J P Dunn Construction Limited - Limited company accounts 22.3

REGISTERED NUMBER: 03718466 (England and Wales)

J P DUNN CONSTRUCTION LIMITED

Strategic Report, Directors' Report and

Financial Statements

for the Year Ended 30 September 2021

Page

Company Information

1

Strategic Report

2

Directors' Report

4

Independent Auditors' Report

6

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

15

Directors:

J P Dunn

K P McSweeney

Y Uruci

N Jacks

Secretary:

O M Dunn

Registered office:

5 AC Court, High Street

Thames Ditton

Surrey

KT7 0SR

Registered number:

03718466 (England and Wales)

Independent auditors:

Haines Watts

Chartered Accountants and Statutory Auditor

New Derwent House

69-73 Theobalds Road

London

WC1X 8TA

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

The purpose of the Strategic Report is to inform shareholders and help them to assess how the directors have performed their duties to promote the success of the Company. The report, together with the further information in the Report of the Directors, provides;

- A fair and balanced review of the Company's business including:

i) The development and performance of the business during the year;

ii) The position of the Company at the end of the year; and

iii) A description of the principal risks and uncertainties facing the Company.

Review of business

The principal activity of the Company during the year was that of a specialist sub-contractor in the construction industry carrying out groundworks and RC frames.

During this financial year the Company turnover increased to £39.3m (2020: £28.1m). This represented a return to pre-covid levels of turnover after works to many projects had been suspended during the pandemic in the previous financial year.

In the year ahead the Company has secured a similar volume of work across a range of sectors including housing regeneration schemes, health, and education.

For only the second time in 23 years of trading the company posted a loss (£2m). The 2020/21 figures reflected extremely difficult trading conditions reflecting the combined impact of Brexit, Covid, fuel shortages, a lack of lorry drivers, etc. This all fed through to cause radical inflation to materials and wages of between approximately 20%. This level of inflation had not been seen in the construction industry since the early 1990's and the Company had not made provision for these increases in pricing projects. These unforeseen cost increases could not be recovered as the Company was contracted to complete long-term projects on a fixed price. The Company has made full provision in the 2020/21 accounts for the extra costs of completing all projects still underway where these inflationary cost increases have caused a loss. The full impact of the war in Ukraine on the costs of completing these legacy jobs has also been fully provided for.

The cash performance remained strong with a year-end cash position of £5.2m (2020 - £8.6m). In the year there was an investment of £3.5m in plant and machinery which explained this movement to the cash position.

The Company remained focused on delivering complex projects safely, to the quality required, and on time. The bulk of work remained with repeat customers including McAlpine, Kingerlee, Wates, Osbornes, Wilmott Dixon, and Kier London. Key to the business success was a collaborative approach with customers from the pre-contract stage through to project handover. The focus on zero harm was recognised by various Client awards for safety and environmental performance.

With a strong liquidity, a high ownership of specialist equipment, a wide Client base, and a healthy pipeline of secured work, the Company is well positioned to move forward positively in the year ahead and quickly return to profitability.

The financial position of the company at the year end

At the year end the Company had a pre-tax loss for the year of £2,032,777 (2020: £1,169,073 profit) there was a net decrease in shareholders' funds from £11,473,541 to £9,874,764. The Company has no significant bank borrowings other than hire purchase agreements arranged through the bank at the reporting date.

Key performance indicators (kpi's)

The Company monitors the business performance through a number of key performance indicators, mainly those noted above. Given the straight forward nature of the business the directors are of the opinion that further analysis using non-financial KPI's is not necessary for the understanding of the development, performance or position of the business.

Description of principal risks and uncertainties

The directors continually monitor the key risks facing the Company together with assessing the controls used for managing these risks. The principal risks and uncertainties facing the Company are as follows:

Liquidity risk

The Company manages its cash requirements to ensure that the Company has sufficient resources to meet the operating needs of the business.

Interest rate risk

The Company uses regular reviews of cash balances to ensure it can keep borrowing to a minimum and hence reduce its exposure to fluctuations in interest rates.

Credit risk

The nature of the activities means that individual client balances can sometimes be significant. The Company's clients are monitored on an ongoing basis to determine the exposure to bad debts and the timing and size of contract entered into is managed to limit this risk to an acceptable level.

