Cosmur Holdings Limited - Limited company accounts 23.2

REGISTERED NUMBER: 10690670 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements

for the Period 1 February 2021 to 31 July 2022

for

Cosmur Holdings Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Statement of Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

P A Conway

S N Naeem

H O Dunnell

SECRETARY:

P A Conway

REGISTERED OFFICE:

72 Salusbury Road

London

NW6 6NU

REGISTERED NUMBER:

10690670 (England and Wales)

AUDITORS:

1. Ian S Anderson 2. Cansdales Audit LLP

1. Greengarth, Thicket Grove,

Maidenhead, Berkshire SL6 4LW

2. St Mary’s Court, The Broadway, Old

Amersham, Bucks HP7 0UT

The directors present their strategic report for the period ended 31 July 2022

REVIEW OF BUSINESS

The group has had turnover of £33 million in the eighteen months to 31 July 2022, albeit on an annualised basis this reflects a downturn of 14.5% on over the year to 31 January 2021. For reasons set out below the Group suffered a consolidated loss of just under £1.8m after tax.

Although the business activity in the main group trading company, Cosmur Construction (London) Limited ("Construction"), continued to generate work throughout the reporting period and this work was procured at market rates, the Group's financial position worsened considerably in the latter part of 2022 and the beginning of 2023, resulting in Construction being forced to enter into a Company Voluntary Arrangement (CVA) in May 2023. Whilst some of the reasons for this were apparent in the 2021 - 2022 year, it was the directors' belief at that time that Construction would be able to trade through these difficulties, backed by a strong order book and balance sheet. This belief was undermined through the 2022-2023 period by the effects of the following:

COVID-19

The effects of the pandemic were still being experienced in 2022 and 2023, with delays to both projects starting and being delivered to the required programme.This caused significant problems for Construction as it was committed to fixed price contracts with clients, while the subcontractors were on a variable contracts. Some contracts were renegotiated with clients to allow the recovery of delay costs; others continued to experience delays and did not receive client support.

INFLATION

During the latter part of the pandemic, the building industry experienced a very high period of inflation, with many parts of the industry suffering inflation rates of over 100%. The effects of this worked through into projects that had been won in 2019 and 2020, but which had been delayed into 2022 and 2023. Again, some clients agreed to assist with these increased costs, but others proved unwilling to engage with us on this matter.

The effects of inflation were further exacerbated by the outbreak of the Ukrainian war which resulted in further rapid price increases in energy and other costs throughout 2022.

INTEREST RATES

The value of the investment property owned by Construction which underpinned the balance sheet was undermined by the increase in interest rates resulting from government actions and world events in 2022 and 2023. The directors commissioned a valuation of the property in February 2023 which indicated a much lower value than had previously been allowed within the accounts, which had been based on professional valuations.

LABOUR AND MATERIALS SHORTAGES

Labour shortages which started with the aftermath of Brexit continue to be impact the building industry, adding to the inflationary pressures. Further pressure arose from the well documented materials shortages that arose throughout the world following the pandemic and that were exacerbated by the rapid demand from materials as demand suddenly increased as the pandemic abated.

CLIENT SUPPORT

As noted above, the inflationary and delay costs became more throughout 2022. The group was able to secure support from many of its public sector clients, and believed that it had sustainable claims against others that would assist it to meet its contractual obligations. This situation changed at the end of 2022 and the beginning of 2023, with a major client withholding payments that had a severe effect on cash-flow. This in turn lead to further delays which lead to further cash flow pressures culminating in the need to enter the CVA.

Further details of the CVA decision making process and subsequent actions are contained in the CVA proposal submitted to the High Court under Part 1 of the Insolvency Act 1986.

Company Voluntary Arrangement

Cosmur Construction (London) Limited entered into a CVA in May 2023 and is currently fulfilling its obligations under the arrangement. The CVA is reviewed regularly by RSM, the Nominees appointed under the Act.

ENVIRONMENTAL AND HEALTH AND SAFETY

All previous industry and management accreditations have been retained, including ISO 9001. The group holds accreditation under ISO 14001, environmental, and OHSAS 18001, health and safety standards. Our health and safety record remains excellent. Notwithstanding the difficulties that have arisen, the Considerate Constructors' Scheme continues to be used to benchmark performance on all our construction sites.

KEY PERFORMANCE INDICATORS

During the financial period we have continued to use KPIs to measure our performance across several areas of the business:

1. Training and employment: we have monitored training hours per employee and achievement.

2. Health and Safety: we use our site safety visits to produce average performance figures per site.

3. Estimating: we look at percentages of tenders won (strike rate).

4. Financial: we consider productivity per employee and profit against turnover.

5. Performance: we look at actual project handover dates against original contract dates and the amount of defects notified.

