Oakleaf Contracts (Europe) Ltd - Limited company accounts 23.2

REGISTERED NUMBER: NI040383 (Northern Ireland)

OAKLEAF CONTRACTS (EUROPE) LTD

STRATEGIC REPORT, DIRECTORS' REPORT AND

FINANCIAL STATEMENTS FOR THE PERIOD 1 SEPTEMBER 2021 TO 31 DECEMBER 2022

Page

Company Information

1

Strategic Report

2

Directors' Report

4

Independent Auditors' Report

6

Income Statement

10

Statement of Financial Position

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

DIRECTORS:

Patrick Scullion

Michael Scullion

Philip McCoubrey

Kevin O'Neill

Glenn Anderson

REGISTERED OFFICE:

71 Creagh Road

Castledawson

Magherafelt

Northern Ireland

BT45 8EY

REGISTERED NUMBER:

NI040383 (Northern Ireland)

INDEPENDENT AUDITORS:

CavanaghKelly

Chartered Accountants and Statutory Auditors

36-38 Northland Row

Dungannon

Co. Tyrone

BT71 6AP

SOLICITORS:

Doris and MacMahon

63 James Street

Magherafelt

Co Derry

BT45 6EE

The directors present their strategic report for the period 1 September 2021 to 31 December 2022.

REVIEW OF BUSINESS

The directors are satisfied with the trading performance for the 16 month period ended 31 December 2022 and the business remains in sound financial position at year end.

The directors consider the key performance indicators are those that communicate the financial performance and strengths as a whole, being revenue, gross profit margin and operating profit.

The directors have provided an analysis of the key performance indicators of the business below. Despite the competitive nature of the industry the company operates in, the directors are pleased to report an increase in turnover and gross profit. The directors continue to monitor costs to ensure the company remains profitable. The company continues to main a strong net asset position.

KEY PERFORMANCE INDICATORS

16 month period ended 31 December 2022

Year ended 31 August 2021

£

£

Revenue

35,303,865

16,246,353

Gross profit

5,610,090

1,999,805

Gross profit margin

15.89%

12.31%

Profit before tax

2,928,562

402,374

FINANCIAL RISK MANAGEMENT OBJECTIVES

The company operations expose it to a variety of risks that include competition risk, economic risk, liquidity risk, price risk and interest rate cash flow risk. The company has in place a risk management programme that seeks to limit any adverse effects on the financial performance of the company.

Competition Risk:

Competition risk comes from other building contractors and developers. The directors manage this risk by ensuring a quality service is offered to all customers.

Economic Risk:

Economic risk is inherent in the industry in which the company operates. The directors manage this risk by ensuring relationships with suppliers and subcontractors are maintained with the company having long standing relationships with such entities.

Liquidity Risk:

The company generates sufficient cashflow to ensure it has adequate available funds for operations.

Price Risk:

Risk of changes in material prices are managed through fixed price distributor and manufacturer

agreements as well as factoring in expected or known price increases at tender stage. The company has no exposure to equity securities price risk as it holds no listed investments.

Interest Rate Cash Flow Risk:

The company has both interest bearing assets and interest bearing liabilities. Interest bearing assets include cash balances which earn interest as variable rates. Interest bearing liabilities include bank overdrafts and hire purchase contracts. The directors monitor interest rates on an ongoing basis.

HEALTH AND SAFETY

The company consider the highest standards of health and safety as an integral part of its success and

regard the health and safety of its employees, clients and anyone else who interfaces with its business

activities of paramount importance.

HUMAN RESOURCES

The company's most important resource is its people; their knowledge and experience is crucial to meeting clients' requirements. Retention of key staff is critical and the group has invested in relevant employment training and development.

STRATEGY

The company's success is dependent on the ongoing management of business risk and uncertainties it faces. The directors continue to work closely with suppliers, customers, staff and financial institutions to carefully manage the company's operations.

FUTURE DEVELOPMENTS

The company is committed to long term creation of shareholder value. The economic environment continues to evolve and is making a return to relative stability. In the coming years the company aims to increase revenue and profitability. The company will continue to develop relationships with customers and suppliers and generate new work where possible while remaining highly competitive.

ON BEHALF OF THE BOARD:

Patrick Scullion - Director

24 July 2023

The directors present their report with the financial statements of the Company for the period 1 September 2021 to 31 December 2022.

DIVIDENDS

Interim dividends were paid during the period amounting to £150,000 (2021: £93,484). No final dividends have been declared or paid.

EVENTS SINCE THE END OF THE PERIOD

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

DIRECTORS

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

Patrick Scullion

Michael Scullion

Philip McCoubrey

Kevin O'Neill

Other changes in directors holding office are as follows:

Glenn Anderson - appointed 1 March 2022

DIRECTORS' RESPONSIBILITIES STATEMENT

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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

AUDITORS

The auditors, CavanaghKelly, have indicated their willingness to continue in office in accordance with the provision of Section 485 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

Patrick Scullion - Director

24 July 2023

Opinion

We have audited the financial statements of Oakleaf Contracts (Europe) Ltd (the 'Company') for the period ended 31 December 2022 which comprise the Income Statement, Statement of Financial Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the Company's affairs as at 31 December 2022 and of its profit for the 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 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 Directors' Responsibilities Statement set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements

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

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The objectives of our audit in respect of fraud are to assess the risk of material misstatement due to fraud, design and implement appropriate responses to those assessed risks and to respond appropriately to instances of fraud or suspected fraud identified during the course of our audit. However, the primary responsibility for the prevention and detection of fraud rests with management and those charged with governance of the company.