Financial instruments

The Company has very limited exposure to financial instruments in respect of its own assets which comprise principally of cash in liquid resources, trade debtors, trade creditors and finance leases that arise directly from its operations.

Future developments

The directors expect steady increments in turnover and a stability in profit , but do not envisage any significant changes to structure or trade of the Company for the foreseeable future.

Going forward all secured work has been priced to reflect all inflationary factors including the impact of the Ukrainian war. Wage costs have levelled out, and JPD are insulated against rising plant costs as the Company owns 90% of the equipment which it utilises. Qualifications have been inserted into future contracts for the recovery of costs of materials that remain volatile such as steel reinforcement.

By order of the board:

O M Dunn - Secretary

14 December 2022

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

Principal activity

The principal activity of the Company in the year under review was that of a specialist sub-contractor in the construction industry carrying out groundworks and RC frames.

Dividends

No dividends were paid out in the year.

Directors

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

J P Dunn

K P McSweeney

Y Uruci

N Jacks

Political donations and expenditure

The Company made charitable donations of £4,201 in the year, none were political in nature.

Events since the end of the year

Information relating to events since the end of the year is given in the notes to the financial statements.

Disclosure in the strategic report

As permitted by paragraph 1A of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 certain matters which are required to be disclosed in the directors' report have been omitted as they are included in the strategic report on pages 2 to 3. These matters relate to Future Developments and Financial Instruments.

Statement of directors' responsibilities

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

-	select suitable accounting policies and then apply them consistently;

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

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement as to disclosure of information to auditors

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

By order of the board:

O M Dunn - Secretary

14 December 2022

Opinion

We have audited the financial statements of J P Dunn Construction Limited (the 'Company') for the year ended 30 September 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the Company's affairs as at 30 September 2021 and of its loss for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Auditors' Report thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the 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 where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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.

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

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

- we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge;

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006, taxation legislation, employment, data protection and capital requirements;

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

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

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

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

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

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

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgement and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

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

- agreeing financial statement disclosure to underlying supporting documentation;

- reading the minutes of meetings of those charged with governance;

- enquiring of management as to actual potential litigation and claims; and

- reviewing correspondence.

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 Auditors' 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 Auditors' 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.

Chris Evans BSc FCA (Senior Statutory Auditor)

for and on behalf of Haines Watts

Chartered Accountants and Statutory Auditor

New Derwent House

69-73 Theobalds Road

London

WC1X 8TA

14 December 2022

Turnover

3

39,282,637

28,064,808

Cost of sales

(39,653,009

)

(24,929,396

)

Gross (loss)/profit

(370,372

)

3,135,412

Administrative expenses

(1,779,920

)

(2,190,726

)

(2,150,292

)

944,686

Other operating income

122,992

213,395

Operating (loss)/profit

(2,027,300

)

1,158,081

Interest receivable and similar income

8,976

27,999

Interest payable and similar expenses

6

(14,453

)

(17,007

)

(Loss)/profit before taxation

7

(2,032,777

)

1,169,073

Tax on (loss)/profit

8

434,000

99,417

(Loss)/profit for the financial year

(1,598,777

)

1,268,490

(Loss)/profit for the year

(1,598,777

)

1,268,490

Other comprehensive income

-

-

Total comprehensive income for the year

(1,598,777

)

1,268,490

Fixed assets

Tangible assets

10

5,142,277

2,829,791

Current assets

Debtors

11

9,456,420

5,411,565

Cash at bank and in hand

5,229,237

8,561,546

14,685,657

13,973,111

Creditors

Amounts falling due within one year

12

9,941,346

5,043,859

Net current assets

4,744,311

8,929,252

Total assets less current liabilities

9,886,588

11,759,043

Creditors

Amounts falling due after more than one year

13

(11,824

)

(55,502

)

Provisions for liabilities

17

-

(230,000

)

Net assets

9,874,764

11,473,541

Capital and reserves

Called up share capital

18

41,817

41,817

Capital redemption reserve

19

2,000

2,000

Retained earnings

19

9,830,947

11,429,724

Shareholders' funds

9,874,764

11,473,541

The financial statements were approved by the Board of Directors and authorised for issue on 14 December 2022 and were signed on its behalf by:

