JOHN_N_DUNN_GROUP_LIMITED - Accounts

The directors present the strategic report for the year ended 31 March 2022.

The principal activity of the company continued to be that of contracting services to the construction industry.

The COVID-19 pandemic continued to have impact on the business resulting in turnover of £27.2m in the year; around 85% of pre-pandemic levels. This is a big improvement on the prior year, which was heavily impacted by the pandemic, where turnover was only £22.4m. The recovery in the year, along with an effort to make operations more efficient has resulted in an operating profit of £207k compared to an operating loss of £769k in 2021. During the year the business incurred significant one-off costs in relation to a re-financing. Excluding these, the business would have been close to an overall break-even position.

During the year the business has further invested in their renewables department, in recognition of the growing demand in this sector. The business has MCS accreditation and, amongst other technologies, is skilled up to install photovoltaic (PV) panels, electric vehicle (EV) charging points and air source heat pumps. The business has delivered a number of significant renewable contracts in the current year with increasing numbers of further contracts scheduled going forward.

Trading for the year ending March-23 is expected to be back at pre-pandemic levels and the business will return to profit this year. The business has won a large number of new contracts during the year, including new contracts for renewables, and has already secured a significant proportion of the workload required for the year ending March-24.

The management of the business and the execution of the company's strategy are subject to a number of risks. The board reviews these risks and puts in place policies to mitigate them.

The key business and financial risks are:

Liquidity risk

The directors regularly monitor the financial information to ensure that any risks in this area are considered on a timely basis.

Credit risk

The company monitors credit risk and considers that its current policy of strict credit checks meets its objectives of managing its exposure.

Interest rate risk

The company monitors interest rate risk and considers that its current policy meets its objectives of managing its exposure.

Employees

The company recognises its performance depends largely on its key employees. Employees are remunerated with competitive packages and conditions as well as specific employee incentive schemes.

The directors consider turnover, gross profit and EBITDA (earnings before interest, tax, depreciation and amortisation, before any exceptional items) to be the key measures of the company's performance:

• Turnover has increased during the year by 21.1% to £27,163,229

• Gross profit margin has increased during the year to 8.8% (2021 - 5.2%)

• EBITDA for the year was £221,337 (2021 - £(690,704))

The loss after tax for the year was £104,247 (2021 - £1,554,900) and the net liability position at year end was £2,334,882 (2021 - £2,230,635).

The directors consider the company's key performance indicators to be satisfactory in light of the prevailing economic and industry conditions.

The directors have assessed the company's ability to continue as a going concern for the foreseeable future and for the appropriateness of the preparation of the accounts on the going concern basis. In making such an assessment the directors have considered the company's exposure to relevant commercial and economic forces effective at the date of approval of these accounts, including but not limited to: the forward order book; the company's performance since the reporting date and its current financial position; and the availability of resources to meet its working capital requirements.

The directors recognise that the economic climate remains challenging and the construction industry is highly susceptible to liquidity and credit default risk, and its potential impact on construction sites and sourcing supplies.

Post year end the company has returned to profitability as trading returned to pre-pandemic levels. In light of this the company continues to have sufficient working capital to meet its commitments, coupled with the company's active measures to increase the efficiency of the business and increase the profitability further, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2022.

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

In accordance with the company's articles, a resolution proposing that RMT Accountants & Business Advisors Ltd be reappointed as auditor of the company will be put at a General Meeting.

The directors are responsible for preparing the annual 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 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;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     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.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of John N Dunn Group Limited (the 'company') for the year ended 31 March 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 March 2022 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 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.

Emphasis of matter - going concern

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 1.2 to the financial statements concerning the company's ability to continue as a going concern.

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 contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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 remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

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.

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.

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:

• Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.

• Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include health & safety regulations.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

John N Dunn Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Phoenix House, Kingfisher Way, Silverlink Business Park, Wallsend, Tyne & Wear, NE28 9NX.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;

• Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ – Carrying amounts; and

• Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of John N Dunn Holdings Limited. These consolidated financial statements are available from its registered office; Phoenix House, Kingfisher Way, Silverlink Business Park, Wallsend, United Kingdom, NE28 9NX.

The directors have assessed the company's ability to continue as a going concern for the foreseeable future and for the appropriateness of the preparation of the accounts on the going concern basis. In making suchtrue an assessment the directors have considered the company's exposure to relevant commercial and economic forces effective at the date of approval of these accounts, including but not limited to: the forward order book; financial forecasts in excess of 12 months from accounts sign off; the company's performance since the reporting date and its current financial position; and the availability of resources to meet its working capital requirements.

The directors recognise that the economic climate remains challenging and the construction industry is highly susceptible to liquidity and credit default risk, and its potential impact on construction sites and sourcing supplies.

Post year end the company has returned to profitability as trading returned to pre-pandemic levels. In light of this the company continues to have sufficient working capital to meet its commitments, coupled with the company's active measures to increase the efficiency of the business and increase the profitability further, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.

Turnover represents amounts receivable for goods and services provided in the normal course of business, net of trade discounts, VAT and other sales related taxes.

Turnover is calculated as the value of the contract works completed at the balance sheet date, as noted in note 1.10. Profit is recognised on long-term contracts if the final outcome can be assessed with reasonable certainty, by including in the profit and loss account turnover and related costs as contract activity progresses.

Goodwill arising on the acquisition of subsidiary undertakings and businesses, representing any excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised and written off on a straight line basis over its useful economic life, which is not more than 10 years. Provision is made for any impairment.

Computer software and licences are included at cost and depreciated in equal instalments over their estimated useful economic life. Provision is made for any impairment.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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 credited or charged to profit or loss.