6. Employee Satisfaction: we send out surveys annually to monitor employee satisfaction.

7. Market standing and share: we benchmark ourselves against our nearest competitors in relation to tendering opportunities and market reach.

Clearly the difficulties encountered in the period and since, which resulted in the management structure downsizing and Construction entering the CVA, are relevant, but the directors have endeavoured to measure and monitor performance based on the above indicators.

ON BEHALF OF THE BOARD:

P A Conway - Director

2 October 2023

The directors present their report with the financial statements of the company and the group for the period 1 February 2021 to 31 July 2022.

PRINCIPAL ACTIVITY

The principal activity of the group in the period under review was that of building and civil engineering contractors.

DIVIDENDS

The total distribution of dividends for the period ended 31 July 2022 was £263,297 (year to 31 January 2021 £81,202).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 February 2021 to the date of this report.

P A Conway

S N Naeem

H O Dunnell

Other changes in directors holding office are as follows:

T L Lane ceased to be a director after 31 July 2022 but prior to the date of this report.

CHARITABLE DONATIONS

During the year the group contributed £2,441 to charities (2021 £Nil).

RESULTS FOR YEAR

The group loss for the period, before taxation, amounted to £2,088,984 on turnover of £33,286,025. This result is impacted by matters referred to in the Strategic Report, specifically a provision of £800,000 against contract work in progress and an impairment write down of goodwill of £1,169,649.

The loss after tax is £1,778,749, which includes the research and development tax credit and a deferred tax credit. The latter is £110,522 and arose as deferred tax on the revaluation of the investment property. This is based on its sale value on 14 March 2023 and reflects a deficit on other comprehensive income of £578,155. The research and development credit, based on expert tax advice, is £192,889. In practice HMRC will offset this credit against other tax liabilities existing at the date of the CVA. Notwithstanding the loss in the period, the group's balance sheet has net assets of £567,576.

The Strategic Report reflects the directors' comments on the group's performance.

IMPACT OF BREXIT, COVID-19 AND THE UKRAINE CRISIS

The strategic report outlines the implications of Brexit and Covid as regards the group's activities. Undoubtedly both these and the war in Ukraine had a much greater impact on increased costs and availability of labour than was anticipated, as did the unexpected surge in inflation. Whilst this will have been an industry wide concern, with hindsight the group's contract terms should have been strengthened to minimise the adverse impacts. Going forward, the group is completing contracts and the directors are ensuring that ongoing tenders will have "tighter" terms

GOING CONCERN

The CVA, which occured on 11 May 2023 has "capped" liabilities and given that the group now has reasonable liquidity, with no bank overdraft facilities or loans, and is operating in compliance with the CVA terms, the directors believe the going concern basis adopted, remains valid.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The Joint Auditors, Ian S Anderson and Cansdales Audit LLP will be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

P A Conway - Director

2 October 2023

Opinion

We have audited the financial statements of Cosmur Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 July 2022 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 31 July 2022 and of the group's loss for the period then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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.

Material uncertainty relating to going concern

We draw attention to Note 24 in the financial statements, which sets out the circumstances through which the group's main trading company entered a CVA subsequent to the period end. We would also draw your attention to the paragraph on going concern in Note 2 and the fact that the group incurred a net loss of £1,778,749 during the period ended 31 July 2022. As of that date, current liabilities exceeded current assets by £1,043,865 for the group and by £488,369 for the company. We believe such events and conditions indicate that a material uncertainty exists that may cast significant doubt on the group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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. Our evaluation of the directors' assessment of the entity's ability to continue to adopt the going concern basis of accounting included discussions and correspondence with the directors and Nominees appointed to monitor the CVA as well as reviewing the group's performance since the period end and the forecasts prepared for the period ended 31 March 2025.

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 Group 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 Group 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 Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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 five, 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 group's and the parent 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 group or the parent 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:

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional

scepticism throughout the audit. We also:

1. 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.

2. 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 company's internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

4. 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 auditors' 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 auditors' report. However, future events or conditions may cause the company to cease to continue as a going concern.

5. 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.

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.