J P Dunn - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 October 2019

41,817

10,231,234

2,000

10,275,051

Changes in equity

Dividends

-

(70,000

)

-

(70,000

)

Total comprehensive income

-

1,268,490

-

1,268,490

Balance at 30 September 2020

41,817

11,429,724

2,000

11,473,541

Changes in equity

Total comprehensive income

-

(1,598,777

)

-

(1,598,777

)

Balance at 30 September 2021

41,817

9,830,947

2,000

9,874,764

Cash flows from operating activities

Cash generated from operations

1

233,726

2,969,467

Interest element of hire purchase payments paid

(14,453

)

(17,007

)

Tax paid

298,762

(378,668

)

Net cash from operating activities

518,035

2,573,792

Cash flows from investing activities

Purchase of tangible fixed assets

(3,507,175

)

(1,231,484

)

Sale of tangible fixed assets

9,835

25,142

Interest received

8,976

27,999

Net cash from investing activities

(3,488,364

)

(1,178,343

)

Cash flows from financing activities

Capital repayments in year

(169,447

)

(198,424

)

Amount introduced by directors

-

78,686

Amount withdrawn by directors

(192,533

)

(78,444

)

Equity dividends paid

-

(70,000

)

Net cash from financing activities

(361,980

)

(268,182

)

(Decrease)/increase in cash and cash equivalents

(3,332,309

)

1,127,267

Cash and cash equivalents at beginning of year

2

8,561,546

7,434,279

Cash and cash equivalents at end of year

2

5,229,237

8,561,546

1.	Reconciliation of (loss)/profit before taxation to cash generated from operations

2021

2020

£

£

(Loss)/profit before taxation

(2,032,777

)

1,169,073

Depreciation charges

1,182,984

947,059

Loss/(profit) on disposal of fixed assets

1,870

(4,008

)

Finance costs

14,453

17,007

Finance income

(8,976

)

(27,999

)

(842,446

)

2,101,132

(Increase)/decrease in trade and other debtors

(3,653,162

)

77,703

Increase in trade and other creditors

4,729,334

790,632

Cash generated from operations

233,726

2,969,467

2.	Cash and cash equivalents

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

Year ended 30 September 2021

30/9/21

1/10/20

£

£

Cash and cash equivalents

5,229,237

8,561,546

Year ended 30 September 2020

30/9/20

1/10/19

£

£

Cash and cash equivalents

8,561,546

7,434,279

3.	Analysis of changes in net funds

At 1/10/20

Cash flow

At 30/9/21

£

£

£

Net cash

Cash at bank and in hand

8,561,546

(3,332,309

)

5,229,237

8,561,546

(3,332,309

)

5,229,237

Debt

Finance leases

(224,949

)

169,447

(55,502

)

(224,949

)

169,447

(55,502

)

Total

8,336,597

(3,162,862

)

5,173,735

1.	Statutory information

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

2.	Accounting policies

Basis of preparing the financial statements

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

Set out below is a summary of principal accounting policies, all of which have been consistently applied throughout the year and the preceding year (except as otherwise stated). The financial statements are presented in Sterling.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Profit is recognised on long term contracts, if the final outcome can be assessed with reasonable certainty, by including the income statement turnover and related costs as contract activity progresses.

Turnover is calculated as that contract value assigned to elements of the contract agreed with the customer as complete. Amounts receivable in respect of this turnover are classed as trade debtors as the customer has recognised the requirement to pay within reasonable terms.

Additional turnover is only recognised on contracts that are substantially complete. This additional turnover is calculated as that proportion of the total contract value which costs to date bear to total expected costs for the contract. Amounts receivable in respect of this additional turnover are classed as amounts recoverable on contracts as no formal recognition of the requirement to pay within reasonable terms has been obtained from the customer.

Tangible fixed assets

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

Plant and machinery

-

20% on cost

Fixtures and fittings

-

25% on cost

Motor vehicles

-

25% on reducing balance

Computer equipment

-

25% on cost

Property, plant and equipment are initially recognised at costs which is the purchase price plus any directly attributable costs. Subsequently property plant and equipment are measured at cost less accumulated depreciation and impairment losses.

