Land & Water Services Limited Company accounts

Land & Water Services Limited Company accounts

LAND & WATER SERVICES LTD - Company Information

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COMPANY REGISTRATION NUMBER: 02776439
LAND & WATER SERVICES LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 December 2022
LAND & WATER SERVICES LIMITED
FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2022
Contents
Pages
Officers and professional advisers
1
Strategic report
2
Directors' report
3 to 5
Independent auditor's report to the members
6 to 9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 to 21
LAND & WATER SERVICES LIMITED
OFFICERS AND PROFESSIONAL ADVISERS
The board of directors
Mr R E Melhuish
Mr J A Maclean
Mr A B Gascoyne
Mr K J Kirkland
Company secretary
Ms K Bishop
Registered office
Numeric House
98 Station Road
Sidcup
Kent
United Kingdom
DA15 7BY
Auditor
Opass Billings Wilson & Honey LLP
Chartered Certified Accountants & statutory auditor
Numeric House
98 Station Road
Sidcup
Kent
DA15 7BY
Bankers
Nat West Bank Plc
Chatham Customer Service Centre
Western Avenue
Waterside
Chatham Maritime
ME4 4RT
Solicitors
DMH Stallard
Griffin House
135 High Street
Crawley
West Sussex
RH10 1DQ
LAND & WATER SERVICES LIMITED
STRATEGIC REPORT
YEAR ENDED 31 DECEMBER 2022
Strategic management
Land and Water Services Ltd continues to focus on Environmental Engineering, working particularly successfully with the Environment Agency, however like many other companies L&WS have had to deal with price rises, inflation, and material shortages. Some of our bigger projects have been significantly affected by these increases and has resulted in reduced margins, particularly where the Client could not be recharged.
As a result of reducing Margins LAWS has introduced the role of a Business Improvements Manager, to specifically look at staffing levels, business procedures, how we tender and price and how our Sites function on a day to day basis, in order that going forward we can be a more efficient, streamline company, generating higher profit margin.
Business environment
The Board is cautiously optimistic about the operational climate for the company.
Land & Water Services Limited has a dedicated marketing and business development function and formal procedures are in place for the evaluation of clients and enquiries, tender evaluation and bid review including prescribed authority levels for the settlement of tenders. Over 75% of Land & Water Services Limited sales are generated from customers with whom there is a “repeat business” relationship. Land & Water Services Limited is renowned for alternative thinking, problem solving and driving down conventional competitive tender costs using waste reduction and reuse strategies. Land & Water Services Limited undertakes up to 25 projects at any one time, with as many as 40 projects live, closed or mobilised in any monthly cycle.
Business performance
The Board regards the following as the key performance indicators for the Company:
1. The revenue volumes as compared to the previous operating period
Revenue volumes have increased in comparison to 2022, the board are satisfied with this result.
2. The rate of gross profit achieved on the revenues
The company achieved a Gross Profit Return of 14.03% compared to 16.41% in the previous year.
3. The level of operating surplus
The company's operating surplus has decreased from £1,167,672 in 2021 to £628,538.
This report was approved by the board of directors on 28 September 2023 and signed on behalf of the board by:
Mr R E Melhuish Director
LAND & WATER SERVICES LIMITED
DIRECTORS' REPORT
YEAR ENDED 31 DECEMBER 2022
The directors present their report and the financial statements of the company for the year ended 31 December 2022 .
Directors
The directors who served the company during the year were as follows:
Mr R E Melhuish
Mr J A Maclean
Mr A B Gascoyne
Mr K J Kirkland
Dividends
Particulars of recommended dividends are detailed in note 13 to the financial statements.
Future developments
Land & Water Services (LWS) strategic five-year plan has been split into two stages, stage one which spans BP23 and BP24 is a period of business consolidation. The two-year period will enable the business to focus on developing internal business improvements (incl. waste reduction) to improve the bottom-line profitability. The final stage of the five-year plan will focus on sustainable growth whilst maintaining the focus on improving business performance and continuing to eliminate waste.
