

Computer equipment

-

straight line over 3 years

Impairment policy

At each balance sheet date, the company reviews the carrying amount of its assets to determine whether there is any indication that any items have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost less impairment.