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

-

We obtained understanding of the legal and regulatory requirements applicable to the company’s financial statements and considered the most significant are the Companies Act 2006, Financial Reporting Standards (FRS102) and UK taxation legislation;

-

We have assessed the risk of material misstatement of the financial statements, including risk of material misstatement due to fraud and how it might occur by holding discussions with management and those charged with governance;

-

We enquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations;

-

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

-

Discussions amongst the audit engagement team regarding how fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion we identified the following potential areas where fraud may occur: timing of revenue recognition and management override.

The audit response to risks identified included:

-

Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the relevant laws and regulations above;

-

Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risk of material misstatement due to fraud;

-

In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are reasonable and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are reasonable and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

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.

Mr. Desmond Kelly (F.C.A) (Senior Statutory Auditor)

for and on behalf of CavanaghKelly

Chartered Accountants and Statutory Auditors

36-38 Northland Row

Dungannon

Co. Tyrone

BT71 6AP

24 July 2023

REVENUE

4

35,303,865

16,246,353

Cost of sales

(29,693,775

)

(14,246,548

)

GROSS PROFIT

5,610,090

1,999,805

Administrative expenses

(2,636,392

)

(1,577,726

)

2,973,698

422,079

Other operating income

21,465

22,801

OPERATING PROFIT

7

2,995,163

444,880

Finance costs

8

(66,601

)

(42,506

)

PROFIT BEFORE TAXATION

2,928,562

402,374

Tax on profit

9

(557,954

)

(76,790

)

PROFIT FOR THE FINANCIAL PERIOD

2,370,608

325,584

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

2,370,608

325,584

NON-CURRENT ASSETS

Property, plant and equipment

11

396,523

447,282

CURRENT ASSETS

Inventories

12

595,004

3,086,532

Receivables: amounts falling due within one year

13

3,651,034

2,008,318

Cash at bank and in hand

4,704,509

899,681

8,950,547

5,994,531

PAYABLES

Amounts falling due within one year

14

(2,407,181

)

(3,455,026

)

NET CURRENT ASSETS

6,543,366

2,539,505

TOTAL ASSETS LESS CURRENT LIABILITIES

6,939,889

2,986,787

PAYABLES

Amounts falling due after more than one year

15

(2,652,179

)

(918,069

)

PROVISIONS FOR LIABILITIES

18

(54,253

)

(55,869

)

NET ASSETS

4,233,457

2,012,849

CAPITAL AND RESERVES

Called up share capital

19

20,000

20,000

Retained earnings

4,213,457

1,992,849

SHAREHOLDERS' FUNDS

4,233,457

2,012,849

The financial statements were approved by the Board of Directors and authorised for issue on 24 July 2023 and were signed on its behalf by:

Patrick Scullion - Director

Michael Scullion - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 September 2020

20,000

1,760,749

1,780,749

Changes in equity

Dividends

-

(93,484

)

(93,484

)

Total comprehensive income

-

325,584

325,584

Balance at 31 August 2021

20,000

1,992,849

2,012,849

Changes in equity

Dividends

-

(150,000

)

(150,000

)

Total comprehensive income

-

2,370,608

2,370,608

Balance at 31 December 2022

20,000

4,213,457

4,233,457

1.	STATUTORY INFORMATION

Oakleaf Contracts (Europe) Ltd is a private company, limited by shares , registered in Northern Ireland. The company's registered number and registered office address can be found on the Company Information page.

2.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared on a going concern basis under the historical cost convention.

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements.

The financial statements are prepared in sterling (£), which is the functional currency of the entity.

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

•

the requirements of Section 7 Statement of Cash Flows.

Significant judgements and estimates

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 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

During the current year the directors believes they have not made any critical judgements in the

process of applying the company's accounting policies that have a significant effect on the amounts recognised in the financial statements.

Key sources of estimation uncertainty

During the current and preceding financial years the directors believe that the main balance of estimation uncertainty that has a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the current financial year years relates to creditors due after more than one year.

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the

company and the revenue can be reliably measured. Revenue is measured as the fair value of the

consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods:

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

- the significant risks and rewards of ownership have been transferred to the buyer;

- the company retains no continuing involvement or control over the goods;

- the amount of revenue can be measured reliably;

- it is probable that future economic benefits will flow through the company

- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue is recognised in customer receipt.

Rendering of services and contracting

Revenue from a contract to provide services is recognised in the period in which the services are

provided in accordance with the stage of completion of the contract when all of the following

conditions are satisfied:

- the amount of revenue can be measured reliably;

- it is probable that the company will receive consideration due under the contract;

- the stage of completion of the contract at the end of the reporting period can be measured

reliably, and;

- the costs incurred and the costs to complete the contract can be measured reliably.