Interests in subsidiaries and associates are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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).

Stocks is valued at the lower of cost and net realisable value. Cost includes materials, direct labour and an attributable proportion of manufacturing overheads based on normal levels of activity. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow-moving or defective items where appropriate.

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

Where the outcome of a construction contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract sales rendered for work performed to date compared to the estimated total contract value.

Amounts recoverable on long-term contracts, which are included in debtors, are stated at the net sales value of the work done less amounts received as progress payments on account or invoiced and included in trade debtors. Excess progress payments are included in creditors as payments on account. Cumulative costs incurred net of amounts transferred to cost of sales, less provision for anticipated future losses on contracts, are included as long-term contract balances and included as work in progress. Contract cost accruals are included within accruals and deferred income in creditors falling due within one year. Foreseeable losses on contracts are included within provisions for contract losses.

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, 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.

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. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

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.

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, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors and bank loans 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 receipts 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.

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

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Corporation tax payable is provided on taxable profits at the current rate.

Deferred taxation is accounted for in respect of all material timing differences that have originated but not reversed at the balance sheet date. Timing differences arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements. Deferred tax is calculated at the rate at which it is anticipated the timing differences will reverse and is measured on a non-discounted basis. Deferred tax assets are only recognised to the extent that they are regarded as recoverable.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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, if considered material to the financial statements.

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 operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable. Differences between contributions payable in the year and contributions annually paid are shown as either other debtors or other creditors in the balance sheet.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

The current year income statement includes amounts of £145,758 (2021 - £1,624,707) received by the company in relation to COVID-19 support funding from the government Coronavirus Job Retention Scheme.

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.

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

In assessing whether there have been any indicators of impairment in assets, the directors have considered both external and internal sources of information such as market conditions and experience of recoverability. There have been no indicators of impairments identified during the current financial year.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The company depreciates intangible other than goodwill and tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management.

Judgement is applied by management when determining the residual values for intangible and tangible assets. When determining the residual value management aim to assess the amount that the company would currently receive as consideration for the disposal of the asset expected at the end of its useful life.

The carrying amount of intangible assets other than goodwill at the reporting date was £6,013 (2021 - £11,222).The carrying amount of tangible assets at the reporting date was £44,574 (2021 - £48,841).

The company establishes a provision for debtors that are estimated not to be recoverable. When assessing the recoverability the directors consider factors such as the ageing of debtors, past experience of recoverability, and the credit profile of individual customers. The carrying value of this provision is £631,937 (2021 - £623,564).

The company uses the percentage of completion method to recognise project revenue for construction contracts. The method requires the directors to estimate the future profits and losses expected for each contract. The method also requires the directors to estimate the level of completion at which profits and losses can reliably forecast and hence recognised. Variations to estimates could result in the over or under recognition of revenue.

The company makes a provision for foreseeable future losses on contracts. The directors are required to estimate the likely losses on each contract still in progress at year end. This estimate is based on past experience of the performance of similar projects. The carrying value of this provision is £641,637 (2021 - £658,832).

The company provides warranties on certain contracts for a period following completion of the contract. The directors are required to estimate the likely cost of these warranties. This is based on historical experience of costs incurred based on the turnover recognised in the accounts. The carrying value of this provision is £241,600 (2021 - £315,700).

The company estimates the level of retentions held at reporting date which are not expected to be recovered within 12 months. The estimate is based on assumptions of general contract terms and expected completion dates of construction contracts. The estimated value of non-current retentions included within amounts recoverable on long term contracts is £603,932 (2021 - £696,342).

An analysis of the company's turnover is as follows:

Turnover was generated wholly within the United Kingdom.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2021 - 3).

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Details of the company's subsidiaries at 31 March 2022 are as follows:

Included within other creditors are amounts secured to the value of £1,231,486 (2021 - £825,367) by a first legal mortgage, dated 14 January 2022, on the book debts of the company.

The bank loan is repayable over 6 years and attracts an annual, marginal interest rate of 2.5%.

Loans from related parties have no set repayment terms and no interest is charged thereon. The notice required for repayment is in excess of 12 months and hence these loans are held as a non-current financial liability.

Provision for future losses on long-term contracts

The company accounts for long-term contracts in accordance with FRS 102, Section 23: Revenue. The standard requires companies to recognise foreseeable future losses on contracts. The directors have estimated the likely losses on contracts still in progress at the year end. The nature of long-term contracts and the construction industry mean that the amount and timing of losses is uncertain. However, the directors expect the losses to be realised within a period of no more than 5 years.

Warranty provision

The company provides warranties on certain contracts for a period following completion of the contract. The directors have estimated the likely cost of these warranties. The nature of the warranties and the different contracts mean that the amount and timing of payments is uncertain. However, the directors expect the costs to be realised within a period of not more than 2 years.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The company participates in the Plumbing & Mechanical Services (UK) Industry Pension Scheme multi-employer defined benefit scheme. The scheme is non-segregated, as such the assets and liabilities cannot be separately identified for the company. Consequently, the company accounts for its contributions as if they were paid to a defined contribution scheme.

Total contributions payable to the fund at year end included in creditors are £255,157 (2021 - £164,380).

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

During the year the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

Amounts owed to related parties are noted in note 18.

The following amounts were outstanding at the reporting end date:

No guarantees have been given or received.

The company has taken advantage of the exemption available in FRS 102, Section 33: Related party transactions, whereby it has not disclosed transactions with any wholly owned subsidiary undertakings.

In the opinion of the directors there is no overall controlling party.

The ultimate parent company is John N Dunn Holdings Limited, a company incorporated in England and Wales.