LWS operates in a competitive environment and the performance of the business is subject to many external factors, our ethos and approach over the next five years is to improve what we can control and position ourselves in the marketplace that ensure we do not place carry undue risk our focus will be on improving our profitability. Our business objectives in relation to our sector and operating model are:
Our sector
1. Maintain market leading position, delivering environmental (nature & engineered), dredging and wet/marine civil engineering projects
2. Retain specialism & direct delivery capability
Our business model is to continue delivering:
1. Long term frameworks (Environment Agency (vegetation & civils), CRT NDC, CRT CEC, Thames & other water authority river restoration schemes)
2. Targeted competitively tendered scheme - ECI to delivery
3. Open market competitively tendered schemes
New Markets / Opportunities
1. Earth Change (salt marshes / water neutrality)
2. Water authorities - dredging of reservoirs following droughts of 2022 (SEW, STW)
3. Inert landfill attenuation barriers (Grundon's)
4. London flood defence T2100 developments (St William, Fairview Ltd)
Financial instruments
The company has sufficient levels of working capital, which is monitored on a daily basis by the board. The company's exposure to liquidity risk and cash flow risk is therefore considered to be low.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 judgments 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 28 September 2023 and signed on behalf of the board by:
Mr R E Melhuish Director
LAND & WATER SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LAND & WATER SERVICES LIMITED
YEAR ENDED 31 DECEMBER 2022
Opinion
We have audited the financial statements of Land & Water Services Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows 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 FRS 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 December 2022 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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 other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
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 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.
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 directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, 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 directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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 identify and assess the key risk areas of material misstatement and then design and perform audit procedures in relation to those risks. Materiality has been calculated based on an average of the company's turnover and has been assessed at a level of £123,000. The key risk areas was considered to be Going Concern, the appropriate audit approach was considered and applied to this area. We performed analytical procedures to identify any unusual or unexpected ratios or variances that may indicate risks of material misstatement due to fraud. We reviewed the financial statement disclosures and assessed compliance with relevant laws and regulations. Irregularities which result from fraud are inherently more difficult to detect than irregularities which result from error, however there have never been any instances of fraud encountered with the company and there are controls in place through the segregation of duties and regular reviews of management accounts which reduce the risk of fraud through management override. In addition we have also considered any transactions which are outside the normal course of the company. All audit team members were made aware of the relevant laws & regulations applicable to the company together with potential fraud risks and remained alert to any indications of fraud non-compliance with the laws & regulations throughout the audit. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Philip Benson Woodman FCCA
(Senior Statutory Auditor)
For and on behalf of
Opass Billings Wilson & Honey LLP
Chartered Certified Accountants & statutory auditor
Numeric House
98 Station Road
Sidcup
Kent
DA15 7BY
28 September 2023
LAND & WATER SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 DECEMBER 2022
2022
2021
Note
£
£
Turnover
4
39,844,975
32,648,578
Cost of sales
34,255,385
27,292,454
-------------
-------------
Gross profit
5,589,590
5,356,124
Administrative expenses
5,061,048
4,259,456
Other operating income
6
99,996
71,004
------------
------------
Operating profit
7
628,538
1,167,672
Interest payable
11
509
1,197
------------
------------
Profit before taxation
628,029
1,166,475
Taxation on ordinary activities
12
5,361
5,261
---------
------------
Profit for the financial year and total comprehensive income
622,668
1,161,214
---------
------------
All the activities of the company are from continuing operations.
LAND & WATER SERVICES LIMITED
STATEMENT OF FINANCIAL POSITION
31 December 2022
2022
2021
Note
£
£
£
Fixed assets
Tangible assets
14
53,964
14,024
Current assets
Stocks
15
403,725
320,301
Debtors
16
11,440,267
9,653,814
Cash at bank and in hand
427,860
1,366,614
-------------
-------------
12,271,852
11,340,729
Creditors: amounts falling due within one year
17
7,634,542
7,198,982
-------------
-------------
Net current assets
4,637,310
4,141,747
------------
------------
Total assets less current liabilities
4,691,274
4,155,771
------------
------------
Net assets
4,691,274
4,155,771
------------
------------
Capital and reserves
Called up share capital
21
90,097
85,714
Share premium account
22
161,108
66,429
Profit and loss account
22
4,440,069
4,003,628
------------
------------
Shareholders funds
4,691,274
4,155,771
------------
------------
These financial statements were approved by the board of directors and authorised for issue on 28 September 2023 , and are signed on behalf of the board by:
Mr R E Melhuish Mr J A Maclean
Director Director
Company registration number: 02776439
LAND & WATER SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2022
Called up share capital
Share premium account
Profit and loss account
Total
£
£
£
£
At 1 January 2021
85,714
66,429
3,296,224
3,448,367
Profit for the year
1,161,214
1,161,214
--------
--------
------------
------------
Total comprehensive income for the year
–
–
1,161,214
1,161,214
Dividends paid and payable
13
–
–
( 453,810)