Impairment of assets

At each reporting date the Company reviews the carrying value of its assets to determine whether there is any indication that these 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.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred taxation

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

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

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

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Hire purchase and leasing commitments

Assets held under finance leases and hire purchase agreements, where substantially all the risks and rewards of ownership of the assets have passed to the Company, are capitalised in the balance sheet and are depreciated over their useful lives. The capital element of the future obligations under the leases and hire purchase agreements are included as liabilities in the balance sheet.

The interest element of the leases and hire purchase agreements are charged to the income statement over the periods of the leases and hire purchase agreements at an amount which represents a constant proportion of the capital amount outstanding.

Rentals paid under operating leases are charged to the income statement on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company. Contributions payable to the Company's pension scheme are charged to profit or loss in the period to which they relate.

Going concern

These financial statements have been prepared on a going concern basis.

The current economic conditions present increased risks for all businesses. The directors have reviewed and considered relevant information, including the annual budget in making their assessment. In response to such conditions, the directors have carefully considered these risks including an assessment on uncertainty on future trading projection for a period of at least 12 months from the date of signing the financial statements, and the extent to which they might affect the preparation of the financial statements on a going concern basis.

Based on assessment, the directors consider that the Company maintains an appropriate level of liquidity, including the ability to realise further assets, sufficient to meet the demands of the business including any capital and servicing obligations and external debt liabilities.

In addition, the Company's assets are assessed for recoverability on a regular basis, and the directors consider that the Company is not exposed to losses on these assets which would affect their decision to adopt the going concern basis.

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and that there are no material uncertainties that lead to significant doubts upon the Company's ability to continue as a going concern. Thus the directors have continued to adopt the going concern basis of accounting in preparing these financial statements.

Financial instruments

Financial assets and liabilities are recognised when the Company becomes party to the contractual provisions of the financial instrument. The Company holds financial instruments which comprise cash and cash equivalents, trade and other receivables, trade and other payables, loans and borrowings. The Company has chosen to apply the provisions of FRS102 Section 11 Basic Financial Instruments in full.

Financial assets and liabilities - classified as basic financial instruments

(i) Cash and cash equivalents

This includes cash in hand, deposits held with banks, and other short-term highly liquid investments with original maturities of three months or less.

(ii) Trade and other receivables

Trade and other receivables are initially recognised at the transaction price, including any transaction costs, and subsequently measured at amortised cost including the effective interest method, less any provision for impairment. Amounts that are receivable within one year are measured at the undiscounted amount of the cash expected to be received, net of any impairment.

At the end of each reporting period, the Company assesses whether there is objective evidence that a receivable amount may be impaired. A provision for impairment is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of the estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised immediately in the income statement.

(iii) Trade and other payables and loans and borrowings

Trade and other payables and loans and borrowings are initially measured at the transaction price, including any transaction costs, and subsequently measured at amortised cost using the effective interest method.

Critical accounting judgements and key sources of estimation uncertainty

In applying the Company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.

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, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

Critical judgements in applying the Company's accounting policies

The critical judgement that the directors have made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below:

(i) Assessing indicators and impairment

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

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(i) Income recognition

Turnover is recognised on contracts as contract activity progresses. Therefore determining the stage of progress inherently carries some subjectivity.

(ii) Determining residual values and useful economic lives of property, plant and equipment

The Company depreciates tangible assets over their estimated useful lives. The estimation of the useful lives is based on historical performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes. Judgement is applied by management when determining the residual values for plant, machinery and equipment. When determining the residual value management aim to assess the amount that the Company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices.

3.

Turnover

The turnover and loss (2020 - profit) before taxation are attributable to the one principal activity of the Company.

An analysis of turnover by geographical market is given below:

2021

2020

£

£

United Kingdom

39,282,637

28,064,808

39,282,637

28,064,808

4.	Employees and directors

2021

2020

£

£

Wages and salaries

1,798,511

1,682,835

Social security costs

116,881

114,607

Other pension costs

14,661

12,950

1,930,053

1,810,392

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

2021

2020

Administration

22

21

Site workers

7

7

29

28

5.	Directors' emoluments

2021

2020

£

£

Directors' remuneration

288,302

412,157

Information regarding the highest paid director is as follows:

2021

2020

£

£

Emoluments etc

119,077

142,024

6.

Interest payable and similar expenses

2021

2020

£

£

Hire purchase

14,453

17,007