J G Hale Construction Limited - Limited company accounts 20.1

REGISTERED NUMBER: 03848091 (England and Wales)

J G HALE CONSTRUCTION LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2021

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

DIRECTORS:

C L Brown

J G Hale

D H Harrhy

D Llewellyn

K Omahoney

M Thomas

SECRETARY:

C L Brown

REGISTERED OFFICE:

Unit 3 Jcg Building

Milland Road Industrial Estate

Neath

SA11 1NJ

REGISTERED NUMBER:

03848091 (England and Wales)

AUDITORS:

Bevan Buckland LLP

Chartered Accountants

And Statutory Auditors

Ground Floor Cardigan House

Castle Court

Swansea Enterprise Park

Swansea

SA7 9LA

The directors present their strategic report for the year ended 30 June 2021.

REVIEW OF BUSINESS

The past year continued to be affected by Covid with higher than usual staff absences. Material prices also saw a dramatic increase due to Brexit as well as Covid. This year's results are a symptom of the perfect storm the industry as a whole has suffered.

However we are in a good position for the year ahead with a solid well trained staff base and good order book. We have secured work to exceed this year's turnover next year and are looking to build on this, our close relationships with housing associations as well as our team dedicated to package deals is key to this.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties affecting the company are those associated with other construction businesses including:

- Material price uncertainty

- The increased level of contracting is leading to a skills shortage.

- The general and political climate as well as the current conflict in Ukraine;

- The competitive nature of the industry;

We regularly consider these main risks but with our experienced workforce and our commitment to recruitment at both senior and apprenticeship levels we remain confident in our ability to meet these challenges.

We have a strong order book for the coming years and healthy margins we believe will help us to strengthen the business. The challenge as always is in bringing these schemes in in a timely manner, with sectional agreements and prestart planning issues to contend with along with resourcing key trades.

DEVELOPMENT AND PERFORMANCE

We are always looking to improve the business and find new innovative methods. With our sister company having invested in MMC we are well placed to continue to provide quality housing across Wales. Our sister SOM's potential is enormous in the current market it not only offers a green solution but a time efficient one as well, saving time on site prelims. We feel this investment will give us an edge as well as be rewarding for many years to come. The investment in the premises as well as the machinery and green technology to get the factory towards off grid, is future proofing the business, we are confident that the payback will be easily achieved over time, this is a long term strategy for the future of all the associated business.

Key performance indicators

We monitor key performance indicators to ensure they are within acceptable parameters. These included

- Gross and net profit per contract

- Turnover secured against target

- Health & Safety indicators

- Contract delivery performance and aftercare

- Quality indicators

Targets are established as an integral part of the annual business planning process.

Future prospects

The company is committed to establishing long term relationships with key clients particularly in the social housing sector to underpin our future growth. Demand for housing is positive despite the pandemic and the clients continue to seek an increase in resources to meet their increased budgets. We have recently added a further member to the development team, with experience in community benefits and TR&T. We have a well-rounded team now. We consider that staff are one of the most important assets and with our investment in training we will continue to maintain a strong dedicated workforce. The Directors are confident about the future prospects of the business.workforce.

ON BEHALF OF THE BOARD:

C L Brown - Director

27 June 2022

The directors present their report with the financial statements of the company for the year ended 30 June 2021.

DIVIDENDS

No dividends will be distributed for the year ended 30 June 2021.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 July 2020 to the date of this report.

C L Brown

J G Hale

D H Harrhy

D Llewellyn

K Omahoney

M Thomas

POLITICAL DONATIONS AND EXPENDITURE

During the year the company made non-political donations amounting to £630 (2020 £2,275).

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). 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, Bevan Buckland LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

C L Brown - Director

27 June 2022

Qualified Opinion

We have audited the financial statements of J G Hale Construction Limited (the 'company') for the year ended 30 June 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity 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, except for the effects of the matter described in the Basis for qualified opinion section of our report, the financial statements:

- give a true and fair view of the state of the company's affairs as at 30 June 2021 and of its loss 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 qualified opinion

The company has a long term debt owed from an Associated company, based on the Associated company's results, there is an indication that the recoverability of this debt is impaired by an amount of £1m. Management have not impaired the debt due to the fact it is a long term venture and the company is expected to return profits in the future, before the debt is due to be repaid and therefore no impairment required. There are business plans in place which show the repayment of the loan, and the company has not defaulted on the repayment terms to date, but should the forecasts not be achieved this would cast doubt over the repayment of the loan.