( 453,810)
--------
--------
------------
------------
Total investments by and distributions to owners
–
–
( 453,810)
( 453,810)
At 31 December 2021
85,714
66,429
4,003,628
4,155,771
Profit for the year
622,668
622,668
--------
--------
------------
------------
Total comprehensive income for the year
–
–
622,668
622,668
Issue of shares
4,383
94,679
–
99,062
Dividends paid and payable
13
–
–
( 186,227)
( 186,227)
-------
--------
---------
---------
Total investments by and distributions to owners
4,383
94,679
( 186,227)
( 87,165)
--------
---------
------------
------------
At 31 December 2022
90,097
161,108
4,440,069
4,691,274
--------
---------
------------
------------
LAND & WATER SERVICES LIMITED
STATEMENT OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2022
2022
2021
£
£
Cash flows from operating activities
Profit for the financial year
622,668
1,161,214
Adjustments for:
Depreciation of tangible assets
7,639
12,693
Interest payable
509
1,197
Gains on disposal of tangible assets
( 16,888)
( 20,209)
Taxation on ordinary activities
5,361
5,261
Accrued income
( 691,554)
( 439,103)
Changes in:
Stocks
( 83,424)
( 104,084)
Trade and other debtors
( 1,791,814)
( 849,973)
Trade and other creditors
370,168
2,296,938
------------
------------
Cash generated from operations
( 1,577,335)
2,063,934
Interest paid
( 509)
( 1,197)
Tax paid
–
( 221,271)
------------
------------
Net cash (used in)/from operating activities
( 1,577,844)
1,841,466
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 51,691)
( 10,484)
Proceeds from sale of tangible assets
21,000
20,209
------------
------------
Net cash (used in)/from investing activities
( 30,691)
9,725
------------
------------
Cash flows from financing activities
Proceeds from issue of ordinary shares
99,062
–
Proceeds from borrowings
( 45,381)
( 16,594)
Proceeds from loans from group undertakings
809,638
( 648,772)
Payments of finance lease liabilities
( 7,311)
( 11,904)
Dividends paid
( 186,227)
( 453,810)
------------
------------
Net cash from/(used in) financing activities
669,781
( 1,131,080)
------------
------------
Net (decrease)/increase in cash and cash equivalents
( 938,754)
720,111
Cash and cash equivalents at beginning of year
1,366,614
646,503
------------
------------
Cash and cash equivalents at end of year
427,860
1,366,614
------------
------------
LAND & WATER SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2022
1. General information
The company is a private company limited by shares, registered in England and Wales.. The address of the registered office is Numeric House, 98 Station Road, Sidcup, Kent, DA15 7BY, United Kingdom.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through the statement of comprehensive income. The financial statements are prepared in sterling, which is the functional currency of the entity.
Debtors
Debtors are initially recorded at fair value and are assessed for impairment at each year end date. If any impairments exist the debtors are remeasured to the present value of the expected future cash inflows.
Creditors
Creditors are initially recorded at fair value and are then remeasured to the present value of the expected future cash outflows.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
Revenue refers to the amounts earned from the Company's principal activity; port and inland dredging. The revenue shown in the statement of comprehensive income represents amounts invoiced during the year, exclusive of Value Added Tax. In respect of long-term contracts and contracts for on-going services, revenue represents the value of work done in the year, including estimates of amounts not invoiced. Revenue in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Tangible assets with a cost value in excess of £500 are capitalised, all items below this limit are expensed through the statement of comprehensive income.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant & Machinery
-
16% straight line
Fixtures & Fittings
-
25% straight line
Motor Vehicles
-
25% straight line
The residual value of all tangible assets is deemed to be £Nil.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost or net realisable value using the first in first out basis.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2022
2021
£
£
Construction contracts
39,844,975
32,648,578
-------------
-------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Stock expenditure
Included in cost of sales is £60,623 (2021 £20,886), which represents the total cost of materials used during the period.
6. Other operating income
2022
2021
£
£
Management charges receivable
99,996
71,004
--------
--------
7. Operating profit
Operating profit or loss is stated after charging/crediting:
2022
2021
£
£
Depreciation of tangible assets
7,639
12,693
Gains on disposal of tangible assets
( 16,888)
( 20,209)
Impairment of trade debtors
91,151
–
--------
--------
Operating profit or loss is the profit or loss from business operations before deduction of interest and taxes.
8. Auditor's remuneration
2022
2021
£
£
Fees payable for the audit of the financial statements
12,500
12,500
--------
--------
9. Particulars of employees
The average number of persons employed by the company during the year, including the directors, amounted to:
2022
2021
No.
No.
Production staff
45
45
Distribution staff
60
60
Administrative staff
25
20
----
----
130
125
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2022
2021
£
£
Wages and salaries
6,834,653
6,336,000
Social security costs
768,771
674,090
Other pension costs
42,277
53,864
------------
------------
7,645,701
7,063,954
------------
------------
10. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2022
2021
£
£
Remuneration
285,110
323,540
---------
---------
Remuneration of the highest paid director in respect of qualifying services:
2022
2021
£
£
Aggregate remuneration
164,626
152,219
---------
---------
11. Interest payable
2022
2021
£
£
Interest on obligations under finance leases and hire purchase contracts
( 509)
( 1,197)
----
-------
12. Taxation on ordinary activities
Major components of tax expense
2022
2021
£
£
Deferred tax:
Origination and reversal of timing differences
5,361
5,261
-------
-------
Taxation on ordinary activities
5,361
5,261
-------
-------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is lower than (2021: lower than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).