1. Ian Anderson BA FCA 2. James Foskett BSc FCA (Senior Statutory Auditors)

for and on behalf of 1. Ian S Anderson 2. Cansdales Audit LLP

1. Greengarth, Thicket Grove,

Maidenhead, Berkshire SL6 4LW

2. St Mary’s Court, The Broadway, Old

Amersham, Bucks HP7 0UT

10 October 2023

TURNOVER

3

33,286,025

25,677,994

Cost of sales

27,050,641

21,732,381

GROSS PROFIT

6,235,384

3,945,613

Distribution costs

7,736

4,460

Administrative expenses

8,511,344

4,655,456

8,519,080

4,659,916

(2,283,696

)

(714,303

)

Other operating income

4

264,943

324,936

OPERATING LOSS

6

(2,018,753

)

(389,367

)

Interest receivable and similar income

63

44,838

(2,018,690

)

(344,529

)

Interest payable and similar expenses

7

70,294

44,642

LOSS BEFORE TAXATION

(2,088,984

)

(389,171

)

Tax on loss

8

(310,235

)

(235,759

)

LOSS FOR THE FINANCIAL PERIOD

(1,778,749

)

(153,412

)

OTHER COMPREHENSIVE INCOME

Revaluation of investment property

(578,155

)

-

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF INCOME TAX

(578,155

)

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

(2,356,904

)

(153,412

)

Loss attributable to:

Owners of the parent

(1,778,749

)

(153,412

)

Total comprehensive income attributable to:

Owners of the parent

(2,356,904

)

(153,412

)

FIXED ASSETS

Intangible assets

11

-

1,169,649

Tangible assets

12

7,461

11,936

Investments

13

-

-

Investment property

14

2,156,845

2,735,000

2,164,306

3,916,585

CURRENT ASSETS

Debtors

15

9,366,611

7,797,901

Cash at bank

725,956

1,346,815

10,092,567

9,144,716

CREDITORS

Amounts falling due within one year

16

11,136,432

8,439,968

NET CURRENT (LIABILITIES)/ASSETS

(1,043,865

)

704,748

TOTAL ASSETS LESS CURRENT LIABILITIES

1,120,441

4,621,333

CREDITORS

Amounts falling due after more than one year

17

(500,000

)

(1,270,170

)

PROVISIONS FOR LIABILITIES

21

(52,865

)

(163,386

)

NET ASSETS

567,576

3,187,777

CAPITAL AND RESERVES

Called up share capital

22

140,000

140,000

Share premium

23

2,477,029

2,477,029

Retained earnings

23

(2,049,453

)

570,748

SHAREHOLDERS' FUNDS

567,576

3,187,777

The financial statements were approved by the Board of Directors and authorised for issue on 2 October 2023 and were signed on its behalf by:

P A Conway - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

-

-

Investments

13

1,500,000

3,874,115

Investment property

14

-

-

1,500,000

3,874,115

CURRENT ASSETS

Debtors

15

25

-

Cash at bank

32,124

16,354

32,149

16,354

CREDITORS

Amounts falling due within one year

16

520,518

317,155

NET CURRENT LIABILITIES

(488,369

)

(300,801

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,011,631

3,573,314

CREDITORS

Amounts falling due after more than one year

17

500,000

896,837

NET ASSETS

511,631

2,676,477

CAPITAL AND RESERVES

Called up share capital

22

140,000

140,000

Share premium

23

2,477,029

2,477,029

Retained earnings

23

(2,105,398

)

59,448

SHAREHOLDERS' FUNDS

511,631

2,676,477

Company's (loss)/profit for the financial year

(1,901,549

)

94,808

The financial statements were approved by the Board of Directors and authorised for issue on 2 October 2023 and were signed on its behalf by:

P A Conway - Director

H O Dunnell - Director

S N Naeem - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 February 2020

140,000

805,362

2,477,029

3,422,391

Changes in equity

Dividends

-

(81,202

)

-

(81,202

)

Total comprehensive income

-

(153,412

)

-

(153,412

)

Balance at 31 January 2021

140,000

570,748

2,477,029

3,187,777

Changes in equity

Dividends

-

(263,297

)

-

(263,297

)

Total comprehensive income

-

(2,356,904

)

-

(2,356,904

)

Balance at 31 July 2022

140,000

(2,049,453

)

2,477,029

567,576

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 February 2020

140,000

45,842

2,477,029

2,662,871

Changes in equity

Dividends

-

(81,202

)

-

(81,202

)

Total comprehensive income

-

94,808

-

94,808

Balance at 31 January 2021

140,000

59,448

2,477,029

2,676,477

Changes in equity

Dividends

-

(263,297

)

-

(263,297

)

Total comprehensive income

-

(1,901,549

)

-

(1,901,549

)

Balance at 31 July 2022

140,000

(2,105,398

)

2,477,029

511,631

Cash flows from operating activities

Cash generated from operations

1

(272,954

)

159,784

Interest paid

(70,294

)

(44,642

)

Tax paid

242,151

822,153

Net cash from operating activities

(101,097

)