Should an impairment be included in the year, this would result in a reduction of current assets by £1m, and a reduction in net profit of £1m.

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 four, 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:

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

We identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, and then, design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

We discussed our audit independence complying with the Revised Ethical Standard 2019 with the engagement team members whilst planning the audit and continually monitored our independence throughout the process.

Identifying and assessing potential risks related to irregularities.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

-

enquiring of management, including obtaining and reviewing supporting documentation, concerning the Company's policies and procedures relating to:

-

identifying, evaluating and complying with laws and regulations 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;

-

the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations;

-

discussing among the engagement team how and where fraud might occur in the Financial Statements and any potential indicators of fraud. As part of this discussion, we identified potential for fraud in the following areas;

-

Assumptions used for valuing work in progress at the year end, and;

-

Potential for deferring income already earned at the year end.

-

obtaining an understanding of the legal and regulatory frameworks that the Company operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect on the operations of the Company, The key laws and regulations we considered in this context included the UK Companies Act and relevant tax legislation.

Audit response to risks identified

In addition to the above, our procedures to respond to risks identified included the following:

-

reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations;

-

enquiring of management 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;

-

reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and

-

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments;

-

assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and

-

evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

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.

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.

Alison Vickers (Senior Statutory Auditor)

for and on behalf of Bevan Buckland LLP

Chartered Accountants

And Statutory Auditors

Ground Floor Cardigan House

Castle Court

Swansea Enterprise Park

Swansea

SA7 9LA

27 June 2022

TURNOVER

3

33,057,106

32,254,622

Cost of sales

(30,486,867

)

(30,026,946

)

GROSS PROFIT

2,570,239

2,227,676

Administrative expenses

(1,851,852

)

(1,545,031

)

718,387

682,645

Other operating income

4

68,258

170,133

OPERATING PROFIT

6

786,645

852,778

Interest payable and similar expenses

7

(10,944

)

(8,823

)

PROFIT BEFORE TAXATION

775,701

843,955

Tax on profit

8

(157,304

)

(169,958

)

PROFIT FOR THE FINANCIAL YEAR

618,397

673,997

PROFIT FOR THE YEAR

618,397

673,997

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

618,397

673,997

FIXED ASSETS

Tangible assets

9

879,811

638,734

CURRENT ASSETS

Debtors

10

9,086,111

8,043,565

Cash at bank and in hand

1,761,164

3,548,465

10,847,275

11,592,030

CREDITORS

Amounts falling due within one year

11

5,579,715

6,624,204

NET CURRENT ASSETS

5,267,560

4,967,826

TOTAL ASSETS LESS CURRENT LIABILITIES

6,147,371

5,606,560

CREDITORS

Amounts falling due after more than one year

12

(2,931,187

)

(3,109,351

)

PROVISIONS FOR LIABILITIES

16

(191,628

)

(91,050

)

NET ASSETS

3,024,556

2,406,159

CAPITAL AND RESERVES

Called up share capital

17

104

104

Retained earnings

18

3,024,452

2,406,055

SHAREHOLDERS' FUNDS

3,024,556

2,406,159

The financial statements were approved by the Board of Directors and authorised for issue on 27 June 2022 and were signed on its behalf by:

J G Hale - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 July 2019

104

1,732,058

1,732,162

Changes in equity

Total comprehensive income

-

673,997

673,997

Balance at 30 June 2020

104

2,406,055

2,406,159

Changes in equity

Total comprehensive income

-

618,397

618,397

Balance at 30 June 2021

104

3,024,452

3,024,556

1.	STATUTORY INFORMATION

J G Hale Construction 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.

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.

Going concern

The directors are satisfied that despite the Covid-19 pandemic, it is appropriate for the company's financial statements to be prepared on a going concern basis. The pandemic has resulted in a number of uncertainties arising and the directors have taken steps to minimise the effect on the company and will continue to do so. In the circumstance they have concluded that no adjustments are required to the financial statements at this time.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Amounts recoverable on long term contracts

A number of the construction contracts included within the financial statements have completion dates that differ from the year end. The measurement of revenue and costs is affected by a variety of uncertainties that depend upon future events. Under construction contracts, the estimates of contract revenue and costs often need to be revised as events occur and uncertainties are resolved.