2022
2021
£
£
Profit on ordinary activities before taxation
628,029
1,166,475
---------
------------
Profit on ordinary activities by rate of tax
119,326
221,630
Effect of expenses not deductible for tax purposes
17,866
( 247,830)
Effect of capital allowances and depreciation
( 5,744)
( 5,397)
Effect of group relief
( 131,448)
31,597
Effect on deferred tax
5,361
5,261
---------
------------
Tax on profit
5,361
5,261
---------
------------
13. Dividends
2022
2021
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
186,227
453,810
---------
---------
14. Tangible assets
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2022
70,991
78,959
56,608
206,558
Additions
–
955
50,736
51,691
Disposals
–
–
( 24,622)
( 24,622)
--------
--------
--------
---------
At 31 December 2022
70,991
79,914
82,722
233,627
--------
--------
--------
---------
Depreciation
At 1 January 2022
70,887
76,569
45,078
192,534
Charge for the year
104
819
6,716
7,639
Disposals
–
–
( 20,510)
( 20,510)
--------
--------
--------
---------
At 31 December 2022
70,991
77,388
31,284
179,663
--------
--------
--------
---------
Carrying amount
At 31 December 2022
–
2,526
51,438
53,964
--------
--------
--------
---------
At 31 December 2021
104
2,390
11,530
14,024
--------
--------
--------
---------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Motor vehicles
£
At 31 December 2022
–
----
At 31 December 2021
4,028
-------
15. Stocks
2022
2021
£
£
Raw materials
403,725
320,301
---------
---------
16. Debtors
2022
2021
£
£
Trade debtors
3,155,427
2,537,414
Amounts owed by group undertakings
583,684
356,580
Deferred tax asset
360
5,721
Prepayments and accrued income
104,824
83,042
Corporation tax repayable
5,645
5,645
Directors loan account
29,302
–
Amounts recoverable on contracts
7,134,377
5,736,915
Other debtors
426,648
928,497
-------------
------------
11,440,267
9,653,814
-------------
------------
17. Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
4,193,152
4,347,926
Amounts owed to group undertakings
1,520,355
710,717
Accruals and deferred income
711,282
1,402,836
Social security and other taxes
1,209,753
642,397
Obligations under finance leases and hire purchase contracts
–
7,311
Director loan accounts
–
45,381
Other creditors
–
42,414
------------
------------
7,634,542
7,198,982
------------
------------
The company has entered into a composite accounting agreement with Natwest Bank Plc between Land & Water Services Limited, Land & Water Plant Limited, Land & Water Remediation Limited, Land & Water Estates Limited, M.H.J. Limited & Land and Water Group Limited. Under the terms of this agreement the bank is authorised in certain circumstances to seize bank account balances and apply them in reduction of liabilities including overdrawn bank accounts of the other group companies in the agreement. The total potential liability under the composite agreement at the year end is £1,389,139. During the year the company entered into a debenture with Natwest Bank Plc, all assets of the company are held as security as part of the agreement.
18. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2022
2021
£
£
Not later than 1 year
–
7,311
----
-------
19. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2022
2021
£
£
Included in debtors (note 16)
360
5,721
----
-------
The deferred tax account consists of the tax effect of timing differences in respect of:
2022
2021
£
£
Accelerated capital allowances
( 360)
( 5,721)
----
-------
20. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 42,277 (2021: £ 53,864 ).
21. Called up share capital
Issued, called up and fully paid
2022
2021
No.
£
No.
£
Ordinary shares of £ 0.10 each
900,977
90,098
857,144
85,714
---------
--------
---------
--------
22.Reserves
Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs. Profit and loss account - This reserve records retained earnings and accumulated losses.
23. Analysis of changes in net debt
At 1 Jan 2022
Cash flows
At 31 Dec 2022
£
£
£
Cash at bank and in hand
1,366,614
(938,754)
427,860
Debt due within one year
(763,409)
(756,946)
(1,520,355)
------------
------------
------------
603,205
( 1,695,700)
( 1,092,495)
------------
------------
------------
24. Directors' advances, credits and guarantees
Advances brought forward and additional advances during the year totalling £8,520 were made available to the directors. The balance outstanding at the year end was £8,520. The advances were made interest free and are repayable on demand (2021 - £8,520).
25. Ultimate parent company
The company's ultimate parent undertaking is M.H.J. Limited. It has included the company in its consolidated financial statements, copies of which are available from its registered office: Numeric House, 98 Station Road, Sidcup, Kent, DA15 7BY.