Property, plant and equipment

Property, Plant and Equipment under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The company adds to the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the Income Statement during the period in which they are incurred.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives. The estimated useful lives range as follows:

Plant and machinery

30% reducing balance

Fixtures, fittings and equipment

35% reducing balance

Motor vehicles

25% reducing balance

The asset's residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the Income Statement.

Inventories

Inventories and Work in Progress are valued at the lower of cost and net realisable value. Cost in respect of finished goods represents direct materials, direct labour and a proportion of appropriate overheads. Net realisable value is the price at which inventory can be realised in the normal course of business. Provision is made where necessary for obsolete, slow moving and defective inventory.

Work in Progress is valued on the basis of direct costs plus attributable overheads based on normal activity. Provisions are made for any foreseeable losses where appropriate. No element of profit is included in the valuation of Work in Progress.

Financial instruments

The company have chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances and amounts owed by related parties are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables, bank loans and overdrafts and amounts owed to related parties 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. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

(iii) Offsetting

Financial assets and liabilities are offset and 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.

Taxation

Taxation for the period 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 tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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 period 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.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Employee benefits

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

Hire purchase and leasing commitments

Property, plant and equipment held under Hire Purchase and leasing arrangement which transfer

substantially all the risks and rewards of ownership to the company are capitalised and included in

the Statement of Financial Position at their cost or valuation, less depreciation. The corresponding

commitments are recorded as liabilities. Payments in respect of these obligations are treated as

consisting of capital and interest elements, with interest charged to the Income Statement.

Operating leases

Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.

Government Grants

Grants that relate to specific capital expenditure are treated as deferred income which is then credited to the Income statement over the related asset's useful economic life. Other grants are credited to the income statement when receivable.

Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are show in equity as deduction, net of tax, from the proceeds.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term

highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Finance Costs

Finance costs are charged to the Income Statement over the term of the debt.

Dividends

Dividends are recognised when they become legally payable. Interim dividends are recognised

when paid. Final dividends are recognised when approved by the shareholders at an annual general meeting.

4.

REVENUE

No analysis of turnover by activity or geographical area has been provided as, in the opinion of the

director, such disclosure would be seriously prejudicial to the interests of the company.

5.	EMPLOYEES AND DIRECTORS

Period

1/9/21

to

Year ended

31/12/22

31/8/21

£

£

Wages and salaries

1,515,225

314,076

Other pension costs

153,550

19,987

1,668,775

334,063

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

Period

1/9/21

to

Year ended

31/12/22

31/8/21

Administration

30

6

Direct

60

18

90

24

6.	DIRECTORS' EMOLUMENTS

No retirement benefits are accruing to any directors at the year end (2021: nil). The directors are considered to be the key management of the company.

7.	OPERATING PROFIT

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

Period

1/9/21

to

Year ended

31/12/22

31/8/21

£

£

Depreciation - owned assets

189,341

172,834

(Profit)/loss on disposal of fixed assets

(40

)

439

Foreign exchange differences

(339,886

)

108,020

Auditors remuneration

9,500

9,500

Operating leases

108,704

79,138

8.	FINANCE COSTS

Period

1/9/21

to

Year ended

31/12/22

31/8/21

£

£

Bank interest

38,480

28,324

Hire purchase interest

28,121

14,182

66,601

42,506

9.

TAXATION

Analysis of the tax charge

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

Period

1/9/21

to

Year ended

31/12/22

31/8/21

£

£

Current tax:

UK corporation tax

559,570

36,582

Deferred tax

(1,616

)

40,208

Tax on profit

557,954

76,790

Reconciliation of total tax charge included in profit and loss

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

Period

1/9/21

to

Year ended

31/12/22

31/8/21

£

£

Profit before tax

2,928,562

402,374

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)

556,427

76,451

Effects of:

Expenses not deductible for tax purposes

3,094

2,150

Capital allowances in excess of depreciation

-

(1,811

)

previous year

Deferred Tax

(1,616

)

-

Depreciation in excess of capital allowances

49

-

Total tax charge

557,954

76,790

10.

DIVIDENDS

Period

1/9/21

to

Year ended

31/12/22

31/8/21

£

£

Ordinary shares of 1 each

Final

150,000

93,484

11.	PROPERTY, PLANT AND EQUIPMENT

Fixtures

Plant and

and

Motor

machinery

fittings

vehicles

Totals

£

£

£

£

COST

At 1 September 2021

330,693

307,751

406,414

1,044,858

Additions

83,332

49,224

49,400

181,956

Disposals

-

-

(107,245

)

(107,245

)

At 31 December 2022

414,025

356,975

348,569

1,119,569

DEPRECIATION

At 1 September 2021

159,448

272,279

165,849

597,576

Charge for period

93,451

31,906

63,984

189,341

Eliminated on disposal

-

-

(63,871

)

(63,871

)

At 31 December 2022

252,899

304,185

165,962

723,046

NET BOOK VALUE

At 31 December 2022

161,126

52,790

182,607

396,523

At 31 August 2021

171,245

35,472

240,565

447,282