Therefore, contract revenue and costs are allocated to the accounting periods in which the construction work is performed. In cases where the outcome of a construction contract can be estimated reliably, the contract revenue and costs are recognised by reference to the stage of completion at the end of the reporting period. Estimation of the contract outcome is based upon the stage of completion, future cost and the collectability of contract billings.

In cases where the outcome of a construction contract cannot be estimated reliably, contract costs are recognised in the profit and loss account as an expense in the period in which they are incurred, and revenue is recognised only to the extent of contract costs incurred when it is considered probable that these will be recovered

Turnover

Turnover represents amounts receivable for services net of VAT and trade discounts.

Turnover in respect of construction contracts, where the Company is providing construction work and related services to housing associations and private housing developers, is recognised using the percentage of completion method, with the percentage complete being determined by comparing the percentage of costs incurred to date with the estimated total costs of the contract. Losses on these contracts, if any, are recognised in the period when such losses become probable and can be reasonably estimated.

Turnover from the provision of goods and all services is only recognised when the amounts to be recognised are fixed or determinable and recoverability is reasonably assured.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

-

15% reducing balance

Fixtures and fittings

-

33% on cost

Motor vehicles

-

25% reducing balance

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Impairment of fixed assets

At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

The company participates in a defined contribution pension scheme. Contributions to the scheme are charged to the profit and loss account as they fall due

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2021

2020

£

£

Construction services

33,057,106

32,254,622

33,057,106

32,254,622

An analysis of turnover by geographical market is given below:

2021

2020

£

£

United Kingdom

33,057,106

32,254,622

33,057,106

32,254,622

4.	OTHER OPERATING INCOME

Included within other income is an amount received by the company amounting to £nil (2020 £113,158) as part of the Job retention scheme.

5.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

2,598,971

2,375,684

Social security costs

246,975

219,794

Other pension costs

104,393

93,562

2,950,339

2,689,040

The average number of employees during the year was as follows:

2021

2020

Construction

58

45

Administrative

30

27

Directors

6

6

94

78

Directors remuneration

2021

2020

£

£

Remuneration

263,644

230,553

Pension contributions to defined contribution scheme

53,900

45,945

317,544

276,498

6.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2021

2020

£

£

Other operating leases

150,000

12,500

Depreciation - owned assets

92,000

67,376

Depreciation - assets on hire purchase contracts

70,224

48,096

Profit on disposal of fixed assets

(1,423

)

-

Auditors' remuneration

9,830

12,260

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Hire purchase

10,944

8,823

8.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2021

2020

£

£

Current tax:

UK corporation tax

137,853

123,594

Prior year over charge

(16,963

)

-

Total current tax

120,890

123,594

Deferred tax

36,414

46,364

Tax on profit

157,304

169,958

UK corporation tax has been charged at 19% .

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2021

2020

£

£

Profit before tax

775,701

843,955

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

147,383

160,351

Effects of:

Expenses not deductible for tax purposes

998

1,729

Capital allowances in excess of depreciation

(4,091

)

(38,486

)

Adjustments to tax charge in respect of previous periods

(14,181

)

-

forward

Group relief

(9,219

)

-

Deferred tax movement re. fixed asset timing differences

36,414

46,364

Total tax charge

157,304

169,958

Factors that may affect future current and total tax charges

A UK corporation tax rate of 19% (effective 1 April 2020) was substantively enacted on 17 March 2020, reversing the previously enacted reduction in the rate from 19% to 17%. Deferred tax balances have therefore been calculated using a 19% rate.It has been announced that the rate will increase to 25% with effect from 1st April 2023. This will increase the company's future tax charge accordingly.

It is likely that the overall effect of the change would not have a significant impact to the deferred tax.

9.	TANGIBLE FIXED ASSETS

Fixtures

Plant and

and

Motor

machinery

fittings

vehicles

Totals

£

£

£

£

COST

At 1 July 2020

790,147

16,228

174,635

981,010

Additions

287,777

50,561

66,873

405,211

Disposals

(575

)

-

(3,461

)

(4,036

)

At 30 June 2021

1,077,349

66,789

238,047

1,382,185

DEPRECIATION

At 1 July 2020

265,234

14,503

62,539

342,276

Charge for year

123,592

4,249

34,383

162,224

Eliminated on disposal

(490

)

-

(1,636

)

(2,126

)

At 30 June 2021

388,336

18,752

95,286

502,374

NET BOOK VALUE

At 30 June 2021

689,013

48,037

142,761

879,811

At 30 June 2020

524,913

1,725

112,096

638,734