937,295

Cash flows from investing activities

Interest received

63

44,838

Net cash from investing activities

63

44,838

Cash flows from financing activities

New loans in year

-

400,000

Loan repayments in year

(270,176

)

(130,679

)

Government grants

13,648

157,757

Equity dividends paid

(263,297

)

(81,202

)

Net cash from financing activities

(519,825

)

345,876

(Decrease)/increase in cash and cash equivalents

(620,859

)

1,328,009

Cash and cash equivalents at beginning of period

2

1,346,815

18,806

Cash and cash equivalents at end of period

2

725,956

1,346,815

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

Period

1.2.21

to

Year Ended

31.7.22

31.1.21

£

£

Loss before taxation

(2,088,984

)

(389,171

)

Depreciation charges

1,174,124

174,272

Government grants

(13,648

)

(157,757

)

Finance costs

70,294

44,642

Finance income

(63

)

(44,838

)

(858,277

)

(372,852

)

Increase in trade and other debtors

(1,611,148

)

(792,642

)

Increase in trade and other creditors

2,196,471

1,325,278

Cash generated from operations

(272,954

)

159,784

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:

Period ended 31 July 2022

31.7.22

1.2.21

£

£

Cash and cash equivalents

725,956

1,346,815

Year ended 31 January 2021

31.1.21

1.2.20

£

£

Cash and cash equivalents

1,346,815

18,806

3.	ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 1.2.21

Cash flow

At 31.7.22

£

£

£

Net cash

Cash at bank

1,346,815

(620,859

)

725,956

1,346,815

(620,859

)

725,956

Debt

Debts falling due within 1 year

(161,455

)

(499,993

)

(661,448

)

Debts falling due after 1 year

(770,170

)

770,170

-

(931,625

)

270,177

(661,448

)

Total

415,190

(350,682

)

64,508

1.	STATUTORY INFORMATION

Cosmur Holdings 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 General 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 as modified by the revaluation of certain assets.

The financial statements are presented in Sterling (£).

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and all group undertakings. These are adjusted, where appropriate, to conform to group accounting policies. Acquisitions are accounted for under the acquisition method and goodwill on consolidation is capitalised and written off over ten years from the year of acquisition. The results of companies acquired or disposed of are included in the profit and loss account after or up to the date that control passes respectively. In the year of acquisition this is on a proportionate basis. As a consolidated profit and loss account is published, a separate profit and loss account for the parent company is omitted from the group financial statements by virtue of section 408 of the Companies Act 2006.

Significant judgements and estimates

Consequent on the group's main trading company entering a CVA on 11 May 2023, the accounting policies have been reviewed and the relevant treatment of certain transactions and assets & liabilities have been adjusted as adjustable subsequent events. In addition the financial statements disclose certain non adjustable events where such disclosure is relevant to a user's understanding of the financial position.

Turnover

Turnover represents the total invoice value of construction and related activities, including development property sales, carried out for third parties excluding value added tax, during the accounting year.

Where the outcome of a construction contract can be estimated reliably, contract costs and turnover are recognised by reference to the stage of completion at the balance sheet date, being based on the relevant valuation certificates.

Where the outcome cannot be measured reliably, contract costs are recognised as an expenses in the period in which they are incurred and contract turnover is recognised to the extent of costs incurred that it is probable will be recoverable.

Where it is probable that contract costs will exceed the contract turnover, the expected loss is recognised as an expense immediately, with a corresponding provision.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2017, is being amortised evenly over its estimated useful life of ten years.

Consequent upon the relevant subsidiary's performance and entering a CVA post period end, the directors have concluded from their impairment review that the balance on goodwill on consolidation should be written off to nil.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

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

Plant and machinery

-

25% on reducing balance

The group's only freehold property until 14 March 2023 was held as an investment property.

Government grants

Grants are recognised in the profit and loss account so as to match them with the expenditure towards which they are intended to contribute.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

In accordance with the relevant Financial Reporting Standard FRS102 no provision is made for depreciation. The directors consider that this accounting policy results in the financial statements giving a true and fair view. Depreciation is only one of many factors reflected in the annual valuation and the amount attributable to this factor cannot be separately identified or quantified.

In general, valuations are carried out at intervals of not more than five years by independent external valuers and in the intervening years by the directors. However, the group's only investment property was sold subsequent to the period end and the valuation shown in these financial statements is based on the net proceeds from that sale.

Financial instruments

The Group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other

accounts receivable and payable, are initially measured at present value of the future cash flows and

subsequently at amortised cost using the effective interest method. Debt instruments that are payable or

receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at

the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting

period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of income and retained earnings.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, 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.